Hallelujah! Get a Handel on Weekend Economists December 11-13, 2009

[Demeter]

First of all, Happy Chanukah to all! And then raise a chorus to the phenom of the season--Handel's "Messiah" Oratorio. I know nobody who has a poor opinion of this masterwork--and it never gets old. For one thing, it's so long that seldom does one get through the whole thing in one sitting. For another, it is a gem of the Baroque era in music:

"Messiah (HWV 56), often (incorrectly) called The Messiah, is an English oratorio composed by George Frideric Handel, his most famous creation and is one the most popular works in Western choral literature. The libretto by Charles Jennens is entirely drawn from the King James and Great Bibles and interprets the Christian doctrine of the Messiah.

Composed in London during the summer of 1741 and premiered in Dublin, Ireland on 13 April 1742, Messiah was repeatedly revised by Handel, reaching its most familiar version in the performance to benefit the Foundling Hospital in 1754. In 1789, nearly 40 years after Handel's death, Mozart re-orchestrated a German version and his added woodwind parts were commonly heard until the mid-20th century and the rise of historically informed performance.

The Messiah sing-alongs now common around Christmas usually consist of only the first of the oratorio's three parts, with the Hallelujah Chorus (originally concluding Part Two) replacing Part One's "His Yoke is Easy"...

http://en.wikipedia.org/wiki/Messiah_%28Handel%29

BUT the Ann Arbor Singalong includes 2/3 of the entire piece, leaving out some of the arias due to time constraints. It is performed in a circular sanctuary which is shared by both a Temple and a Catholic church, and is a beautiful acoustic and visual space. With a scratch orchestra, an enthusiastic free-for-all chorus, a pipe organ and a masterful director, performing any and all parts (I love to sing the tenor opening aria, although it's a bit of a strain) it is a blast. And it happens Saturday!

So, in between performances (our church cantata is Sunday night, and at Sunday service I have the first verse of "Let All Mortal Flesh" to myself) I will lead us all here in prayer that Obama will either grow a spine, get a clue, or like the Cowardly Lion, a medal for courage, or like the Scarecrow, a brain, or like the Tin Man, a heart. After all, we know he already has a diploma (wonder why the Birthers haven't argued that). If all else fails, there's always the proverbial bolt of lightning...

So post what you have on the sorry state of the United States.

Let's see if we can't fix or at least avoid the disaster, one family at a time....Then it will be time for Hallelujahs!

[rfranklin]

1. Obama's Big Sellout....

Obama's Big Sellout
The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway
MATT TAIBBI

Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

Then he got elected.

What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.

How could Obama let this happen? Is he just a rookie in the political big leagues, hoodwinked by Beltway old-timers? Or is the vacillating, ineffectual servant of banking interests we've been seeing on TV this fall who Obama really is?

http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/print

[Demeter]

3. Lighting the First Candle...

Hanukkah (Hebrew: חֲנֻכָּה‎, Tiberian: Ḥănukāh, nowadays usually spelled חנוכה pronounced <ˈχanuka> in Modern Hebrew, also romanized as Chanukah), also known as the Festival of Lights, is an eight-day Jewish holiday commemorating the rededication of the Holy Temple in Jerusalem at the time of the Maccabean Revolt of the 2nd century BCE. Hanukkah is observed for eight nights, starting on the 25th day of Kislev according to the Hebrew calendar, and may occur from late November to late December on the Gregorian calendar.

The festival is observed by the kindling of the lights of a special candelabrum, the nine-branched Menorah or Hanukiah, one additional light on each night of the holiday, progressing to eight on the final night. An extra light called a shamash (Hebrew: "guard" or "servant") is also lit each night for the purpose of lighting the others, and is given a distinct location, usually above or below the rest. The "shamash" symbolically supplies light that may be used for some secular purpose.

In the United States, Hanukkah is considered as one of several primary holidays within the Christmas and holiday season...

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

[Demeter]

2. And at 7PM Eastern, We have one Bank Failure--in Florida

Republic Federal Bank, National Association, Miami, Florida, was closed today by the Office of the Comptroller of the Currency (OCC), which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with 1st United Bank, Boca Raton, Florida, to assume all of the deposits of Republic Federal Bank, N.A.

As of September 30, 2009, Republic Federal Bank, N.A. had total assets of approximately $433.0 million and total deposits of approximately $352.7 million. 1st United Bank will pay the FDIC a premium of 1.2 percent to assume all of the deposits of Republic Federal Bank, N.A. In addition to assuming all of the deposits of the failed bank, 1st United Bank agreed to purchase $267.1 million of the failed bank's assets.

The FDIC and 1st United Bank entered into a loss-share transaction on approximately $210.4 million of Republic Federal Bank, N.A.'s assets. 1st United Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be {b]$122.6 million[/b}... Republic Federal Bank, N.A. is the 131st FDIC-insured institution to fail in the nation this year, and the 13th in Florida. The last FDIC-insured institution closed in the state was Commerce Bank of Southwest Florida, Fort Myers, on November 20, 2009.

[Demeter]

4. Jerry Hadley - Comfort ye my people -Messiah - Handel

http://www.youtube.com/watch?v=8dDjva1ecYo&feature=related

[Demeter]

15. At 8 PM, We Have 2 More Banks Down

SolutionsBank, Overland Park, Kansas, was closed today by the Office of the State Bank Commissioner of Kansas, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Arvest Bank, Fayetteville, Arkansas, to assume all of the deposits of SolutionsBank...
As of September 30, 2009, SolutionsBank had total assets of $511.1 million and total deposits of approximately $421.3 million. Arvest Bank did not pay the FDIC a premium for the deposits of SolutionsBank. In addition to assuming all of the deposits of the failed bank, Arvest Bank agreed to purchase essentially all of the assets.

The FDIC and Arvest Bank entered into a loss-share transaction on approximately $411.3 million of SolutionsBank's assets. Arvest Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $122.1 million. Arvest Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. SolutionsBank is the 133rd FDIC-insured institution to fail in the nation this year, and the third in Kansas. The last FDIC-insured institution closed in the state was First National Bank of Anthony, Anthony, on June 19, 2009.

Valley Capital Bank, National Association, Mesa, Arizona, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Enterprise Bank & Trust, Clayton, Missouri, to assume all of the deposits of Valley Capital Bank...As of September 30, 2009, Valley Capital Bank had total assets of approximately $40.3 million and total deposits of approximately $41.3 million. Enterprise Bank paid the FDIC a 2 percent premium for the right to assume all of the deposits of Valley Capital Bank. In addition to assuming all of the deposits of the failed bank, Enterprise Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Enterprise Bank entered into a loss-share transaction on approximately $29.8 million of Valley Capital Bank's assets. Enterprise Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.4 million. Enterprise Bank's acquisition of all the deposits was the "least costly" resolution for the DIF compared to all alternatives. Valley Capital Bank is the 132nd FDIC-insured institution to fail in the nation this year, and the forth in Arizona. The last FDIC-insured institution closed in the state was Bank USA, National Association, Phoenix, on October 30, 2009.

[Demeter]

5. International Newsbeat Goes Here

Every Valley Shall Be Exalted, and Mountain and Hill Laid Low..

[Demeter]

6. Why Greece has the E.C.B. by the Shorthairs By Mike Whitney

http://www.informationclearinghouse.info/article24149.htm

Greek Finance Minister George Papaconstantinou has the European Commission over a barrel and doesn't even know it. Instead of dragging the EC over the coals--like he should --he's carrying on like a blubbering crybaby. "Steady on there, Georgie". Treasury Secretary Hank Paulson didn't go wobbly when he stormed up Capital Hill and demanded a $700 billion TARP bailout, did he? Well, then, at least learn from history. The EC is not going to let Greece default and trigger another Lehman Brothers-type meltdown. That won't happen. If G-Sax and JPM are Too Big To Fail (TBTF), then surely Greece is too. That means the Greek Finance Minister needs to summon his courage and hammer out the best deal possible for his country. Wishy-washy will get you nowhere.

Markets started tumbling this week on news that Fitch Ratings cut Greece’s debt rating from A- to to BBB+ which means it will cost the government more to roll over its debt in the future. It also means that the ECB may not accept Greek government bonds as collateral when they return to the pre-crisis rules in 2011. The ratings flap has reawakened Dubai fears and the possibility of a sovereign default within the EU.

According to Bloomberg: "The European Commission “stands ready to assist the Greek government in setting out the comprehensive consolidation and reform program, in the framework of the treaty provisions for euro-area member states,” said Joaquin Almunia, who is in charge of economic and monetary affairs, in a statement late yesterday. He didn’t say what form any assistance could take.

Almunia’s comments come as investors debate whether EU governments would bail out Greece if it was unable to pay its bills. Former German Finance Minister Peer Steinbrueck said in February that euro members would “in reality” rescue states in difficulty. Almunia said yesterday Greece “is a matter of common concern” for euro nations, echoing language he has used since November. He didn’t elaborate further.

“The situation in Greece is very difficult,” European Central Bank President Jean-Claude Trichet said Dec. 7. “We all know the figures, and we all know the very important, courageous decisions that have to be taken to put the situation back on track.” (Bloomberg)

Trichet is full of it. The ECB has no cards to play. If the European Commission doesn't put out the fire fast, global stock markets will tank, the dollar carry trade will reverse, and all the mini-bubbles in commodities, stocks and housing will crash and burn. All Papaconstantinou has to do is thumb his nose at the EC's demands for “fair fiscal consolidation", (which is the latest variation on "structural adjustment") and wait for Trichet and Co. to cave in.

Papaconstantinou's Socialist government was elected promising higher spending and wages. They should stick with their program and let the chips fall where they may. Within 24 hours, central banksters from around the world will be boarding flights to Athens with valises stuffed with $100,000 bills and loan guarantees begging Papaconstantinou to accept their humble contribution to future Greek prosperity.

There's no excuse for the Greek government not knowing what to do. The path has already been cleared by trailblazing investment banks in the US which have used the TBTF meme to extort trillions of dollars of public funds. Has anyone noticed Congress demanding that "austerity measures" be imposed at Goldman Sachs? Of course, not. The government has basically been subsumed by the banks, and now provides unlimited guarantees which lower the cost of capital. Greece can expect the same treatment, if the government has the guts to stick up for itself, that is. Here's how the Financial Times William Buiter sums it up:

"Greece can expect a bail out from the ECB “only at a price,” said Willem Buiter, the former Bank of England official ... “They’ll probably go to the IMF, have a credible standby program and then aid from Brussels and bilateral aid from selected sovereign governments in Europe and the U.S. will be available,” Buiter said in a Bloomberg Television interview. “We could see the first all EU-15 sovereign default since Germany had it in 1948.”(Bloomberg)

Buiter is brilliant, but this is nonsense. Greece is not going to default. Besides, the banks created this crisis and now they are using it to impose their neoliberal agenda on the states. The question is whether leftists, like Papaconstantinou, are willing to endure a little pain (capital flight) to defend what they say they believe in. If the Greek Finance Minister truly believes that capitalism is the problem, he'll never have a better chance to land a few hearty jabs. Here's Buiter again:

"The massive build-up of sovereign debt as a result of the financial crisis and especially as a result of the severe contraction that followed the crisis, makes it all but inevitable that the final chapter of the crisis and its aftermath will involve sovereign default, perhaps dressed up as sovereign debt restructuring or even debt deferral....

From Dubai to Iceland, Ireland, Greece, Hungary, Italy, Portugal, Spain, Japan, France, the UK and the USA, the sovereign debt burdens have been at current levels during peacetime only on the way down from even higher public debt burdens incurred during wars. ("The intrinsic unimportance of Dubai World and the important wider message it conveys", William Buiter , Financial Times)

Sure, Greece can go the way of Ireland and push the country into a full-blown depression to fulfill the myth of a unified Europe. It can cut public services, slash government spending, sell state lands and resources, reduce health and education budgets, and fire a few thousand state workers. That ought to satisfy the EU deficit hawks. That ought to satisfy Brussels.

Or they can tell Trichet and the EC to "pack sand" and watch while global markets go down the drain.

Who'd want to miss that?

[Demeter]

10. Greece pledges swift action on deficit

http://www.ft.com/cms/s/0/8e1fca10-e5b6-11de-b5d7-00144feab49a.html

Greece admitted on Thursday that swift action was needed to bring the budget deficit under control and rebuild confidence in its bond and stock markets.

George Papandreou, the prime minister, will give details on Monday of how the government plans to cut the budget deficit from 12.7 per cent to 3 per cent of gross domestic product, the eurozone limit.

He said Greece was “determined to send a strong message internationally: that we will move ahead with streamlining the economy and promoting a new model for growth.”

The decision to bring forward by several weeks the announcement of Greece’s strategy underlines the government’s new sense of urgency and comes in response to a 10-day battering of Greek bonds and falling share prices on the Athens bourse.

The announcement comes a month before it was due to be presented to the European Commission for approval.

The Socialist government, elected two months ago, is having difficulty persuading markets it is serious about implementing structural reform and curbing the public debt, which is projected to reach 113 per cent of GDP this year.

Share prices on the Athens bourse were up 5.1 per cent on Thursday, after falling by 11.7 per cent in the first three days of this week. Greek banks – also downgraded by Fitch on Tuesday – showed the highest gains.

