Weekend Economists Ask Why the Twenties Roared, June 24-26, 2011

[Demeter]

What made the Roaring Twenties (1920-29) roar?

From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Roaring_Twenties

The Roaring Twenties is a phrase used to describe the 1920s, principally in North America, but also in London, Berlin and Paris. The phrase was meant to emphasize the period's social, artistic, and cultural dynamism. 'Normalcy' returned to politics in the wake of World War I, jazz music blossomed, the flapper redefined modern womanhood, Art Deco peaked, and finally the Wall Street Crash of 1929 served to punctuate the end of the era, as The Great Depression set in. The era was further distinguished by several inventions and discoveries of far-reaching importance, unprecedented industrial growth, accelerated consumer demand and aspirations, and significant changes in lifestyle and culture.

The social and cultural features known as the Roaring Twenties began in leading metropolitan centers, especially Chicago, New Orleans, New York, Philadelphia, Paris and London, then spread widely in the aftermath of World War I.

The United States gained dominance in world finance. Thus when Germany could no longer afford war reparations to Britain, France and other Allies, the Americans came up with the Dawes Plan and Wall Street invested heavily in Germany, which repaid its reparations to nations that in turn used the dollars to pay off their war debts to Washington. By the middle of the decade, prosperity was widespread. The second half of the decade becoming known as the "Golden Twenties". In France and francophone Canada, they were also called the "années folles" ("Crazy Years"). LEAVE IT TO THE FRENCH TO CALL IT LIKE IT IS--DEMETER

The spirit of the Roaring Twenties was marked by a general feeling of discontinuity associated with modernity, a break with traditions. Everything seemed to be feasible through modern technology. New technologies, especially automobiles, moving pictures and radio proliferated 'modernity' to a large part of the population. Formal decorative frills were shed in favor of practicality in both daily life and architecture. At the same time, jazz and dancing rose in popularity, in opposition to the mood of the specter of World War I. As such, the period is also often referred to as the Jazz Age.

http://t0.gstatic.com/images?q=tbn:ANd9GcQbv0At8ttYHQ_aV2W1Le0I4eaebmzLfatXGJ9kxWUIdzZe1gsh

In my humble opinion, several generations removed, the defining characteristic was the lawlessness. Prohibition, that great experiment of social engineering, provided fertile soil for both the outlaws and the law-abiding to find common cause, and do massive business with each other. There was cross-pollination at all levels: bribes, affairs, moles, and murders. You couldn't pick a side and stick with it, because all sides were contaminated with the corruption that trying to make a legal drug illegal engendered.

And so it is today. The War on Drugs was the GOP response to LBJ's War on Poverty, which was making some real progress in actually reducing poverty:

"The programs initiated under Johnson brought about real results, reducing rates of poverty and improved living standards for America's poor.

But the poverty rate has remained steady since the 1970s and today, Americans have allowed poverty to fall off the national agenda, says Sheldon Danziger, a professor of public policy at the University of Michigan..."

http://www.npr.org/templates/story/story.php?storyId=1589660

The RW insists that poverty was declining from the days of Hoover (one would HOPE so!) and that Johnson was committing some kind of boondoggle... so declaring and fighting the Drug War was their response. And as with the previous attempt at social engineering, the outlaws and the lawmakers and the law enforcers all started to blend together...bribes, affairs, murders. It's the lawlessness of stupid laws that gets us, every time.

And here we are. Our banks float on a wave of drug money-laundering. Our politicians are bought and paid for. Our "so-called" national security is inflated at the expense of our liberties and civil rights.

It can only end in catastrophe. And so that's how we got to here.

[Demeter]

1. ONE LONELY GEORGIA BANK DOWN

Mountain Heritage Bank, Clayton, 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 First American Bank and Trust Company, Athens, Georgia, to assume all of the deposits of Mountain Heritage Bank.

The two branches of Mountain Heritage Bank will reopen during normal business hours as branches of First American Bank and Trust Company...As of March 31, 2011, Mountain Heritage Bank had approximately $103.7 million in total assets and $89.6 million in total deposits. In addition to assuming all of the deposits of the failed bank, First American Bank and Trust Company agreed to purchase essentially all of the assets.

The FDIC and First American Bank and Trust Company entered into a loss-share transaction on $69.2 million of Mountain Heritage Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $41.1 million. Compared to other alternatives, First American Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Mountain Heritage Bank is the 48th FDIC-insured institution to fail in the nation this year, and the fourteenth in Georgia. The last FDIC-insured institution closed in the state was McIntosh State Bank, Jackson, on June 17, 2011.

[Demeter]

2. Reining In The Deficit By Doing Nothing?

http://www.npr.org/blogs/thetwo-way/2011/06/24/137405138/reining-in-the-deficit-by-doing-nothing?ft=1&f=1001

We've seen the graph, before, but the liberal leaning site Talking Points Memo points it out again, today, and it's interesting enough that we'll pass it along.

The site points to two graphs that the Congressional Budget Office put side-by-side in its just-released long-term budget outlook (pdf). The point the office makes is that if Congress does nothing, the deficit — mind you, not the debt — comes even around the year 2016. That means that revenues and spending would even out then.

The Washington Post's Ezra Klein pointed the same thing out back in April and enumerated what "does nothing" means:

But nothing is hard to do. This nothing, for instance, includes three crucial elements: (1) All the Bush tax cuts expire, as they're currently scheduled to do; (2) The Medicare doc fix is either implemented or its repeal is paid for over the next 70 years; and (3) the Affordable Care Act is implemented, and all of its spending targets are met and all of its taxes are collected.

And here are the charts:

?t=1308953432&s=3

[hay rick]

3. First rec.

[Demeter]

5. Thanks Rick! You Win!

Got a theme for next week? Of course, it's 4th of July...but there's other things to talk about.

[Demeter]

4. House rejects move to cut funds from Libya mission

http://www.latimes.com/news/la-pn-congress-libya-20110624,0,4227523.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews+%28L.A.+Times+-+Top+News%29&utm_content=My+Yahoo


The House of Representatives refused to authorize U.S. involvement in the NATO mission in Libya on Friday but also rejected an effort to cut off partial support for the mission, sending contradictory messages in a pair of votes that demonstrated the deep divisions in both parties over the use of American forces in the conflict...Despite growing frustration in Congress over the White House's handling of the Libya mission, the failure of the back-to-back votes in the House will preserve the status quo for now, allowing the U.S. military to continue operations in Libya...The attempt to strip funding was in large part an attempt to give voice to that frustration. Republicans blasted the president as conducting an unconstitutional military mission, while setting a dangerous precedent that would give the executive branch nearly unchecked power to wage war...The White House argues that because the United States is acting as a part of NATO, its engagement does not meet the definition of "hostilities" that requires congressional authorization under the War Powers Act. The argument has won over few in Congress, even Democratic allies. But opponents of the House bill argued that the solution was to authorize the Libya mission. Cutting off the funding was merely an attempt to score political points while risking damage to the U.S.' relationship with allies, they argued.

"If we want our allies to stand by us in our time of need in Afghanistan we have to stand by them in places like Libya," said House Minority Whip Steny Hoyer (D-Md.). "We're either in an alliance or we're not." STENY HOYER, IDIOT FOR HIRE...DEMETER

Earlier, an attempt to authorize the current level of military force in Libya for one year failed. That measure, identical to one with bipartisan support in the Senate, was overwhelmingly rejected by a vote of 123-295. Seventy Democrats joined with Republicans to reject the measure, and eight Republicans voted for the measure...The funding bill failed 180-238. It would have cut all U.S. financial backing for the mission until authorized by Congress. It makes an exception for a short list of specific activities not directly related to a typical definition of "hostilities," including intelligence gathering, search and rescue, aerial refueling and planning. Opponents argued that the bill would essentially end U.S. involvement in the mission.

Even if it passed, the bill would have had virtually no chance of becoming law. Senate Majority Leader Harry Reid has expressed support for the mission in Libya and was not expected to bring it up for a vote.

HARRY REID STRIKES OUT AGAIN

[Demeter]

12. Obama Declares Thingamajig-- Mark Fiore Hits the Target!

http://www.markfiore.com/political-cartoons/watch-barack-obama-libya-afghanistan-conflict-war-hostility-thingamajig-animated-video-mark-fiore-animation

[kickysnana]

74. +1

[DemReadingDU]

81. That was great!

[Demeter]

83. And so very sad, because it's so very true.

[Demeter]

6. Wall Street sinks on Europe's debt misery

http://beta.news.yahoo.com/wall-street-reverses-sharp-sell-off-greek-deal-061359558.html

- Wall Street dropped for a third day on Friday on worries about the Italian banking sector and Greece's debt crisis, but the S&P 500 managed to hold its 200-day moving average in a sign buyers still see value.

The Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7 percent from its 2011 closing high at the end of April.

Investors are fearful that Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures. "They (politicians) may not believe that financial markets are as sensitive to their decisions as they actually are, and there is a worry that somewhere along the line, some political vote goes against the market," said Nicholas Colas, chief market strategist of the ConvergEx Group in New York.

The S&P 500 remained within striking distance of its 200-day moving average -- a line that has been tested twice in recent trading and has so far acted as a springboard for stocks. The level was at 1,263.47. "Every time you test a resistance or support level, you make it weaker," Colas said. "It's almost like a piece of metal. Every time you hit it, it grows more fragile and that's why people are really worried the third or fourth time."


THE MECHANICAL ENGINEERING VIEW OF THE MARKET? I THINK RATHER THE DRAINING OF THE SUCKER POOL...

[Demeter]

7. Madoff trustee triples JPMorgan suit to $19 billion

http://beta.news.yahoo.com/madoff-trustee-seeks-19-billion-jpmorgan-000753848.html

The trustee seeking money for Bernard Madoff's victims is now demanding $19 billion in damages from JPMorgan Chase & Co, more than tripling what he hopes to recover from what had been the main bank for the now-imprisoned Ponzi schemer. The amended complaint by the trustee Irving Picard adds new charges and was filed three days after the second-largest U.S. bank agreed to pay $153.6 million to settle U.S. Securities and Exchange Commission fraud charges. Picard maintained that JPMorgan was "thoroughly complicit" in Madoff's fraud and ignored red flags. In his original complaint, made public in February, he had sought $6.4 billion, including $5.4 billion of damages and $1 billion for fraudulent transfers and claims.

"JPMorgan Chase chose to enable Madoff's fraud, not just through the various ways it participated in its activity, but by helping to cover Madoff's naked theft with the imprimatur of a globally recognized financial institution," the 155-page amended complaint said. The higher damage request reflects "life-to-date damages," or what the trustee considers the minimum losses over the entirety of Madoff's Ponzi scheme. Picard is also seeking at least $500 million that JPMorgan made "off the backs of Madoff's victims," and more than $400 million of alleged fraudulent transfers.

Tasha Pelio, a JPMorgan spokeswoman, repeated in an email the bank's earlier statement that Picard's lawsuit is meritless and distorts the facts and law. "JPMorgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff," she said. "At all times, JPMorgan complied fully with all laws and regulations governing bank accounts."

Picard has filed roughly 1,050 lawsuits seeking more than $100 billion for former investors at Bernard L. Madoff Investment Securities LLC. The amended JPMorgan complaint adds new allegations that another financial services company around 1997 investigated nearly daily transfers of $1 million to $10 million between Madoff's account there and his account at Chase. It said that company questioned Madoff's employees about the suspicious back-and-forth transfers. Having failed to be satisfied about them, they closed Madoff's account, it said. "JPMorgan Chase's bankers literally watched the fraud unfold before their very eyes," Deborah Renner, a lawyer representing Picard, said in a statement. Both are partners at the law firm Baker & Hostetler.

[Demeter]

20. JPMorgan pays $154m to end fraud case

JPMorgan will pay $153.6m to resolve US civil fraud charges that it misled investors in a mortgage-related security created for Magnetar

Read more >>
http://link.ft.com/r/WDI4RR/SPNQDF/1O51V/8AOSHR/D4MWDS/82/t?a1=2011&a2=6&a3=22

[Demeter]

45. YVES HAS THE DETAILS: JP Morgan Pays $153.6 Million to Settle SEC Charges on Toxic Magnetar CDO

http://www.nakedcapitalism.com/2011/06/jp-morgan-pays-153-6-million-to-settle-sec-charges-on-toxic-magnetar-cdo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[Demeter]

21. Madoff’s yacht is the talk of Monaco

The 90ft powerboat is being discreetly offered for sale with a €3m price tag at one of the hedge fund industry’s most glamorous annual events

Read more >>
http://link.ft.com/r/WDI4RR/SPNQDF/1O51V/8AOSHR/S3FPL8/82/t?a1=2011&a2=6&a3=22

[Demeter]

8. Geithner to shortsellers: take your profits and go home

http://www.creditwritedowns.com/2009/03/geithner-to-shortsellers-take-your-profits-and-go-home.html

Oppenheimer has a research note out that calls Tim Geithner an "evil genius". The genius moniker comes from the steady creep up the capital structure, giving Geithner access to huge pools of money as the Treasury dials for dollars. The evil part has everything to do with the pain this strategy is going to mete out to preferred shareholders and, eventually, bondholders.

The end of Oppenheimer's piece is worthy of a quote as it demonstrates great analysis from a team that just lost star analyst Meredith Whitney.

Geithner's Message to the Capital Markets

In his actions if not his words, Secretary Geithner is saying something very pointedly to all the key capital-market participants, and he is saying it to all participants industry-wide--not just Citi shareholders:

To common equity shareholders, he is effectively saying this: "You will be treated fairly and you will be allowed to raise substantial new equity at the reference price, which is roughly the prevailing price at the time that I took office. However, if you bought a $2 or $3 bank stock in hopes of earning leveraged, warrant like returns, on the assumption that Treasury would supply infinite capital and liquidity on favorable terms in perpetuity, guess again. You will be diluted until the right-hand side of the balance sheet has a reasonable mix between common equity and more senior capital."

To preferred and subordinated debt holders, Geithner is effectively saying the following: "If the bank holding company in which you hold capital instruments is in dire need of common equity capital, then come to terms with them or we will do it for you! You knew at the time that you purchased this paper that they were not FDIC insured deposits, but rather capital instruments of a bank holding company. If the company in which you invested is in dire trouble, you too should share some of the pain and not expect 100 cents on the dollar."

To the short-sellers of bank stocks, Geithner is effectively saying this: "Take your profits and go home; you cannot drive another major BHC stock to zero. We will never let another Lehman Brothers catastrophe happen. If need be, we will drill through the next $18 billion of preferred equity which would add another percentage point to the TCE ratio, and if that is not enough then there is another $192 billion of Citigroup holding company debt obligations which can be converted and add another ten percentage points to TCE (all of which at $3.25 per share would result in another 65 billion shares being issued), but at the end of the process, however far it needs to go, we are going to end up with a viably capitalized, publicly traded company trading under the "C" symbol. The only thing that is really at issue how many shares of this stock will be in circulation at the end of the process. It is this way with Citi, and it will be this way with any other large BHC."

Source
Geithner's Evil Genius, Intraday Report - Oppenheimer (no link)

I THINK THEY GIVE TIMMY TOO MUCH CREDIT (IN ALL MEANINGS OF THAT PHRASE) THIS WAS FROM A YEAR AGO MARCH...

[Demeter]

9. Hundreds of wealthy Irish burnt in bond haircuts

http://www.independent.ie/business/irish/hundreds-of-wealthy-irish-burnt-in-bond-haircuts-2800069.html

Disgraced Irish banker Sean FitzPatrick -- who has lost millions after investing in an Anglo Irish Bank debt bond -- is not the only individual to have been burnt by Irish bank debt. Hundreds of wealthy Irish individuals are nursing heavy losses after pouring millions into Irish bank bonds over the last two years. Some investors have lost millions of euro. The bonds -- known as unguaranteed subordinated bonds -- were sold by some stockbrokers and the private banking arms of the main banks.

"Individual investors have lost hundreds of thousands -- and even into the millions after investing in these bonds," said Vincent Digby, founder of the financial advisers Impartial and a former head of funding with Bank of Ireland Global Markets. "Some investors incorrectly believed they could not lose money because they thought the bonds were covered by the government guarantee."

Although some bank bonds were guaranteed by the Government, many of those which offered the prospect of higher returns were not guaranteed. Gary Hanrahan, who heads up the financial advisers Capital Options, said he has come across clients who had invested in AIB subordinated bonds and had seen as much as half of their investment wiped out.

The minimum investment for these bonds was usually between €50,000 and €100,000 but many wealthy investors poured between €1m and €2m or more into them. Haircuts of up to 90 per cent have been imposed on subordinated bond-holders...Some credit unions invested in subordinated bonds. A spokeswoman for the Irish League of Credit Unions (ILCU) said that credit unions were "disappointed they are to suffer losses on these bonds".

[AnneD]

91. OK.....

Icelantic people tell the private bankers to take their private losses and go fuck themselves. Their economy is doing ok. The Irish on the other hand 'do the right thing' (by whose standards) and the whole of Ireland is in improvised slavery, serving as economic slaves to generate profits and have their assets stolen from them.

Another piece of info and I can't remember the source. Why we (or Wall Street) cares about the PIGS and the potential defaults.....European banks bought all this mortgage sausage that were labeled as high grade. But as any good, prudent investor knows, get insurance if you can. Well, the Europeans found insurance from.........( drumroll please) the Americans, AIG perhaps. We will soon be wallowing in the same cesspool as PIGS. The only country doing well is Iceland, and why....because they refuse to give up their independence and call the bankers out. The bankers are the ones that gambled foolishly and they should take the haircut, not the people.

We are being sold out by our politicians, just like the poor folks in Argentina.

My thought, we should bring back the custom of granting a year of jubilee a year when the slate is wiped clean.

[AnneD]

92. Ever wonder why...

Grocho Marx worked so late in his life and without his brothers.... Seems like he literally lost everything in the stock market. He lost $240,000 on Black Tuesday (the October 29, 1929, stock-market crash). He later joked that "I would have lost more, but that was all the money I had."

[DemReadingDU]

106. Good quote

I need to remember that one for the future

[Demeter]

10. The Roaring Economy

The Roaring Twenties was an era of great economic growth and widespread prosperity driven by government growth policies, a boom in construction, and the rapid growth of consumer goods such as automobiles. The North American economy, particularly the economy of the US, which had successfully transitioned from a wartime economy to a peacetime economy, boomed, although there were sectors that were stagnant, especially farming and mining. The United States augmented its standing as the richest country in the world, its industry aligned to mass production and its society acculturated into consumerism. In Europe, the economy did not start to flourish until 1924.<2>

The Roaring Twenties ended with the Stock Market Crash of late 1929 and the onset of the Great Depression....Wikipedia

IN OTHER WORDS, IT WAS A MASSIVE CREDIT BUBBLE THAT BURST.

The 1920s was a decade of increased consumer spending and economic growth fed by supply side economic policy. The post war saw three consecutive Republican administrations in the U.S. All three took the conservative position of forging a close relationship between those in government and big business. When President Warren Harding took office in 1921, the national economy was in the depths of a depression with an unemployment rate of 20% and runaway inflation. Harding proposed to reduce the national debt, reduce taxes, protect farming interests, and cut back on immigration. Harding didn't live to see it, but most of his agenda was passed by the Congress. These policies led to the "boom" of the Coolidge years.

One of the main initiatives of both the Harding and Coolidge administrations was the rolling back of income taxes on the wealthy which had been raised during World War I. It was believed that a heavy tax burden on the rich would slow the economy, and actually reduce tax revenues. This tax cut was achieved under President Calvin Coolidge's administration. Furthermore, Coolidge consistently blocked any attempts at government intrusion into private business. Harding and Coolidge's managerial approach sustained economic growth throughout most of the decade. However, the overconfidence of these years contributed to the speculative bubble that sparked the stock market crash and the Great Depression. The government's role as an arbiter rather than an active entity continued under President Herbert Hoover. Hoover worked to get businessmen to respond to the crisis by calling them into conferences and urging them to cooperate. Hoover's vigorous attempts to get business to end the depression failed.

When the income tax was established in 1913, the highest marginal tax rate was 7 percent; it was increased to 77 percent in 1916 to help finance World War I. The top rate was reduced to as low as 25 percent in 1925. The "normalcy" of the 1920s incorporated considerably higher levels of federal spending and taxes than the Progressive era before World War I. From 1929 to 1933, under President Hoover's administration, real per capita federal expenditures increased by 88 percent.

In 1920-1921 there was an acute recession, followed by the sustained recovery throughout the 1920s. The Federal Reserve expanded credit, by setting below market interest rates and low reserve requirements that favored big banks, and the money supply actually increased by about 60% during the time following the recession. By the latter part of the decade "buying on margin" entered the American vocabulary as more and more Americans over-extended themselves to speculate on the soaring stock market and expanding credit. Very few expected the crash that began in 1929, and none suspected it would be so drastic or so prolonged.

[Demeter]

11. there are so many parallels between this era and that one

so I get to relive my great-grandparents' lives...

[DemReadingDU]

61. and we know where this era will end up

reliving the 1930's, only it will be worse after this bubble crashes.

[Demeter]

64. It's not the 30's that bother me---it's the 40's

The parallels are not exactly parallel...the cultural revolution of the 60's preceded the credit bubble of the 80's and 90's and beyond. The War on Poverty and the Boomers really skewed the Plan (assuming there is one).

But this damn Drug War is getting ridiculous, and the undeclared wars are prima facie criminal enterprises.

I saw what happened to Detroit first-hand. That was incentive enough to stop the madness...

and the GOP is madness personified. We KNOW how to deal with our social and economic issues. Other nations have shown us the way. Other nations are even picking up the torch of Democracy, which we let fall in the slime of Greed.

[DemReadingDU]

67. I didn't mention the 40's and world war

but these undeclared wars today, I believe, will eventually lead to an all-out world war, for oil. Maybe I will be dead by then, but it's going to be really ugly for my children and grandbabies.

[Demeter]

13. I Hear Fireworks Tonight

We start celebrating early around here.

[Demeter]

14. Carlyle to raise $1bn in weak IPO market

Carlyle, the private equity firm with $108bn under management, plans to raise more than $1bn with a initial public offering of stock but is likely to come to the market with a lower-than-expected valuation, according to bankers familiar with the matter.

Carlyle this month selected Citigroup, Credit Suisse and JPMorgan Chase to lead the offer. Generally, firms file their registration statements within two or three months of selecting bankers, which suggests that Carlyle could list as soon as September if market conditions allow.

Read more >>
http://link.ft.com/r/FG6LAA/XHTL06/CWSVD/D4AL99/M9EPXP/ZH/t?a1=2011&a2=6&a3=23

[Demeter]

15. US states plan Google antitrust probes

A handful of the biggest US states has started antitrust investigations into Google, adding to the mounting regulatory pressure on the search company as federal authorities move closer to a full-blown inquiry of their own.

Attorneys-general in California, New York and Ohio have all recently begun reviews of the potential threat to online competition from Google’s search dominance, according to people familiar with the investigations. The moves come in the wake of an investigation launched last year by the Texas attorney-general’s office, which became the first regulator in the US to weigh in.

Read more >>
http://link.ft.com/r/IOCBMM/U1P3Z9/ULCJB/KEXOBA/WLUO9U/MQ/t?a1=2011&a2=6&a3=23

[Demeter]

16. Oil price tumbles after reserves release

Oil prices tumbled after Western nations surprised the market, releasing the biggest amount of oil from their emergency strategic stocks since 1991, in a calculated shot across the bows of Opec, the oil producers’ cattle.

The International Energy Agency agreed to release 60m barrels of oil in the coming month to offset the loss of 1.5m barrels a day production of high quality oil from Libya, the north African country engulfed in a civil war.

Read more >>
http://link.ft.com/r/19JYUU/TU3N15/VTVRG/ZBUD17/C57IL5/AZ/t?a1=2011&a2=6&a3=23

[Demeter]

17. Ian Bremmer: Global oil supplies are healthier than they seem

Many of the world’s oil consuming nations, led by the United States, shocked oil markets this week as the International Energy Agency agreed to release 60m barrels of oil from strategic reserves over the coming month.

The move was intended to offset price pressures brought about by Libya’s supply cut and comes in response to Opec’s recent inability to formally endorse new supply increases.

The IEA action is also an example of growing concern over higher oil prices in Washington, where the White House is managing political fallout from high gasoline prices as next year’s presidential elections loom just over the horizon.

Read more >>
http://link.ft.com/r/QM42II/QNFNM8/9MEOW/S3S5TS/C57S8B/SN/t?a1=2011&a2=6&a3=24

[Demeter]

18. Martin Feldstein: Postponing Greece’s inevitable default

A default by the Greek government is inevitable. With a debt to gross domestic product ratio of more than 150 per cent, large annual deficits and interest rates more than 25 per cent, the only question is when the default will occur. The current negotiations are really about postponing the inevitable default.

If Greece were the only insolvent European country, it would be best if its default occurred now. Cutting its debt in half and replacing the existing debt with low interest rate bonds would allow Greece to service its debt without the excruciating pain that would be involved if it tried to service its current debt.

Read more >>
http://link.ft.com/r/5F39HH/U1PJST/B49CK/6V89SH/KEYS1D/RF/t?a1=2011&a2=6&a3=22

[Demeter]

71. What's The Point Of Austerity Again? Joe Weisenthal

http://www.businessinsider.com/whats-the-point-of-austerity-again-2011-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+clusterstock+%28ClusterStock%29&utm_content=Google+Feedfetcher

FROM APRIL 28TH

So now we know: Not only does austerity not help the economy, it doesn't even help governments get out of debt, as Greece's and Spain's latest horrific numbers confirm.

The governments have been cutting spending, and deficits have gotten worse.

So, what's the point of austerity again?

If the point is to improve a country's fiscal situation it's an obvious failure.

Up next: we all pretend to be shocked when UK deficits come in higher than expected.

[AnneD]

93. On this board and thread.....

We WILL have to be pretending.

MONDAY, JUNE 29, 2009

Audience Doesn't Clap, Lets Tinkerbell Die
Audience members decided to take control of an elementary school production of "Peter Pan" in Miami, Florida.  As Tinkerbell, played by 5 year old Rachel, slowly grew closer to her death, Peter Pan quickly sprung to the audience. 

"If you believe in fairies clap your hands!"

The  audience did not budge.  There was an awkward silence among the two performers on the stage.  

"She was really quite annoying" Said one viewer of the performance.

"I was actually happy when she died.  I thought maybe this play would start getting good.  Then she pulls that clapping shit.  We all gasped at the thought of her coming back.  She was dreadful.  I think I speak for everyone in the audience, when I say we just didn't care about the stupid fairy."

http://ostracizedostrichblog.blogspot.com/2009/06/audience-doesnt-clap-lets-tinkerbell.html

[Demeter]

97. OMG!

Perhaps this generation is a total waste of nutrients. The theory is that the songs the youth listen to reveal how narcissistic they are...

[AnneD]

99. What waste....

We have been feed by corperations since the late 60's. I think the chickens are coming home to roost so to speak. It is hard to find an idealistic young person anymore past the age of 9.

Kids are the sad collateral damage from this economy. Try keeping your family together in a homeless shelter. How would I know? The shot records that come across my desk. These kids shot requirements are waived due to inability to keep records all very descretely of course.

[DemReadingDU]

105. How sad

and ominous for the future. More people are getting less health care, so eventually we will be having more people getting sick with contagious diseases thus even more people getting sicker and dying.

[Demeter]

19. Tennessee bank settles SEC bond fund charges

Morgan Keegan agrees to pay $210m to resolve US regulatory charges that it defrauded investors by inflating the value of mortgage securities
Read more >>
http://link.ft.com/r/XYEWFF/97AV6Z/IEP5S/GKMT67/ZBTOO5/JY/t?a1=2011&a2=6&a3=23

[Demeter]

22. BP in $75m Gulf spill settlement with contractor

UK oil and gas group agrees to indemnify US arm of Weatherford International against compensation claims linked to the accident

Read more >>
http://link.ft.com/r/WDI4RR/SPNQDF/1O51V/8AOSHR/HDXYQR/82/t?a1=2011&a2=6&a3=22

[Demeter]

23. US approves $3.4bn Native American settlement

http://english.aljazeera.net/news/americas/2011/06/20116212149693524.html

A US federal judge has approved a $3.4bn settlement over "mismanaged" Native American royalties, in a case that represents the largest settlement ever approved against the US government.

Elouise Cobell of Browning, Montana, claimed in the 15-year-old suit that for more than a century, US officials systematically stole or squandered billions in royalties intended for Native Americans in exchange for oil, gas, grazing and other leases.

Thomas Hogan, the US district judge, approved the settlement on Monday after a daylong hearing, saying the legitimacy of Cobell's claims could not be questioned. "The government mismanaged these resources on a staggering scale," Hogan said. The settlement does not make up for the losses native American tribes suffered for more than a century, Hogan added, but "at least it provides some certainty" to hundreds of thousands of individuals who will now receive payments of least $1,000 each from the government. Many will receive substantially more money....

[Demeter]

24. Iceland Declares Independence from International Banks By Bill Wilson

http://www.informationclearinghouse.info/article28391.htm

Iceland is free. And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers...On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.

At the time of the bank’s failure, Iceland refused to cover the losses. But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union. In response, the Icelandic people have told Europe to go pound sand. The final vote was 103,207 to 69,462, or 58.9 percent to 39.7 percent. “Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group that opposed the bailout.

A similar referendum in 2009 on the issue, although with harsher terms, found 93.2 percent of the Icelandic electorate rejecting a proposal to guarantee the deposits of foreign investors who had funds in the Icelandic bank. The referendum was invoked when President Olafur Ragnur Grimmson vetoed legislation the Althingi, Iceland’s parliament, had passed to pay back the British and Dutch. Under the terms of the agreement, Iceland would have had to pay £2.35 billion to the UK, and €1.32 billion to the Netherlands by 2046 at a 3 percent interest rate. Its rejection for the second time by Iceland is a testament to its people, who feel they should bear no responsibility for the losses of foreigners endured in the financial crisis.

That opposition to bailouts led to Iceland’s decision to allow the bank to fail in 2008. Not that the taxpayers there could have afforded to. As noted by Bloomberg News, at the time the crisis hit in 2008, “the banks had debts equal to 10 times Iceland’s $12 billion GDP.” “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks,” Iceland President Olafur Grimsson told Bloomberg Television...If that fervor catches on amongst taxpayers worldwide, as it has in Iceland and with the tea party movement in America, the banks would have something to fear; that is, the inability to draw from limitless amounts of funding from gullible government officials and central banks. It appears that the root cause is government guarantees, whether explicit or implicit, on risk-taking by the banks...

[plumbob]

85. Excellent! More like this, please!

If everyone will simply make the pirates take their well-deserved haircuts, they'll be gone in five years.

Stealing people by lying to them is not really a business, anyway. Back when, they'd have been strung up on the spot.

[Demeter]

88. I'm Trying, Bob

They aren't calling me Madame LaFarge around here for nothing...

[Demeter]

25. WE'LL PICK IT UP FROM HERE IN THE MORNING

Sweet dreams, y'all!

[hamerfan]

26. And to you, Demeter!

Thank you for all the time and effort you put into the WEE.
Have a great mañana.

[Demeter]

27. The Great Corn Con by Steven Rattner

http://www.nytimes.com/2011/06/25/opinion/25Rattner.html



FEELING the need for an example of government policy run amok? Look no further than the box of cornflakes on your kitchen shelf. In its myriad corn-related interventions, Washington has managed simultaneously to help drive up food prices and add tens of billions of dollars to the deficit, while arguably increasing energy use and harming the environment. Even in a crowd of rising food and commodity costs, corn stands out, its price having doubled in less than a year to a record $7.87 per bushel in early June. Booming global demand has overtaken stagnant supply. But rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex. Corn is hardly some minor agricultural product for breakfast cereal. It’s America’s largest crop, dwarfing wheat and soybeans. A small portion of production goes for human consumption; about 40 percent feeds cows, pigs, turkeys and chickens. Diverting 40 percent to ethanol has disagreeable consequences for food. In just a year, the price of bacon has soared by 24 percent.

To some, the contours of the ethanol story may be familiar. Almost since Iowa — our biggest corn-producing state — grabbed the lead position in the presidential sweepstakes four decades ago, support for the biofuel has been nearly a prerequisite for politicians seeking the presidency. Those hopefuls have seen no need for a foolish consistency. John McCain and John Kerry were against ethanol subsidies, then as candidates were for them. Having lost the presidency, Mr. McCain is now against them again. Al Gore was for ethanol before he was against it. This time, one hopeful is experimenting with counter-programming: as governor of corn-producing Minnesota, Tim Pawlenty pushed for subsidies before he embraced a “straight talk” strategy...Eating up just a tenth of the corn crop as recently as 2004, ethanol was turbocharged by legislation in 2005 and 2007 that set specific requirements for its use in gasoline, mandating steep rises from year to year. Yet another government bureaucracy was born to enforce the quotas.

To ease the pain, Congress threw in a 45-cents-a-gallon subsidy ($6 billion a year); to add another layer of protection, it imposed a tariff on imported ethanol of 54 cents a gallon. That successfully shut off cheap imports, produced more efficiently from sugar cane, principally from Brazil...Here is perhaps the most incredible part: Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent. That’s not all. Ethanol packs less punch than gasoline and uses considerable energy in its production process. All told, each gallon of gasoline that is displaced costs the Treasury $1.78 in subsidies and lost tax revenue...Nor does ethanol live up to its environmental promises. The Congressional Budget Office found that reducing carbon dioxide emissions by using ethanol costs at least $750 per ton of carbon dioxide, wildly more than other methods. What is more, making corn ethanol consumes vast quantities of water and increases smog. Then there’s energy efficiency. Studies reach widely varying conclusions on that issue. While some show a small saving in fossil fuels, others calculate that ethanol consumes more energy than it produces.

Corn growers and other farmers have long exercised outsize influence, thanks in part to the Senate’s structural tilt toward rural states. The ethanol giveaway represents a 21st-century add-on to a dizzying patchwork of programs for farmers. Under one, corn growers receive “direct payments” — $1.75 billion in 2010 — whether they grow corn or not. Washington also subsidizes crop insurance, at a cost of another $1.75 billion last year. That may have made sense when low corn prices made farming a marginal business, but no longer...At long last, the enormity of the nation’s budget deficit has added momentum to the forces of reason. While only a symbolic move, the Senate recently voted 73 to 27 to end ethanol subsidies. That alone helped push corn prices down to $7 per bushel. Incredibly, the White House criticized the action — could key farm states have been on the minds of the president’s advisers? Even farm advocates like former Agriculture Secretary Dan Glickman agree that the situation must be fixed. Reports filtering out of the budget talks currently under way suggest that agriculture subsidies sit prominently on the chopping block. The time is ripe.

Steven Rattner has spent nearly 30 years on Wall Street as an investor and investment banker and is a contributing writer to Op-Ed.

[Demeter]

28. 5 WikiLeaks Revelations Exposing the Growing Corporatism Dominating American Diplomacy Abroad

http://www.informationclearinghouse.info/article28401.htm

One of the most significant scourges paralyzing our democracy is the merger of corporate power with elected and appointed government officials at the highest levels of office. Influence has a steep price-tag in American politics where politicians are bought and paid for with ever increasing campaign contributions from big business, essentially drowning out any and all voices advocating on behalf of the public interest. Millions of dollars in campaign funding flooding Washington's halls of power combined with tens of thousands of high-paid corporate lobbyists and a never-ending revolving door that allows corporate executives to shuffle between the public and private sectors has blurred the line between government agencies and private corporations.

This corporate dominance over government affairs helps to explain why we are plagued by a health-care system that lines the pockets of industry executives to the detriment of the sick; a war industry that causes insurmountable death and destruction to enrich weapons-makers and defense contractors; and a financial sector that violates the working class and poor to dole out billions of dollars in bonuses to Wall Street CEO's. The implications of this rapidly growing corporatism reach far beyond our borders and into the realm of American diplomacy, as in one case where efforts by US diplomats forced the minimum wage for beleaguered Haitian workers to remain below sweatshop levels. In this context of corporate government corruption, one of WikiLeaks' greatest achievements has been to expose the exorbitant amount of influence that multinational corporations have over Washington's diplomacy. Many of the WikiLeaks US embassy cables reveal the naked intervention by our ambassadorial staff in the business of foreign countries on behalf of US corporations... While the merger of corporate and government power isn't exactly breaking news, it is one of the most critical yet under-reported issues of our time. And WikiLeaks has given us an inside look at the inner-workings of this corporate-government collusion, often operating at the highest levels of power. It is crystal clear that it's standard operating procedure for US government officials to moonlight as corporate stooges. Thanks to WikiLeaks, here are five instances that display the lengths to which Washington is willing to go to protect and promote US corporations around the world.(SEE LINK ABOVE FOR THE DETAILS==DEMETER)

1. US officials work as salespeople for Boeing.....
2. US diplomats by day — Monsanto henchmen by night...
3. Pharmaceuticals + US diplomats = best friends forever...
4. Washington 'hearts' abusive mining companies in Peru....
5. Diplomats as corporate spies....

What don't we know about?

Besides getting a good laugh at watching pathetically corrupt diplomats whore themselves out to corporate executives, these cables give us a rare glimpse at American diplomatic subservience to corporate behemoths regardless of the costs to people and the environment. It appears that the collusion between corporate executives and US diplomats is taking place at an ever accelerating rate around the globe, yet more and more, these shady endeavors are shrouded in secrecy. Transparency and accountability have taken such a devastating blow over the past decade, that whistleblowers and media outlets such as WikiLeaks are the only mechanisms left still capable of shedding light on the consequences of the unbridled corporate influence infecting our government.

With tens of thousands of WikiLeaks embassy cables still waiting to be published, there’s sure to be hundreds if not thousands of episodes involving US corporate and government collusion that have yet to be discovered.

[Demeter]

29. The Divergent Paths of Growth and Human Progress By Bill Bonner

...the one thing this market has not fully reckoned with is the Great Correction. All this ‘recovery’ talk has masked the real, underlying trend. That is this: we’re correcting 60 years’ worth of credit expansion. How far? How much? How fast? We don’t know…but households are not spending like they used to. So, it doesn’t make sense that businesses should be worth what they used to be worth…or that people should have the jobs they used to have…or that economic policy should work the way it used to work...But we’ve been making the point, this week, that the Great Correction might be part of something much bigger. Real GDP growth slowed to medieval levels in Japan after 1989 and in the US 10 years later. Japan has not added a single new job in 20 years; America has not added a single new full time job in over 10.

Why? (BECAUSE SUSTAINED GROWTH IS NOT POSSIBLE WHEN THE LOOTERS WALK OFF WITH EVERYTHING, BILL. PEOPLE CANNOT THRIVE WHEN THE FRUIT OF THEIR LABOR IS STOLEN FROM THEM, BY WHATEVER MEANS: WAR, FRAUD, BRIBERY, OR CORPORATE CRONYISM)

...In the last century, the political authorities in Russian and China caused real GDP to go backward for 70 and 30 years respectively. Couldn’t central financial planning achieve the same perverse effects in the US and Japan today? Maybe. Or, maybe it is something more profound. Yesterday, we looked at what an economic flop the Internet Age turned out to be. Since the introduction of the worldwide web growth rates have gone down, not up. While the web has certainly made a lot of things more efficient, and made a lot of people rich, it has not led to growth.

(THIS ENDS BONNER'S ECONOMIC SPECULATIONS--WITH WHICH I HAVE NO ARGUMENT.

BUT AFTER THIS COMES THE BIGGEST MISTAKE I'VE EVER SEEN ANYONE MAKE IN PRINT...DEMETER)

The Internet may be a great thing, but it is not like the discovery of fire. When ancient man discovered fire it gave him an opportunity for above-trend growth. All of a sudden, he was able to use calories that did not come from his own digestive system. He moved into colder areas. His numbers increased (we imagine.) Every major advance for mankind has been made possible by using more energy. First, he used the energy from wild plants and animals – eating them; converting them to useful calories. Then, he found that he could grow the plants that he wanted…and domesticate the animals that were most useful. This further increased the number of calories available to him. Human populations grew again...Then, in the 18th and 19th centuries, he got his biggest break ever. He discovered that he could use coal and oil – thereby drawing on energy that had been condensed and stocked up by the earth itself. This gave him a huge advantage over other animals. It allowed his numbers to soar. It increased GDP growth rates from almost negligible to over 5%. Finally, he went forth and multiplied so much that it looked like even these new advances could not keep up with him...But there are limits to everything. After two centuries it may be that the easy, accessible and cheap sources of fossil fuel – at least of oil – have been exploited. It may be too that the human population has expanded to the point where further increases will be costly and difficult. It could be that the advanced economies – those that got onto oil first – have already squeezed most of the growth juice out of it. That is, perhaps they have reached the point where further growth will be slow, incremental, and expensive…just as it was through most of human history?

As we noted yesterday, all the great technological advances happened at least a half a century ago. They all involved new and better ways to use fossil fuel. Since then, the only big advance has been the Internet…and it looks like a dud from a growth point of view. If this is so…perhaps we are not doomed to a “lost decade,” as the papers warn. Perhaps the whole century will be lost. We have lost one decade already.

Read more: The Divergent Paths of Growth and Human Progress http://dailyreckoning.com/the-divergent-paths-of-growth-and-human-progress/#ixzz1QH5bA8Wx

WHAT BONNER REFUSES TO SEE IS THAT THE INTERNET IS THE ENGINE OF DEMOCRACY, THAT IT IS THE COUNTERFORCE TO THE ABOVE-MENTIONED WAR, FRAUD, BRIBERY, AND CORPORATE CRONYISM.

WHEN PEOPLE CAN COMMUNICATE AROUND THE WORLD, SHARING INFORMATION AND IDEAS WITH THE ENTIRE WORLD, THEN NOT ONLY INFORMATION, BUT THE RULE OF LAW, PUBLIC EDUCATION, AND THE REVOLUTIONS THAT GUTENBERG, MARX, AND ANY NUMBER OF SCIENTISTS AND TECHNOLOGISTS SPAWNED GO GLOBAL. THE MULTINATIONAL CORPORATIONS LOSE THEIR CAPTIVES, THE PETTY GOVERNMENTS LOSE THEIR SHEEP, AND THE WASTE AND FRAUD THAT BOTH PRODUCE IN THE PURSUIT OF LOOTING COME TO AN END.

THE INTERNET IS IN ITS INFANCY AS A GLOBAL FORCE, BUT ALREADY THE SELF-STYLED ELITE, THE "ELITISTS", ARE WORRIED. AS WELL THEY SHOULD BE. THEY ARE LOSING THEIR ONLY COMPETITIVE EDGE: PROPRIETARY SECRECY. THEY CAN'T KEEP THE CON RUNNING FOR VERY MUCH LONGER.

[Demeter]

30. Bubble to Bubble, Dust to Dust By Bill Bonner

IN WHICH BILL BONNER AGAIN PROVES THAT HE CANNOT SEE THE FOREST FOR THE TREES, BUT WHICH PROVES ENLIGHTENING ANYWAY...

So far, this century has been a delight. From tech bubble to tech bubble in scarcely 10 years...The trouble with edgy technology is that something edgier comes along soon after. So capitalizing a tech company at more than a few times earnings is usually a mistake. But the conceits of the worldwide web go far beyond p/e ratios. Ten years ago, people had such high hopes they could barely talk about it without running out of oxygen. George Gilder, in his book Telecosm announced a new economy “based on a new sphere of cornucopian radiance – reality unmassed and unmasked, leaving only the Promethean light.” Gilder thought he could see the Promethean light shining through the undersea cables laid by a company called Global Crossing. He urged investors to buy. The stock had traded over $60 during the tech bubble of the late ’90s. By the middle of 2002, you could buy it for 6 cents...Another Internet visionary, Michael Saylor, chairman of MicroStrategy, said he was on a mission to purge “ignorance from the planet.” He said his company was leading a “crusade for intelligence.” In a contest between intelligence and ignorance, we know how to bet. On March 20, 2000, Saylor admitted that he had cooked his company’s books. Investors lost $11 billion. Saylor, personally, lost $6.1 billion – more than anyone had ever lost in a single day’s trading.

Behind the huge losses were cosmic delusions. Digitized knowledge was supposed to make us all smarter and richer. Computing power doubled every 18 months; true believers thought the rate of innovation and GDP growth should speed up too. But did it? Just the opposite. For starters, the Promethean light was harmful to jobs. Larry Summers explained, in The Financial Times, what the Internet did to the book trade. First, Amazon undermined bookstores. And then, e-books undermined the kind made of trees. Between writing a word and reading it there were fewer middlemen. Thousands of jobs disappeared. (AS WE KNOW HERE, LARRY SUMMERS IS ANOTHER WHO CANNOT SEE THE FOREST FOR THE TREES. IN FACT, I DON'T THINK HE CAN EVEN SEE ONE TREE IN ITS ENTIRETY--HE'S LIKE ONE OF THE BLIND MEN AROUND THAT ELEPHANT...) In other industries too productivity rose, but fewer employees were needed. In 2000, America had 113,899,000 full time jobs. Ten years later it had 112,618, 000. Real GDP growth declined too. The US government accumulated $8 trillion in deficits, but GDP only rose $4 trillion. Adjust for inflation properly and America’s real GDP per capita went backwards for the entire decade – the first time ever recorded. In real terms, house prices and stock prices too, both declined.

What went wrong? Why didn’t computer-equipped Wall Street allocate capital to businesses that could grow wealth and create jobs? Why didn’t entrepreneurs and scientists use the worldwide web to invent new technology and new sources of prosperity? Why didn’t investors use the knowledge at their fingertips to avoid dead-end investment in mortgage backed derivatives and housing? Digital progress is not the same as real progress. And digital knowledge is a far cry from actually knowing anything useful. Besides, it’s not knowledge that makes the world go around, anyway. It’s ignorance. How many people would have bought Global Crossing if they had known what would happen? How many innovations would be aborted if people knew how they would work out? How many marriages would be cancelled; how many movie tickets would go unsold? If you could look into the future and know your whole life in every intimate detail…how many people would blow their brains out rather than sit through a re-run? People hustle and take chances only because they don’t know how it will turn out.