But spreads on 10-year Greek bonds widened further on Thursday to 260 basis points above their German equivalent, marking a seven-month high, although Jean-Claude Juncker, chairman of the Eurogroup, ruled out any possibility of Greece leaving the eurozone.

“I completely exclude a state bankruptcy for Greece,” he said.

...Mr Papandreou was expected to come under pressure from peers to set aside his an election pledge of protecting low-income groups and public sector workers and follow Ireland’s example of reducing public sector wages.

A one-year freeze on pay rises and additional social transfers would reduce the budget deficit by an extra 1.5 percentage points of GDP, but would damage the Socialists’ popularity with their core voters, according to a senior Greek economist.

A recent proposal by George Papaconstantinou, finance minister, to freeze civil service monthly salaries of over €2,000 ($2,900, £1,800) was rejected by Socialist leftwingers.

The alternative would be to raise value added tax and excise taxes on tobacco, alcohol and fuel – moves that would be criticised by the Commission as one-off measures without lasting effects.

The prime minister also promised a crackdown on tax evasion and corruption.

Greece is braced for further downgrades after Fitch on Tuesday reduced its rating to BBB-plus. Standard & Poor’s on Monday warned of a possible downgrade.

[AnneD]

50. and he shall reign....

fore ever and ever.

[amandabeech]

51. The author speaks peacetime national debt burdens

in the second multi-line paragraph from the bottom. The author says that the burdens have only occurred during peacetime as a result of high levels of spending during war.

His point is not quite valid with respect to the US and UK debt problems because the US and UK are at war. Here in the US we do not have a general mobilization like we did in WWII or even the lesser Viet Nam conflict. Nonetheless, we are spending very large sums on the Iraq and Afghanistan wars now. According to the author's criteria, the US and UK debts may not be out of the ordinary unless such debt burdens were to continue without decrease in the event that we actually do finish the wars and bring everyone--well, nearly everyone--home.

[Demeter]

7. Van Rompuy urges Europe to double growth

http://www.ft.com/cms/s/0/ff4f4c78-e59e-11de-b5d7-00144feab49a.html

Herman Van Rompuy, the European Union’s newly appointed full-time president, called on European Union governments on Thursday to double their economic growth rates in order to ensure the survival of “Europe’s way of life” – or social market economy.

In his first big public speech since his appointment last month, Mr Van Rompuy also said a global climate change agreement could form the basis for what he called “a kind of world governance”.

Mr Van Rompuy, a former Belgian prime minister, was speaking at a congress of European centre-right political party leaders in Bonn ahead of the start of a two-day EU summit in Brussels.

“What is at stake is the survival of what has been so painstakingly built up. We must at least double the poor growth rate of 1 per cent projected for our economies ... a strong economy is necessary not only so that we can play our part in the world but above all to safeguard the achievements of our European way of life.”

Mr Van Rompuy will serve a two-and-a-half year term as EU president, with the possibility of a second term of identical duration. EU leaders deliberately chose him as a low-profile consensus-building figure rather than a better-known but more controversial personality such as Tony Blair, the former UK prime minister.

NO THANKS, I'LL PASS ON THAT WORLD GOVERNANCE. NOBODY YET HAS DEMONSTRATED THE ABILITY TO GOVERN ONE NATION OR PEOPLE, LET ALONE MANY.

[Demeter]

8. Brazil posts weaker-than-expected GDP growth

http://www.ft.com/cms/s/0/75525a4a-e5a0-11de-b5d7-00144feab49a.html

Brazil’s economy grew in the third quarter but growth missed forecasts after Latin America’s largest economy emerged from recession in the previous quarter.

Brazil posted gross domestic product growth of 1.3 per cent in the third quarter over the second, according to government numbers released on Thursday.

That marked a second straight quarter of expansion after a six-month recession, but was below a median growth forecast of 2.0 per cent by 18 analysts in a Reuters poll.

The government also revised down second-quarter growth to 1.1 per cent quarter-on-quarter from 1.9 per cent.

The weaker-than-expected growth, partly dragged down by weakness in Brazil’s huge farm sector, underscores the lingering impact of the global economic crisis that has plunged much of the developed world into recession.

The weaker-than-forecast figures drove drove down yields on Brazilian interest rate futures contracts as investors pegged back their expectations on the timing of interest rate hikes by the central bank next year.

Analysts pointed to signs of strength in domestic consumption and investment as evidence that Brazil’s recovery was on firm ground. Household consumption rose 2.0 per cent on the previous quarter, while capital spending jumped 6.5 per cent.

”We expected stronger growth, but seeing that expansion came about through capital spending and consumption, we have an optimistic view for the economy,” said Andre Perfeito, an economist with Gradual Investimentos in Sao Paulo.

Brazil’s relatively rapid recovery from recession has made it a global investor darling this year, helping drive rises of 81 per cent in the stock market and 32 per cent in the currency....

[Demeter]

9. China revives property tax to avert bubble

http://www.ft.com/cms/s/0/dfd473ec-e5a7-11de-b5d7-00144feab49a.html

China has reintroduced a nationwide real estate sales tax in an attempt to reduce speculation and cool the bubbling property market after price rises accelerated across the country in November.

The new policy is the first concrete response from Beijing to growing fears that an unsustainable bubble has formed in the real estate market. Concerns over property bubbles have been voiced by a wide range of commentators in China in recent weeks, including prominent real estate developers.

Residential prices in China’s 70 largest cities rose 5.7 per cent in November from a year earlier, accelerating from October’s 3.9 per cent year-on-year rise.

Overall prices rose 1.2 per cent month-on-month from October to November.

The new tax policy requires anyone selling a secondhand apartment or house within five years of its purchase to pay a sales tax of 5.5 per cent, extending the taxable period from the previous two years.

The new policy, intended to discourage “flipping” of apartments by speculators, essentially returns the market to the situation a year ago, before the government introduced a series of preferential policies to stimulate the flagging property market.

“On its own, this is just a piecemeal reversal of the government’s stimulus policies but it sends a powerful signal to the market that the government wants to encourage home purchases for dwelling but is trying to contain speculative demand,” according to Ha Jiming, chief economist for CICC, the Chinese investment bank.

But the government is clearly wary of clamping down too hard on the property market, which has been a driver of Chinese economic growth for much of this decade and the force behind such fast-growing industries as cement, steel, automobiles and home furnishings...

[Demeter]

11. Beijing imposes steel duties on Russia and US

http://www.ft.com/cms/s/0/a57f4ffc-e5b9-11de-b5d7-00144feab49a.html

China imposed duties on Thursday on imports of certain speciality steel products from the US and Russia, in the latest sign of trade tensions between Beijing and its main trading partners.

The Chinese commerce ministry said the duties were a response to the dumping of products in the Chinese market by companies from the two countries. Beijing also alleged the US companies were receiving what were in effect subsidies as the result of “Buy American” legislation.

The ministry said it was the first time China had investigated the role of subsidies in lowering prices for imported goods, a riposte to the common claim that Beijing subsidises its companies. The case involves flat-rolled steel used in the electrical power industry.

Analysts said the duties affected only a small volume of trade, worth well below 1 per cent of the Chinese steel market. Coming at a time when China is under international pressure to let its currency appreciate, the new duties are the latest trade spat between China and the US. Tension began to escalate in September when the Obama administration imp­osed punitive tariffs on imports of China-made tyres. The US has also placed duties on Chinese steel pipes, while China has opened an inquiry into US imports of poultry, cars and auto parts....

[Demeter]

17. US rules out climate aid for China

http://www.ft.com/cms/s/0/e1b1f2e4-e4f7-11de-9a25-00144feab49a.html

China will receive no significant funding from the US to combat climate change, the US delegation leader at the Copenhagen conference vowed on Wednesday.

The statement, which shocked many negotiators, was part of a broader US attack on China and other developing countries for not promising deeper concessions to reduce greenhouse gas emissions.

“I do not envision public funds, certainly not from the US, going to China. We would intend to direct our public funds to the neediest countries,” said Todd Stern, special envoy for climate change. He said China was wealthy enough to fund its own efforts, and firmly rejected the idea that the US and other developed countries owed “reparations” for past emissions.

China has led developing countries in demanding funds from rich nations to help them cut emissions and adapt to the effects of climate change as the price of forging a deal on the climate...

THAT'S SOME CHUTZPAH!

[Demeter]

24. China focuses on boosting rural demand

http://www.ft.com/cms/s/0/9caf9dce-e34c-11de-8d36-00144feab49a.html

China will take steps next year to boost rural demand while trying to curb overcapacity in numerous industrial sectors, the government said on Monday at the end of its annual closed-door gathering to discuss economic policy.

Beijing promised to bolster rural demand by raising agricultural subsidies, increasing the minimum purchase prices for grain crops, investing more in infrastructure and improving public services to outlying areas.

The nation’s leaders also vowed to maintain ultra-loose monetary and “proactive” fiscal policies, while improving the quality of economic growth through “structural adjustment” that will involve restrictions on industries deemed to be suffering from overcapacity. But the government warned it would maintain a balance between “fast and stable” economic growth and dealing with predicted inflation next year.

The annual economic policy meeting, known as the Economic Work Conference, helps establish policy priorities for the next year.

Although few specific details are usually published immediately after the conference, the meeting often lays the foundations for a series of more specific proposals over the coming weeks and months.

As a result, analysts expect the government to introduce new measures to stimulate rural consumption, on top of existing policies aimed at encouraging spending on vehicles and household appliances that have helped to maintain rising rural sales this year.

Given that next year is the last in the government’s current five-year plan, the decisions made about policy priorities now will help shape what goes into the plan running from 2011 to 2015.

China has bounced back from the global crisis faster than any other big economy, thanks in large part to a substantial fiscal stimulus package and an unprecedented expansion of credit that saw new bank loans reach nearly Rmb9,000bn ($1,325bn, €880bn, £800bn) in the first 10 months of the year, from about Rmb4,000bn for the whole of last year.

In the statement on Monday, the government said it would promote more “balanced external trade”. However, there was some scepticism among economists about how Beijing would achieve this, given the high levels of stimulus for industry.

“Continued rapid growth in manufacturing investment guarantees that China will also be seeking to expand exports for a long time to come,” said Mark Williams at Capital Economics in London. “The trade surplus is unlikely to decline very rapidly.”

Along with its pledge to restrict new loans to industries suffering from overcapacity, the government said it would deal the same way with energy intensive and polluting sectors.

[Demeter]

33. China eyes industrial bases in Africa

http://www.ft.com/cms/s/0/040beac2-e041-11de-8494-00144feab49a.html

The World Bank and Beijing are in discussions about setting up low-cost factories in new industrial zones in Africa to help the continent develop a manufacturing base and reverse its declining share in global trade.

Robert Zoellick, the president of the World Bank, said Beijing had shown “strong interest” in proposals to set up manufacturing bases to help African countries achieve high growth paths similar to Asian ones.

“There is not only willingness but strong interest among some in China and I’ve discussed with the minister of commerce, Chen Deming, that there may be possibilities of moving some of the lower-value manufacturing facilities to sub-Saharan Africa – toys or footwear,” Mr Zoellick told the Financial Times.

Chinese officials and academics have been debating in recent months proposals to use the country’s vast foreign exchange reserves to try to stimulate demand in developing countries – ideas sometimes referred to as “China’s Marshall Plan”.

[amandabeech]

54. Ideas sometimes referr to as "China's Resource Grab."

This may be a cheap labor policy, but somehow I think that it might be related to China's unquenchable thirst for raw materials, and, more importantly, Chinese controlled farmland to sate China's agricultural appetite.

It would be interesting to see if China actually lets the natives get jobs, or whether China would import "workers" along with the factories.

[Demeter]

75. My Fear Also--Imperial China

and down trodden Africa, the doormat at the bottom of the world...

[amandabeech]

77. It really isn't a good combo.

Why should China act better than the European countries when they colonized Africa?

All China will do is change the form of their colonial dominance, not the substance.

[amandabeech]

52. You know, I just don't think that we are going to get along well with the Chinese

for the foreseeable future.

Not that I think the Chinese are really interested in getting along with any country so long as they can get what they want by other means.

Not that they're the first country to behave that way.

However, I think that it was the height of short-sightedness to let us be in the position that we simply can't make things for ourselves. The fact that our stores are packed with Chinese-made goods, everything from a baking pan to computers, really may leave us even less room to maneuver than the Chinese holdings of our treasury securities.

I wonder if the Chinese have regulations concerning removal of capital goods, i.e. machines used in manufacturing, from China for reassembly elsewhere? Those factories moved to China from the US (and probably Mexico) in a real hurry. I just wonder how fast they could move in the opposite direction.

[Demeter]

12. France follows UK on bank bonus tax

http://www.ft.com/cms/s/0/05b1bb70-e570-11de-81b4-00144feab49a.html

France on Thursday said it would follow Britain’s lead in levying a supertax on bankers’ bonuses, giving added momentum to efforts to curb high levels of financial sector pay.

The British and French moves stirred the first real public debate as to whether the US should adopt a windfall tax, too. However, with the administration wary and no instant surge of support in Congress, there appeared to be little prospect that the US would join the European drive in the near term....

....Ken Feinberg, the government “pay tsar” who can set salaries at bailed-out companies, on Friday announced a $500,000 limit on salaries for most employees at Citigroup, AIG, General Motors, Chrysler and the carmakers’ finance arms....