As for making people smarter, a report in last week’s press tells us that the typical teenager spends 13 hours a day on some form of electronic device. Another report tells us that his IQ will go down if he watches dumb programming. Today, there are 600 million people on Facebook and 175 million on Twitter. Knowledge is there aplenty. You can go there, if you like, and find out what a congressman’s crotch looks like...Facebook and Twitter have not yet gone public. But secondary market trading suggests that Facebook would fetch a price of more than $75 billion and Twitter as much as $8 billion. As for their real value to the human race, they’re probably not worth a damn.

Read more: Bubble to Bubble, Dust to Dust http://dailyreckoning.com/bubble-to-bubble-dust-to-dust/#ixzz1QHB07jvY

BILL, THERE'S A GREAT DIFFERENCE BETWEEN SKIMMING OFF SPECULATIVE FROTH AND BUILDING A NEW WORLD. YOU JUST WANT TO BE THE RENTIER, TO STEAL THE PROFITS PRODUCED BY THE SWEAT FROM SOME OTHER POOR SLOB'S BROW. THAT'S NOT HOW THE ECONOMY IS GOING TO WORK FROM HERE ON OUT. THE GAME IS CHANGING, AND WE ARE ONLY AT MOST 1/4 OF THE WAY TO THE FUTURE ECONOMY, WHICH WILL BE ORGANIZED ON AN ENTIRELY DIFFERENT PARADIGM. ALL THE EFFORTS AT BREAKING LABOR'S BACK HAVE ALSO BROKEN THE PROFITS THAT COULD BE SKIMMED OFF LABOR'S EFFORTS. THE REST OF THE WORLD'S LABOR IS BENEFITING FROM OUR HISTORICAL RECORDS, AND THEY AREN'T GOING TO BE HALF AS SLOW TO COUNTERACT, SINCE THE PATH AND THE DEAD-ENDS HAVE BEEN SO CLEARLY RECORDED FOR ALL MANKIND, AND THE INFORMATION IS SPREAD BY THE INTERNET...

TAKE THE BOOK INDUSTRY. IT USED TO RESEMBLE THE NASCENT CAR INDUSTRY, BEFORE HENRY FORD: DESIGNER LUXURY ITEMS FOR THE COLLECTOR/FANCIER.

CONSIDER THE PROGRESS OF THE AUTOMOBILE: TOYS FOR THE OBSCENELY WEALTHY, THEN THE WELL-OFF, THE WORKHORSE FOR INDUSTRY, THEN THE FAMILY TRANSPORT...NOW A RIDICULOUS MEANS OF PROCLAIMING STATUS...AND IN THE FUTURE...TRANSPORT IS GOING TO CHANGE DRASTICALLY AGAIN, AS THE NEED TO MOVE AROUND CHANGES AND THE AVAILABLE FUELS CHANGE.

FROM THE HAND-COPIED, ARTISTIC GEMS OF THE MONASTERY, BOOKS HAVE CHANGED. THE INFORMATION INDUSTRY IS A POWERHOUSE, PUSHING UNLIMITED INFORMATION OUT DAILY TO THE WORLD, IN AN EASILY ACCESSIBLE, EASILY STORED, EASILY UPDATED FORMAT THAT DOESN'T REQUIRE PHYSICAL LIBRARIES NOR THE CHOPPING OF TREES. KNOWLEDGE IS FINALLY PORTABLE, CHEAP, UNIVERSAL--OR AT LEAST, WELL ON THE WAY.

AND THE POWER OF THE PHYSICAL PRESS IS BROKEN, WHEN ANYONE CAN OWN A PRESS OR RENT ACCESS TO ONE FOR PENNIES. ASK YOUR LOCAL DAILY NEWSPAPER, IF YOUR CITY STILL HAS ONE.

AND ANOTHER THING, BILL. GREATER GENERATIONS THAN YOURS HAVE WRITTEN OFF THEIR YOUTH, PLACED INTOLERABLE BURDENS UPON THEM, TOO, TO KEEP THE WHIPPERSNAPPERS IN THEIR PLACE. AND SOME OF THOSE CODGERS LIVED LONG ENOUGH TO EAT THEIR WORDS AND REPENT OF THEIR MISERLY WAYS, IF THEY WEREN'T TOO INTO SELF-DESTRUCTION AND RIGIDITY.

FINALLY, THERE IS MORE TO LIFE, HUMANITY, AND THE ECONOMY THAT P/E RATIOS.

WE TRULY ARE IN THE MIDST OF AN INFORMATION REVOLUTION. IT'S NOT JUST THE ACTUAL INFORMATION WHICH IS CHANGING FOR THE BETTER, BUT ALSO THE WAY IT GETS AROUND.

[Demeter]

31. Don't get me wrong, Daily Reckoning does have useful info, too

http://dailyreckoning.com/how-to-benefit-from-depressed-housing-and-a-declining-dollar/

It's just the skewed interpretations that are risible...

[Demeter]

40. MORE DATA When Bank Profits Hurt Home Sales By Eric Fry

http://dailyreckoning.com/when-bank-profits-hurt-home-sales/



The National Association of Realtors (NAR) provides a more comprehensive explanation for the housing market's persistent weakness - an explanation tinged with vitriol. In the NAR's 18-page, lavishly illustrated "Realtors Confidence Index" report for May 2011, the Association's Chief Economist, Lawrence Yun, blames both the soft economy and the "perverse new banking mindset" for the housing market's difficulties. "The spring economy was basically OK," Yun's analysis begins placidly. "It was expanding, but at a low rate of growth...Jobs were being created, but perhaps not in the industries that generate the big bucks."

But after a brief nod to the soft economy, Yun pillories the banking industry for its refusal to lend. "Adding to the challenge is the fact that banks are not lending," he says flatly. "Banks are still hoarding cash and contracting lending activity... adding profits to their bottom lines, due partly from their ability to access money on the cheap, thanks to government backing of deposits, and by buying tradeable assets such as realtors in government bonds. The inevitable too-big-too-fail taxpayer bailout if something were to go wrong is also quite reassuring for the large banks.

"In the 'good old days,'" Yun continues, "there used to be a rule: the 3-6-3 banking rule. The bank would offer 3% interest to depositors, charge 6% on loans, and then be on the golf course by 3:00 p.m. That rubric has now been replaced with a new one: give nothing to depositors, give nothing to those who want to borrow, buy tradeable assets, get an easy 3% yield from government bonds, and pretend to work long hours to justify a high salary and bonus. Partly because of this perverse new banking mindset...pending home sales in April took a tumble, falling 11% from the previous month."

The substance of Yun's scathing rebuke of the banking industry is not nearly as surprising as its source. Historically, the NAR and the banking industry relied on a close symbiosis to nourish themselves. Whatever was good for one of them was automatically good for the other. Easy credit nourished the housing bubble, just as the housing bubble fattened bank profits and provided the wherewithal to continue extending easy credit. Yun's analysis therefore, is not so much the clinical commentary of a dispassionate economist as it is the bitter musings of a rejected symbiont...

[Demeter]

44. Who’s Really More Productive? Ranking the Top-20 US vs European States By Rocky Vega

University of Michigan economics professor Mark Perry argues quite a different story...Based on recent data from the Commerce Department’s Bureau of Economic Analysis (BEA), Perry has compared the per capita output of the 50 US states to European countries and found that as a group Europe — in terms of GDP adjusted for purchasing power parity (PPP) — has a $32,700 PPP GDP per capita, and could likely benefit from learning a little something from even humble Mississippi, the poorest US state, at $32,764. Perry also highlights how even mighty Germany falls at #47 according to his measures.

Here are the top 20 from Prof. Mark Perry’s Carpe Diem blog comparison:

Rank | State | 2010 GDP per Capita (PPP)
* District of Columbia, $168,327
* Luxembourg, $81,383
1 Alaska, $70,814
2 Delaware, $69,880
3 Wyoming, $68,162
4 Connecticut, $66,022
5 New York, $59,596
6 Massachusetts, $58,339
7 New Jersey, $55,715
8 Virginia, $53,113
9 Colorado, $52,205
* Norway, $52,013
10 California, $51,905
11 North Dakota, $51,882
12 Minnesota, $51,238
13 Maryland, $51,224
14 Washington, $50,912
15 Illinois, $50,581
16 South Dakota, $49,741
17 Texas, $49,119
18 Nebraska, $48,708
19 Hawaii, $48,697
20 Oregon, $48,590

Only two European countries — Luxembourg and Norway (the latter of which is neither part of the EU, nor does it use the euro) — even make the top 20. In fact, the list would need to extend all the way down to #31, Georgia, and #32, Utah, to find the next European nation, Switzerland, wedged in between. This is despite being the famed private banking center and, again, the non-EU, non-euro using nation that it is.

Of course, GDP adjusted by PPP does not take into consideration certain quality of life issues such as living standards, vacation time, healthcare, and a host of other factors… however, it’s interesting to note that at least by some measures, the US continues to come out ahead. You can check out the complete top-50 list in a Carpe Diem blog post on how Europe could get an economic lesson from Mississippi.

Read more: Who's Really More Productive? Ranking the Top-20 US vs European States http://dailyreckoning.com/whos-really-more-productive-ranking-the-top-20-us-vs-european-states/#ixzz1QHXnr5gP

IN OTHER WORDS, THERE'S A GREAT DIFFERENCE IN HOW MUCH IS SCOOPED OFF THE WORKERS' QUALITY OF LIFE TO BOOST PROFITS BETWEEN THE US AND EUROPE...THE DEVIL IS ALWAYS IN THE DETAILS.

[Demeter]

63. Gross National Happiness, Anyone?

[Demeter]

47. Home sales at six-month low, showing weakness even in 'peak' season

http://www.csmonitor.com/Business/2011/0621/Home-sales-at-six-month-low-showing-weakness-even-in-peak-season

MORE HOUSING DATA FROM ANOTHER SOURCE...

[Demeter]

72. Wealthy Leaving Las Vegas Mansions as Foreclosures Spreading FROM APRIL

http://www.bloomberg.com/news/2011-04-26/wealthy-leaving-las-vegas-mansions-as-pain-of-foreclosure-crisis-spreads.html

Nicolas Cage, the Oscar-winning star of “Leaving Las Vegas,” bought a seven-bedroom home with a panoramic view of the city’s casino-lined Strip in 2006 for $8.5 million. By January 2010, it was in foreclosure...The next owner, who property records show paid $4.2 million, has put the house on the market for $7.9 million -- an “unrealistic” price, according to Zar Zanganeh, the broker handling the listing. “It’s sad,” Zanganeh said, his high-heeled boots clacking on the marble floor as he gave a tour of the 14,000-square-foot (1,300-square-meter) mansion featuring a six-person steam shower and a closet the size of a small apartment. “There’s a lot of inventory, a lot of homes like this waiting for an owner.”

A growing number of high-end homes are selling at a loss or facing repossession by lenders in Las Vegas, which already has the highest rate of foreclosure filings among large U.S. cities. The wave of defaults that began with subprime borrowers and the unemployed has spread to upscale homeowners who see no point of staying even if they can afford to.

In the 15 months through March, at least 25 houses in the Las Vegas area changed hands for more than $3 million, with at least seven doing so through foreclosure or by selling at a loss, according to the Greater Las Vegas Association of Realtors and Clark County property records. In 2009, 14 homes sold for more than that amount, with one trading at a loss.In the first quarter, 30 Clark County homes with loans exceeding $1 million were repossessed by banks or bought by third-parties in foreclosure sales, up from 20 homes a year earlier, according to ForeclosureRadar.com, a Discovery Bay, California-based company that tracks defaults. Short sales, in which the bank agrees to accept less than the loan balance, and bank-owned properties accounted for about three-quarters of all home sales, according to the Las Vegas Realtors. “You feel like a sucker if you’re paying a $5 million mortgage on a house that’s worth $2 million,” Zanganeh, 28, said while showing the grounds of an 11-acre Las Vegas estate built by Prince Jefri Bolkiah, brother of the Sultan of Brunei. “These days, there are no traditional sales. They’re all short sales or bank-owned.” The estate -- with 18 bedrooms, 36 bathrooms, a 20,000- bottle wine cellar, an 11-car garage and air-conditioned stables for 10 horses -- sold for $14 million in 2004 to Eric Petersen, who owned Consumer Credit Services Inc., a Las Vegas-based catalog-merchandising company that closed in 2008. Petersen, 44, said he spent $20 million to make the estate habitable. It’s back on the block for $25 million -- $9 million less than his investment -- with an offer “for considerably less on the table,” Petersen said in a telephone interview from Las Vegas. He has slashed the listing price four times since October from an initial $37.5 million. “I gave up on Vegas,” Petersen said. “There’s no opportunity for anything in this town that I can see.”

...In Nevada, 23 percent of delinquent borrowers said they “strategically defaulted,” or walked away from their homes by choice rather than necessity, according to a January report by the Nevada Association of Realtors...The population of Clark County, home of Las Vegas, has fallen by about 16,000 from its estimated high of 1.97 million in 2008, according to the government-funded Nevada State Demographer. Almost 15 percent of homes in the county -- 125,000 residences -- were vacant, according to the 2010 Census, following a construction boom in the last decade that peaked with 39,000 housing permits issued in 2005...Las Vegas home values plunged 58 percent from the 2006 high-water mark through February, the biggest drop of the 20 metropolitan areas tracked by the S&P/Case-Shiller index, and are the lowest since June 1999, the group said today in New York. Prices fell 7.4 percent in March from a year earlier to a median $125,950, the Las Vegas Realtors reported April 8. Almost 70 percent of Las Vegas-area homeowners with mortgages were underwater at the end of 2010, meaning they owed more than the value of the property, according to CoreLogic Inc. (CLGX), a Santa Ana, California-based real estate information company. Among cities with a population of more than 200,000, Las Vegas has led the nation in the pace of foreclosure actions since November 2009, with one of every 31 homes receiving a filing in the first quarter of this year, RealtyTrac Inc., an information provider in Irvine, California, reported April 14....“Prices are below the cost of materials and labor,” said Lang, also a senior fellow at the Brookings Institution in Washington. “If you’re betting the U.S. economy won’t go back to Armageddon, you might see one-third appreciation if you buy now.”

[Demeter]

73. McDaniel Details Effect of Foreclosure Info Bill

http://www.myfoxmemphis.com/dpp/news/arkansas/mcdaniel-details-effect-of-foreclosure-info-bill-apx-20110412?sms_ss=twitter&at_xt=4db75105b20e4603,0

LITTLE ROCK, Ark. - Attorney General Dustin McDaniel said Tuesday a new law that helps better inform Arkansas homeowners before having their houses undergo foreclosure "will help people during a difficult time." The bill, sponsored by Rep. Tiffany Rogers, D-Stuttgart, was signed into law by Gov. Mike Beebe March 31. Act 885 requires mortgage companies to give homeowners more information if the company is pursuing foreclosure.

"Every year, the Consumer Protection Division in my office deals with numerous calls, often several a day, from people who find out their homes are being foreclosed on," McDaniel said. "They have little time to react and many times don't know where to get the information they must have before they can act." The measure requires mortgage holders to inform homeowners about the foreclosure procedures and will let homeowners attempt to make good on delinquent payments or otherwise develop a plan to continue making payments. Rogers said mortgage services will be required to provide homeowners with copies of the note, mortgage and any assignments, along with the physical location of the note and payment history, to any homeowner before initiating a foreclosure on their home.

McDaniel said during a news conference that the act does not provide financial assistance or foreclosure relief, but instead provides much needed information that is not typically given to Arkansan homeowners currently. He said homeowners often receive foreclosure notices in the mail days before the house is put up for sale and that many don't even know where their loan is located. "It's easy to understand the frustration of a consumer who is not able to access the information the he or she needs to take action that could keep families in their homes," he said. "It is important to know the information is available to you, and I think it should be your right to have prior to having your home sold out from under you."

Rogers said mortgage service also must provide information about available assistance programs and encourage loss mitigation and loan modifications before initiating foreclosure. The new legislation also extends the minimum number of days a homeowner must be notified before their house is sold from five to 10 days. "These changes will help people during a difficult time, now and in the future," she said. "A person's home is really most likely the most valuable asset that they will ever have and probably the largest purchase they will ever make in their entire lifetime."

DOESN'T THAT MAKE YOU FEEL ALL WARM AND FUZZY? REALLY CARED FOR?

[AnneD]

94. Bankers and homeowners....

Still haven't got the news that it is a buyers market.

I keep looking at the home prices and they are way out of line with our income and most of the working class. This is why the only houses that are really selling like hot cakes are for cash and foreclosures. And that is here in Houston where things are suppose to good.

[Demeter]

32. CBO Sees U.S. Federal Debt This Year Climbing to 70% of GDP

http://www.bloomberg.com/news/2011-06-22/cbo-sees-u-s-federal-debt-this-year-climbing-to-70-of-gdp.html

Publicly held federal debt will reach roughly 70 percent of the nation’s gross domestic product by the end of this year, the highest since just after World War II, according to the Congressional Budget Office.

It’s likely to go past 100 percent by 2021 if lawmakers don’t change current policy, the agency said in a report updating its long-term budget outlook. The debt will approach 190 percent by 2035, dwarfing the 109 percent set during World War II, the report said.

[Demeter]

33. U.S. money funds seen cutting European exposure

http://www.reuters.com/article/2011/06/22/markets-money-idUSN1E75L1UV20110622

Some U.S. money market mutual funds are being forced to cut their exposure to euro zone banks due to growing public anxiety about a possible Greek debt default. Worries over the issue prompted Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair to emphasize the need for more regulation of the funds.

As the Greek debt crisis intensified in recent days, money funds have been identified as a channel through which the euro zone crisis could spread to U.S. markets if Greece or another struggling euro zone sovereign were to default. "They do have very substantial exposure to European banks and the so-called core countries -- Germany, France, etc.," Bernanke said at a press conference following the Fed's latest policy meeting on Wednesday. "So to the extent that there is indirect impact on the core European banks that does pose some concern to money market mutual funds and is a reason why the Federal Reserve and other regulators are continuing to look at ways to strengthen money market mutual funds."

There are already signs of money funds reducing exposure to euro zone countries, said Alex Roever, head of short-term rates strategy at JPMorgan Securities in New York. "There's probably some paper that's maturing, that's being allowed to mature without being redeployed, and some paper that's maturing that's getting redeployed at shorter maturities than they otherwise would have," he said. "By shortening the tenors of the investors, it puts the money funds in a position where if something does happen their exposure isn't very long." Roever said the length of loans to European banks was dropping from three months down to one month or to overnight loans. "The investors know these credits and they've known them well for a long time," Roever added. "When I look at where the money is today, it's concentrated in very highly rated, well-capitalized institutions."

JPMorgan's estimates show money funds exposure to European banks dropped from around $490 billion at the end of the first quarter of 2010 to roughly $360 billion at the end of May 2011. "That's already a lot of risk that has been taken off the table from those European banks. What they're left with in terms of those exposures are institutions I think they feel pretty comfortable with from a credit perspective," Roever said.

MORE HAND=WRINGING AT LINK...BEN BETTER KEEP HIS PAWS OFF THE MONEY MARKETS. THIS ISN'T THE FIRST TIME THE FEDS HAVE BEEN SNUFFLING AROUND THEM.

[Demeter]

34. CHINA'S Central bank to suspend bill sales on Thursday

http://news.xinhuanet.com/english2010/china/2011-06/22/c_13944527.htm

The People's Bank of China, the country's central bank, said on Wednesday that it will suspend bill sales scheduled on Thursday, according to a statement on its website...However, the brief statement did not elaborate on the reason for the action...Analysts said the move is being made in response to tightened market liquidity conditions, which increases the possibility that the central bank will soon raise its interest rates again.

The central bank previously suspended bill sales on January 24 of this year. It raised its interest rates two weeks after the suspension.

The central bank has raised its interest rates twice and hiked its reserve requirement ratio for banks six times this year to mop up excessive liquidity, which has helped to fuel the country's skyrocketing inflation rate.

The inflation rate remains stubbornly high, defying the government's efforts to stem price rises. It was widely expected that June's inflation rate will continue accelerating after reaching a 34-month high of 5.5 percent in May.

SO, NOBODY WILL LEND CHINA MONEY? POWERHOUSE CHINA? WHAT GIVES?

[Demeter]

41. China to Allow Foreign Mutual Funds

http://www.zacks.com/stock/news/55685/China+to+Allow+Foreign+Mutual+Funds

Foreign banks can distribute mutual funds in China from October 1, 2011, following a new rule from the China Securities Regulatory Commission. The move is expected to open up opportunities for companies such as Citigroup Inc. (C - Analyst Report) and HSBC Holdings Plc. (HBC - Analyst Report) in the Chinese market, according to a Reuters report.

For long, China has administered conservatism with respect to its financial markets. However, in recent years, the financial industry is getting liberated. This new rule granting the foreign banks permission to sell mutual funds in their territory comes following the third round of the U.S.-China Strategic and Economic Dialogue. As per the new rule, companies need to have a minimum registered capital of CNY20 million, instead of CNY5 million required earlier and a minimum of 10 fund professionals would be permitted to sell mutual funds.

Locally incorporated foreign commercial banks can also apply for licenses. However, certain criteria are required to be fulfilled. These include meeting the requirements the State Council and the banking regulator's conditions on reserve requirement ratio as well as no administrative or criminal penalties in the past three years. In addition, a dedicated sales team for the mutual fund sales department must also be maintained.

In an effort to make the most of the thriving economy in China and a booming capital market, U.S. and U.K. banks are already making efforts to set up JVs in that country. Going forward, we believe that such liberalization of the China financial industry would open up opportunities for the foreign banks in its territory. It would also boost competition in that local market. For the foreign banks, such a rule is inspiring as they can increase their market share in China and boost their revenue base by leveraging on faster-growing economies.

[Demeter]

35. Commodities Tumble After Federal Reserve Cuts Growth, Employment Forecasts

http://www.bloomberg.com/news/2011-06-23/commodities-tumble-after-federal-reserve-cuts-growth-employment-forecasts.html

Commodities dropped after the Federal Reserve reduced its growth and employment forecasts for the world’s biggest economy, worsening the outlook for demand.

Crude oil lost 2.7 percent to $92.88 a barrel at 12:29 p.m. in London, zinc fell 1 percent to $2,228.50 a metric ton and corn dropped 1.9 percent to $6.3775 a bushel. Gold for immediate delivery fell 0.7 percent to $1,537.90 an ounce and the Standard & Poor’s GSCI gauge of 24 commodities slid 1.9 percent.

The Fed reiterated a pledge to keep interest rates near zero and said it will complete a $600 billion bond-purchase program as scheduled this month, even as Chairman Ben S. Bernanke said the recovery is progressing “more slowly” than expected. The economy will expand between 2.7 percent to 2.9 percent this year, down from forecasts ranging from 3.1 percent to 3.3 percent in April, it said.

The central bank “acknowledged that the slowdown may not be temporary but offered no hint of further monetary support,” commodity analysts at Australia & New Zealand Banking Group Ltd. led by Mark Pervan said in a report. “The cautious tone in the Fed’s statement dashed expectations of some looking for a hint of more asset purchases.”

NOW THAT WOULD CUT SPECULATORS OFF AT THE KNEES...NOT THE STUPID TAPPING THE OIL RESERVES.

[Demeter]

37. Bernanke brushes off Greek risk to banks

http://finance.fortune.cnn.com/2011/06/22/bernanke-brushes-off-greek-risk-to-banks/

WHY DOES THAT MAN STILL HAVE A JOB?

...he contends that it would not hit the U.S. banks very hard. There has been some doubt in the market on this point. In part because there are doubts about how exposed U.S. banks are via credit default swaps -- the disclosure on that point is lacking, let's say -- and in part it's because regulators missed the boat so badly when the market turned in 2007.

But Bernanke said the Fed had asked banks to do stress tests on the question, including their exposure via derivatives such as CDS, and concluded that the effect on bank capital wouldn't be substantial...

ANYBODY BELIEVE WRONG-WAY BERNANKE?

...Bernanke added that the Fed has been looking at the exposure of U.S. money funds, which hold a large percentage of their assets in loans of various stripes to European banks. Bernanke admitted that the indirect exposure to a Greek crisis is thus "very substantial" but sounded hopeful that the worst won't come to pass.

So everyone's retirement account may well get crushed again in a Greek default, but it won't be because the banking system here is on the verge of collapse. Thank goodness for small blessings.

THE AUTHOR OF THIS REPORT SURE DOESN'T

[Demeter]

38. Bernanke to Congress: Don't cut too much, too fast

The Federal Reserve’s outlook on the U.S. economy is gloomier than it was two months ago, the central bank’s chairman said Wednesday afternoon, reiterating plans to keep interest rates near zero and urging Congress not to cut federal spending by too much too fast.

At his second-ever press conference, Bernanke repeated the findings of the Federal Open Market Committee, which said in a statement earlier in the day that while “the economic recovery is continuing at a moderate pace,” it is happening “somewhat more slowly” than had been expected.

Bernanke also urged congressional negotiators to hold off on making deep spending cuts in the short term. The effect of federal spending cuts “depends on the timing,” Bernanke said. “I have advocated that the negotiations about the budget focus on the longer term, say 10 years, which is the budget window, or even longer” if considering entitlement reform.

“In light of the weakness of the recovery, it would be best not to have sudden and sharp fiscal consolidation in the near term,” he said. “I don’t think that sharp, immediate cuts in the deficit would create more jobs.”

Read more: http://www.politico.com/news/stories/0611/57546.html#ixzz1QHSnnOAU


MORE ENTRAIL READINGS FOLLOW

[Demeter]

39. Federal Reserve, acknowledging slowdown, reins in forecasts for economic growth

http://www.washingtonpost.com/business/economy/fed-says-economy-is-slowing-will-let-bond-program-expire/2011/06/22/AGPzYzfH_story.html

...Bernanke, whom markets turn to as a purveyor of economic wisdom, said the Fed had no solid answers as to why, two years into an economic recovery, growth keeps disappointing. “We don’t have a precise read on why this slower pace of growth is persisting,” Bernanke said in a news conference Wednesday afternoon. He suggested that problems in the financial sector and the housing market, and with consumers trying to pay down their debt, had been underestimated. “Some of these head winds may be stronger or more persistent than we thought.”

Even as the central bank’s leaders lowered their expectations for the days immediately ahead, a different set of government economists offered a dire long-term forecast for the federal government’s fiscal health. The nonpartisan Congressional Budget Office estimated that the rising cost of Medicare, Medicaid and Social Security would, if left unchecked, lead to a national debt twice as big as the economy.

The CBO report highlighted the quandary confronting the United States: a weak economy in the near term and huge deficits in the longer run. Bernanke on Wednesday cautioned against conflating the two problems.

“Our budgetary problems are very long-run in nature,” said the Fed chairman, noting that the CBO projections go to 2025 and beyond. “That doesn’t mean we should wait to act. The sooner we can act, the better. But the most efficient and effective way to address our fiscal problems . . . is to take a long-run perspective, not to focus the cuts heavily on the near term.”

[Demeter]

36. Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks

http://www.bloomberg.com/news/2011-06-22/trichet-says-risk-signals-red-as-debt-crisis-threatens-banks.html

European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

Trichet, who chairs the ESRB, made the remarks as European leaders meet in Brussels to discuss how to stave off a Greek default, while preparing a second bailout. The EU is trying to avoid a repeat of the financial crisis that followed the 2008 collapse of Lehman Brothers Holdings Inc. (LEHMQ) and resulted in European governments setting aside more than $5 trillion to support banks.

The yield difference, or spread, between 10-year German bunds and Greek securities of a similar maturity was at 1,388 basis points today, up from 1,317 at the beginning of the month. Swaps on Greece rose 25 basis points to 2,012, signalling an 82 percent chance of default within five years, according to CMA.

THE SOONER, THE BETTER, DEFAULTS ALL AROUND.

[Demeter]

42. SEC delays hedge-fund registration rule

http://www.marketwatch.com/story/sec-oks-new-oversight-for-hedge-funds-2011-06-22?link=MW_latest_news

The nation’s securities regulator on Wednesday delayed a long-awaited rule bringing U.S. hedge funds under its purview, as the agency struggles to implement a mountain of new rules after the banking crisis.

The Securities and Exchange Commission pushed back until the first quarter of 2012 a plan to have the new funds register by July 21.

SEC members adopted a proposal they introduced in November that requires hedge-fund and private-equity managers with more than $150 million in assets, or with 15 or more clients in the United States, to register with the agency. Roughly 750 big funds will now be subject to the new regulations, a rule that the Dodd-Frank bank reform legislation allowed the agency to write.

The SEC also will conduct surprise examinations of these managers, who will be required to file reports about their funds and on any conflicts of interest starting in 2012...

READ MORE ABOUT GOP MEDDLING IN REGULATORY FUNCTIONS AT LINK

[xchrom]

43. The Best Investment You Can Make

http://blogs.hbr.org/haque/2011/06/the_best_investment_you_can_ma.html

It's the burning question many of you have been hurling at me recently: "So instead of idly waiting around for the so-called mysteriously reluctant non-recovering recovery, what should we do to survive this never-ending raging crisis?"

Here's a tiny suggestion. The "best" investment you can make isn't gold. It's the people you love, the dreams you have, and living a life that matters.

Now, some among you will probably roll your eyes and snicker: "Hey, bro, want fries with that hopelessly naive idealism?"

But you're probably willing to entertain the idea that maybe the great systems of human organization, whether political, social, or economic, aren't creating a meaningful prosperity as well as they could. And cynicism's the surest path to mediocrity.

[Demeter]

46. SCAVENGER NATION: 'Scrap Yards Are the New Pawn Shops'

http://www.financialarmageddon.com/2011/06/apparently-scrap-yards-are-the-new-pawn-shops.html

IN WHICH A COMPENDIUM OF PUBLIC THEFT IS LISTED...SIMPLY AMAZING

[AnneD]

95. My brother with the farm...

Has a scrapyard at the front of the farm. He sells parts and scrap. He has guns at his doors and several guns hidden around his acreage. Everyone in the county knows this fact. In this he is very much a redneck.

One of the funniest things we have on video is him shooting down some mistletoe to decorate the door for Christmas.

[Demeter]

48. Orange Juice Surges to Four-Year High

http://www.bloomberg.com/news/2011-06-21/asia-commodity-day-ahead-orange-juice-surges-to-four-year-high.html

COMMODITIES SUMMARY REPORT

[Demeter]

49. JPMorgan Joins World Bank in $400 Million Hedging Program for Agriculture

WHAT FRESH HELL IS THIS?--Dorothy Parker

http://www.bloomberg.com/news/2011-06-21/jpmorgan-joins-world-bank-in-400-million-food-hedging-program.html

JPMorgan Chase & Co. (JPM) and the World Bank will provide as much as $400 million to developing nations for hedging their trade in agricultural supplies after record global food prices pushed 44 million more people into poverty...The credit will come equally from New York-based JPMorgan and the World Bank’s International Finance Corp. and allow for as much as $4 billion of hedging, the World Bank said in a statement today. The funds are available to producers, consumers, cooperatives and local banks.

“High, uncertain and volatile food prices are the single gravest threat facing the most vulnerable in the developing world,” World Bank President Robert Zoellick said in the statement. “People are hungry for food and for action on a global level.”

Group of 20 farm ministers meet in Paris this week to discuss proposals to share information on stockpiles, eliminate export restrictions, create emergency food stocks for the poorest nations and reduce commodity price swings. World food output will have to rise 70 percent by 2050 as the global population climbs to 9.2 billion from an estimated 6.9 billion in 2010, the United Nations says...The World Bank wants to get other lenders involved in its Agriculture Price Risk Management product, extending credit to those in emerging markets who would not normally be able to pay for hedging. Stable prices will help farmers get financing to expand output and ensure “reasonable access” to food for consumers, the Washington-based bank said.
Central Database

The G-20 ministers should agree to establish a central database on the quality and quantity of global grain stocks, which would reduce price swings by avoiding panic-buying, Zoellick said in the statement. They should also exempt humanitarian aid from export bans, he said...Growth in rice and wheat yields in developing countries, representing about 80 percent of the global population, has slowed to 1 percent a year, from 3 percent in the 1970s, Zoellick said. Unless action is taken to mitigate climate change, agricultural yields may drop 16 percent over the next half century. “We need to be creative about farming, so there are not only more crops but more resilient crops,” Zoellick said. There are almost 1 billion hungry people in the world, he said...World food prices rose 37 percent in the past 12 months, reaching a record in February, according to an index of 55 commodities from the UN’s Food and Agriculture Organization. That helped push 44 million people into poverty in the past year, defined as those living on less than $1.25 a day.

SEEMS TO ME THAT DECENT REGULATIONS WOULD OUTWEIGH BILLIONS IN "HEDGING". BUT I'M JUST A REALITY-BASED, LEFT-WING MORON. WHAT DO I KNOW?

I DO KNOW THAT WHENEVER TWO BIG ELEPHANTS GO DANCING TOGETHER, THE PLANTS AND ANIMALS IN THE AREA GET TRAMPLED.

[Demeter]

50. IMF says crisis, slow recovery key risks for Spain

OBVIOUSLY, SPAIN ISN'T COLLAPSING FAST ENOUGH FOR THE IMF...

http://uk.reuters.com/article/2011/06/21/uk-spain-imf-idUKTRE75K4ZM20110621

Spain faces considerable risks to its recovery and must deepen and conclude reform work to allay market concerns, the International Monetary Fund said on Tuesday. In an annual mission report, the IMF said Spain's wide-ranging policy response last year had helped the economy to rebalance, but the repair of the economy was incomplete and risks were considerable.

"There can be no let-up in the reform momentum, including further enhancing the credibility of fiscal consolidation, completing financial sector restructuring," the IMF said. Spain has been under intense scrutiny since the beginning of the euro zone debt crisis over concerns the bloc's fourth-largest economy would be forced to follow Greece, Ireland and Portugal in seeking a bailout package. A slew of reforms and austerity measures have helped calm fears, though the premium investors demand to hold Spanish over German debt remains near euro-era highs as concerns persist over Greece. Risks over the outlook for Spain meant reforms made to date, including in the labour and pension sectors, must be strengthened, the organisation said.

REPORT POSITIVE

Spain's Economy Minister Elena Salgado said in a telephone interview with Reuters the report was positive and the IMF's position that the reforms should be consolidated was shared by the government. "We completely agree with the IMF and, in order to do this, we will see this legislature through to the end," she said...Spanish media has been speculating that the government, lead by Prime Minister Jose Luis Rodriguez Zapatero, would not last until general elections in March and would call voters to the polls before the end of the year.

The government's latest overhaul of collective bargaining would be ratified by parliament on Wednesday, Salgado added...The government's public deficit target of 6 percent of gross domestic product this year, after 9.2 percent of GDP in 2010, was "within reach," the IMF said. If near-term risks materialise then some additional measures may be needed, the IMF warned. The medium-term targets were also appropriate but under the mission's least optimistic projections additional fiscal measures worth about 2 percent of GDP will be required through until 2014. The key risk to Spain in the near term was the possibility of further deterioration of financial conditions in the midst of a euro zone debt crisis, it said. In the medium term the key risk was a protracted recovery, and especially stubbornly high unemployment, which it expected to only moderately fall in the medium term. The IMF also said the recovery would continue to be export-led, with growth gradually rising to 1.5 to 2.0 percent in the medium term...

[Demeter]

51. IMF Says Spain Must Step Up Reform Efforts as Eur Region’s Crisis Worsens

http://www.bloomberg.com/news/2011-06-21/imf-sees-considerable-risks-to-spain-economy-urges-additional-overhauls.html

The International Monetary Fund said Spain must step up efforts to overhaul its economy as Europe’s sovereign-debt crisis threatens to damp growth. “The repair of the economy is incomplete and risks are considerable,” the Washington-based IMF said in its annual appraisal of Spain yesterday. There must be “no let-up in the reform momentum” to bolster the recovery and reduce a 21 percent unemployment rate that is “unacceptably high,” the fund said.

Spain’s Socialist government is carrying out the deepest budget cuts in at least three decades while raising the retirement age and reducing firing costs. Prime Minister Jose Luis Rodriguez Zapatero overhauled wage-bargaining rules on June 10 in the latest step aimed at reining in borrowing costs that surged to the highest in a decade last week on mounting expectations of a Greek default.

“Financial conditions could deteriorate further, reflecting rising concerns about sovereign risks in the euro area,” the IMF said. “This could put additional pressure on sovereign and bank funding costs for Spain, which in turn could feed back to the real economy.”

The IMF called on the government, which has passed two labor overhauls in the past year, to make deeper changes to reduce the highest unemployment rate in Europe...

[xchrom]

57. Egypt says will not need IMF, World Bank funds

http://uk.reuters.com/article/2011/06/25/uk-egypt-finance-idUKTRE75O0PX20110625

(Reuters) - Egypt will not borrow from the World Bank and International Monetary Fund after revising its budget and cutting the forecast deficit, even though a loan had been agreed, Finance Minister Samir Radwan said on Saturday.

The 2011/12 deficit in the first draft budget was forecast at 11 percent of gross domestic product, but was revised to 8.6 percent because of a national dialogue and the ruling army council's concerns about debt levels, the minister told Reuters.

"So we do not need to go at this stage to the Bank and the Fund," Radwan said, adding Egypt, which had borrowed from the IMF under ousted president Hosni Mubarak, still had the "best relations" with the two U.S.-based institutions.

Despite the budget revisions, the government said it still expected growth of 3.0-3.5 percent, in line with previous forecasts, which some economists said could prove optimistic.

[xchrom]

52. Financial contagion Coughs and sneezes

http://www.economist.com/blogs/dailychart/2011/06/financial-contagion




WITH the Greek government perilously close to default, investors and policymakers are wondering whether European banks have caught something nasty. The hard numbers alone thus suggest that a Greek default would do little lasting harm to the rest of Europe’s financial system. What is more worrying for Europe’s policymakers is the thought that Greece’s affliction would spread not just to foreign banks but to foreign governments.

[Demeter]

53. Tom Ferguson: “Standstill Nation” as the New Abnormal?

http://www.nakedcapitalism.com/2011/06/tom-ferguson-%E2%80%9Cstandstill-nation%E2%80%9D-as-the-new-abnormal.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Let’s try to clarify why Congress is actually gridlocked...In the mid-1980s, a group of insurgent Republicans broke with the long established norms governing how the U.S. House of Representatives transacted business. Led by Newt Gingrich, it derided older Republican House leaders as timid, unimaginative, and too inclined to compromise with Democrats. Self-styled “revolutionaries” launched vigorous public attacks on Democrats as they trumpeted their own agenda of deregulation, budget cuts, lower taxes, and a baker’s dozen of social issues, from abortion to opposition to all forms of gun control...Result? The House boiled over. Statistical measures of Congressional behavior show that party line votes jumped sharply...In 1992, in the midst of a recession, the Republicans lost the White House. But their dreams of a sweeping political realignment did not die. In fact, by clearing centrist Republicans out of their perches in the White House, the loss probably helped Gingrich and his allies. Completely undaunted, Gingrich, Republican National Chair Haley Barbour, and National Republican Senatorial Committee Chair Phil Gramm orchestrated a vast national campaign to recapture Congress for the Republicans in the 1994 elections. With the economy stuck in a “jobless recovery” and Democratic fundraising sputtering, the Republicans won control of both houses of Congress.

The tidal wave of political money they conjured allowed Gingrich, Gramm, Barbour and Co., to brush aside older, less combative center-right Republican leaders and persist in their efforts to roll back the New Deal and remake American society in the image of free market fundamentalism. Once in power, the Republicans institutionalized sweeping rules changes in the House and the Republican caucus that vastly increased the leadership’s influence over House legislation. They also implemented a formal “pay to play” system that had both inside and outside components....On the outside, DeLay and other GOP leaders, including Grover Norquist, who headed Americans for Tax Reform, mounted a vast campaign (the so-called “K Street Project”) to defund the Democrats directly by pressuring businesses to cut off donations and avoid retaining Democrats as lobbyists. Inside the House, Gingrich made fundraising for the party a requirement for choice committee assignments. Senate Republicans, led by Phil Gramm and other apostles of deregulation, emulated the House.

...Watching the Republicans restructure their national political committees into giant ATMs capable of financing broad national campaigns left the Democrats facing the same dilemma they had in the late seventies, as the GOP’s Golden Horde first formed up behind Ronald Reagan. Democrats could respond by mobilizing their older mass constituencies. Or they could emulate the Republicans and just chase money. That battle had been settled in favor of so-called “New Democrats” (see Thomas Ferguson and Joel Rogers, “Right Turn“). Dependent for many years on campaign money from leading sectors of big business where regulation kept recreating divisions – notably finance and telecommunications (Ferguson, “Golden Rule“) – the Democrats reconfirmed their earlier decision to go for the gold. They followed the Republicans and transformed both the national party committees and their Congressional delegations into cash machines, with leaders in each chamber, but especially the House, wielding substantially more power than at any time since the famous revolt that overthrew Speaker Cannon in 1910-11. As the Republicans moved further and further to the right, the Democrats did, too, constrained only by the need to preserve something of their mass base.

A feedback loop running between Congress and the mass media intensified the whole process: Congressional leaders of both parties now focused intently on creating sharper party profiles (“brands”) that would mobilize potential outside supporters and contributors. So they spent enormous amounts of time and money honing messages that were clear and simple enough to attract attention as they ricocheted out through the media to an increasingly jaded public. And they and the Republican leadership staged more and more votes not to move legislation, but to score points with some narrow slice of the public or signal important outside constituencies. For the same reasons, they made exemplary efforts to hold up bills by prolonging debate or, in the Senate, putting presidential nominations on hold...Contrary to what popular pundits may say, there is nothing “normal” or constructive about a Congress dominated by centralized parties. We should not accept a Congress presided over by leaders with far more power than in recent decades, running the equivalent of hog calls for resources, trying to secure the widest possible audiences for their slogans and projecting their claims through a mass media that was more than happy to play along with right thinking spokespersons of both parties. The idea that putting government programs on an automatic chopping block is a step forward is equally outlandish. This is hardly government “doing what it has to do.” It may be what it is paid to do. But no one should confuse this with public policy that serves the interests of all Americans.

[Demeter]

54. Alex Andreou: Democracy vs Mythology – The Battle in Syntagma Square

The protests in Greece concern all of you directly...What is going on in Athens at the moment is resistance against an invasion; an invasion as brutal as that against Poland in 1939. The invading army wears suits instead of uniforms and holds laptops instead of guns, but make no mistake – the attack on our sovereignty is as violent and thorough. Private wealth interests are dictating policy to a sovereign nation, which is expressly and directly against its national interest. Ignore it at your peril. Say to yourselves, if you wish, that perhaps it will stop there. That perhaps the bailiffs will not go after the Portugal and Ireland next. And then Spain and the UK. But it is already beginning to happen. This is why you cannot afford to ignore these events.

The powers that be have suggested that there is plenty to sell. Josef Schlarmann, a senior member of Angela Merkel’s party, recently made the helpful suggestion that we should sell some of our islands to private buyers in order to pay the interest on these loans, which have been forced on us to stabilise financial institutions and a failed currency experiment. (Of course, it is not a coincidence that recent studies have shown immense reserves of natural gas under the Aegean sea).

China has waded in, because it holds vast currency reserves and more than a third are in Euros. Sites of historical interest like the Acropolis could be made private. If we do not as we are told, the explicit threat is that foreign and more responsible politicians will do it by force. Let’s make the Parthenon and the ancient Agora a Disney park, where badly paid locals dress like Plato or Socrates and play out the fantasies of the rich.

It is vital to understand that I do not wish to excuse my compatriots of all blame. We did plenty wrong. I left Greece in 1991 and did not return until 2006. For the first few months I looked around and saw an entirely different country to the one I had left behind. Every billboard, every bus shelter, every magazine page advertised low interest loans. It was a free money give-away. Do you have a loan that you cannot manage? Come and get an even bigger loan from us and we will give you a free lap-dance as a bonus. And the names underwriting those advertisements were not unfamiliar: HSBC, Citibank, Credit Agricole, Eurobank, etc. Regretfully, it must be admitted that we took this bait “hook, line and sinker”. The Greek psyche has always had an Achilles’ heel; an impending identity crisis. We straddle three Continents and our culture has always been a melting pot reflective of that fact. Instead of embracing that richness, we decided we were going to be definitively European; Capitalist; Modern; Western. And, damn it, we were going to be bloody good at it. We were going to be the most European, the most Capitalist, the most Modern, the most Western. We were teenagers with their parents’ platinum card...

A MUST READ

[Karenina]

102. ^Link for the above^

http://www.nakedcapitalism.com/2011/06/alex-andreou-democracy-vs-mythology-%E2%80%93-the-battle-in-syntagma-square.html

[DemReadingDU]

103. That is an excellent read

In fact, 'midnight' had posted it last week in GD. Link for some more responses
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=439&topic_id=1344099

[Karenina]

113. It most certainly is! It ALSO counters the vile media narrative

that has so many German knickers in a twist. I had to immediately forward this to friends with whom I've discussed this issue. Bild's meme, particulary, of "lazy brown folk sucking off our work ethic" has really taken hold. The problems with the Eurozone and the banks are SYSTEMIC. Why, oh WHY does ANYONE take the IMF (insolvent and NOWHERE have their remedies created anything but chaos,) the ECB (ALSO insolvent) or the credit ratings agencies (now THERE'S a cesspool) seriously? I'm sure you remember the great cheap credit dump in the U.S. during the 80's. Same shit, different day...