[Demeter]

18. Dubai property merger blocked

http://www.ft.com/cms/s/0/b03278d2-e4e9-11de-817b-00144feab49a.html

Dubai Holding, the conglomerate owned by the emirate’s ruler, received a blow on Wednesday when Emaar Properties blocked a proposed merger with its real estate arms. Emaar’s decision appeared to be a bid to protect itself from the continuing fallout of Dubai’s debt woes.

The company’s board said there was no economic sense in merging with Dubai Holding, whose interests include real estate, leisure and investment holdings. This surprise announcement came from the government, which owns 32 per cent of Emaar.

The move appeared to indicate the government’s intention to separate Dubai’s good assets from troubled vehicles in need of restructuring as the emirate grapples with a debt burden of at least $80bn. Dubai’s stock market fell another 6.4 per cent as Dubai’s debt problems continued to weigh on investor sentiment. Emaar, the market’s bellwether stock, has fallen 38 per cent since Dubai World triggered global panic by asking for a standstill on $26bn in distressed debt.

Analysts said Emaar’s decision made it more likely that Dubai Holding could become the next conglomerate to restructure its debts of more than $10bn, about $2bn of which mature next year. This conglomerate, owned by Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler, saw its bonds come under heavy selling pressure...

[Demeter]

22. Dubai World debt talks to take months

http://www.ft.com/cms/s/0/bd5ded5c-e3d6-11de-b2a9-00144feab49a.html

Investor sentiment took a knock on Tuesday after the Dubai government said talks to restructure a troubled state-backed conglomerate at the centre of the emirate’s financial crisis could drag on beyond a previously requested deadline.

Abdul Rahman al-Saleh, Dubai’s finance chief, insisted that Dubai World had sufficient assets to meet its obligations but said it would take more than six months to work out a restructuring plan....

[Demeter]

23. Creditors meet Dubai World in payment push

http://www.ft.com/cms/s/0/cbbc3e24-e356-11de-8d36-00144feab49a.html

A group of international and regional banks met Dubai’s struggling conglomerate, Dubai World, for the first time on Monday as talks began on the company’s request to restructure debts of $26bn.

People familiar with the process said it was a “kick off” meeting for what is expected to be a long and drawn-out process and it included key creditors expected to form a steering committee.

No restructuring plan was presented by Dubai World...

[Demeter]

32. Dubai rejects debt guarantee

http://www.ft.com/cms/s/0/b0805f64-dd7a-11de-9f8b-00144feabdc0.html

Dubai’s government will not guarantee the debts of Dubai World, the state-owned holding company struggling under the weight of $59bn (£36bn) in liabilities, arguing that lenders were mistaken to think that there was sovereign backing.

Abdulrahman al-Saleh, department of finance chief, said that creditors were responsible for their own lending decisions and should differentiate between companies and the state.

“Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct,” Mr Saleh said...

[Robbien]

72. In 2006 Dubai World bought WHotel Union Square for $282 mil; its just been auctioned off for $2 mil

according to this site
http://www.sandiegoreader.com/weblogs/financial-crime-politics/2009/dec/11/this-is-how-bad-it-is-in-tourism/


Dubai World also own a hefty portion of the new Citycenter which is opening up 7000 hotel rooms in Las Vegas this month. This Citycenter being a place where no gambling or smoking is allowed.

Makes you wonder if there are any good assets in Dubai's portfolio to protect.

[Demeter]

25. Gibraltar works to lose ‘tax haven’ tag

http://www.ft.com/cms/s/0/20b123da-e349-11de-8d36-00144feab49a.html

Gibraltar, the British territory long criticised as an offshore-style tax haven within the European Union, has almost completed its transformation into a conventional financial centre, according to Peter Caruana, chief minister...

...it was “an absolute must” for these centres – the others were Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman Islands, the British Virgin Islands, Anguilla and the Turks and Caicos Islands – to meet international standards on tax transparency, financial regulation and financial crime.

The Gibraltar government says it has met those demands. At the end of next year it will abolish its “exempt status tax regime”, under which some companies are not liable for tax, and apply a single 10 per cent corporation tax rate across the board.

As part of its drive to meet international standards on tax co-operation and transparency set by the Organisation for Economic Co-operation and Development, Gibraltar has signed tax information exchange agreements with 13 jurisdictions and is due to sign four more this month.

Mr Caruana, who is also finance minister, says Gibraltar, like Ireland, has the right to compete with other countries and financial centres on the basis of low tax rates, although he acknowledges this is challenged by some larger European economies. Gibraltar does not apply value added tax or tax on capital gains.

“Europe has got to have a debate about whether low tax equals tax havenism, because that’s very different,” Mr Caruana said. “Most of the new EU member states have very low taxes, much lower than 10 per cent ... There is low tax throughout the EU and Gibraltar is simply mimicking that model.”

[Demeter]

31. Australia raises rates for third month

http://www.ft.com/cms/s/0/173f548e-de3a-11de-8c63-00144feabdc0.html

Australia’s central bank lifted interest rates for a third consecutive month on Tuesday amid signs that inflationary pressures were building in an economy expected to return to “trend” growth of 3.25 per cent next year.

The 25 basis point rise to 3.75 per cent matches increases in the past two months and is part of the Reserve Bank of Australia’s strategy of weaning the economy off historically low interest rates. The benchmark rate fell to a 49-year low of 3 per cent earlier this year....

[Demeter]

13. Those Banksters We Love to Hate Will Get Theirs

http://www.youtube.com/watch?v=77Gy4aPjM_I

http://www.youtube.com/watch?v=CiTX_E5Bcpg&feature=related

[Demeter]

14. Geithner moots Tarp exemption for small banks

http://www.ft.com/cms/s/0/16226ee4-e5b8-11de-b5d7-00144feab49a.html

Tim Geithner, US Treasury secretary, on Thursday advocated exempting small businesses from restrictions attached to the bank bail-out programme that Goldman Sachs , Citigroup and other large banks have been anxious to escape.

In testimony to the Congressional Oversight Panel, Mr Geithner said small banks were worried about being “stigmatised” for asking for money from the troubled asset relief programme and that this was exacerbating a credit crunch for their small business customers. “They don’t want to come to do business with the government.

“They think it’s a sign of weakness, not strength. Even though capital is the best way to help get lending going again, they’re reluctant . . . To be effective in dealing with this, we have to mitigate the stigma.”

Government-imposed restrictions on pay and hiring at banks that have received Tarp money have been a primary reason for large banks looking to leave the programme. Bank of America repaid $45bn this week and Citigroup is seeking permission from regulators to follow suit.

Mr Geithner said it was “a good thing for the country that banks are eager to get out” but said he would not allow an institution to damage itself. “We are not prepared to have this money come back in a way that would leave the system or these institutions without adequate capital to face their challenges ahead.”

This week Mr Geithner announced he would extend Tarp until next October and refocus the funds on small businesses, mortgage relief and the term asset-backed securities lending facility (Talf), which seeks to increase credit flow.

Republicans have criticised the decision to extend Tarp, which has been deployed to save General Motors and Chrysler and to inject capital into financial institutions.

Paul Atkins, a former commissioner at the Securities and Exchange Commission and member of the COP, told Mr Geithner yesterday he was irresponsible to maintain the programme.

“Tarp continues to inflict great economic costs, both directly to the taxpayer in the form of actual and potential tens of billions of dollars of losses and indirectly . . . of moral hazard, distorted incentives created by implicit government guarantees and inefficient government interference in the operation of private firms.”

The Treasury believes that it will deploy less than $550bn of the $700bn allocated by Congress for Tarp and that most of that money will be repaid.

But Mr Geithner acknowledged that not all companies would be in a position to pay back the investment. “There is a significant likelihood we will not be repaid from our investments in AIG, GM and Chrysler.”

[amandabeech]

55. AIG. Didn't Timmy have something to do with some of the TARP funds handed out to AIG?

You know, the funds that passed through AIG and came out as fertilizer for Goldman Sucks, et al.

[ozymandius]

61. He sure did. It was one of his crowning fuckups.

Geithner Aides Worked With AIG for Months on Bonuses

.....
Treasury officials say the AIG problem didn't register with Mr. Geithner at the hearing amid the other issues he faced. Mr. Baker, the Treasury spokesman, acknowledged that information about the financial-products bonuses was "in the public arena...for many months." But, he said, it wasn't until March 10 -- five days before the big batch of retention payments were due -- that department staff spelled out the situation for the secretary.

http://online.wsj.com/article/SB123777083390610069.html

---

"the AIG problem didn't register with Mr. Geithner," as the story says. So I wonder rhetorically why this man is Secretary of the Treasury.

[Robbien]

76. WSJ posted a great article today on Goldman fueling AIGs bets

of course the WSJ would post the article on Saturday and on its lessor read online journal.

Goldman Fueled AIG Gambles
http://online.wsj.com/article/SB10001424052748704201404574590453176996032.html

Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American Insurance Group Inc.

. . .

A Wall Street Journal analysis of AIG's trades, which were on pools of mortgage debt, shows that Goldman was a key player in many of them, even the ones involving other banks.

Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman, according an analysis of ratings-firm reports and an internal AIG document that details several financial firms' roles in the transactions.

. . .

Once a CDO debt pool is assembled, it is sliced into layers based on risk and return. sold the safest, or top layer, of deals like South Coast to large banks, including in Europe and Canada.

The banks wanted protection in case the housing market tanked. Many turned to Goldman, which effectively insured the securities against losses. Then, to cover its own potential losses, Goldman bought protection from AIG, in the form of credit-default swaps.

Goldman charged more than AIG for the protection, so it was able to pocket the difference, making millions while moving the default risks to AIG, according to people familiar with the trades.


--------------------------------------------




The article goes on to say Goldman wanted collateral from AIG when the real estate market started to tank, but AIG refused to believe the market was tanking so refused Goldman's demand. Goldman then went to other banks and bought insurance against potential losses from its AIG risk.

Appears to me that if we taxpayers did not pay Goldman 100% of its AIG's swaps, the other banks would have been on the hook for the loss. No matter what Goldman wasn't going to lose.

[Demeter]

16. Goldman scraps cash bonuses for 30 top executives

http://www.ft.com/cms/s/0/1ba50b30-e5b6-11de-b5d7-00144feab49a.html

Goldman Sachs moved to quell public anger over executive pay on Thursday by unveiling plans to eliminate cash bonuses for its top 30 executives this year and give shareholders a vote on compensation.

The new policies come as some of the world’s financial capitals weigh steep taxes on bonuses paid to employees of banks that drew government support during the credit crisis. Goldman’s rapid recovery from the downturn, and the likely windfall many employees will reap next month thanks to surging profits, has made the bank a frequent target for politicians and shareholders.

“The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders’ meeting in May,” Lloyd Blankfein, Goldman’s chief executive, said on Thursday in a statement. “We believe our compensation policies are the strongest in our industry.”

US ‘pay tsar’ poised for next wave of rulings

Ken Feinberg, the government “pay tsar” who can set salaries at bailed-out companies, will on Friday announced a $500,000 limit on salaries for most employees at Citigroup, AIG, General Motors, Chrysler and the carmakers’ finance arms.

The 30 members of Goldman’s management committee will receive their entire 2009 bonus in stock awards that must be held for five years. Those restricted shares can be reduced if the bank finds that the employee failed to properly analyse or disclose risks.

Goldman will also give investors a non-binding, advisory vote on the bank’s compensations principles as well as the payouts to its top officers, including Mr Blankfein, at its 2010 annual meeting.

Large shareholders and corporate-governance advocates have pressed high-profile companies like Goldman to add such a provision before the US Congress passes legislation requiring the so-called “say on pay” vote.

Hye-Won Choi, head of corporate governance at TIAA-Cref, a giant retirement fund and a major Goldman investor, welcomed the changes saying the bank’s management had shown ”strong leadership on an issue of critical concern to shareholders”.

Goldman executives have argued publicly that the bank has consistently paid out a smaller portion of its net revenues than most if not all of their peers. Meantime, though, they have met privately with top investors and regulators to glean their advice on how to tweak their compensation policies to stem the public outcry.

A US windfall tax?

Krishna Guha lays out the case for a tax on bankers bonuses. What’s your opinion?

Goldman earned $12.5bn through the first nine months of 2009, helping to double the bank’s share price. During that period, the bank set aside $16.7bn for pay, health insurance and other benefits, or 43 per cent of the net revenues.

People familiar with Goldman’s thinking told the FT last week that the bank was also considering paying out a larger portion of the greater bonus pool in equity.

Goldman employees currently receive as much as 75 per cent of their annual payouts in restricted stock or options.

Wall Street firms’ compensation ratios typically fall during the fourth quarter as they adjust the pool of funds they have set aside to reflect actual payouts they will make to employees.

Additional reporting by Francesco Guerrera in New York

[Demeter]

19. Citi faces snub from Kuwaitis

http://www.ft.com/cms/s/0/af948542-e501-11de-9a25-00144feab49a.html

The Kuwait Investment Authority has held internal discussions about scaling back its banking relationship with Citigroup in a move that could include transferring funds currently deposited with the US bank, people familiar with the matter say.