[Demeter]

110. Ooops! Thanks for Catching That!

[Demeter]

55. Two Supreme Court Rulings Give Big Companies “Get Out of Liability Free” Cards

http://www.nakedcapitalism.com/2011/06/two-supreme-court-rulings-give-big-companies-get-out-of-liability-free-cards.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

If you had any doubts that the US has become a corpocracy, two fresh rulings by the Supreme Court should seal any doubt. They are stunningly bad, in that they reduce or gut the reach of well-settled law over large companies, to the degree that it will take very little in the way of effort for companies to organize their affairs so as to escape liability for their actions in areas that affect large numbers of citizens.

The through line in both rulings is the creative and selective use of the notion of corporate “personhood”. That personhood has been the basis for the extension of a whole raft of rights to corporations, including, perversely, the Constitutional right of free speech. Yet the same notion which has been used to confer privileges that companies lack in other countries is at the same time being construed so as to vitiate accountability, when ordinary people find it mighty hard to escape the consequences of their actions. I’m certain the Founding Fathers, who were wary of concentrated power, would be spinning in their graves at the logic and effect of recent decisions on this front...

[xchrom]

56. Urban dwellers, far from fields, harvest millions in federal farm subsidies

http://latimesblogs.latimes.com/money_co/2011/06/farm-subsidy-database-urban-payments-ewg-.html

Turns out you don’t have to live on a farm to pull in farm subsidies from the federal government.

In its latest update to its farm subsidy database, the Environmental Working Group reported this week that the federal government sent $394 million in federal farm subsidies last year to people who live in cities with populations of 100,000 or larger.

The data in the 2011 Farm Subsidy Database, which can be searched here, comes as Congress is wrestling with ways to cut the budget. Lawmakers are also preparing to start the laborious process of updating, and potentially overhauling, the federal farm program.

"While 60% of American farmers must get along without a dime in federal subsidies, the so-called farm 'safety net' benefits a narrow band of the wealthiest agri-businesses and absentee land owners and the lobbyists who ensure that the subsidies keep flowing," EWG officials said in a statement.

[Demeter]

58. The World Held Hostage by Credit Default Swaps.

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

We need to comment on the latest financial bailout, in this case the apparent salvation of the European banks from taking a hit in the restructuring of Greece....the more accurate description is that all of the major players in the world of credit default swaps were bailed out on JUNE 17TH, proof again that this financial ghetto known as OTC derivatives is adding to the systemic risk problem -- and holds the entire world hostage...The net increase in financial exposures due to the existence of the CDS market in sovereign credit risk has not made the real economy safer, but instead multiplies the dollar amount of the basis risk in all markets, real or imagined. You cannot get rid of systemic risk and "too big to fail" until you limit credit derivative products to holders of actual debt. Instead we have hedge funds and banks gambling on the end of the world.

The impending damage of a mark-to-market event with respect to Greece or Ireland is such that the craven fools who inhabit public offices from Paris to Washington are forced to socialize the losses of the banks. The free market is dead and we have all arrived at a sort of involuntary socialism, where the largest banks rape and pillage, and even hedge funds and other credulous players in the financial markets are turned into victims. This grotesque situation reminds us of the comment made by our friend Walker Todd at AIER, who suggested that governments should simply underwrite all commercial risk exposures and by law exclude all other claims from any safety net. The remaining "speculative" financial activity in things like CDS contracts would be specifically banned from the banking sector. This eliminates the need for governments to worry about who is the dumbest guy in the room, to paraphrase author Martin Mayer on this question...The thing people need to appreciate is that the large banks today with respect to exposure to Greece and Ireland are in precisely the same position as was American International Group in 2007. In that case, AIG had written excessive credit insurance on mortgage backed securities in order to generate fictitious income. This financial fraud eventually collapsed, forcing the Fed of New York under Timothy Geithner to come riding to the rescue of JPM, Goldman Sachs ("GS") and their derivatives counterparties in Europe because AIG could not make good on its liabilities.

In the most recent case, the major dealer banks in the EU end US have created mountains of new credit risk with respect to Greece and Ireland by selling insurance to their clients, both commercial hedgers and speculators. The latter group is far larger than the true commercial hedging needs for risk management, a side benefit of the expansionary policies of the Fed under Alan Greenspan and now Ben Bernanke. Thus the original sin of monetary accommodation by the Fed comes back to haunt us all in the form of an uncontrolled market panic fueled by cash settlement credit derivatives...The refusal of the political class to imposes losses on large bank creditors since the collapse of Lehman Brothers and Washington Mutual in 2008 illustrates the extent to which the financialization of the western industrial economies has turned into a gradual coup d'etat by the banks and the global speculators who dominate their client base. The CDS market specifically has become so large and threatening that the politicians are even forced to renege on bets against Greece by the largest and most important bank clients. So much of what goes on inside the typical investment bank today has nothing to do with the real economy as illustrated by the Greek situation. Much of finance today is beggar they neighbor speculation. But even the hedge funds that were betting on raging contagion are getting stiffed by the banksters and their political sponsors. Just as individual savers are being denied their due via low rate policies, the speculative class is also being stiffed by banks that cannot make good on their wagers in CDS....By saying that the banks and their creditors cannot be made to take losses on even their speculative activities, technocrats such as Germany's Angela Merkel, France's Nicholas Sarkozy and Barack Obama have become the ambassadors for the new global ruling class. The servants of the banksters, Sarkozy, Merkel and Obama, think that they can put the entire weight of restructuring Europe and US debt on the backs of taxpayers.

Do our leaders really think that they can restructure Greece and Ireland via austerity without requiring any pain from investors in bank debt or the managers of the banks? If so, then the decision on Friday is not a solution but instead puts the western market economies on the road to further political and financial turmoil. Just as the unfair peace after WWI led to economic depression in Europe and the rise of fascism, the decision to dispense with the pretense of free market discipline in the industrial economies puts us all on the road to serfdom and political upheaval.

[Demeter]

59. Ciudad Juarez is all our futures. This is the inevitable war of capitalism gone mad

http://www.guardian.co.uk/commentisfree/2011/jun/20/war-capitalism-mexico-drug-cartels

Mexico's drug cartels are actually pioneers of the global economy in their business logic and modus operandi...TODAY'S MUST READ!

War, as I came to report it, was something fought between people with causes, however crazy or honourable: like between the American and British occupiers of Iraq and the insurgents who opposed them. Then I stumbled across Mexico's drug war – which has claimed nearly 40,000 lives, mostly civilians – and all the rules changed. This is warfare for the 21st century, and another creature altogether. Mexico's war is inextricable from everyday life. In Ciudad Juarez, the most murderous city in the world, street markets and malls remain open; Sarah Brightman sang a concert there recently. When I was back there last month, people had reappeared at night to eat dinner and socialise, out of devil-may-care recklessness and exhaustion with years of self-imposed curfew. Before, there had been an eerie quiet at night, now there is an even eerier semblance of normality – punctuated by gunfire. On the surface, the combatants have the veneer of a cause: control of smuggling routes into the US. But even if this were the full explanation, the cause of drugs places Mexico's war firmly in our new postideological, postmoral, postpolitical world. The only causes are profits from the chemicals that get America and Europe high...Interestingly, in a highly politicised society there is no rightwing or Mussolinian "law and order" mass movement against the cartels, or any significant leftwing or union opposition. The grassroots movement against the postpolitical cartel warriors, the National Movement for Peace, is famously led by the poet Javier Sicilia, who organised a week-long peace march after the murder of his son in the spring. This very male war is opposed by women, in the workplaces and barrios, and in the home.

But this is not just a war between narco-cartels. Juarez has imploded into a state of criminal anarchy – the cartels, acting like any corporation, have outsourced violence to gangs affiliated or unaffiliated with them, who compete for tenders with corrupt police officers. The army plays its own mercurial role... Not by coincidence, Juarez is also a model for the capitalist economy. Recruits for the drug war come from the vast, sprawling maquiladora – bonded assembly plants where, for rock-bottom wages, workers make the goods that fill America's supermarket shelves or become America's automobiles, imported duty-free. Now, the corporations can do it cheaper in Asia, casually shedding their Mexican workers, and Juarez has become a teeming recruitment pool for the cartels and killers. It is a city that follows religiously the philosophy of a free market... "It's a city based on markets and on trash," says Julián Cardona, a photographer who has chronicled the implosion. "Killing and drug addiction are activities in the economy, and the economy is based on what happens when you treat people like trash." Very much, then, a war for the 21st century. Cardona told me how many times he had been asked for his view on the Javier Sicilia peace march: "I replied: 'How can you march against the market?'"(MY QUESTION--HOW DOES THIS DIFFER FROM DETROIT?--DEMETER)

Mexico's war does not only belong to the postpolitical, postmoral world. It belongs to the world of belligerent hyper-materialism, in which the only ideology left – which the leaders of "legitimate" politics, business and banking preach by example – is greed. A very brave man called Mario Trevino lives in the city of Reynosa, which is in the grip of the Gulf cartel. He said of the killers and cartels: "They are revolting people who do what they do because they cannot be seen to wear the same label T-shirt as they wore last year, they must wear another brand, and more expensive." It can't be that banal, I objected, but he pleaded with me not to underestimate these considerations. The thing that really makes Mexico's war a different war, and of our time, is that it is about, in the end, nothing...The killers post their atrocities on YouTube with relish, commanding a vast viewing public; they are busy across thickets of internet hot-sites and the narco-blogosphere. Journalists find it hard that while even people as crazy as Osama bin Laden will talk to the media – they feel they have a message to get across – the narco-cartels have no interest in talking at all. They control the message, they are democratic the postmodern way.



People also ask: what can be done? There is endless debate over military tactics, US aid to Mexico, the war on drugs, and whether narcotics should be decriminalised. I answer: these are largely of tangential importance; what can the authorities do? Simple: Go After the Money. But they won'...Narco-cartels are not pastiches of global corporations, nor are they errant bastards of the global economy – they are pioneers of it. They point, in their business logic and modus operandi, to how the legal economy will arrange itself next. The Mexican cartels epitomised the North American free trade agreement long before it was dreamed up, and they thrive upon it. Mexico's carnage is that of the age of effective global government by multinational banks – banks that, according to Antonio Maria Costa, the former head of the UN Office on Drugs and Crime, have been for years kept afloat by laundering drug and criminal profits. Cartel bosses and street gangbangers cannot go around in trucks full of cash. They have to bank it – and politicians could throttle this river of money, as they have with actions against terrorist funding. But they choose not to, for obvious reasons: the good burgers of capitalism and their political quislings depend on this money, while bleating about the evils of drugs cooked in the ghetto and snorted up the noses of the rich. So, Mexico's war is how the future will look, because it belongs not in the 19th century with wars of empire, or the 20th with wars of ideology, race and religion – but utterly in a present to which the global economy is committed, and to a zeitgeist of frenzied materialism we adamantly refuse to temper: it is the inevitable war of capitalism gone mad. Twelve years ago Cardona and the writer Charles Bowden curated a book called Juarez: The Laboratory of Our Future. They could not have known how prescient their title was. In a recent book, Murder City, Bowden puts it another way: "Juarez is not a breakdown of the social order. Juarez is the new order."

[Demeter]

60. After that last post, I need a break

It is terribly distressing to have one's speculative guesses of last night abruptly confirmed by the morning's pre-breakfast reading...

I really hate being confirmed about this--it's like finding out a fanciful sarcastic remark is actually a fact...

I'll be back after some food, pointless wage labor, and maybe a nap...

Meanwhile, carry on!

[plumbob]

141. The Space Merchants is a book I read as a teenager and which I

now have my senior economics students read, along with 1984 and Brave New World, along with watching the movie Blade Runner. It's a thin book and a fast read, but absolutely spot on with the consumer goals and criminal behavior listed in your post for Juarez.

Thanks for the post. We live about 4 hours from Juarez, and many of my students have family in the area, and this analysis seems right on.

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

[DemReadingDU]

62. Videos of the Roaring Twenties, and the crash

The Roaring Twenties, and its death
http://www.youtube.com/watch?v=YM8yxBL21Pk appx 5 minutes


The optimism and excess speculation in 1929, and the crash
a lot of historical parallels depicted in 1929 to what we are going thru now
http://www.youtube.com/watch?v=TQUcoSy1yMA appx 9.5 minutes


Public TV, 5-part series, each video is 10 minutes
Includes snippets of interviews with people who lived during the 1920's and 1930's

http://www.youtube.com/watch?v=N54mhu03vBM&feature=related part 1
http://www.youtube.com/watch?v=u3-1tYYogAQ&feature=related part 2
http://www.youtube.com/watch?v=Iv5E0y5D3kI&feature=related part 3
http://www.youtube.com/watch?v=IXrtjlBC5cI&feature=related part 4
http://www.youtube.com/watch?v=pKF7mzyzUIQ&feature=related part 5

or watch the complete video at PBS: The American Experience appx 55 minutes
http://video.pbs.org/video/1308436568/

[DemReadingDU]

65. PBS documentary of President Hoover

Clip from the 2008 PBS documentary, "Landslide: A Portrait of President Herbert Hoover", appx 4 minutes
http://www.youtube.com/watch?v=6EB4xdUhVVw


I saw this documentary, but I am unable to find the complete program either on PBS nor YouTube.
It looks like it is available on DVD
http://www.moviefone.com/movie/landslide-a-portrait-of-president-herbert-hoover/10023550/main


Additional info about the documentary

At the time of his landslide victory in 1928, Herbert Hoover, was by many accounts the most respected man in America. An Iowa orphan-turned-exceptional mining engineer, adventurer and international businessman, he'd made his fortune by the age of 40. When the world plunged into the chaos of World War I, he turned his considerable talents to humanitarian relief, delivering more than $5 billion in food and medical aid to Europe - and later Russia - saving an estimated 20 million men, women and children from starvation. On the home front, as the country's first U.S. Food Administrator, he galvanized American housewives behind the cause of conservation to feed the troops and our Allies overseas, then continued his stellar political rise as an uncommonly forward thinking secretary of commerce for both Presidents Warren G. Harding and Calvin Coolidge.

Despite popular misconception, Hoover toiled to correct the country's economic course. In many instances, his anti-depression efforts - from his early experimentation with public work programs and voluntary cooperation between government and business to the ultimate, if largely ineffectual, appropriation of federal loans to stimulate business - were unprecedented. Underlying every corrective measure was Hoover's unwavering belief in "American Individualism," the unique American ability to overcome any hardship with hard work, integrity and a commitment to community. But to the public, Hoover often appeared at best incompetent and at worst, heartless. The "superman" who had saved millions the world over from starvation after World War I, had seemingly left the American public, hungry, penniless, fending for themselves.

more...
http://www.duncanentertainment.com/movie_hoover.php

[Demeter]

66. Popular Bitcoin exchange Mt. Gox hacked, prices drop to pennies

http://venturebeat.com/2011/06/19/popular-bitcoin-exchange-mt-gox-hacked-prices-drop-to-pennies/

The most popular exchange of Bitcoin online currency, Mt. Gox, on Sunday admitted it had been hacked. It made the announcement after the price of Bitcoins dropped from $17 to nearly zero in a matter of minutes. The sell off happened after a Mt. Gox account with a large amount of Bitcoins was hacked, and the hacker sold all Bitcoins in that account...Bitcoins, an unregulated peer-to-peer currency, has been in the news a lot lately, with two Senators suggesting it would lead to illegal online drug purchases. It also raised eyebrows when a hacker stole more than $500,000 in Bitcoins from an unsuspecting trader.

Following the most recent hack, Mt. Gox immediately took down its main site and said it will re-launch the exchange after it “rolls back” prices to the levels Bitcoin had before the incident, which was about $17.50 per Bitcoin. Mt. Gox said service would not resume before 10 p.m. EST Sunday and that the re-opening could be “delayed depending on what is found during the investigation.”...The Hong-Kong-based hacker who broke into the exchange likely used a database of Mt. Gox user names and associated information that has been making the rounds on the Internet today. The database includes user names, hashed passwords, and e-mail addresses. To address concerns about leaked passwords, Mt. Gox will require all users with simple passwords to choose new ones. It also encouraged users who have e-mail addresses connected to their Mt. Gox accounts to change their e-mail passwords immediately.

Thankfully for Bitcoin owners, the crash appears to have just affected the price of Bitcoin on Mt. Gox, rather than the currency in general. Competing Bitcoin exchange TradeHill currently prices the currency at around $13 per Bitcoin. TradeHill has halted trading “for a few hours” because of the possibilty that members had used the same password for TradeHill and Mt. Gox. The incident is bad news all around for the Bitcoin currency, which has seen a staggering value jump in the last few months. From April to June, the currency rose from $1 to more than $30, but during the last few weeks the price has fallen. After the earlier mentioned theft of $500,000 of Bitcoins, Bitcoin traders were already concerned about the security of their transactions. But with this incident, prepare for Bitcoin holders to consider cashing out completely when the exchanges re-open.

*************************************

AUTHOR'S note of transparency: I invested in and sold Bitcoins using Mt. Gox before this incident, but a few weeks ago I sold all my Bitcoin holdings and do not own any currently.

*****************************************

POSTER'S NOTE: DEMETER WOULDN'T BE FOOLISH ENOUGH TO PUT MONEY INTO SUCH NONSENSE, EVEN IF SHE HAD ANY...ALTHOUGH THE TIN FOIL HAT IS PINGING LIKE MAD. REMEMBER WHEN THE FEDS TOOK DOWN THE GUY CREATING HIS OWN GOLD STANDARD WITH HIS OWN COINS, IN THE US? AND THE FELLOW PAYING PEOPLE OFF WITH "FACE VALUE" ON COLLECTIBLE, VALUABLE ANTIQUE COINS? AND THE IRS ATTEMPTING TO BLUDGEON BARTER TO DEATH? SOMEBODY DOESN'T REALLY WANT FREE TRADE BETWEEN INDIVIDUALS...THE "X PERCENTERS" WANT THEIR "CUT".

MAYBE ALL THE SONY HACKING IS COVER FOR THIS ONE...AND TO JUSTIFY MORE FBI ATTACKS ON WIKILEAKS.

WE ARE IN YET ANOTHER SEMI-DECLARED WAR--THE WAR OF THE ELECTRONIC BIT BATTLES.

[kickysnana]

75. +1

[Demeter]

68. The Kid Rented "The Adjustment Bureau"

Sci-fi playing on chance, Fate, free will vs. "corporate" manipulation.

I'm having too much co-incidence...

[DemReadingDU]

69. We saw that

and actually, better than I thought it would be

[Demeter]

70. Feds Sue Bankers Over Fall in Bonds (JPMORGAN FOR THE 3RD TIME THIS WEEKEND)

WHAT'S WITH GOLDMAN? HAVE THEY DECIDED TO LIE LOW FOR A BIT?

http://online.wsj.com/article/SB10001424052702304070104576397590007402016.html

Federal regulators accused J.P. Morgan Chase & Co. and Royal Bank of Scotland Group PLC of duping five large credit unions into buying more than $3 billion in mortgage bonds that were "destined to perform poorly," and that quickly sank the credit unions...The two civil lawsuits filed Monday in U.S. District Court in Kansas City, Kan., by the National Credit Union Administration are the most aggressive move yet by U.S. regulators to recover losses from Wall Street firms for alleged wrongdoing before and during the financial crisis.

Many of the nation's 7,000 credit unions, which play a critical role in community lending, have been damaged by the mortgage crisis. More than 40 have failed since the start of 2009, and the survivors are being forced to absorb some of the costs of the failures, forcing some to charge higher interest rates on loans and to pay less on customer deposits...The collapse of the five large institutions, called wholesale credit unions, "resulted in the worst crisis faced by the credit-union industry in its history," said NCUA Chairman Debbie Matz. "We believe numerous parties within the chain, primary underwriters and intermediaries as well, have responsibility." The credit-union failures have saddled the NCUA with roughly $50 billion in battered bonds that now are worth just a fraction of their original value. Some of those losses are being absorbed by other credit unions in the form of higher payments to the NCUA's insurance fund.

Officials at the NCUA, a federal regulator that supervises the nation's credit unions, expect to file additional lawsuits against as many as eight more banks and securities firms that pooled individual mortgages into securities and sold them to the five credit unions, which failed in 2009 and 2010, according to people familiar with the situation. The NCUA has issued 986 subpoenas to companies involved in the mortgage machine, including lenders that originate loans, investment banks that sell mortgage-backed securities, mortgage servicers and credit-ratings agencies, a spokesman said. Proceeds from the lawsuits, which seek more than $800 million from J.P. Morgan and RBS, would help fund the NCUA's insurance and emergency support funds.

The NCUA has threatened to sue Goldman Sachs Group Inc. and other firms over mortgage-bond sales, according to securities filings and people familiar with the matter. It is currently engaged in settlement discussions with some banks, said an NCUA spokesman. THERE'S THE GOLDMAN FINGERPRINT!

[Demeter]

76. Latest “New Normal” Sighting: Divorce Rebound

http://www.nakedcapitalism.com/2011/04/latest-new-normal-sighting-divorce-rebound.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A Financial Times article discusses an unlikely indicator of recovery: divorce rates have risen. One divorce attorney commented, “There is huge pent up demand.” Another lawyer, who was apparently a decent representative, said her business had increased 25% compared to the same period last year.

But the post crisis economy has led to some changes in tactics:

Divorce has not become any less acrimonious but the fights have changed, lawyers said.

“People no longer argue about who’s keeping the house, but about who’s stuck with it,” Mr Willick said.

[AnneD]

100. I recommend watching...

The Cinderella Man. One of the things that was frequent was that many a husband and father went AWOL, just disappeared. They went out to seek work and some sent money back to their families- some were never heard from again. Imagine your dad or grandfather looking into his wife and kids faces and feeling like he can't provide for them. It was more than some men could endure. The lucky kids were sent to family members that had farms or could take in kids for a while.

http://www.youtube.com/watch?v=DlbHzcH4VJY&feature=youtube_gdata_player

[DemReadingDU]

107. Suicide rate up for white, middle-aged men

6/26/11 Suicide rate up for white, middle-aged men
Mental health officials say men often reluctant to seek help for stress, anxiety and depression.

A 48-year-old husband and father ended his life in the early morning hours June 21 by jumping off Ohio’s tallest bridge.

Statewide statistics show tough economic times may be a factor. The number of suicides increased from an average of 1,239 per year (2000-2007) to 1,402 deaths in 2008, when the economic recession began.

“Men tend to connect their identities with their careers. They see themselves as the backbone of the family,” Whalen said. “They’re so worried about — ‘who’s going to see me, what are they going to think.’ They need to get beyond the stigma of seeking mental health services.”

more...
http://www.springfieldnewssun.com/news/springfield-news/suicide-rate-up-for-white-middle-aged-men--1194014.html

so sad
:(

[Demeter]

77. Bank of America Lawyer, Consultant Gave Foreclosure Probe Chief $15,000 FROM APRIL

http://swampland.time.com/2011/04/21/bank-of-america-lawyer-consultant-gave-foreclosure-probe-chief-15000/

Iowa’s Democratic Attorney General Tom Miller is known for taking on big business. Elected to eight four-year terms, he led a multi-state anti-trust case against Microsoft in 2001 and filed a suit against 79 drug companies in 2007, alleging they illegally profited by inflating prices for drugs purchased through Medicaid.

Most recently, Miller took the lead on the investigation by all 50 state attorneys general into the “robo-signing” foreclosure scandal, where several big banks allegedly approved taking away people’s homes without adequately verifying the facts in court, as required by law in some states.

Last fall, just after he made the announcement that he would look into the foreclosure mess, contributions to Miller’s campaign coffers for November’s election soared, thanks in large part to out-of-state lawyers who make a living representing big banks, a new report from the National Institute for Money in State Politics finds. “Nearly half of the money Miller raised in 2010,” NIMSP reports, “was donated after the October 13 announcement that he would be coordinating the 50-state attorneys general investigation.”

Two Miller contributors have become directly involved in defending the banks in the probe. One, Meyer Koplow of Wachtell Lipton in New York, gave Miller $5,000 and is representing Bank of America in direct negotiations with Miller, the attorney general tells TIME. Another, Elizabeth McCaul of Promontory Financial Group, gave Miller $10,000 and is consulting Bank of America in the negotiations, Miller says. Bank of America was one of the first and most prominent institutions accused in the foreclosure investigation. It gave more than $80,000 to the Democratic Attorney Generals Association, which spent more than $200,000 on Miller’s campaign, Miller says. Miller says Kaplow and McCaul are old friends and professional associates, and that they were not working for Bank of America before election day. He says neither has discussed the campaign contributions with him since they began work for the bank. The NIMSP report and revelations of campaign contributions by those working for Bank of America come at a sensitive moment, as Miller is in the thick of far-reaching negotiations with the banks. Though the case started as an investigation into robo-signing, it has broadened. The talks are aimed at a settlement that could set the terms by which banks service current and future home loans, and determine how they foreclose on properties. That could complement, or supercede, a settlement between banks and federal regulators reached earlier this year...

[Demeter]

78. Lawyer intensifies fee-splitting battle against mortgage servicing providers

http://www.housingwire.com/2011/04/22/lawyer-intensifies-fee-splitting-battle-against-mortgage-servicing-providers?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+housingwire/uOVI+%28HousingWire%29&utm_content=Google+Reader

The alleged splitting of attorney fees between foreclosure law firms and third-party mortgage servicing providers is the subject of another lawsuit, bringing the number of cases filed on this issue to five within the past seven months, said Nick Wooten, an Alabama-based plaintiff's attorney involved in all of the cases.

By mid-May, Wooten said he expects to file 10 to 12 additional cases, making similar allegations about what he claims are illegal, split-attorney fee arrangements between mortgage servicing outsourcers and law firms. The cases are concentrated in the Northern District of Mississippi, the Southern District of Alabama and the Northern District of Florida-Pensacola division.

The latest case involves plaintiff, Susan Marie Harris of Florida, against Lender Processing Services (LPS: 20.31 -1.88%), its subsidiary LPS Default Solutions Inc., and the Ben-Ezra & Katz law firm.

Harris, who is seeking class-action status of her lawsuit, claims the defendants violated bankruptcy code by creating contractual agreements that allowed them to "illegally split attorney's fees" with law firms that signed up to join LPS Default Solutions' attorney network...

[Demeter]

79. Bank of America Wins Dismissal From Countrywide Mortgage Securities Suit

http://www.bloomberg.com/news/2011-04-22/bank-of-america-wins-dismissal-of-countrywide-securities-claims.html

FROM APRIL (SORRY IT'S SO LATE--APRIL WAS A REALLY BAD MONTH--ONE IN A SERIES)

Bank of America Corp. (BAC) was dismissed from a lawsuit brought by investors who bought mortgage-backed securities sold by Countrywide Financial Corp., the home lender Bank of America acquired in 2008.

U.S. District Judge Mariana Pfaelzer granted Bank of America’s request to dismiss the claim against it on grounds that it can’t be held liable for actions of a unit, according to an April 20 order filed in Los Angeles.

The investors failed to show that two separate transactions in 2008, whereby Bank of America, through a subsidiary, acquired and transferred the Countrywide assets, were a “de facto” merger, Pfaelzer said.

The judge had dismissed the lawsuit in November, saying the investors didn’t sufficiently demonstrate they suffered an injury for the securities they bought, and that the statute of limitations had expired for some claims. The judge allowed the plaintiffs to file an amended complaint to address these failings before she would rule on Bank of America’s Aug. 20 request to dismiss it from the complaint....

[DemReadingDU]

80. John Xenakis - The Principle of Maximum Ruin

Reposting from 6/14/11

6/14/11 John Xenakis - The Principle of Maximum Ruin

"During a financial crash following the implosion of a generational credit bubble, the markets act in an incredibly ingenious manner, to ruin the maximum number of people to the maximum extent possible."
.
Xenakis also discusses Steve Keen.
.
"Keen's analysis fills in a gap in Generational Dynamics theory, by describing exactly where the 1970s macroeconomic models go wrong in the 2000s. Keen doesn't relate his analysis to generational theory, but it's this transition from a "well-functioning economy" to a "Ponzi economy" that occurs as the survivors of the previous financial crisis (the Great Depression) all disappear, leaving behind younger generations that have no fear of unlimited debt acceleration."

"The "Principle of Maximum Ruin" says that these young generations have no fear of accelerating debt until the trend exhausts itself, causing them to lose everything in a new Depression. As Keen points out, this lesson has not yet been learned, and the worst of the financial crisis is yet to come."

lots more...
http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e110614b#e110614b

:(

[Demeter]

82. Considering How F****ed up the Economy of the 70's Was, I'm NOT Impressed

and the 70's led to the 80's and so forth...Vietnam was the source of so much failure, loss, and despair, all for a lie, and all for naught.

And that whole "Conglomerate" craze...that bit a lot of rubes.

[DemReadingDU]

84. World's wealthiest people now richer than before the credit crunch

6/22/11 World's wealthiest people now richer than before the credit crunch
a new report shows the world's wealthiest people are getting more prosperous – and more numerous – by the day.

The globe's richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.

In the world of the well-heeled, the rich are referred to as "high net worth individuals" (HNWIs) and defined as people who have more than $1m (£620,000) of free cash.

According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7tn (£26.5tn) in 2010, rising nearly 10% in a year and surpassing the peak of $40.7tn reached in 2007, even as austerity budgets were implemented by many governments in the developed world.


more...
http://www.guardian.co.uk/business/2011/jun/22/worlds-wealthiest-people-now-richer-than-before-the-credit-crunch





It is apparent from the graph that there were fewer HNWIs in 2008 after that downturn in the markets. After the next downturn it will be interesting to compare the number of HNWIs to 2010.

edit: click to see larger image
http://image.guardian.co.uk/sys-files/Guardian/documents/2011/06/22/HNWI_World_web.pdf

[Demeter]

87. (Psst! Paper Assets)

Good for wiping ones ass, but not for covering it, in a crisis. They will get their just rewards, probably sooner than later.

[AnneD]

101. And that is when the fun kicks in......

When these folks discover they are not immune from being screwed. That is when you have to watch out for low flying bankers. Poor people that have never had the sweet life don't experience the shock of losing it.

[DemReadingDU]

104. especially true in poverty countries

However, many people in the U.S. now get food stamps and several months of unemployment compensation which help to keep people fed and pay a few bills. If our country didn't have these programs, it would be lots more obvious the numbers of people in our own country who are in poverty. I worry if/when these programs get cut back, or eliminated.

[Viva_La_Revolution]

86. kick! nt

[The Big Vetolski]

89. Great post and recommended.

[Demeter]

154. Welcome to our little band

the only requirement is to seek knowledge and share it.

[xchrom]

90. Chinese prime minister offers support for euro

http://www.thejakartapost.com/news/2011/06/25/chinese-prime-minister-offers-support-euro.html

Chinese Prime Minister Wen Jiabao has offered his country's support for Europe and its common currency amid the eurozone's debt crisis.

Wen says China is a long-term investor in the European sovereign debt market and has purchased a "not small" amount of euro-denominated bonds in the past years.

Wen says China will offer "consistent support for Europe and the euro."

Wen, on a five-day tour of Hungary, Britain and Germany just as Europe hammers out a plan to battle the eurozone debt crisis, met Saturday in Budapest with Hungarian Prime Minister Viktor Orban.

Wen says China is also willing to purchase bonds issued by Hungary, which does not yet use the euro, and offered Hungary a loan of 1 billion euros ($1.4 billion).

[hamerfan]

96. Just because...

hamerfan

[Fuddnik]

98. Oh, a wise guy!

[Demeter]

111. The Self-Styled "Elite" ARE Wiseguys

in the traditional, Mafia sense of the world.

[xchrom]

108. Banks Face Up to 2.5-Point Buffer in Basel

http://www.bloomberg.com/news/2011-06-25/basel-committee-reaches-deal-on-capital-levels-for-too-big-to-fail-banks.html

Global regulators said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.

The additional capital buffers will range from 1 percentage point to 2.5 percentage points, the Basel Committee on Banking Supervision said in a statement yesterday. From 28 to 30 banks, including as many as eight in the U.S., may face surcharges, said the person, who declined to be identified because the talks are private.

Regulators are at loggerheads with some banks over the additional capital rules, with lenders arguing the requirements may harm the global economic recovery. Many banks are “vigorously lobbying” against being branded as systemically important, Sheila Bair, chairman of the U.S. Federal Deposit Insurance Corp. told U.S. lawmakers on June 22.

“It’s the best possible outcome for U.S. banks given the way the regulators were pushing for high capital levels,” Charles Peabody, an analyst with New York-based Portales Partners LLC, said in a phone interview. The 2.5 percent maximum surcharge is the most that European banks can withstand as they’re “less well-capitalized” than U.S. banks and more exposed to risky sovereign debt, Peabody said.

[xchrom]

109. Canada, Australia Back Carstens for IMF

http://www.bloomberg.com/news/2011-06-24/carstens-wins-canada-australia-s-backing-for-imf-leadership-over-lagarde.html

Australia and Canada said they support Mexican central bank Governor Agustin Carstens for the top job at the International Monetary Fund over his rival Christine Lagarde, the French finance minister.

“It is important that the new IMF managing director be selected in an open and transparent process with the candidate chosen on the basis of merit and not nationality,” Australia and Canada said in joint statement e-mailed today by Australian Treasurer Wayne Swan’s spokesman, Fergus Maguire. A European has held the top IMF job since it was created at the end of World War II, while an American has always headed the World Bank.

The statement said Carstens’ experience as a deputy managing director of the IMF, along with his background as finance minister of Mexico and his current position, “equip him very well to understand and address, on a collaborative and inclusive basis with IMF member countries, the challenges faced by the global economy.”

[Demeter]

117. If We Had a Real Choice

I'd pick Michael Hudson. He gave Iceland the key to defeat the banksters. He'd shut that criminal syndicate down, and either make it function for people, or make it go away forever.

[xchrom]

118. i would love that. nt

[bread_and_roses]

112. "Capital Is a Fickle Lover"

This is an interesting article, but what is most interesting to me is that it illuminates how little it takes to keep the majority of the populace quiescent.

http://www.commondreams.org/view/2011/06/24-3

"China is today the ideal capitalist state: freedom for capital, with the state doing the 'dirty job' of controlling the workers,” writes the prominent Slovenian philosopher Slavoj Zizek. “China as the emerging power of the twenty first century …seems to embody a new kind of capitalism: disregard for ecological consequences, disdain for workers' rights, everything subordinated to the ruthless drive to develop and become the new world force."

er... - just what exactly is "new" about the "kind of capitalism" described in the quote? The author presents the quote without remark.

The author goes on to note signs of emerging labor unrest in China, and then examines two more rising economies, Brazil and Indonesia.

Brazil is interesting:

Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbors. Unlike Russia, it exports more than oil and arms, and treats foreign investors with respect. Under the presidency of Luiz Inácio Lula da Silva, a former trade-union leader born in poverty, its government has moved to reduce the searing inequalities that have long disfigured it. Indeed, when it comes to smart social policy and boosting consumption at home, the developing world has much more to learn from Brazil than from China.

... Lula seems to have squared the circle. Is this for real? The progressive analyst Perry Anderson believes it is. ... he says that Lula’s innovation was to combine conservative macroeconomic policy and foreign-investment-friendly policies with an anti-poverty program, the Bolsa de Familia, that cost relatively little in terms of government outlays but produced socially and politically significant impacts. ...

Does not Brazil have some issues around exploiters vs. First People's in the Amazon? Of course, the developers are so much stronger and better armed, the First People's so few and powerless, that this is probably an insignificance in the context of the article. Also interesting is Lulu's ability to keep foreign investors happy and labor quiet by the simple expedient of scattering a few pennies of largess amongst the populace, while making the global Oligarchs happy. That a former Labor leader "did not behave as labor’s representative in power" and that his erstwhile Sisters and Brothers would take what they can get (which is no doubt a good bit better than, say, in Columbia) is sad but not surprising. Nor is it surprising that lifting 20 million out of 50 million out of the worst level of poverty quiets the masses - it is, after all, basically the same formula the US used to such good effect throughout the 50's and 60's.

On to Indonesia, where after summing up the economic picture and why the global vampire oligarchs (my description, not the author's - the author is very measured) love it so much, the author notes:

For many on the left in both countries, however, the social situation is far from ideal, and they see Lula and SBY’s formula of friendship with capital cum poverty mitigation as the wrong formula to address their countries’ massive problems. Their skepticism is not unjustified: According to the Institute for Applied Economic Research, social inequality has not changed in 25 years. Half the total income in Brazil is held by the richest 10 percent, and only 10 percent of the national wealth is shared by the poorest 50 percent. Owing to continuing plunder by powerful logging interests with friends in high places, Indonesia’s rate of deforestation is among the 10 quickest on earth, the main reason it has become the third largest emitter of greenhouse gases. For the moment, however, these dissenters are a subdued minority.

Excepting the nod to deforestation, global climate change and the impossibility of lifting more than a fraction of the earth's population into "middle-class" consumer status is not addressed.

[Demeter]

114. Another Day, Another Compendium of Disaster

I will post until I can't stand it anymore. Enjoy!

[Demeter]

115. UK Treasury plans for Greece to go bust

http://www.telegraph.co.uk/news/politics/8588047/Treasury-plans-for-Greece-to-go-bust.html

Jack Straw, the former Labour foreign secretary, said that a “quick” end to the single currency was now better than a “slow death”.

In an emergency debate, senior MPs from all parties demanded that Britain stand aside from a new rescue package for Greece and push for the country to leave the euro.

Mark Hoban, a Treasury minister, admitted that “many scenarios were being considered”. He said it would “not be appropriate” to discuss the detail, but added he would be “guilty of not stepping up to the responsibilities of his office” if plans had not been made to cope with a default.

He said British banks had about £2.47billion in outstanding loans to Greek institutions and individuals.

BIG CHANGES COMING, PEOPLE

[Demeter]

116. Time for Plan B: How the Euro Became Europe's Greatest Threat

http://www.spiegel.de/international/europe/0,1518,769329,00.html

The euro is becoming an ever greater threat to Europe's common future. The currency union chains together economies that are simply incompatible. Politicians approve one bailout package after the other and, in doing so, have set down a dangerous path that could burden Europeans for generations to come and set the EU back by decades.

In the past 14 months, politicians in the euro-zone nations have adopted one bailout package after the next, convening for hectic summit meetings, wrangling over lazy compromises and building up risks of gigantic dimensions... For just as long, they have been avoiding an important conclusion, namely that things cannot continue this way. The old euro no longer exists in its intended form, and the European Monetary Union isn't working. We need a Plan B....if it wasn't for the euro, Greece's debt crisis would be an isolated problem -- one that was tough for the country, but easy for Europe to bear. It is only because Greece is part of the euro zone that Athens' debts are a problem for all of its partners -- and pose a threat to the common currency.

If the rest of Europe abandons Greece, the crisis could spin out of control, spreading from one weak euro-zone country to the next. Investors would have no guarantees that Europe would not withdraw its support from Portugal or Ireland, if push came to shove, and they would sell their government bonds. The prices of these bonds would fall and risk premiums would go up. Then these countries would only be able to drum up fresh capital by paying high interest rates, which would only augment their existing budget problems. It's possible that they would no longer be able to raise any money at all, in which case they would become insolvent.

But if the current situation continues, the monetary union will invariably turn into a transfer union, a path the inventors of the euro were determined to prevent...

EXCERPT FROM A 5 PART SERIES--EVERYTHING YOU'LL EVER NEED OR WANT TO KNOW...

[Demeter]

119. WSJ and Al-Jazeera Lure Whistleblowers With False Promises of Anonymity

https://www.eff.org/deeplinks/2011/06/wsj-and-al-jazeera-lure-whistleblowers-false

The success of Wikileaks in obtaining and releasing information has inspired mainstream media outlets to develop proprietary copycat sites. Al-Jazeera got into the act first, launching the Al-Jazeera Transparency Unit (AJTU), an initiative meant to "allow Al-Jazeera's supporters to shine light on notable and noteworthy government and corporate activities which might otherwise go unreported." AJTU assures users that "files will be uploaded and stored on our secure servers" and that materials "are encrypted while they are transmitted to us, and they remain encrypted on our servers."

On May 5, the Wall Street Journal (WSJ), a subsidiary of Dow Jones & Co., Inc., launched its own site, SafeHouse. That same day, the Atlantic published a story describing SafeHouse as a “secure uploading system” with “separate servers,” two layers of encryption, and a policy of discarding information about uploaders “as quickly as possible.” You can “keep yourself anonymous or confidential, as needed,” the SafeHouse site promises, as you “securely share documents with the Wall Street Journal.”...Immediately after its launch, however, online security experts ripped SafeHouse apart. The Atlantic published its story online at noon on May 5 and by 5 p.m., the page was updated with a link directing readers to the Twitter feed of Jacob Appelbaum, a security researcher and Wikileaks volunteer, who had already exposed an embarrassing number of security problems with SafeHouse....EFF’s review of the legal side of these websites doesn't fare any better. While some of the more egregious technical problems with SafeHouse have been fixed since its launch, its terms of use haven't changed. We read through the Terms of Service for both SafeHouse and AJTU (pdf). Don't fall for the false promises of anonymity offered by these sites. Here's what you should know.

They Reserve the Right to Sell You Out

Despite promising anonymity, security and confidentiality, AJTU can “share personally identifiable information in response to a law enforcement agency’s request, or where we believe it is necessary.” SafeHouse’s terms of service reserve the right “to disclose any information about you to law enforcement authorities” without notice, then goes even further, reserving the right to disclose information to any "requesting third party,” not only to comply with the law but also to “protect the property or rights of Dow Jones or any affiliated companies” or to "safeguard the interests of others.” As one commentator put it bluntly, this is “insanely broad.” Neither SafeHouse or AJTU bother telling users how they determine when they'll disclose information, or who's in charge of the decision....Whistleblowing by definition threatens "the interests of others." Every time someone uploads a scoop to SafeHouse, they jeopardize someone's interest in order to inform the public of what’s actually going on. That's the whole point. In the United States, submitting documents to journalists is protected speech under the First Amendment. But people in totalitarian countries cannot expose the secrets of their governments without breaking those governments' laws. And neither news outlet acknowledges that governments might abuse their police power to find out who leaked damaging information -- even here in the good old U.S. of A.

You Have to Make Promises No Whistleblower Can Keep(SEE LINK)

Communications are Neither Anonymous Nor Confidential (SEE LINK)

These Sites Don't Deliver What They Promise

It's understandable that news organizations would want to have access to news scoops provided by whistleblowers. That sort of competition is great. But these websites are misleading and based on our review of the fine print, use of them by people who risk prosecution or retaliation for bringing sunshine to corruption, illegal behavior, or other topics worthy of whistleblowing, is risky at best and dangerous at worst.

[Demeter]

120. Bill Black: My Class, right or wrong – the Powell Memorandum’s 40th Anniversary

http://www.nakedcapitalism.com/2011/04/bill-black-my-class-right-or-wrong-%E2%80%93-the-powell-memorandum%E2%80%99s-40th-anniversary.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Bill Black, an Associate Professor of Economics and Law at the University of Missouri-Kansas City. He is a white-collar criminologist, a former senior financial regulator, and the author of The Best Way to Rob a Bank is to Own One.

August 23, 2011 will bring the 40th anniversary of one of the most successful efforts to transform America. Forty years ago the most influential representatives of our largest corporations despaired. They saw themselves on the losing side of history. They did not, however, give in to that despair, but rather sought advice from the man they viewed as their best and brightest about how to reverse their losses. That man advanced a comprehensive, sophisticated strategy, but it was also a strategy that embraced a consistent tactic – attack the critics and valorize corporations!

He issued a clarion call for corporations to mobilize their economic power to further their economic interests by ensuring that corporations dominated every influential and powerful American institution. Lewis Powell’s call was answered by the CEOs who funded the creation of Cato, Heritage, and hundreds of other movement centers...

Confidential Memorandum:
Attack on the American Free Enterprise System

DATE: August 23, 1971
TO: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce
FROM: Lewis F. Powell, Jr.

http://www.pbs.org/wnet/supremecourt/personality/sources_document13.html

Lewis Powell was one of America’s top corporate lawyers and President Nixon had already sought to convince him to accept nomination to the Supreme Court before he wrote his memorandum. Powell was famous for his successful efforts on behalf of the Tobacco Institute. The Institute was desperately seeking to prevent the government from alerting consumers to the lethal effects of tobacco and to prevent its customers from holding the tobacco corporations legally responsible for their premature deaths. The Institute played the critical role in covering up the lethality and paying for junk science designed to mislead consumers about the lethal effects of tobacco products. They were literal merchants of death, selling a product that when used as intended was likely to kill the customer...

SO, ANOTHER TRAIL BACK TO THE BEGINNING OF THE CRIME..READ IT ALL

[Demeter]

122. BILL BLACK IS A MAN ON A MISSION--READ EVERYTHING HE WRITES!

"When cheaters prosper, market mechanisms become perverse and can drive the honest from the marketplace. The market becomes dominated by cheats because they obtain a competitive advantage. The most common reason that firms can cheat with impunity is that their CEOs are cronies of powerful politicians. The defining characteristics of crony capitalism are that the cronies receive subsidies, favors, and immunity from normal rules and laws. The cronies dominate the big corporations and provide reciprocal benefits to controlling politicians. Managerial incompetence and wealth flourishes under crony capitalism. Merit and efficiency suffer, income inequality surges, and class and who one knows become the primary determinants of economic and political success and power. The elites become pervasively corrupt.

Crony capitalism is the antithesis of “free enterprise.” The best way to destroy free enterprise is to allow CEOs to commit control fraud with impunity because that maximizes the perverse Gresham’s dynamic. Only big business had the power to destroy “free enterprise” in America – and Powell’s strategic plan was the best way to destroy free enterprise. As the left had long argued, it was the purported capitalists who would destroy capitalism."