A withdrawal of KIA funds from Citi would mark another setback for the bank as it seeks to recover from the financial crisis and pay back government bail-out funds.

According to KIA officials, most of Kuwait’s oil revenues are deposited at Citi – a decades-long relationship.

The KIA deliberations have taken place in recent months while the fund was in the process of selling Citi shares it acquired in January 2008. The KIA said on Sunday it had completed the sale of its stake for $4.1bn, making a profit of $1.1bn.

The KIA’s internal talks on changing its relationship with Citi reflect irritation with what is seen as a lack of communication on the bank’s part, according to people familiar with the matter.

These people say Vikram Pandit, Citi’s chief executive, has failed to meet Bader al-Saad, the KIA’s chief executive, in spite of repeated requests from the KIA for a meeting.

Further, Michael Klein, the former Citi vice-chairman who had close ties with officials across the Middle East, has left the bank, effectively shutting another channel of communication.

Citi declined to comment on the KIA’s business relationship with the bank. The KIA also declined to comment.

In recent months Citi has responded to the KIA concerns with a campaign to improve relations. John Gerspach, chief financial officer, Ned Kelly, vice-chairman and former CFO, and other senior executives have been involved in efforts to brief the KIA on Citi’s performance.

While Citi tries to mend its relationship with the KIA, other financial groups, including BlackRock, the asset manager, have spoken to the Kuwait fund with the aim of winning assignments to handle some of the money deposited in Citi.

BlackRock’s involvement is noteworthy because the KIA this year invested $750m in the asset manager to help it acquire Barclays Global Investors . BlackRock declined to comment.

The KIA’s decision to invest in Citi was reached at a time when sovereign wealth funds around the world thought they had a chance to buy shares in beleaguered US banks on the cheap.

[Demeter]

20. GE chief attacks executive ‘greed’

http://www.ft.com/cms/s/0/fe1e3f7c-e507-11de-9a25-00144feab49a.html

Jeffrey Immelt, General Electric’s chief executive, said on Wednesday his generation of business leaders had succumbed to “meanness and greed” that had harmed the US economy and increased the gap between the rich and the poor.

Mr Immelt’s attack on his fellow corporate chiefs – made in a speech at the West Point military academy – is one of the strongest criticisms by a top executive of the compensation and business practices that prevailed before the financial crisis.

“We are at the end of a difficult generation of business leadership ... tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits,” said Mr Immelt, who succeeded Jack Welch, one of the toughest leaders of his generation, at the helm of the US conglomerate. “Rewards became perverted. The richest people made the most mistakes with the least accountability.”

Several executives, especially in financial services, have apologised for their companies’ role in the crisis but Mr Immelt’s remarks went further, linking bad leadership to growing inequality.

“The bottom 25 per cent of the American population is poorer than they were 25 years ago. That is just wrong,” he said. “Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong.”

GE wants to win a large slice of the infrastructure projects funded by governments around the world in an effort to kick-start their economies.

Mr Immelt said business should welcome government as “a catalyst for leadership and change”.

Mr Immelt also issued a mea culpa over his inabilty to foresee the financial turmoil, which slashed GE’s profits and put its financial arm, GE Capital, under pressure, saying he should have been a better listener.

“I felt like I should have done more to anticipate the radical changes that occurred,” he said.

The GE chief now gathers GE’s top 25 executives to twice-monthly Saturday sessions to talk about the company and its future.

In the speech, Mr Immelt indicated GE would continue to shrink GE Capital, which accounted for around half of the company’s profits as reently as two years ago. He said it was wrong for the US economy to have “tilted toward the quicker profits of financial services” at the expense of the manufacturing industry and research and technology investments.

[Demeter]

21. And He Shall Purify the Sons of Lehmans....

http://www.youtube.com/watch?v=oPiQE4HjcxA

[AnneD]

56. The apology may be too late....

Tenn. demonstrates trend of looser guns laws

NASHVILLE, Tenn. - It's been the year of the gun in Tennessee. In a flurry of legislative action, handgun owners won the right to take their weapons onto sports fields and playgrounds and, at least briefly, into bars.

A change in leadership at the state Capitol helped open the doors to the gun-related bills and put Tennessee at the forefront of a largely unnoticed trend: In much of the country, it is getting easier to carry guns.

A nationwide review by The Associated Pressfound that over the last two years, 24 states, mostly in the South and West, have passed 47 laws loosening gun restrictions.


Among other things, legislatures have allowed firearms to be carried in cars, made it illegal to ask job candidates whether they own a gun and expanded agreements that make permits to carry handguns in one state valid in another.

The trend is attributed in large part to a push by the National Rifle Association. The NRA, which for years has blocked attempts in Washington to tighten firearms laws, has ramped up its efforts at the state level to chip away at gun restrictions.

more.....

www.msnbc.msn.com/id/34382626/ns/us_news-life/


Peace on Earth good will to men,,,,,this message brought to you by Edna's Gun Emporium


GE can apologize to eternity but nothing can erase the stain that the rat bastard Jack Welch crapped on the GE good name.

[Demeter]

30. Carlyle sued by Kuwaiti group over fund

http://www.ft.com/cms/s/0/7e6a55c0-dde8-11de-b8e2-00144feabdc0.html

A prominent Kuwaiti conglomerate is suing the Carlyle Group in a local court, alleging that the US private equity firm misrepresented the safety of its affiliate, Carlyle Capital Corp, a public debt fund that collapsed in March 2008.

The conglomerate, National Industries Group, invested $50m in CCC, which was marketed to many investors in other Carlyle funds as a safe fund that would invest largely in triple A mortgage-backed securities.

CCC raised about $600m from investors privately and an additional $340m when it listed.

CCC became one of the first casualties of the financial crisis, because of its high leverage, which made it highly sensitive to small moves in prices. Its investors lost all their money...

...The implosion of CCC has damaged Carlyle’s reputation in the Middle East, where the affiliate raised most of its funding, according to people familiar with the matter. It is a personal setback for Carlyle’s co-founder and chief fundraiser, David Rubenstein, a frequent visitor to the Gulf.

“Arab money made Carlyle what it is,” said the head of the investment bank of one major financial institution in Dubai.

NIG’s decision came several months after a stormy meeting in Kuwait involving Mr Rubenstein and Saad Al Saad, the head of NIG and the patriarch of one of Kuwait’s wealthiest families.

The meeting was abruptly terminated after a young Carlyle staffer told the NIG executives to lower their voices, according to people familiar with the matter.

Mr Rubenstein had asked for the meeting in order to apologise formally for the loss.

Mr Rubenstein and his team told NIG that while Carlyle could not compensate NIG for the loss, they would allow NIG to invest $100m in any Carlyle fund without paying any of the customary management and performance fees. This was not acceptable to NIG.

NIG was also angry that the meeting was attended by the general manager of a fund that Carlyle was in the process of launching – the Hong Kong-based Asian Growth Fund.

[AnneD]

57. Wonder if...

They still want to hold either of the Bush' hands. I was sad CBS canceled As the World Turns but this may be a good replacement drama :popcorn:. As the economy contracts, look for more of these law suits-the big boys are finally taking hits.

[Demeter]

34. Bid nears for AIG aviation business

http://www.ft.com/cms/s/0/6d2279ae-dd0d-11de-ad60-00144feabdc0.html

A consortium of private equity investors and the head of International Lease Finance Corp are close to making a bid for about half of the aviation-leasing business of American International Group, ILFC’s troubled parent.

Steven Udvar-Házy, ILFC chief executive, along with Onex, Greenbriar and Canada Pension Plan, could make an offer for the aircraft portfolio as early as this week, said people familiar with the matter.

Credit Suisse is arranging a debt facility of more than $2bn, and a deal appears on course after months of uncertainty over whether the would-be buyers had sufficient financing.

An agreement would end speculation on the fate of ILFC, an important source of aircraft for many airlines and a top customer for both Boeing and Airbus.

While the finance arm has remained profitable, AIG’s collapse and subsequent federal rescue has shut off many of ILFC’s traditional sources of funding...

[ozymandius]

62. Goldman Sachs Trading Should Get No U.S. Backstop, Volcker Says

Dec. 12 (Bloomberg) -- Goldman Sachs Group Inc., which took $10 billion in U.S. bailout funds last year, shouldn’t get taxpayer support if the firm focuses on trading over banking, according to former Federal Reserve Chairman Paul Volcker.

The “safety net” provided by the U.S. government “should not be extended beyond the core commercial-banking business,” Volcker, 82, said in an interview yesterday at Deutsche Bank AG’s Berlin office, where he was attending a conference. “They can do trading and do anything they want, but then they shouldn’t have access to the safety net.”
.....

When the collapse of smaller rival Lehman Brothers Holdings Inc. triggered a crisis of investor confidence last year, regulators allowed Goldman Sachs and Morgan Stanley, another competitor, to convert into bank holding companies. That put the New York-based firms under the Fed’s purview and gave them access to cheap funding.

The two firms received federal guarantees on new debt issues, as did commercial banks and some companies with financing businesses, such as General Electric Co.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.O8G_pyd5ZE

---

I would applaud a street vendor selling torches and pitchforks outside Golden Sacks HQ.

[ozymandius]

63. What Ritholtz says:

I will probably re-post this on Monday's SMW. It is that significant.

Goldman Fueled AIG Gambles

From the WSJ:

...Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman, according an analysis of ratings-firm reports and an internal AIG document that details several financial firms’ roles in the transactions.

In Goldman’s biggest deal, it acted as a middleman between AIG and banks, taking on the risk of as much as $14 billion of mortgage-related investments. Then Goldman insured that risk with one trading partner—AIG, according to the Journal’s analysis and people familiar with the trades.

.....

Now, would someone explain to me why Goldman got 100 cents on the dollar as a counter-party to AIG via the Bailouts?

If Ron Paul wants to show he has balls, why not go after GS? The Fed is a soft target, and I believe there is almost no one in Congress with the testicular fortitude to demand repayment, and/or threaten a lawsuit on behalf of taxpayers.

As Ritholtz says, the public's list of allies is thin.

[Po_d Mainiac]

78. Why did GS get 100 pennies on the dollar? Tough negotiating

by Paulson and Co. The negotiations started at 2.7 times face value. Getting the figure down to FV was accomplished with bulldog tenacity..Don't cha know! (do I need to do the oozing S icon here?)

[Demeter]

79. Quelle Surprise, As Yves would say

We knew it was a dirty deal, we knew the pirate bandits' names, now we know the numbers....where's the lawsuits? Where are the regulations?

[JDPriestly]

92. Just for the record.

In my opinion, I repeat, in my opinion, Hank Paulson organized the bail-outs of Goldman, AIG and coincidentally of other Too Big to Fail institutions because (and this is just my opinion) he personally, as the head of Goldman at the time that much of Goldman's derivatives took place, would have faced a hurricane of lawsuits if not criminal indictments for fraud and breach of fiduciary duty, etc. had Goldman not been bailed out.

Steal a car worth $50.00 and you go to jail. Steal billions from the American people, your investors and the world and you bail yourself out. No damages, no lawsuits. No losses. Where's the crime?

In my view someone just performed the perfect crime -- in plain view and in the most prominent place in the world -- the White House and Congress. This is the end of our republic/democracy. Once someone gets by with that, the rest is history.

It is like Caesar crossing the Rubicon. The banks and investment companies are now Caesar.

2008 was the year that our nation as we have known it officially and once and for all became a bankogarchy. Thank you George Bush. Thank you Barack Obama for making history.

[Robbien]

74. FDIC moves against BankUnited execs

The FDIC lost $4 billion when it closed BankUnited in June and took on its toxic assets. Now it's demanding that 15 former officers and directors of the failed bank pay up.

In a scathing letter, the Federal Deposit Insurance Corp. accuses former Chairman Alfred Camner, former Chief Executive Ramiro Ortiz and 13 others of "negligence, gross negligence and/or breach of fiduciary duties related to certain residential loans."

The FDIC letter focuses on BankUnited's fatal attraction to Option ARMs, the risky mortgages that gave boom-time borrowers three choices each month: Make a full payment of principal and interest, make a minimum payment that results in the loan balance growing, or pay some amount in between. As South Florida home prices plummeted and jobless rates soared, Option ARMs have gone bad in droves.

In a Nov. 5 letter that's now part of the BankUnited bankruptcy court file, the FDIC lambastes the bankers for their "loose lending policies" and demands civil damages. Among other things, the FDIC accuses the bankers of:

* "Encouraging an extremely liberal and aggressive lending mentality to 'make the loan as long as the borrower has a pulse.'
* "Engaging in reckless, high-risk, and limited-scrutiny lending to fuel the bank's aggressive and rapid growth — in direct contradiction to public representations of the bank's conservative lending and strict underwriting policies.
* "Approving and putting in place a compensation structure that drove the bank's directors and officers to pursue recklessly risky lending and business practices."

The FDIC says those practices caused $227 million in loan losses in addition to the $4 billion hit the FDIC took.

http://www.palmbeachpost.com/money/fdic-moves-against-bankunited-execs-116367.html


The article doesn't mention any "moves against BankUnited" as the headline suggests except for FDIC sending banksters a scathing letter and demanding banksters "pay up".

A four billion fraud and still no mention of jail time. What's it gonna take?