[Demeter]

124. Sens. Franken, Blumenthal & Rep. Johnson Announce Legislation Giving Consumers More Power In Courts

ANOTHER FRANTIC, DOOMED, FINGER-IN-THE-DIKE BILL...

http://www.nakedcapitalism.com/2011/04/guest-post-senators-franken-and-blumenthal-and-representative-johnson-announce-legislation-giving-consumers-more-power-in-courts-vs-corporations.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[xchrom]

121. {interesting for the details} Ireland's NAMA wins control of prized properties - source

http://uk.reuters.com/article/2011/06/24/uk-ireland-property-idUKTRE75N5IH20110624

(Reuters) - Ireland's National Asset Management Agency (NAMA) has won control of some of London's most prized retail sites, including Louis Vuitton's flagship store, as it seeks to recover loans made to an Irish developer, a source familiar with the situation said on Friday.

NAMA, set up to purge Irish banks of risky property loans, appointed receivers on Friday to recover personal loans, worth hundreds of millions of euros, made to David Daly, the source told Reuters.

NAMA declined to comment. Daly could not be reached for comment.

Daly's loans are secured against an array of Irish and British properties, including three buildings on London's exclusive Bond Street, one of which is occupied by Louis Vuitton. Another one houses luxury British handbag maker Mulberry.

[Demeter]

123. The Question Is: Control for Whom?

[xchrom]

127. i wondered the same.

& i wondered what else is laying around out there to recover?

we get lots of big picture coverage of this crises -- but little of the details like this -- & i don't even know what they mean.

[Demeter]

125. IRS Likely to Expand Mortgage Industry Coverup by Whitewashing REMIC Violations

FROM APRIL, BUT STILL IMPORTANT SINCE THE WHITE HOUSE IS BEHIND IT!!

http://www.nakedcapitalism.com/2011/04/irs-likely-to-expand-mortgage-industry-coverup-by-whitewashing-remic-violations.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

As established readers know, we’ve been writing since mid 2010 about the widespread, possibly pervasive, failure of mortgage securitization originators to convey the notes (the borrower IOU) to securitization trusts as stipulated in the deal documents, well before the robo signing scandal broke. This abuse matters because the transaction procedures were designed carefully to satisfy certain legal requirements, among them rules contained in the 1986 Tax Reform Act regarding REMICs, or real estate mortgage investment conduits, which required that the securitization trust receive all its assets by 90 days after closing and that all assets conveyed to the trust have to be “performing”, as in not in default. Failure to comply with the rules is a prohibited act and subject to taxation at a rate of 100%, and additional penalties may apply.

Now, with the Federal government under enormous budget pressure, shouldn’t the authorities be keen to go after tax cheats? The headline of a Reuters article, “IRS weighs tax penalties on mortgage securities,” would suggest so. But don’t get your hopes up. The lesson is don’t jump to conclusions when big finance is involved.

An overview from the article:

Should the IRS find reason to take tough action, the financial impact could be enormous. REMIC investments are held by pension funds, in individual retirement plans such as 401(k)s and by state and local government entities.

As of the end of 2010, investments in REMICs totaled more than $3 trillion, according to data supplied by the Securities Industry and Financial Markets Association.

In a brief statement in response to questions from Reuters, the agency said: “The IRS is aware of questions in the market regarding REMICs and proper ownership of the underlying mortgages as set out in federal tax law, and is actively reviewing certain aspects of this issue.”

This matter was raised early last year by an attorney I know with IRS, to a senior officer, not in enforcement but familiar with REMIC rules. She immediately understood the importance and nature of the violations being alleged and was keen to proceed. Having had no follow up, the attorney rang again, and the IRS officer took the call, this time reluctantly. She indicated she was not supposed to be taking to him. She said the issue had gone to the White House, where word came back that the IRS was not going to be used as a tool of policy.

So demanding that tax law violators pay what they owe is somehow seen as an misuse of government authority? That appears to be the message.

Knowing of this background, in the blogger meeting with Treasury last August, when someone we will euphemistically call as senior official argued that the Treasury had little power over servicers, I objected, and said it depended on whether they construed of their power narrowly or broadly. I pointed out that a Pacer scrape on foreclosure filings would find thousands of violations of REMIC rules that were subject to punitive charges, and that that was an important leverage point to bring the industry to heel. (Yes, this is an example of using tax as a tool of policy, as opposed to merely enforcing the rules……that was by design). He sidestepped the reference to REMIC both in my initial question and follow up...

[Demeter]

126. For the Servicers: Is It Better to Rob Peter or Paul? APRIL AGAIN..

http://www.creditslips.org/creditslips/2011/04/for-the-servicers-is-it-better-to-owe-peter-or-paul.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+creditslips%2Ffeed+%28Credit+Slips%29

The U.S. mortgage servicing industry is in deep doo-doo. To foreclose on a mortgage, you must own the note and the mortgage. That's a lot of paperwork to keep track of, especially when you're trying to package as many mortgage loans into as many securitizations as you can before the market dries up. If we have learned nothing else in the past four years, it is a lot to ask Wall Street to make sure they get things right when there is money to be made. Because of lost, sloppy, and perhaps nonexistent paperwork, banks who purport to have the right to foreclose often cannot prove they own the note and mortgage.

Things are starting to hit the fan -- we can't say exactly what is hitting the fan because this is a family blog (except for here, here, and especially here). In defending itself, the mortgage industry is taking yet another reflexive, knee-jerk position that seems to me to be against their long-term interest.

A typical fact pattern might play out like this. Bank forecloses on Peter. At the foreclosure sale, Paul buys the property. Bank cannot prove it owned the mortgage and note at the time of the foreclosure sale, meaning it had as much right to foreclose as any other stranger to the property. That is to say, it had no right to foreclose.

At this point, Bank either owes Peter or Paul. It owes Peter for fraudulently obtaining a judgment of foreclosure against him and dispossessing him of his home. Or, if we overturn the foreclosure sale, it owes Paul for conveying an invalid title (more accurately, it would owe the sheriff who should have to return Paul's money). If I had to choose between owing a homeowner for dispossessing the person of her home or owing a disappointed investor for conveying an invalid title at a foreclosure sale, I would rather owe the disappointed investor. It is going to be cheaper...

[xchrom]

128. "Probably inevitable" a country will exit euro: George Soros

http://economictimes.indiatimes.com/news/international-business/probably-inevitable-a-country-will-exit-euro-george-soros/articleshow/9002026.cms

VIENNA: Billionaire investor George Soros thinks a country will eventually exit the euro zone and urged policymakers on Sunday to come up with a "plan B" that could rescue the European Union from looming economic collapse.

Soros, famous for making $1 billion by betting against the British pound in 1992, did not name any country he thought might exit the currency, but speculation is mounting about the fate of Greece as its politicians struggle to agree more austerity measures demanded by international lenders as the price for staving off bankruptcy.

Soros reiterated his view in a panel discussion in Vienna that the euro had a basic flaw from the start in that the currency was not backed by political union or a joint treasury.

"The euro had no provision for correction. There was no arrangement for any country leaving the euro, which in the current circumstances is probably inevitable," he said.

[Demeter]

129. Is the Chinese Economy Sputtering for the Same Reasons as the American Economy?

http://www.washingtonsblog.com/2011/06/is-chinese-economy-sputtering-for-same.html

It was tempting to believe that China was different.

With its command and control economy with some of the trappings of free market capitalism, trillions in reserves, and abundant natural resources, many thought that China would "decouple" from the Western world's problems and sail into a prosperous future...However, despite its long history, exotic names and seemingly strong position, China cannot avoid the rules of economics which have applied to all countries throughout history.

Corruption and Phony Bookkeeping

Corruption and the failure to follow the rule of law is one of the main factors which has dragged down the American economy...The fact that - according to the Chinese central bank - Chinese officials stole $120 billion and fled the country does not auger well for China. Scandals among various Chinese companies are not helping, either. And then there are the made up statistics. As Warren Hatch of Catalpa Capital Advisors notes: "As Li Keqiang, the vice premier and heir-apparent to Wen Jiabao, laconically remarked to the US ambassador a few years ago, most of the statistics in China are “for reference only.”" ...And Charles Hugh Smith argues: "Despite their many differences, the economies of China and the U.S. share a number of key traits: both are corrupt, rigged, crony-Capitalist, rely on phony statistics and propaganda and operate with two sets of rules: one for the Elites, and another for the masses."

Can We Trust You?

The credit crisis hit in 2008 largely because American banks lost trust in one another. Specifically, top economists say that each bank had so much bad debt on its books (in the form of mortgage backed securities and derivatives which WEREN'T worth the paper they were written on) which made them essentially insolvent that they assumed that all of the other banks must be in a similar situation ... so they stopped lending to each other. This drove the price which banks charged each other for loans (libor) skyrocket, and the whole credit market froze up...The same thing is now happening in China. As ZeroHedge reports, Chinese interbank lending is freezing up and "shibor" - the prize which Chinese banks charge each other for loans - is skyrocketing.

MUCH MORE AT LINK

[Demeter]

130. Fiscal Conservatives Dodge $10 Trillion Debt: Simon Johnson ANOTHER APRIL

http://www.bloomberg.com/news/2011-04-19/fiscal-conservatives-dodge-10-trillion-debt-simon-johnson.html

Washington is filled with self-congratulation this week, with Republicans claiming that they have opened serious discussion of the U.S. budget deficit and President Barack Obama’s proponents arguing that his counterblast last Wednesday will win the day. The reality is that neither side has come to grips with the most basic of our harsh fiscal realities.

Start with the facts as provided by the nonpartisan Congressional Budget Office. Compare the CBO’s budget forecast for January 2008, before the outbreak of serious financial crisis in the fall of that year, with its latest version from January 2011. The relevant line is “debt held by the public at the end of the year,” meaning net federal government debt held by the private sector, which excludes government agency holdings of government debt...In early 2008, the CBO projected that debt as a percent of gross domestic product would fall from 36.8 percent to 22.6 percent at the end of 2018. In contrast, the latest CBO forecast has debt soaring to 75.3 percent of GDP in 2018.

What caused this stunning reversal, which in dollar terms works out to a $10 trillion swing for end-year 2018 debt, from $5.1 trillion to $15.8 trillion?
Almost all of this increase is due to the severe recession that followed the financial crisis of late 2008. This lowered output and employment, and therefore reduced tax revenue.

MASSIVE, DEPRESSING DETAIL--SEE LINK

The right way to think about future budget deficits is in a probability-based fashion: What is the chance something bad will happen, and how bad will that be for debt levels? The odds of another major financial calamity next year are small, but the risk over a 10- to 20-year period is high. That’s the right time horizon to use in the coming budget debate. The impact of a new financial crisis on the U.S. public balance sheet would be huge. Anyone who wants to be taken seriously as a fiscal conservative must stop dodging this issue and start proposing solutions.

[bread_and_roses]

131. the people roar in Spain

http://www.commondreams.org/headline/2011/06/25-1

Spain's 'Indignant' Launch New Protest March
Spain's Indignant: First We Took the Steets, then the Squares, Now the Roads. "After That, We Will Take Europe."
by Josep Lago

... The protest movement started in Madrid on May 15 and fanned out nationwide as word spread by Twitter and Facebook, bringing tens of thousands of people into city squares around Spain ahead of May 22 local elections.

On Sunday, about 200,000 protesters packed the streets of Madrid, Barcelona and other major cities to vent their anger, according to estimates by the Spanish media and some regional authorities....

...The "indignants" have inspired similar offshoot movements in other European countries, notably Greece, where the government is also trying to implement a strict austerity programme to avoid defaulting on its loans....

Where, oh where are our "indignants?"

[Demeter]

133. Swilling Tea with Sarah Palin

They don't really know what to complain about, but they are loud...the trick is, to harness that noise. The candidate who does that takes the pot.

[bread_and_roses]

140. yep (nt)

[bread_and_roses]

147. I swear, the poor and working class (redundancy) used to be smarter

For my own purposes, I am reading about the history of eating patterns among the non-wealthy (this is simply one of my side interests - not meaning to imply I'm doing serious research -)

So I google a question that I think will work, and on second page I get this:

http://ilstu.academia.edu/RobertDirks/Papers/160220/DIET_AND_NUTRITION_IN_POOR_AND_MINORITY_COMMUNITIES_IN_THE_UNITED_STATES_100_YEARS_AGO

...Finding subjects for dietary research often proved difficult... the suspicion that dietary research was designed to see how cheaply people could live so employers could cut wages accordingly was a recurrent impediment to investigations.

Edward L. Bernays has a hell of a lot to answer for....

[Demeter]

132. Beyond ForeclosureGate - It Gets Uglier

http://www.economicpopulist.org/content/beyond-foreclosuregate-it-gets-uglier

The ForeclosureGate scandal poses a threat to Wall Street, the big banks, and the political establishment. If the public ever gets a complete picture of the personal, financial, and legal assault on citizens at their most vulnerable, the outrage will be endless.

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.

ForeclosureGate represents the sum total illegal and unethical lending and collections activities during the real estate bubble. It continues today. Law professor and law school dean Christopher L. Peterson describes the contractual language for the sixty million contracts between borrowers and lenders as fictional since the boilerplate language names a universal surrogate as creditor (Mortgage Electronic Registration System), not the actual creditor. Other aspects of ForeclosureGate harmed homeowners but the contractual problems that the lenders created on their own pose the greatest threats.

When the Massachusetts Supreme Court upheld a lower court ruling that the actual creditor must be named in the mortgage agreement (a legal requirement that the banks forgot to meet in their contracts), there was consternation on Wall Street. What would happen if a class action lawsuit challenged these flawed mortgages? Isn't the Massachusetts decision the latest of many attacking the legal basis of the shoddy business practices and boilerplate industry contracts? What if homeowners started walking away from their underwater mortgages based on the legally flawed contracts? If there were a viable prospect of a class action suit against financial institutions threatening to invalidate these contracts, wouldn't that crash the stock values of the big banks and some Wall Street firms?

The big banks and their partners on Wall Street need a preemptive strike to derail the legal process that threatens their existence. They may get a temporary reprieve through pending consent decrees from the United States Department of Justice and consortia of state attorney's general. If that protection fails, big money will make every effort to buy a bill from Congress that absolves them retroactively, en masse. The consent decree might cost them a few billion dollars. That's much better than owing the trillions in lost home values due to their contrived real estate bubble and stock market crash.

As bad as this is, it gets worse.

Beyond ForeclosureGate

The surface scandal is about fraudulent business practices and a systematic assault on homeowners by lenders, servicers, and the legal system. A much broader picture must be viewed in order to understand the utter contempt that the ruling elite has toward citizens and the depraved tactics used to express that contempt, all to serve endless desire to accumulate more money and power.

The set up began when we heard about the ownership society in the 2004 presidential election. President Bush defined ownership as taking the government out of our lives so more people could own homes and control their destinies. The foundation was home ownership. As Bush said on the campaign trail, "We're creating a home -- an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property" October 2, 2004.

Then Federal Reserve Chairman Alan Greenspan was uncharacteristically coherent when he laid the foundation for the swindle earlier that year. Greenspan told the Credit Union National Association that the fixed rate mortgage was "an expensive way of financing a home." He was clear when he advised lenders that, "consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage." February 2, 2004. Home equity through exotic mortgage products fueled consumption and became the new "margin account."

The Chairman of the Federal Reserve and the president ratified the real estate bubble, already underway at the time, as political and financial doctrine. The advice was clear. Get an ARM, own your piece of the American Dream and spend that equity. Housing prices never go down, right?

Freddie Mac, Fannie Mae, Wall Street and the big banks provided the back room. Mortgage Backed Securities (MBS) derivatives were vastly expanded. This made it easy for more homebuyers to qualify for mortgages they might not otherwise get, credit standards dropped. Those with good credit saw an array of tantalizing zero interest loans and other mortgage products to maximize available cash and feed the stock market.

It was all good until it wasn't.

The real scandal is the unfathomable loss of wealth and opportunities by the vast majority of citizens and the vicious attack on the most vulnerable citizens as a part of that process. The attack continues and is worthy of review.

Foreclosure and Bankruptcy

Foreclosure is the down side of the ownership society. When you're sold a bill of goods, a property that you were told you were qualified to buy, and you lose it, you are evicted from ownership island.

Before Congress passed the 2005 bankruptcy reform act, homeowners could avert foreclosure in many states by filing for bankruptcy. Not just anyone could qualify. The process of qualifying was difficult and, oftentimes humiliating. But homes were saved and families were preserved with a chance to start over.

A myth emerged of the bankruptcy abuser, a high-class sort of welfare cheat. These reckless people worked the system to rack up large debts that were subsequently wiped clean through bankruptcy. The alleged abuse of the system became the excuse for a major overhaul of bankruptcy law. The legislation passed the Senate with 74 yes votes and soon became law.

The changes since the 2005 legislation provide substantial benefits to creditors. Morgan et al summarized the direct benefits to creditors in a forthcoming publication in the New York Fed's Economic Policy Review. Before bankruptcy reform, the filer of a bankruptcy claim used to determine Chapter 7 or 13 filing status. That makes a difference in the amount and type of debt relief. The legislation imposes means test that determines precisely which chapter (7 or 13) filers must use. Significantly, chapter 13 filers retain more debt from medical and other unsecured credit.

Legal costs ranged from $600 to $1500 before bankruptcy reform. Legal fees now range between $2800 and $3700. Previously, there was no requirement for credit counseling prior to filing.

Filers must now document approved credit counseling six months before filing or face dismissal of their case(Morgan et al.). This counseling requirement can lead to unwarranted dismissals or inordinate delays in filing at a time when filers need relief.

Under the old law, only bankruptcy trustees appointed by the federal court could file claims of abuse by the filer. Under the new legislation, anyone can file a claim of bankruptcy abuse, which can lead to a dismissal of the cause. This is a huge benefit to lenders who wanted to keep citizens from realizing debt relief.

The Real Benefit for Big Money - Delayed Bankruptcy Filings

The new law makes it harder to file a claim, doubles costs, and gives the creditors a say in claiming fraud on the part of those who file claims. Significant delays in filing for bankruptcy became the norm.



From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

Time is money for loan servicers. A long delay before a bankruptcy filing, allows servicers the opportunity to add on special fees, many of which the borrower can't comprehend. One thorough study showed that many of these fees were questionable. The longer it takes, the greater the revenue opportunities. Delay benefits creditors since loan payments continue at their original level.

What happened to those big spending, reckless bankruptcy abusers that were the rationale for the 2005 reforms? The following graph from the Consumer Bankruptcy Project shows that there is virtually no difference between the incomes of filers before and after bankruptcy reform. The majority of filers made between ten and forty thousand dollars a year before reform. That has remained virtually unchanged. The big spending abusers were and remain a mythical construct; the centerpiece of a diversion strategy to keep attention away from this never-ending gift to creditors.



From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

These newly empowered creditors were the same creditors who hired debt collectors to try and frighten people out of their filings. A major study found that 24% of filers reported that debt collectors told deliberate lies to avoid bankruptcy. They heard that filing for bankruptcy would lead to jail, job loss, or an IRS audit. Some were told that it was illegal to file for bankruptcy. Lawless, et al. Did the Bankruptcy Reform Fail? An Empirical Study, October 2008

The deck was stacked early against citizens and protection from creditors disappeared under the new law. The creditors, who so recklessly precipitated the economic collapse, came out on top. They were free to profit in any way they could from their new market,

What Causes Bankruptcy - Financial Shocks from Medical Expenses

Prior to the new law, the major cause of bankruptcy stemmed from medical care expenses and the resulting disruptions to families. Rather than the mythical big spender contrived by Congress, for nearly half of filers, major medical expenses, family tragedies, were the tipping point to a loss of financial viability.

The Consumer Bankruptcy Project audited a representative sample of bankruptcy filers in 2001. The audit found that 46% cited a "major medical cause" for bankruptcy. This includes the direct cost of uncovered medical bills for major illness or injury, lost work due to the same, and the need to mortgage the family home to cover medical costs.

Did Congress review this data? Were they intent on making it harder to file bankruptcy as a result of illness? When bankruptcy is delayed or simply not attainable, less money is available for needed medical care. Were the members supporting bankruptcy reform indifferent to the suffering compounded by their thoughtless legislation?

The situation is worse now. A comprehensive survey of those who filed bankruptcy in 2007 showed the increasing desperation of those faced with medical problems. When individuals or family members are in dire need of medical care, do they just sit home and suffer?



From Medical Bankruptcy in the United States, 2007: Results of a National Study, Himmelstein et al., American Journal of Medicine, 2009:04

Nearly two thirds of bankruptcies result from medical care that people can't afford or losses in income from medically required leave. Where are the big spending cheats?

Nihilists at the Helm

The big banks, Wall Street, the politicians they own, and the Federal Reserve Board created the real estate bubble in bad faith.

They knew or should have known:

* that the real estate bubble was unsustainable;
* when the bubble deflated, many homeowners would hit a financial wall; and, that
* when homeowners hit the wall, to maintain viability for their families, they would need relief of some sort.

What did the nihilists of the financial elite and their hit men walking the halls of power do with all this knowledge? They went ahead with the real estate bubble, fostered it, deregulated meaningful controls on the financial industry, and crafted a new bankruptcy law to stick it to filers. They knew or should have know that data from 2001 showed a very high rate of filings due to the financial stress of medical care. Did they care? Do they care now? Has anything been done to correct this injustice?

Citizens suffer financial distress, often due to illness, at the behest of influential bankers and investors. At the same time, the Department of Justice crafts a settlement with lenders and their representatives to relieve them of the stern justice due for their specific crimes and the larger horrors they visit upon citizens.

We are most emphatically not a nation of laws. We are a nation where the law is used by a very few for their own purposes, without regard for the well being of the nation or its citizens. We are a lawless nation

END

This article may be reproduced entirely or in part with attribution of authorship and a link to this article.

[Demeter]

134. For What It's Worth, Asian Markets Are Soaring

Anybody know why?

[westerebus]

149. Comrade President is buying the EU.

Lock, stock, barrel, bolt, hook, line and sinker. Just a guess.

[Demeter]

153. He Can't Afford To

Maybe they are all selling the sinking of the Euro?

[westerebus]

161. A third of their reserves are Euros.

I don't think they can take the inflation shock if the EU goes Bernank and monetizes.

Just what they need, more worthless paper and their second largest customer de leveraging.

Buy the hope, sell the panic?

Between the length of the road this can has been kicked down and the amount of lipstick on this pig, I am just amazed.

[Demeter]

135. I'm Blushing! Too Close to the Truth, Dilbert!

[Demeter]

136. Brazen Hacker Group Says It's Disbanding

http://www.npr.org/2011/06/26/137428413/brazen-hacker-group-says-its-disbanding?ft=1&f=1001

A publicity-seeking hacker group that has left a trail of sabotaged websites over the last two months, including attacks on law enforcement and releases of private data, said unexpectedly on Saturday it is dissolving itself. Lulz Security made its announcement through its Twitter account. It gave no reason for the disbandment, but it could be a sign of nerves in the face of law enforcement investigations. Rival hackers have also joined in the hunt, releasing information they say could point to the identities of the six-member group...One of the group's members was interviewed by The Associated Press on Friday, and gave no indication that its work was ending. LulzSec claimed hacks on major entertainment companies, FBI partner organizations, the CIA, the U.S. Senate and a pornography website.