[Demeter]

26. Good Tidings

http://www.youtube.com/watch?v=qNweTk5pqnc

[Demeter]

27. Morales emerges with clear mandate

http://www.ft.com/cms/s/0/54d11fbe-e374-11de-8d36-00144feab49a.html

A hat trick of electoral victories has made Evo Morales, Bolivia’s leftist president, one of Latin America’s most popular leaders, with a clear mandate to push ahead with plans to increase state control of the economy, grant greater autonomy to regions and improve the lot of the Andean nation’s indigenous majority.

The former coca farmer union rose to power in 2005 with 54 per cent of the vote, consolidated that majority in 2008 with 67 per cent of the vote in a recall referendum and on Monday took 63 per cent. With votes still to be counted, Mr Morales’ Movement Towards Socialism (MAS) party had won a two-thirds majority in the Senate and was close to securing a majority in the lower house, although this was not assured.

“Effectively there is no national opposition. There’s no leader who can challenge Evo, there’s no political party that can challenge Evo and there’s no base in Congress that can touch him,” said Jim Shultz, head of The Democracy Center, a Bolivian think-tank.

Adolfo Mendoza, the first MAS senator to be elected last night in the department of Cochabamba, where Mr Reyes used to be governor, said the election meant “a new collective consciousness” and had once and for all defeated “an ancient regime”.

“We have constituted a historical bloc, there’s no return,” he told the FT. “This crushing defeat shows that the old party system was corrupt and obsolete. Now the people are the mediators, there’s greater pluralism with the indigenous and social movements being part of the whole thing, and they will act as the observer and apply checks and balances.”

While Mr Morales failed to win over the rebellious south-eastern “media luna” states where much of the Andean nation’s hydrocarbons and agricultural wealth is based, he gained significant ground against his nearest rival, Manfred Reyes Villa.

“We have an enormous responsibility to deepen, accelerate this process of change,” the newly re-elected president told his supporters. “Having more than two thirds in the chambers allows me to accelerate the process.”

Details of Mr Morales’ agenda are still unclear. The president has announced plans for a large-scale industrialisation of key wealth sectors, including cement, paper, dairy, lithium, fertilisers, steel; a continuance of direct subsidy schemes for Bolivia’s poor; and support for greater regional autonomy that many critics say will prove to be almost ungovernable.

So far nine departments and 11 indigenous regions have decided to become autonomous, including Villa Mojocoya in Chuquisaca; Charazani in La Paz; and Pampa Aullagas, Salinas de Garci Mendoza and Curahuara Carangas in Oruro.

“All we really know is that Evo has a huge mandate, that he intends to use it, and that the opposition is absolutely flat on its back,” said Mr Shultz.

[Demeter]

28. Antarctic shielded by ozone hole - scientists

http://www.ft.com/cms/s/0/232eebfa-dddc-11de-b8e2-00144feabdc0.html

Antarctica has been protected from the most damaging effects of climate change by the impact of one of the worst environmental disasters of the 20th century, the hole in the ozone layer, research published today will reveal.

However, the study has also found that increased melting of some parts of the ice cap around the south pole will cause sea levels to rise much higher than previously expected.

John Turner, of the British Antarctic Survey, and lead editor of the work, said: “The most astonishing evidence is the way that one man-made environmental impact – the ozone hole – has shielded most of Antarctica from another – global warming.”

For years, climate change scientists have been puzzling over why most of the Antarctic has shown relatively little warming, and why in some areas the ice cover has, in fact, been increasing.

The failure of the Antarctic to melt across most of its extent – in sharp contrast to the Arctic, where the decline of sea ice and the melting of Greenland’s glaciers have been well-documented – has been held up by climate change sceptics as evidence of how global warming is not that serious.

But after drawing on several years of research, experts from the international Scientific Committee on Antarctic Research, a group made up of 100 leading scientists from 13 countries, now say the hole in the ozone layer has changed south polar weather systems.

Westerly winds over the Southern Ocean have, they say, intensified by about 15 per cent, “isolating Antarctica from the warming elsewhere on the planet”.

As a result, during the past 30 years there has been little change in surface temperature over much of the vast continent, though west Antarctica has warmed somewhat.

When the ozone layer closes up – which it is doing, as the ozone-depleting chemicals that caused it are phased out – temperatures are expected to rise across most of the continent by only about 3°C, which will not be enough to melt the main ice sheet.

However, in parts of the ice cap that rest on the seabed rather than on a land mass, the warming sea is expected to accelerate the melting of the ice from below.

The melting of those parts of the Antarctic, along with glaciers moving faster to the sea, will be enough to raise sea levels by 1.4m by 2100, the scientists suggested on Monday.

This is a large increase on the estimate of sea level rises of 59cm suggested by the United Nations’ Intergovernmental Panel on Climate Change in 2007, which failed to take account of the dynamics of ice at the south pole.

[Demeter]

29. Messiah-For Behold...The people that walked in darkness

http://www.youtube.com/watch?v=rzBHaWohP-c&feature=related

[Demeter]

35. Then Shall the Eyes of the Blind Be Opened

http://www.youtube.com/watch?v=LgKChEUy6xc&feature=related

[Demeter]

36. Bernanke fights for Fed powers

http://www.ft.com/cms/s/0/bb20d1f0-e01e-11de-8494-00144feab49a.html

Ben Bernanke on Thursday urged Congress not to take away the Federal Reserve’s bank supervision powers or curtail its independence even as he admitted that the US central bank had made regulatory mistakes in the run-up to the crisis.

“We must take care that the Federal Reserve remains effective and independent,” Mr Bernanke told the Senate banking committee during his confirmation hearing for a second term as Fed chairman.

Amid tough but generally respectful questioning, most senators appeared ready to support Mr Bernanke’s renomination, but many voiced deep concerns about the Fed as an institution and challenged the chairman’s views as to the roles it should play in the future.

Chris Dodd, Democratic chairman of the committee, said the Fed had “failed terribly” as a bank regulator. He said Mr Bernanke was “the right leader for this moment in our nation’s economic history” – but said he wanted to pare back the Fed’s responsibilities to focus it more narrowly on monetary policy.

Richard Shelby, senior Republican on the committee, withheld his support for Mr Bernanke, saying: “For many years I held the Federal Reserve in very high regard . . . I fear now, however, that our trust and confidence was misplaced.”

The Fed chairman for his part repeatedly questioned the wisdom of Mr Dodd’s plan to take banking supervision out of the Fed as part of a regulatory overhaul. “It is a fundamental issue about the soundness of the plan,” he said.

Meanwhile, Mr Bernanke assured legislators that he was very focused on high unemployment, now at 10.2 per cent. “Jobs are the issue right now . . . the biggest challenge, the biggest problem we face,” he said.

The Fed chief said near-zero interest rates were not fuelling asset price bubbles in the US and that it was not the Fed’s job to prevent bubbles abroad.

“US monetary policy is intended to address both financial and economic issues in the US,” he said. “Countries that are concerned about that have their own tools to address bubbles in their own countries.”

However, Mr Bernanke said the Fed would monitor asset prices. The Fed chairman also said the Fed had not made a final decision to end asset purchases, as scheduled in March, saying the committee would decide “whether or not to do more” based on the economic outlook.

Mr Bernanke pledged “unsparing self-assessments” of the central bank’s failings in the run-up to the crisis, admitting that the Fed had fallen short on consumer protection and bank supervision. But he argued the Fed needed to retain its bank supervision role in order to be an effective lender of last resort and maintain financial stability.

[Demeter]

39. Thirty financial groups on systemic risk list

http://www.ft.com/cms/s/0/df7c3f24-dd19-11de-ad60-00144feabdc0.html

Thirty global financial institutions make up a list that regulators are earmarking for cross-border supervision exercises, the Financial Times has learnt.

The list includes six insurance companies – Axa, Aegon, Allianz, Aviva, Zurich and Swiss Re – which sit alongside 24 banks from the UK, continental Europe, North America and Japan.

The list has been drawn up by regulators under the auspices of the Financial Stability Board, in an effort to pre-empt systemic risks from spreading around the world in any future financial crisis.

Insurers are considered systemically important for a variety of reasons: they might, for example, have a large lending arm, such as Aviva, or a complex financial engineering business, akin to that of Swiss Re.

AIG of the US, the failed insurance group, was proven to be a vast systemic risk last year, in large part because of its diversification from insurance into complex financial engineering.

Raj Singh, chief risk officer of Swiss Re, said his company had not been formally notified about being on the list. “The real interconnectivity for the insurance industry is more muffled in that there needs to be a dual trigger for there to be any big systemic effects,” he added.

None of the other insurers contacted by the FT said they were aware of being on the list.

The list, which is not public, contains many of the multinational bank names that would be widely expected.

The exercise follows the establishment of the FSB in the summer and is principally designed to address the issue of systemically important cross-border financial institutions through the setting up of supervisory colleges.

These colleges will comprise regulators from the main countries in which a bank or insurer operates and will have the job of better co-ordinating the supervision of cross-border financial groups.

As a spin-off from that process, the groups on the list will also be asked to start drawing up so-called living wills – documents outlining how each bank could be wound up in the event of a crisis.

Regulators are keen to see living wills prepared for all systemically important financial groups, but the concept has split the banking world, with the more complex groups arguing that such documents will be almost impossible to draft without knowing the cause of any future crisis.

Paul Tucker, deputy governor of the Bank of England, and head of the FSB working group on cross-border crisis management, said recently that the wills – also known as “recovery and resolution” plans – would have to be drawn up over the next six to nine months.

National regulators, led by the UK, are known to have begun pilot-testing the living wills exercise with some of the listed banks in the past few weeks.

[Demeter]

40. Whistleblower challenges US court ruling

http://www.ft.com/cms/s/0/34dbda02-e05c-11de-8494-00144feab49a.html

The whistleblower central to the US government’s drive to crack down on tax evasion through undeclared accounts in Switzerland has launched a challenge to have his prison sentence overturned.

Lawyers for Bradley Birkenfeld, the former UBS banker whose testimony played a large part in uncovering thousands of undeclared accounts at Switzerland’s biggest bank, say there has been a miscarriage of justice because US prosecutors made a false statement at his sentencing hearing in Florida in August.

Mr Birkenfeld is due to start a 40-month sentence next month at a federal prison after pleading guilty to conspiring to defraud the US government.

The challenge has erupted just as Mr Birkenfeld, a 44-year-old American who spent five years with UBS, presses a separate legal claim for a big “reward” from the authorities under rules introduced by the Internal Revenue Service to encourage whistleblowers.

“This is uncharted territory. It could be a gigantic fight,” said Stephen Kohn, one of two legal specialists representing Mr Birkenfeld’s compensation claim.

The IRS only started offering compensation to whistleblowers in December 2006, and no cases have come to court.

The regulations allow whistleblowers to receive a minimum 15 per cent and a maximum 30 per cent of money raised as a result of their information, including unpaid taxes, penalties and interest. The reward can also include “any related actions” and “settlements”, suggesting lawyers for Mr Birkenfeld could argue his evidence exposed not just the three US taxpayers prosecuted so far but the thousands of others whose details will be transmitted to Washington under a deal in August between the US and Swiss governments and UBS.

On the attempt to overturn the prison sentence, Mr Birkenfeld’s lawyers will appeal directly to Eric Holder, US attorney-general, by arguing that prosecutors misled the court in saying Mr Birkenfeld had not divulged information about specific UBS clients. Mr Birkenfeld’s lawyers have argued such information had been given.

The Justice Department and the IRS declined to comment.

[Demeter]

41. Handel - Messiah - He Was Despised - Charlotte Hellekant

http://www.youtube.com/watch?v=Rdf0Qyhc82Q

[Demeter]

37. Robert Shaw -- "Messiah" His Yoke Is Easy

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

[Demeter]

38. Oil and gas chiefs win bonuses despite missing targets

http://www.ft.com/cms/s/0/4a9bb62e-dd13-11de-ad60-00144feabdc0.html

Several oil and natural gas companies in the US and Europe boosted their chief executives’ remuneration last year, in spite of often missing performance targets or other measures of investor value, data collected by the Financial Times show.

The most significant bonus of 2008 was that of Aubrey McClendon, chief executive of Chesapeake Energy, one of the US’s biggest natural gas producers.

Mr McClendon, who founded Chesapeake in 1989, received a bonus of more than $75m after Chesapeake’s falling stock price forced him to sell more than 90 per cent of his shares to meet a margin call from his creditors.

In Europe, the Royal Dutch Shell board granted top management a bonus even though the company missed performance targets linked to the award.

Mr McClendon came lowest in the FT’s rankings of “best value” chief in the energy industry last year, while Jeroen van der Veer of Shell came 20th of 35, making him the lowest-ranked European.

The ranking equally weighted one-year total shareholder return, return on equity employed, and pay, all for 2008. Almost all oil and gas companies generated negative returns to shareholders last year and many did not meet their internal targets.

Nevertheless, most compensation packages rose over the period, according to data provided by Equilar, the executive pay analysts.

Hye-Won Choi, head of corporate governance at TIAA-CREF, the big US pension fund, says investors want pay to be linked to performance. “Especially during economic downturns . . . there is a heavy burden on company boards to explain why their chief executive is an exception,” she said.

“The often-used argument for paying large compensation packages to retain executives doesn’t hold water in this job market,” she added.