Kevin Mitnick, a security consultant and former hacker, said the group had probably concluded that the more they kept up their activities, the greater the chance that one of them would make some mistake that would enable authorities to catch them. They've inspired copycat groups around the globe, he noted, which means similar attacks are likely to continue even without LulzSec.

[Demeter]

139. The Battle for Control — What People Who Worry About the Internet Are Really Worried About

http://scholarlykitchen.sspnet.org/2011/03/02/the-battle-for-control-what-people-who-worry-about-the-internet-are-really-worried-about/

Over the past few years, we’ve been witness to a parade of partisans in the debate over whether the Internet is making us smarter and more capable or turning us into shallow and superficial information parasites. Nicholas Carr carries the most water for this argument, but others have joined in. Usually, their arguments that we’re going too far, becoming too fragmented, or becoming distracted are positioned to seem as if they have our best interests at heart — concern for our minds, our families, our communities, our culture.

Adam Gopnik, writing recently in the New Yorker, breaks down the more typical partisans in the following manner:

. . . the Never-Betters, the Better-Nevers, and the Ever-Wasers. The Never-Betters believe that we’re on the brink of a new utopia, where information will be free and democratic. . . . The Better-Nevers think that we would have been better off if the whole thing had never happened, that . . . books and magazines create private space for minds in ways that twenty-second bursts of information don’t. The Ever-Wasers insist that at any moment in modernity something like this is going on, and that a new way of organizing data and connecting users is always thrilling to some and chilling to others.

A recent post by Jeff Jarvis puts what he calls “the distraction trope” into perspective. Instead of worrying about whether our brains, families, or communities are changing, Jarvis strips away that sophistry and lays bare something more primal that seems to be at stake:

And isn’t really their fear . . . that they are being replaced? Control in culture is shifting. We triumphalists — I don’t think I am one but, what the hell, I’ll don the uniform — argue that these tools unlock some potential in us, help us do what we want to do and better. The catastrophists are saying that we can be easily led astray to do stupid things and become stupid. One is an argument of enablement. One is an argument of enslavement. Which reveals more respect for humanity? That is the real dividing line. I start with faith in my fellow man and woman. The catastrophists start with little or none.

Throughout history, this fear of losing control has been consistently masked as concerns for higher, even altruistic interests...It’s vital to note here that the Internet is different than any other communications medium precisely because it’s the first that nobody controls, thanks for packet switching, TCP/IP, and other architectural marvels at its center. It’s tradition is change. Competence with it demands change....So, despite all the partisans, sophistry, and essays about our brains, our culture, our souls, it’s important to remember that what we’re really arguing about is control.

Sometimes, a cigar is just a cigar.

[Demeter]

137. Another County Seeking to Collect Unpaid Recording Fees From MERS

http://www.nakedcapitalism.com/2011/03/another-county-seeking-to-collect-unpaid-recording-fees-from-mers.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts. The latest, as we mentioned a few weeks ago, is the prospect of litigation by various local governments asserting the right to the recording fees that the MERS system bypassed... The press release below is from the Guilford County Register of Deeds in North Carolina. As you can see, he is exploring the county’s options for recouping recording fees he believes that MERS owe to Guilford County, to the tune of $1.3 million (hat tip Lisa Epstein via ForeclosureFraud). I particularly like this sentence:“Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?”

As we have indicated, MERS is far from a deep pockets target. And no one has yet filed a lawsuit; litigation is an expensive proposition for both parties. You could easily see the county spending more that it could possibly collect in legal costs. The real question is whether a clever lawyer can find a legal theory that would allow the local governments to sue not just MERS but one of the parties that benefitted from the MERS process, presumably the sponsors. And then you’d need to file it on a class action basis so that the legal cost divided over a large number of plaintiffs would still allow for reasonable recoveries.

[Demeter]

138. Supreme Court: Corporations don’t have ‘personal privacy’ rights FROM MARCH--HOW'D I MISS IT?

http://www.rawstory.com/rs/2011/03/02/supreme-court-corporations-dont-have-personal-privacy-rights/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story%29

The Supreme Court of the United States ruled Tuesday that AT&T and other corporations do not have personal privacy rights under the Freedom of Information Act (FOIA).

The Freedom of Information Act requires federal agencies to make documents publicly available upon request, but contains an exemption for documents that "constitute an unwarranted invasion of personal privacy."

Claiming they were a "corporation citizen," AT&T tried to use the personal privacy exemption to prevent the disclosure of federal government documents about the company.

The unanimous decision in Federal Communications Commission v. AT&T, Inc. reversed a ruling by a US appeals court in favor the telecommunications company:

"Personal' in the phrase 'personal privacy' conveys more than just 'of a person,'" Chief Justice John Roberts wrote in his decision. "It suggest a type of privacy evocative of human concerns—not the sort usually associated with an entity like, say, AT&T."

"We reject the argument that because 'person' is defined for purposes of FOIA to include a corporation, the phrase 'personal privacy' in Exemption 7(C) reaches corporations as well," he said.

"The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations."

"We trust that AT&T will not take it personally," Roberts added. "The judgment of the Court of Appeals is reversed."

WHAT? IS ROBERTS CRACKING A JOKE?

The decision is a striking contrast to the court's ruling in Citizens United, which upended decades of campaign finance regulation, allowing corporations to spend unlimited amounts on political campaigns without having to identify themselves.

[Demeter]

142. Where Your Income Tax Money Really Goes

http://www.care2.com/causes/where-your-income-tax-money-really-goes-war-resisters.html

[Demeter]

143. Cooking up trouble – Soaring food and fuel prices in North Africa and the Middle East

http://www.nakedcapitalism.com/2011/02/guest-post-cooking-up-trouble-%E2%80%93-soaring-food-and-fuel-prices-in-north-africa-and-the-middle-east.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

World food prices are now even higher than their peak just before the global crisis. During periods of high commodity prices, North African and Middle Eastern governments have a long tradition of subsidising food and fuel products. But this column shows that food price inflation and consequently subsidies were also high during periods when global commodity prices were falling. Now these countries have an opportunity to correct this.

Just before the global crisis struck in September 2008, food and fuel prices soared, pushing up inflation in most countries (see for example, Tangermann 2008 and Conceição and Mendoza 2009 on this site). The impact was particularly large in North Africa and the Middle East (such as Algeria, Tunisia, Libya, Egypt, Israel, Jordan, Palestinian territories and Syria) where food constitutes a large share of consumer spending. Only those countries with more developed agricultural sector, such as Morocco, escaped to some extent from a rise in its consumer price inflation due to the available domestic supply of basic commodities.

In 2009, the global crisis reduced the global demand for food and fuel and subsequently stopped the surge in global commodity prices. On its own, this lower inflation was a welcome blessing, notably in countries such as Egypt where annual consumer price inflation had reached 24% in August 2008.

Figure 1. World food prices vs. North African and Middle Eastern food prices




The impact of the soaring commodity prices on public finances

Governments in North African countries have a long tradition in subsidising food and fuel – and higher prices have led to higher spending. Across these countries, the impact of the subsidies on the fiscal balances varies but subsidies take up at least 10% of current government expenditures in most countries (see Albers and Peeters 2011, and Figure 2).

Figure 2. Food and fuel prices



MORE GRAPHIC GOODNESS AND WORDS AT LINK--NOW YOU KNOW WHY!

[Demeter]

144. Researchers: 100 Percent Green Energy Possible By 2050

SO, WHEN I'M 95?

http://www.greencarreports.com/news/1055509_researchers-100-percent-green-energy-possible-by-2050

...a recent article claims it could take just 40 years to convert the bulk of the world's global energy usage from fossil fuels to renewable energy, primarily wind and solar power.

That's not only vehicle fuel, but also electric-power generation, home heating, and the many other global activities that rely on the remarkably high energy density of the hydrocarbon molecules in coal, oil, and natural gas. Researchers from Stanford University and the University of California-Davis published their analysis in the journal Energy Policy.

Measuring costs vs benefits

The main challenges, say the authors, will be summoning the global will to make the conversion. "There are no technological or economic barriers to converting the entire world to clean, renewable energy sources," said author Mark Jacobson, a Stanford professor, saying it is only a question of "whether we have the societal and political will."...When looking at the cost of junking half a century's worth of existing power plants, for example, how can electric utilities benefit from the tens of billions of dollars in public health costs that will be avoided in the future once those emissions are no longer being generated? Those public-health benefits might include saving 2.5 to 3 million lives each year.

And then there's the benefit of halting climate change, not to mention reductions in water pollution, and increased energy security as more of each nation's energy is generated from within its own borders.


Step Two: Shutting down the old stuff

Then comes the second stage: starting to convert existing generating plants from fossil fuels to renewables. That, say the authors, will take another two decades.

End game: By 2050, fossil fuels will have been replaced for more than 90 percent of global energy use. The world's citizens will do more things electrically, from heating their homes to commuting to work, and the carbon footprint of industry, transportation, and other sectors will be approaching zero.

MUCH MORE AT LINK

[Demeter]

145. Wall Street Justice Means Nobody Gets Pinched: Jonathan Weil

http://www.businessweek.com/news/2011-02-09/wall-street-justice-means-nobody-gets-pinched-jonathan-weil.html

THE SEC AND GE--FROM FEBRUARY. 'NUFF SAID.

[Demeter]

146. The Gender Pay Gap by Industry

http://economix.blogs.nytimes.com/2011/02/17/the-gender-pay-gap-by-industry/?ref=business

[Demeter]

148. THAT'S ALL FOLKS! I'M DIGGING INTO REALLY OLD STUFF

The backlog is going down, and there's less and less that hasn't expired...

one topic that has fallen off the stage is the "reform" of Fannie and Freddie...probably overtaken by the whole MERS mess and the MBS scandals...

to wind it up, some Rag Time music:

the Charleston:

http://www.youtube.com/watch?v=ZJC21zzkwoE



# GENE AUSTIN - My Blue Heaven http://www.youtube.com/watch?v=5w-_xbBmXJ4
# AL JOLSON - California, Here I Come http://www.youtube.com/watch?v=7IjpAGf0oks
# JAN GARBER - Baby Face http://www.youtube.com/watch?v=-WJjiV4HQ6I
# PAUL WHITEMAN & HIS ORCHESTRA - Whispering http://www.youtube.com/watch?v=tOhkc1a-zCo
# PAUL WHITEMAN'S CONCERT ORCHESTRA featuring GEORGE GERSHWIN - Rhapsody In Blue http://www.youtube.com/watch?v=1U40xBSz6Dc
# NICK LUCAS - Tip Toe Through The Tulips http://www.youtube.com/watch?v=UZMHJX4b9bU
# AL JOLSON - April Showers http://www.youtube.com/watch?v=O4nkp3pNe5I
# ARTHUR GIBBS - Charleston SEE ABOVE
# GENE AUSTIN - Yes Sir! That's My Baby http://www.youtube.com/watch?v=c_j2CaFF56c
# MARION HARRIS - Tea For Two http://www.youtube.com/watch?v=KxadblDT6zI
# ISHAM JONES - It Had To Be You
# BEN BERNIE - Ain't She Sweet
# AL JOLSON - Swanee
# "WHISPERING" JACK SMITH - Me And My Shadow
# BEN BERNIE - Sweet Georgia Brown
# PAUL WHITEMAN & HIS ORCHESTRA - Valencia
# AL JOLSON - Sonny Boy
# GENE AUSTIN - Ramona
# RUDY VALLEE - Honey
# AL JOLSON - When The Red, Red Robin Comes Bob-Bob-Bobbin' Along
# FRED WARING'S PENNSYLVANIANS - Memory Lane
# PAUL WHITEMAN & HIS ORCHESTRA - Three O'Clock In The Morning
# ISHAM JONES - Wabash Blues
# BEN SELVIN'S NOVELTY ORCHESTRA - Dardanella
# TED LEWIS & HIS BAND - When My Baby Smiles At Me
# MARION HARRIS - St. Louis Blues
# FANNY BRICE - My Man
# PAUL WHITEMAN & HIS ORCHESTRA - Song Of India
# TED LEWIS & HIS BAND - All By Myself
# ISHAM JONES with RAY MILLER'S ORCHESTRA - I'll See You In My Dreams
# GENE AUSTIN - Bye Bye Blackbird
# LOUIS ARMSTRONG & HIS HOT FIVE - West End Blues
# PAUL WHITEMAN & HIS ORCHESTRA - Say It With Music
# GENE AUSTIN - Carolina Moon
# GUY LOMBARDO & HIS ROYAL CANADIANS - Sweethearts On Parade
# GUY LOMBARDO & HIS ROYAL CANADIANS - Charmaine!
# PAUL WHITEMAN & HIS ORCHESTRA - In A Little Spanish Town
# VERNON DALHART - The Prisoner's Song http://www.youtube.com/watch?v=V0tg5u9y2Ps
# PEERLESS QUARTET - Birth Of The Blues
# ORIGINAL DIXIELAND JAZZ BAND - Royal Garden Blues
# TED WEEMS - Somebody Stole My Gal
# BILLY JONES - Yes! We Have No Bananas
# AL JOLSON - Toot Toot Tootsie (Goo'Bye)
# VAN & SCHENCK -Carolina In The Morning
# PAUL WHITEMAN & HIS ORCHESTRA - What'll I Do
# LEO REISMAN - Wedding Of The Painted Doll
# BESSIE SMITH - Down Hearted Blues
# JOHN STEEL - The Love Nest
# AL JOLSON - O-H-I-O (O-My!-O!)
# PEERLESS QUARTET - Way Down Yonder In New Orleans

[Demeter]

150. The Future is Grey, Small and Female

VIDEO LECTURE BY PAUL KEDROSKY--MUST SEE!

Kiyohiko G Nishimura: This time may truly be different – balance sheet adjustment under population ageing

http://www.bis.org/review/r110112a.pdf

[Demeter]

162. Forgot the video link

http://paul.kedrosky.com/archives/2011/01/the_future_is_g.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29

[Demeter]

151. The “None of the Above” Election LAST NOVEMBER

http://www.newdeal20.org/2010/11/03/the-none-of-the-above-election-25820/

The midterm results are just more proof that Americans are exhausted with our broken political system...

Never underestimate the power of the American people. To raise the rotted, decrepit corpse of the Republican Party from the grave like Lazarus and make it appear full of life and vigor, if even for one night, is quite the trick. What does that say about our pathetic Democratic Party? Well, it’s a confirmation that the Democrats regained power on the cheap in 2006 and 2008. There was no great rethinking or years of organizing from the ground-up. No, just a fat and happy Democratic D.C. political class waiting for the public to become completely exhausted by 30 years of Republican rule so the Democrats could get back and divvy up the spoils of an increasingly corrupt and dysfunctional political economy. But remember, even that was difficult. The D.C. Democrats had to be dragged kicking and screaming by Howard Dean and the Internet crowd to oppose the wars, which was the determining factor in the ‘06 election and a major determinate in ‘08. Once in, that was quickly forgotten.

No doubt the Republicans will make the same mistake in misinterpreting these most recent results. This was the ultimate “none of the above” election, with the Republicans playing the part of none. What will come next? Our completely broken and corrupt politics will now turn to focus on who will next wear the purple, but think about it. Nixon, Carter, Reagan, Bush I, the Clintons, Bush II, and Obama: the real question should be, why would we want to elect another president?

We have no functioning politics in this country. I’m afraid we can continue down this path of swapping out one failed lot for the other for a long time, with one continuity: the bipartisan looting of America by our political class, Wall Street, and the mega-corporations. Our politics needs fundamental reform. Our economy needs fundamental reform. This is only going to be accomplished by coming together and figuring out what political economy should be in the 21st century and then implementing the change. The first step is understanding we have a problem, that things can’t continue the way they are, nor are they going back to how they were. That is where we are.

Joe Costello was communications director for Jerry Brown’s 1992 presidential campaign and was a senior adviser for Howard Dean’s effort in 2004.

[Demeter]

152. Matt Stoller: Understanding the Strategy of the Democratic Power Class

http://www.nakedcapitalism.com/2011/01/matt-stoller-understanding-the-strategy-of-the-democratic-power-class.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Matt Stoller, the former Senior Policy Advisor for Rep. Alan Grayson. His Twitter feed is @matthewstoller

Since the 1970s, Democratic elites have focused on breaking public sector unions and financializing the economy. Carter, not Reagan, started the defense build-up. Carter, not Reagan, lifted usury caps. Carter, not Reagan, first cut capital gains taxes. Clinton, not Bush, passed NAFTA. It isn’t the base of the Democratic party that did this, but then, voters in America have never had a lot of power because they are too disorganized. And there wasn’t a substantial grassroots movement to challenge this, either...Obama continues this trend. It isn’t that he’s not fighting, he fights like hell for what he wants. He whipped incredibly aggressively for TARP, he has passed emergency war funding (breaking a campaign promise) several times, and nearly broke the arms of feckless liberals in the process. I mean, when Bernie Sanders did the filiBernie, Obama flirted with Bernie’s potential 2012 GOP challenger. Obama just wants policies that cement the status of a aristocratic class, with crumbs for everyone else (Republican elites disagree in that they hate anyone but elites getting crumbs). And he will fight for them.

There is simply no basis for arguing that Democratic elites are pursuing poor strategy anymore. They are achieving an enormous amount of leverage within the party. Consider the following. Despite Obama violating every core tenet of what might have been considered the Democratic Party platform, from supporting foreclosures to destroying civil liberties to torturing political dissidents to wrecking unions, Obama has no viable primary challenger. Moreover, no Senate Democratic incumbent lost a primary challenge in 2010, despite a horrible governing posture. Now THAT is a successful strategy, it minimized the losses of the Democratic elite and kept them firmly in control of the party. Thus, the political debate remains confined to what neoliberals want to talk about. It’s a good strategy, it’s just you are the one the strategy is being played on. A lot of people think that Obama is a bad poker player, but they miss the point. He’s not playing with his money, he’s playing with YOUR money. You are the weak hand at the table, he’s colluding with the other players.

There are parts of the Democratic elite that don’t believe in neoliberalism, but they are a modest portion of that structure. So often what comes out of the party is garbled. Most Democrats support our reigning institutions, they believe in paying taxes, they believe in government power. Given a choice, they’ll grumble, but they are more willing to believe that this government is good than to support structural change. By contrast, the Republicans are unified in their desire for a more brutal and more plutocratic though otherwise unchanged institutional arrangement.

This makes the GOP seem more committed, more professional and more change-oriented. This isn’t poor strategy or coordination from Democratic elites. The lack of willingness to fight on behalf of the public isn’t the same of an unwillingness to fight. It’s just their unwillingness to fight anyone but you.

[Fuddnik]

156. You are digging into the old stuff.

Jan. 13th?

Only it's even more true now.

[Demeter]

159. I Never Toss Anything Without Looking

Until today, just keeping up with the new stuff was hard...it's too quiet.
They got something big and nasty up their sleeves...those Bilderbergers, no doubt.

Conspiracy theory is no longer a theory in my book. It's a fact.

[hay rick]

160. There's still some gold in those old mines.

"The first step is understanding we have a problem, that things can’t continue the way they are, nor are they going back to how they were. That is where we are."

Exactly right.

[Demeter]

155. THIS JUST IN: Threat of $100bn hit if US loses top rating

Investors in the US government bond market could face losses of up to $100bn if the largest economy loses its triple A rating, according to a research arm of McGraw-Hill, the parent of Standard & Poor’s.(AND BFEE SUBSIDIARY)

A ratings downgrade that results in higher bond yields and lower prices could also mean the US Treasury paying $2.3bn-$3.75bn a year more in interest on financing a $1,000bn annual budget deficit.

Read more >>
http://link.ft.com/r/73UJGG/08G6EF/87I64/26TSBJ/TPNCCZ/XL/t?a1=2011&a2=6&a3=26

[Demeter]

157. FROM JANUARY: The US won’t default, even if the debt ceiling stays

http://blogs.reuters.com/felix-salmon/2011/01/13/the-us-wont-default-even-if-the-debt-ceiling-stays/

FELIX SALMON



Greg Ip makes a very important point: even if the US debt ceiling isn’t lifted, that doesn’t mean the government will default.

In any given month, the government’s income dwarfs its debt-service obligations, which means that the government could simply pay all interest on Treasury bonds out of its cashflow. Greg hasn’t run the numbers on principal maturities, but I’m pretty sure that they too could be covered out of cash receipts—and when that happened, of course, the total debt outstanding would go down, and we wouldn’t be bumping up against the ceiling any more.

The point here is that the government has enormous expenditures every month, and debt service constitutes an important yet small part of them. If the debt ceiling weren’t raised, it stands to reason that just about any other form of government spending would get cut before Tim Geithner dreamed of defaulting on risk-free bonds.

Some of those spending cuts could be implemented almost invisibly. For instance, Social Security runs a surplus for the time being; it invests that money in special non-marketable Treasury securities, which count as Treasury debt. If the Social Security trust fund accepted instead just some kind of promise of a top-up at a later date, that could save billions of dollars right there...Beyond that, large defense contractors aren’t going to stop working for the government just because they’re late in being paid; neither are doctors, hospitals or most of the rest of the healthcare industry.

But maybe the smartest thing for Geithner to do would simply be to stop paying the salaries of members of Congress and their staffs. It probably wouldn’t take long, in that event, for Congress to vote Obama the debt-ceiling raise he needs...The bigger picture here is that the US government, like any other company or individual, has enormous freedom when it comes to which creditors it chooses to pay when. Just like GM had every right to privilege some creditors over others, even when those creditors were legally pari passu, the US government can do exactly the same thing. And there’s no way that this administration, or any other that I can think of, would choose to cut debt service given that they have every choice in the matter.

[Demeter]

158. Attorneys ask courts to toss out foreclosure cases THIS IS BACK IN NOVEMBER!

http://articles.baltimoresun.com/2010-11-01/business/bs-bz-foreclosure-challenges-20101028_1_foreclosure-cases-foreclosure-process-baltimore-case

Attorneys for Maryland homeowners are asking the courts to dismiss hundreds of foreclosure cases that depended on paperwork submitted by so-called robo-signers on behalf of mortgage servicers.

Civil Justice, a Baltimore nonprofit that specializes in foreclosure issues, made the request in motions filed last week in two cases. One motion asks that all Maryland foreclosure cases with documents signed by Jeffrey Stephan of GMAC Mortgage — including the Baltimore case in question — be tossed out. The other asks for the same treatment of all Maryland cases with documents signed by Xee Moua of Wells Fargo. Both Stephan and Moua acknowledged in depositions that they signed hundreds of affidavits a day — attesting to information being used to foreclose on U.S. homeowners — without the legally required "personal knowledge" of that information. Quickly dubbed "robo-signing," the practice has prompted investigations by regulators and foreclosure freezes by mortgage servicers.

"It's another example of an attack on the integrity of the courts," said Peter A. Holland, co-counsel on the case and head of the consumer protection clinic at the University of Maryland School of Law. "These affidavits are integral to the honest operating of the foreclosure process."

...The motions contend that failing to dismiss the cases "would further harm our housing recovery by allowing years and years of litigation concerning the title to properties...We have a huge title problem that needs to be solved," Robinson said. "The only way to clear title is to dismiss cases and make mortgage servicers do it the right way."...