The highest-paid executives in the FT survey – Mr McClendon and Nabors’ Eugene Isenberg – were also ranked at the bottom end of their peer group in terms of shareholder return as well as return on capital employed, a metric used to determine how efficiently a company is run.

Top rank went to Harold Korell, chief executive of Southwestern, the US natural gas producer, and the only company in the survey to manage a positive shareholder return in 2008.

[Demeter]

42. the Funnies and Humor Section--Led By a Rogue Oliphant

Oh look! Dubai!

[Demeter]

43. Dear Santa, please pay no attention to this list--Dave Barry

http://www.miamiherald.com/living/columnists/dave-barry/story/1365659.html

In these troubled economic times, when money is scarce for many people, it's important that we remind ourselves, and our loved ones, that the holiday season is not about buying things.

Then we and our loved ones can enjoy a hearty laugh, because, of COURSE the holiday season is about buying things. Now more than ever, the U.S. retail economy depends on consumers spending money they don't actually have on gifts that nobody actually needs. That is the thinking behind the federal government's recently passed $783-billion Emergency Holiday Retail Stimulus Act, which will be used to purchase, among other things, what the White House has described as ``a cheese log the size of the Chrysler Building.''...

[Demeter]

44. Bill Bonner Does Stand Up Comedy (Except he isn't kidding)

Gold is a very good bet for the long term. Because it is a bet against Bernanke & Co. Look at it this way, where would your rather put your money...on the brains and integrity of America's central bankers...or on a dumb metal? We'll take the metal!

Just look at what the Bernanke team does. Listen to what they say. They have no idea what they are doing...yet, they are doing a lot of it. They more than doubled the US monetary base in less than 18 months. They've bought hundreds of billions worth of the banks' dodgy loans. They've threatened to drop money from helicopters rather than permit the economy to correct its mistakes.

We'll take gold, thank you very much...and wait to see what happens next.

Markets are closer to living things than to inanimate objects. They have hearts, souls, and a sense of humor. They don't merely react to circumstances. They create circumstances. And then they react to them. And then they give a good laugh. That's why Modern Portfolio Theory and the Efficient Market Hypothesis are such folderol. They expect markets to act like rubber balls or iron filings. They expect them to behave like objects, rather than like human beings...

[Demeter]

46. Bill Bonner on a more serious note

"...So far, the 'recovery' is as phony as the boom that preceded it. A real recovery requires real savings, real investment, real jobs, and real increases in earnings. (Readers will recognize those as the same requirements for a durable boom in the stock market.) As far as we can tell, they do not exist..."

[AnneD]

58. Thanks.....

I have my ultraviolet stink finder on order. My bull shit detector finally died this year from overwork and they don't make them any more.

[Demeter]

45. The Retarded Recovery By Bill Bonner

http://dailyreckoning.com/the-retarded-recovery/

Nothing is quite as disagreeable as a neighbor who has made a lot of money by not following your advice. After 9 months of 'recovery' they are all around us. They think they have perfected the art of bubble riding.

Here on the back page, we alert investors. We wag our fingers and shake our heads. Little good it does. We might as well warn surfers about an approaching storm. They don't head for cover; they rush to the beach, hoping it's not too late to catch a big one.

As of this week, investors are still making money. Almost everything has outperformed cash over the last 9 months. Stocks, commodities, gold - you name it. This wouldn't be happening were it not for the government. The feds are making waves from Malibu to Manila. 'Don't worry about the depression,' they tell us; 'we're on the case.' That, of course, is what we're worried about.

Instead of allowing things to settle down, the feds are doing all they can to keep them stirred up. Amid the foam and splash, nobody knows what is really going on. For example, they've driven the yield on cash down to near zero. What's a borrower to think? Why are interest rates so low? Are there so many trillions in idle savings that he can have them for nothing?

Investors don't know whether they are coming or going either. They're buying S&P stocks at more than 80 times earnings, while people who know what they are doing - the insiders - dump 82 shares for every one they purchase.

And in the economy, last Friday, came a puzzling report from America. According to the feds, unemployment dropped by 0.2% last month. That leaves only 15 million without work. Another report tells us that each job created by US government stimulus costs $246,000. What were they hiring, bankers?

While the feds muddy the waters, the de-leveraging of the American consumer continues. Consumer credit fell in the US in October, for the 9th month in a row. As long as consumers are cutting back there is no way a real recovery can begin.

What to make of it all? We turn to a ghost for an explanation. Friedrich Hayek described a similar situation 76 years ago:

"There can...be little doubt that ...a deflation process is going on...Central Banks, particularly in the United States, have been making earlier and are more far-reaching efforts than have ever been undertaken before to combat the depression by a policy of credit expansion - with the result that the depression has lasted longer and has become more severe than any preceding one.

"...all conceivable means have been used to prevent the readjustment from taking place; and one of those means , which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about..."

He could have been describing Japan's 20-year depression, too. So far, we have no evidence that the authorities can improve a depression. All we know is that they can stretch it out.

A real recovery is a process of discovery: it begins in misery and ends in prosperity. Investors figure out what their boom-era investments are really worth. Businessmen figure out how to turn a profit in a new environment. Households learn how to match their incomes against their expenses in a world where credit is less forthcoming and jobs are harder to find. Needless to say, the faster these discoveries are made, the better.

But the first thing people realize is that they have been idiots. Then, they call for the government to prove it isn't so. In Britain, the government has spent about $8,000 per family to bail out the banking sector. As a result, we don't get to discover what the bankers would do if they were forced to seek honest employment. Nor do we discover what the poor taxpayers would have done with that $8,000 if it hadn't been forcibly transferred to the City.

Likewise, what we want to know about an insurance company is how well it holds up under pressure. But when the feds rushed in to save AIG they corrupted the facts. Then, in the US alone, there were Bear Stearns, Citigroup, Washington Mutual, General Motors, Chrysler, Fannie Mae and Freddie Mac, not to mention the small fry. Our curiosity remains unsatisfied; what kind of world would it be if they had gotten what they deserved?

Alas, the feds have created a world of darkness and depression. No one knows anything. And what they think they see clearly is often a mirage. Employers don't know whether to hire or fire. Consumers are blind too; they don't know whether things are getting better or worse. Finally, government even pokes its own eyes out. Relying on 'funny money' to cover its deficits, it has no idea how far it can go before it falls off a cliff.

Regards,

Bill Bonner,
for The Daily Reckoning

[Demeter]

47. My Sister Wants me to Go to Bed Now

since the computer is in the guest room. Sleep well, and dream of a roaring comeback of the country we knew and loved and hoped and worked to build...

[DemReadingDU]

49. Thanks for the weekend thread

Pleasant dreams

[DemReadingDU]

48. Robert Prechter Discusses Asset Bubbles, Stock Prices: Video

12/11/09 Robert Prechter Discusses Asset Bubbles, Stock Prices: Video

Dec. 11 (Bloomberg) -- Robert Prechter, founder of Elliott Wave International Inc., talks with Bloomberg's Betty Liu about asset price bubbles. Prechter also discusses the outlook for the U.S. stock market and his investment strategy.

appx 3 minutes
http://www.youtube.com/watch?v=WXa2bj1uJRM

[amandabeech]

53. When I was an undergrad at the Big U back in the seventies,

I used to go to the Messiah performance at Hill Aud.

We only got to sing along for the Hallelujah Chorus, which was fine by me, since my vocal stylings aren't exactly concert quality. Ha-ha!

They used the Interlochen Arts Academy (full year arts-oriented prep school on the Interlochen campus). I used to quiver in fear for the trumpet player who had to do, "The trumpet shall call (or some such solo from Part III)." There was one performance in which the trumpet player never got a clean first note on the fanfare. It was painful to the ear and the eye--the player knew that she had screwed up.

PS--I was accepted at Interlochen for painting and drawing, but in the end, my folks couldn't hack it financially. At that time it was more expensive than a year at U-M. Sometimes I wonder what my life would have been like had I a scholarship back then.

[DemReadingDU]

59. Don't many people do that?

Look backward, and if only I had done this or that, what might have been? Really, life is all about dealing with what we are handed and making the best of it, moving forward and learning from experiences. I always try to keep in mind that at whatever point in time, that I did the best I could with what I had.

[bread_and_roses]

60. Too good not to share - John Bellamy Foster (and I love Handel)

(I tend to love Baroque music in general)

Everyone but me may already be familiar with John Bellamy Foster but I encountered him for the first time on Thursday, in the very few minutes of this week's "Alternative Radio" http://www.alternativeradio.org/ I managed to hear.

from Wiki:

John Bellamy Foster (born August 19, 1953) is editor of the independent socialist magazine Monthly Review and professor of sociology at the University of Oregon in Eugene. His writings have focused on political economy, environmental sociology, and Marxist theory. He is author of numerous books...

Now, I only heard a very few minutes of his talk on "Economy, Ecology & Empire " but during those few minutes he gave an example so telling, at least to my mind, that alone it explains nearly everything about our insane economic model. He relayed the conclusion of some evidently mainstream economist that were global warming to cut US agricultural output in half, it would not be a real problem, since agriculture makes up only 3% of our GDP. Cut it in half? psshawww - big whoop - scarcely a blip on the economic engine! After giving a few brief examples of what such a cut in food production would mean to ordinary people in terms of scarcity and price, he noted that it never seemed to occur to the economist in question that people would buy food before they'd buy computers and what-not, that being an example of how totally removed such economic analysis is from anything resembling real life.

I found this recent interview which I skimmed on the current financial crisis:
http://www.creative-i.info/?p=12123

JBF: The class struggle worldwide is the great unknown. Right now in the context of the biggest crisis since the Great Depression, we are still seeing a very uneven class struggle, waged largely from above, in a manner that has characterized the whole neoliberal era. In Europe and elsewhere resistance from the bottom has grown. But, in the United States, the labor unions remain for the most part dormant or subservient. There has been no big upsurge of revolt. Outrage over the bailout has come more from the right than the left and so has been aimed principally at the government itself, and only secondarily at banks/corporations (focusing there mainly on those who walked off with big bonuses). These are signs of the incoherent anger of a suddenly dispossesed class of small property holders — petit bourgeoisie — terrified by the drop in value of their homes and the wipeout of their (relatively small) investment portfolios. We know from the experience of Germany in the 1920s and 1930s that there are dangers in this phenomenon. In the United States, the election of the Obama administration has nonetheless been a stabilizing factor for the system, defusing any possible left-popular response from the much larger working class, a response that might raise fundamental questions. This is so even though the administration has been more deeply intertwined with financial capital than the Bush administration ever was, witness Obama’s economic advisers, who have in common their past affiliation with Goldman Sachs.

" ...the election of the Obama administration has nonetheless been a stabilizing factor for the system, defusing any possible left-popular response from the much larger working class, a response that might raise fundamental questions." This seems to me to be a more elegant phrasing of my long-held belief that when the Oligarchs have gotten too overtly greedy they bring in someone with a "D" after his/her name to throw we plebes a few scraps and bones before we get to the pitchfork stage.

[Dr.Phool]

64. Obama's 2006 speech to Rubins Hamilton Project.

Tell me again how this guy wasn't Wall Streets Trojan Horse.
-----------------------------------------------------------




It’s the "smoking gun" that links Barack Obama with Bob Rubin-Goldman Sachs, free trade and cuts in entitlements. It’s the young Senator Barack Obama’s little commented on and little-known speech to the Hamilton Project in April, 2006, well before he became president.

Senator Barack Obama ran a stealth campaign for the presidency in which he took positions on issues that he obviously didn’t believe which explains why he jettisoned them early on (FISA; NAFTA renegotiation; DADT; DOMA etc.). But the REAL, unvarnished Obama was unveiled in a speech he gave as a Senator from Illinois in 2006. He spoke at the request of "my friend" Bob Rubin whose Goldman Sachs had just funded the Hamilton Project, a free trade think tank embedded in the Brookings Institution./>

I. Background: Why the Hamilton Project is Important.

/>
Obama’s Hamilton Project speech is vital to understanding the man since:

1) it shows the real Obama before his p.r./propaganda team repackaged him;

2) it shows his links, at an early age, to Bob Rubin and Goldman Sachs; he’s been owned by Goldman ever since;

3) it shows Obama has long been a free trader and lied to get votes when he promised to renegotiate NAFTA. He had no such intention and is philosophically opposed to such a renegotiation. He made that promise (and flip-flopped on it) to pander for union votes in Ohio while fighting Hillary for the nomination;

4) it shows Obama is in the bag for what Goldman really wants: free trade AND cuts to entitlements (including social security and medicare).

Before we examine Obama’s Hamilton Project speech, let’s pay tribute to a much earlier diary right here at Firedoglake which exposed this years ago. Hats off to Kirk James Murphy, M.D., whose diary, "The Hamilton Project: Same Corporatist Whine in New DLC Vessels" spelled this out back in February 13th, 2008. Dr. Murphy wrote in his diary this about the opening of the Hamilton Project:

Oh – the Senator who made time for the christening of the new corporatist think tank… the love child of the Clintons’ BFF Robert Rubin?
Sen Barack Obama.

The Hamilton Project was also written about even earlier by David Sirota (but he missed the Obama speech). Back in April, 2006, Sirota noted:

Wall Street Dems Unveil Plan to Undermine Progressives

Here’s a big shocker – the Wall Street wing of the Democratic Party today announced it would be beginning its new war in earnest on the grassroots elements of the party that are demanding serious public policy changes. As the Financial Times reports, Citigroup Chairman Bob Rubin held a press conference at the Brookings Institution to announce the formation of the so-called "Hamilton Project." After paying lip service to various economic problems afflicting the country, Rubin and his former Treasury colleague Roger Altman quickly let it be known exactly what they are up to.

Here’s the key excerpt:

"At a time when Democrats have become more aggressive in voicing concerns about the foreign ownership of US assets, Roger Altman, former deputy Treasury secretary under Mr Clinton, added that more inclusive economic growth could also ‘blunt the political demands for protectionism’… said it was willing to take on entrenched Democratic interests, such as teaching unions. Policy papers unveiled on Wednesday proposed vouchers for summer schools…"

There it all is. First there’s the dishonest name-calling aimed at those courageous Democrats who are challenging the free trade orthodoxy that is destroying the lives of millions of American and foreign workers. Then there is the promise of an ensuing attack on the labor movement – a reflexive move, of course, for a bunch of corporate executives. And finally, the nod to efforts to defund public education through "vouchers."

None of this is surprising, of course. As head of Citigroup, Rubin has a financial interest in the agenda he’s pushing. And he’s made no apologies for the brazenness with which he pushes his corporatism. Remember, it was Rubin during the debate over the Central American Free Trade Agreement who demanded that congressional Democrats back off their efforts to include labor, human rights and environmental protections in the pact. He and his pals are the same people who rammed trade deals like NAFTA, WTO and China PNTR down the throats of Americans, and then left government service for the high life of the corporate boardroom. There, they reaped the rich financial rewards of the very sell-out policies they used public office to push, while millions of Americans saw their jobs outsourced, their wages frozen and their benefits slashed.

Oh sure, the group claims it is going to look at critical issues like income inequality – but you can be sure they will look at that issue without looking at issues like "free" trade that are fueling that inequality. Because make no mistake about it – this move today is nothing more than the beginning of a frontal attack by Corporate America on the progressive movement, using the Democratic Party as an all-too-transparent cloak of legitimacy.

I added emphasis to that last section because it is so important and has been proven to be what happened under Obama:

>"this move today (the founding of the Hamilton Project) is nothing more than the beginning of a frontal attack by Corporate America on the progressive movement, using the Democratic Party as an all-too-transparent cloak of legitimacy."

(to be continued)
http://seminal.firedoglake.com/diary/17981

[Dr.Phool]

65. Part 2

http://seminal.firedoglake.com/diary/17984


Speech shows his links to Goldman, Entitlement Cuts (Part 2)
By: fflambeau Monday December 7, 2009 9:34 pm


II. The Founding of the Hamilton Project.

That Barack Obama was in bed with Bob Rubin and Goldman Sachs as long ago as April, 2006, is shown by the Hamilton Project and Obama’s speech there. Before looking at that vital speech, we need to know first some of the background about the founding of the Hamilton Project by Rubin and Goldman Sachs. Here is the Financial Times writing on April 6, 2006 about the dangers of populism and what the Hamilton Project is about:

Given the continued absence of credible economic leadership in Washington, it is unsurprising – but troubling – that both Republican and Democratic lawmakers have recently been tempted to fill the gap with populism. In that context, we welcome the launch yesterday by the Brookings Institution of a new platform – the Hamilton Project, named after America’s first Treasury Secretary – to address America’s looming economic challenges. Although composed mostly of Democrats, the group states a clear preference for market-based solutions to America’s problems. It rejects the latent signs of protectionism recently visible on Capitol Hill. But it makes a strong case for the state to play a more constructive role both in improving the efficiency of America’s market economy, but also in addressing the growing inequity of market outcomes.
…

Yet it would be hard to dispute the recommendation that America should boost investment in the skills of its workforce, both through better technical training and improving the underperforming public school system. Likewise, we strongly agree with the view that the US needs to return to the path of fiscal discipline from which Mr Bush has strayed, even if the group ducked the question of how it would reform America’s entitlement system. Reducing the cost of Medicare and Medicaid is America’s most important long-term fiscal challenge. It is also critical to reverse Mr Bush’s tax cuts.
At a time of economic demagoguery on Capitol Hill and a vacuum of leadership in the White House it is refreshing that rational voices are addressing America’s core economic challenges. Many of the policy details are awaited. But the diagnosis is persuasive.

Wikipedia gives us a quick primer on who set up the Hamilton Project and its overall goals:

The Hamilton Project<1> was set up by former US Treasury Secretary Robert Rubin.
He set up the Hamilton Group (sic), a think tank aimed at keeping Democrats from spending too wildly and running up dangerous deficits.<2>
See also: Brookings Institution.

That, folks, complete with the 2 references, is the ENTIRE Wikipedia entry on the Hamilton Group but it captures in a nutshell what the group was designed to do: keep progressive Democrats in line.

Here’s how A Tiny Revolution, under the headline "A Winning Democratic Strategy From People Who Hate Democrats" described the foundation of the Hamilton Project (NOTE: this website has a video clip of Obama’s speech at the Hamilton Project):

David Sirota points out here that the Brookings Institution has launched something called "The Hamilton Project" led by Robert Rubin.

Looking at it, you can tell right away who the Hamilton Project is for: Wall Street Democrats. Or as I like to call them, "The Party of Gay Investment Bankers and Corporate Lawyers Whose Grandfathers Worked in the Roosevelt Administration." (In fact, by my count, its advisory council includes twelve investment bankers.) They’re people who should naturally be Republicans, but just can’t bear having to hang out with Pat Robertson.

The funny thing is, they’re apparently desperate to make this clear. Why? BECAUSE THEY’RE CALLING THEMSELVES "THE HAMILTON PROJECT."
Let’s ask the Democratic Party’s own website to explain the significance of this:

Thomas Jefferson founded the Democratic Party in 1792 as a congressional caucus to fight for the Bill of Rights and against the elitist Federalist Party.
The "elitist Federalist Party," of course, was founded by Jefferson’s chief rival Hamilton.

Moreover, if you only take one thing away from seventh-grade history, it’s that Jefferson was the small-d democrat, while Hamilton famously exclaimed "The People!—The People is a Great Beast!" Hopefully that can be used as the title for all the Hamilton Project’s proposals for free trade, balanced budgets and school vouchers:

Still, it might be nice if the Democratic party didn’t get all its ideas from people who hate Democrats. But don’t get your hopes up.

In the interests of fairness, here is how the Hamilton Project describes itself:

The Hamilton Project produces research and policy proposals on how to create a growing economy that benefits more Americans. The Hamilton Project’s economic strategy reflects a judgment that long term prosperity is best achieved by making economic growth broad-based, by enhancing individual economic security, and by embracing a role for effective government in making needed public investments.

Since its launch in April 2006, The Hamilton Project has undertaken a significant policy agenda with input from leading thinkers in academia, business and public policy communities. The Project has released over 50 policy papers on subjects ranging from energy policy to health care to economic security.

In 2008 we have focused significant attention to our nation’s current economic challenges, starting in January with a public forum on the need for fiscal stimulus, which accompanied the release of a new Hamilton Project policy memo, a fiscal stimulus primer. In March, the Project tackled questions relating to the mortgage market in an event aimed at addressing the national foreclosure crisis. More recently, we focused our attention on the current crises in the housing and financial markets. Our September 23 event featured a high-level discussion on the current state of the financial markets with FDIC Chairman Sheila Bair and Hamilton Project Advisory Council members Lawrence Summers and Eric Mindich. The Hamilton Project also released proposals for new types of mortgages and for alleviating problems in the low-income housing market.

And this from the Hamilton Project:

Leaders from the business, academia, and the public policy community have joined together to launch The Hamilton Project at the Brookings Institution. Consistent with its broad economic strategy, the Project will put forward innovative policy ideas from leading economic thinkers—ideas based on evidence and experience, not ideology and doctrine.

The Project’s economic strategy is built on three principles: that broad-based economic growth is stronger and more sustainable, that economic security and economic growth can be mutually reinforcing, and that effective government can enhance economic growth.

III. Obama’s Speech to the Hamilton Project.

Here is then-Senator Barack Obama’s speech at the opening of the Hamilton Project back in April, 2006 as taken from that original Firedoglake diary. Note again that a video clip of Obama’s speech can be found here:

I would love just to sit here with these folks and listen because you have on this panel and in this room some of the most innovative, thoughtful policymakers, people who have both ideas but also ways of implementing them into action. Our country owes a great debt to a number of people who are in this room because they helped put us on a pathway of prosperity that we are still enjoying, despite the best efforts of some. (Laughter)

I want to thank Bob and Roger and Peter for inviting me to be here today. I wish I could be here longer. I am going to have to run after a few minutes because we do have an important issue relating to U.S.-India relations. But when Roger originally called to invite me, not only to this forum but to invite me to engage in this project, I couldn’t help but think that this was the sort of breath of fresh air that I think this town needs.

We have all known for some time that the forces of globalization have changed the rules of the game—how we work, how we prosper, how we compete with the rest of the word.

We all know that the coming baby boomers’ retirement will only add to the challenges that we face in this new era. Unfortunately, while the world has changed around us, Washington has been remarkably slow to adapt twenty-first century solutions for a twenty-first century economy. As so many of us have seen, both sides of the political spectrum have tended to cling to outdated policies and tired ideologies instead of coalescing around what actually works.

For liberals, and I include myself in that category, too many of us have been interested in defending programs the way they were written in 1938, believing that if we admit the need to modernize these programs to fit changing times, then the other side will use those acknowledgements to destroy them altogether. On the right, there is a tendency to push for massive tax cuts, as Peter indicated from my speech at Knox College, no matter what the cost or who the target is, a view that stems from the belief that there is no role for government whatsoever in the challenges we face. Of course, neither of these approaches really works.



That is what I hope we will see from The Hamilton Project in the months and years to come. You have already drawn some of the brightest minds from academia and policy circles…. So I know that there are going to be wonderful ideas that are generated as a consequence of this project.

Not every idea will I embrace, and I hope that one of the roles that I can play, as a participant in this process, is to not only encourage the work but occasionally challenge it. I will give one simple example. I think that if you polled many of the people in this room, most of us are strong free traders and most of us believe in markets. …So, hopefully, this is not just going to be all of us preaching to the choir. Hopefully, part of what we are going to be doing is challenging our own conventional wisdom and pushing out the boundaries and testing these ideas in a vigorous and aggressive way.

But I can’t think of a better start, given the people who are participating today. I am glad that Brookings has been willing to provide a home for this wonderful effort.

Obama lays it all out: his ties to his friends (Bob Rubin, head of Goldman Sachs; and Peter Orszag of the Hamilton Project who now works in the Obama administration as Budget Chief); his belief in unfettered free trade (making a mockery of his NAFTA renegotiation pledge 2 years later in the heat of battle with Hillary); and, the need for cuts in entitlements.

Paul Street, in a brilliant analysis over at ZNet, shows exactly who Obama is and how he could make such a rapid ascent from obscurity to the Presidency:

I was not alone in seeing Obama as enjoying more than an outside chance at the White House in the near future. Other Left observers knew about Obama’s longstanding outsized ambition and his related "deeply conservative" ideological orientation and power-accommodating nature. We were aware of his early (late 2003-2004) and close vetting by the national political and financial class and of who really selects viable presidential candidates and winners – the corporate and imperial establishment. And we knew also that, as the brilliant left commentator and author-filmmaker John Pilger noted last June, Obama’s racial identity could be a "very seductive tool of propaganda" working on behalf of the ruling class.
…
Obama was understood early on to be a distinctly possible if not probable next president – despite or even because of his race. We felt that he offered the U.S. power elite and its authoritarian business and military order and global empire a much needed re-packaging – a symbolic overhaul and "re-branding" – that none of the other serious presidential contenders in the mix could safely provide to the same degree required in the wake of the Cheney-Bush nightmare. For me and a few other lefties I knew/know, there was little all that unlikely or surprising or remarkable about Obama’s rapid climb to the top of the American Empire. It all made perfect sense. The same goes for Obama’s performance as U.S. president so far.

…Obama, it seemed to me, was poised to profit from a killer combination in U.S. politics. He joined widespread popularity and a related illusory progressive identification among the citizenry to strong approval from elite financial, corporate, and military elites who determined his basic safety to existing dominant domestic and global hierarchies and doctrines. Sophisticated corporate and military power brokers, I was sure, calculated that his deceptive (as they knew, after vetting him) progressive imagery and related newness would be useful when it came to "managing expectations" that were certain to be heightened by the passing of the Cheney-Bush regime and era. "Who better," I thought I could hear members of the political and investor classes saying…. "who better than Obama – with his outwardly progressive credentials, his ‘community organizing’ past, and his non-traditional racial identity – to be the public face for the long-predicted massive taxpayer bailout of high finance? Who better than Obama (with his supposed ‘antiwar’ record and his Islamic-sounding name) to provide cover for the reconfiguration of U.S. military control of strategically hyper-significant Middle Eastern oil resources in the wake of Bush’s Iraq fiasco? Who better to safely channel popular angers and to attach alienated segments of the citizenry to the corporate and imperial state and to refashion America’s image around the world?"
…

Obama’s predictable (and predicted) betrayals of his more leftish campaign rhetoric and imagery have met only minimal and half-hearted opposition from what’s left of a U.S. left. Unjust wars and occupations, mega-bankers’ bailouts and other regressive policies that were seen as intolerable under the nominal rule of a boorish moron from Texas (George W. Bush) have become acceptable for many "progressives" when carried out by an eloquent and urbane black Democrat from Chicago (Barack Obama). A recent pathetic example – one of many – comes from the so-called liberal-left journal The Nation, whose bourgeois editor Katrina Vanden Huevel proclaims the following in an editorial titled "Obama, One Year On:" "Whatever one thinks of Obama’s policy on any specific issue, he is clearly a reform president committed to improvement of peoples’ lives and the renewal and reconstruction of America… Progressives should focus less on the limits of the Obama agenda and more on the possibilities that his presidency opens up"
/>
Ms. Vanden Heuvel announces here that she has fallen prey to what Chris Hedges, author of the recent book Empire of Illusion, calls "Brand Obama." As Hedges wrote last May:

"Barack Obama is a brand. And the Obama brand is designed to make us feel good about our government while corporate overlords loot the Treasury, our elected officials continue to have their palms greased by armies of corporate lobbyists, our corporate media diverts us with gossip and trivia and our imperial wars expand in the Middle East. Brand Obama is about being happy consumers. We are entertained. We feel hopeful. We like our president. We believe he is like us. But like all branded products spun out from the manipulative world of corporate advertising, we are being duped into doing and supporting a lot of things that are not in our interest."

"… The Obama campaign was named Advertising Age’s marketer of the year for 2008 and edged out runners-up Apple and Zappos.com. Take it from the professionals. Brand Obama is a marketer’s dream. President Obama does one thing and Brand Obama gets you to believe another. This is the essence of successful advertising. You buy or do what the advertiser wants because of how they can make you feel ."

Street’s entire analysis is quite long and may be the best expose of Obama in writing. When one reads it and couples it with David Sirota, Obama’s speech to the Hamilton Project then one can understand that Obama really was the perfect stealth candidate. Not only is he NOT a progressive, he is an ANTI-progressive who represents Goldman Sachs and the power elite of this country. After the bailouts, after the trillions given to Wall St. and the banks (Goldman got its investment in Obama repaid in the billions), after the escalation of war in Afghanistan, after Obama’s health "insurance reform", after the false unemployment summit, we likely will get what Bob Rubin also wants: an attack on entitlements.

Obama’s own words at the Hamilton Project opening show what he’s all about and it ain’t pretty and it ain’t progressive. Obama is Goldman Sachs’s salesman for the bailout for the escalation of an unpopular war and for a "limited government approach" to average Americans. Obama = antiprogressive.

[Hugin]

69. So, that's the name of the bus that hit me...

Nice to know. :/

[Demeter]

80. Now You Are REALLY Depressing Me

And I just got back from the Hallelujah Chorus and the Grand Amen...

[DemReadingDU]

66. Bill Moyers - Howard Zinn, George Goehl and Heather Booth

12/11/09
Howard Zinn
http://www.pbs.org/moyers/journal/12112009/profile.html
video
http://www.pbs.org/moyers/journal/12112009/watch2.html
transcript
http://www.pbs.org/moyers/journal/12112009/transcript2.html

George Goehl and Heather Booth
http://www.pbs.org/moyers/journal/12112009/profile2.html
video
http://www.pbs.org/moyers/journal/12112009/watch.html
transcript
http://www.pbs.org/moyers/journal/12112009/transcript1.html

full transcript
http://www.pbs.org/moyers/journal/12112009/transcript4.html


edit - Matt Damon grew up next door to Howard Zinn. Damon, in the 5th grade, brought his copy of Zinn's book to school.
From the above interview of Howard Zinn.

[DemReadingDU]

67. New Boss, Same as the Old Boss: Howard Zinn Traces Social Change

12/11/09 New Boss, Same as the Old Boss: Howard Zinn Traces Social Change

In Howard Zinn’s new documentary, “The People Speak,” the actress Marisa Tomei is shown reading aloud an essay by a worker at a 19th-century textile mill in Lowell, Mass., who led other women to protest wage reductions and demand better working conditions.

In the woman’s description of oppression at the hands of a company, Mr. Zinn, the left-wing historian, hears both past and present tense. “She says the same thing of the 1830s that we hear today — that you are at the mercy of your employer,” Mr. Zinn said in an interview.

So much of Mr. Zinn’s career, reflected in his “People’s History of the United States” book, has been about the struggle for social change. With “The People Speak,” which has its premiere on the History Channel on Sunday (at 8 p.m., Eastern and Pacific times; 7, Central time), he is having a raft of celebrities recount that effort through the words of people who were there. “It’s the people’s point of view of history,” said the actor Josh Brolin, an executive producer of the film.

Onstage and on camera, Benjamin Bratt reads a farmer’s grievances during Shays’s Rebellion. Matt Damon reads from “The Grapes of Wrath.” Morgan Freeman reads from “The Meaning of July Fourth for the Negro,” a speech by Frederick Douglass.

“Once you get the actors reading these things, it really brings the history alive,” Mr. Damon said in an interview last month, amid a college tour to promote the film.

more...
http://www.nytimes.com/2009/12/12/arts/television/12zinn.html

[Dr.Phool]

68. My worthless PBS station pre-empts Moyers most of the time.

It hasn't been on for the last two weeks.

I'll have to watch it online. Zinn's book is probably the most important that I've ever read.

[hamerfan]

90. Which book?

By Howard Zinn do you recommend? Thanks!

[Dr.Phool]

91. A Peoples History of The United States 1492-Present.

He did another one "Voices of A peoples History". I have it but I haven't read it yet.

Tonights show on the History Channel will be on both. I saw clips of it on Moyers. Don't miss it!

[DemReadingDU]

73. October protests in Chicago against the banker convention

Thousands of protesters in Chicago, and yet where was the main stream media?
Thousands of protesters, but over a million people went to DC for Obama's inauguration and media coverage everywhere.
It appears it will take over a million people to protest the banksters to get MSM coverage?


10/25/09 "Showdown In Chicago": Protesters Crash Bankers Convention
videos
http://www.huffingtonpost.com/2009/10/25/bank-protests_n_333155.html
10/27/09
http://www.huffingtonpost.com/2009/10/27/showdown-in-chicago-thous_n_335533.html

[MattSh]

70. You might remember this woman from a few months back...

Keeping with the real spirit of the season...

Kseniya Simonova’s sand artistry helps sick children

In her home Crimean town of Yevpatoria, Kseniya Simonova is lovingly referred to as the “Lady of Sand.” This slender and shy 24-year-old performance artist earned the nickname after winning this year’s “Ukraine’s Got Talent” television show on June 26, a local equivalent of the British and U.S. talent shows. But since her victory, despite worldwide recognition and over 10 million hits on YouTube, Simonova has shunned the trappings of stardom for charity work and a quiet life with her family.

<and>

But she persisted for the good cause she had in mind when auditioning for the show. Simonova said she wanted to win to help a gravely sick little girl, Nika Fesenko, who was just over one year old at the time. “No doctor in Ukraine wanted to treat this girl, who had been infected with staphylococcus in a maternity hospital and is now in a coma,” Simonova said. “Her mother was forced to keep silent about it and threatened she would be sued otherwise. I decided to try finding some sponsors who would help the girl. I think I won just for her!” she added.

Simonova, herself a mom to a baby boy, was trying hard to save another girl’s life by transporting her to Italy for treatment. However, the 16-month old child died on Dec. 5. “A deep coma caused blood clots in her heart. One of them got lose and she died at a hospital in Simferopol,” Simonova said. “She was a little angel.”

http://www.kyivpost.com/news/guide/general/detail/54816/

Something new from her... In memory of Little Nika.

http://www.youtube.com/watch?v=UzLlY4Z_Zto

Note: The 05.12.2009 is December 5, not May 12.

Hey who knows. I might even go ahead and post this in General Discussion, thought I need to swear off posting there. Don't get me started about GD or GD:P.

[Hugin]

71. How sad...

Nice that her art was performed in the spirit of generosity. Very touching.

[DemReadingDU]

81. Very nice, She has great talent

And so generous of her to help little sick children.

[DemReadingDU]

82. Professor Michael Hudson on the Global Financial Crisis

12/7/09
Hudson slides through a multitude of issues to drag us back to the big picture that is constantly ignored.

video appx 5 minutes
http://dandelionsalad.wordpress.com/2009/12/07/professor-michael-hudson-on-the-global-financial-crisis/

[DemReadingDU]

83. Sovereign Debt Defaults the Next Shoe to Drop?

12/11/09 Sovereign Debt Defaults the Next Shoe to Drop?
Mike Larson

Governments the world over have spent the past year bailing out, backstopping, insuring, and stimulating their financial sectors and economies. Trillions of dollars, euros, yen, and pounds have been thrown around like Halloween candy. Officials have assured us there’s little risk to that strategy.

But we have warned consistently that the opposite is true. Our stance: If you borrow and spend too much, all you’re going to do is transform a Wall Street debt crisis into a Washington debt crisis.

Lo and behold, the bill for all this global fiscal and monetary largesse is beginning to come due. Debt and deficit problems are going from bad to worse in many nations. That’s raising the very real risk of the unthinkable: Widespread SOVEREIGN debt defaults!

Dubai Debt Proves Too Hot to Handle

...the Dubai debt crisis was a long time coming. But the troubling thing is that Dubai is NOT alone …

Greece Heading down the Slippery Slope to Default?
What about Spain? The U.K.? The U.S.?

more...
http://www.moneyandmarkets.com/sovereign-debt-defaults-the-next-shoe-to-drop-2-36832

[DemReadingDU]

84. Dmirty Orlov: Predictions

12/12/09 Dmirty Orlov: Predictions

Around this time of year, some brave souls venture to put their reputations at risk by attempting to predict what the next year will bring. Some do so with uncanny accuracy, others — not so much. Being a serious author who hardly ever makes jokes, I generally sit out this annual bout of frivolity, but, noting that a new decade is about to burst upon us, I thought it reasonably safe to paint a picture of how I see the next decade. (In the unlikely case that my predictions turn out to be completely wrong, I would think that they will have been very thoroughly forgotten by the time 2020 rolls around.) And so, without further ado, here are my predictions for what it will be like in The United States of America during the second decade of the XXI century.

click to read predictions...
http://cluborlov.blogspot.com/2009/12/predictions.html

[Mojorabbit]

96. That was some dismal reading. nt

[Demeter]

85. Inequality as policy: The United States since 1979* John Schmitt**

http://www.paecon.net/PAEReview/issue51/Schmitt51.pdf

Since the end of the 1970s, the United States has seen a dramatic increase in economic inequality. While the United States has long been among the most unequal of the world’s rich economies, the economic and social upheaval that began in the 1970s was a striking departure from the movement toward greater equality that began in the Great Depression, continued through World War II, and was a central feature of the first 30 years of the postwar period.
Despite the magnitude of the rise in inequality, the political discourse in the United States refers only obliquely to these developments. The public debate generally acknowledges neither the scale of the increase in inequality nor, except in the most superficial way, the causes of this sudden and sustained turn of events.
This short essay seeks to provide an alternative view of the postwar period in the United States, particularly of the last three decades. My argument is that the high and rising inequality in the United States is the direct result of a set of policies designed first and foremost to increase inequality. These policies, in turn, have their roots in a significant shift in political power against workers and in favor of their employers, a shift that began in the 1970s and continues through today....

[bread_and_roses]

93. That's an excellent analysis

And what are we to do, with the sector most able to mobilize resistance to this state of affairs - our unions - as supine as the rest of the progressive community in this Brave New World of Obama?

The Labor movement is going to be silent and acquiescent to anything done in this Administration in the hope of getting the Employee Free Choice Act passed. We've already sold out on health care. Looks like as long as members benefits are not taxed, we'll support anything and say Hosannah Obama! This is a far cry, believe me, from the lofty goals that we started with in 2007.

Why our leadership thinks anything will be different with EFCA - that it and it alone will not be passed only in a gutted, toothless form - is beyond me.

[Demeter]

86. Managerialism and the demise of the Big Three Robert R Locke

http://www.paecon.net/PAEReview/issue51/Locke51.pdf

....Khurana concentrated his story on how a group of NGO bureaucrats (mainly from the Ford Foundation), in league with business school deans and corporation CEOs carried through a thorough transformation of business study programs and research agendas in the top twenty business schools of America. Even the Harvard Business School, which pedagogically clung to the case method of instruction in order to draw lessons from real-world experience in real companies, had in research and faculty recruitment to align itself with the “New Paradigm.” Elsewhere, at the University of Chicago Graduate School of Business, the Stanford Graduate School of Business, Columbia Graduate Business School, the University of California business schools at Berkeley and Los Angeles, the Carnegie Institute of Technology GSIA, the Wharton School, etc. it completely triumphed.

Khurana’s study centers on the economists’ take-over of the business schools, after economics had itself been transformed into a “decision science” through its absorption of operations research techniques (mainly linear programming and mathematical modeling) from scientists working on government contracts at the Rand Corporation. J.-C. Spender (private communication 1.09.2009) calls the move of economists into prominent if not dominant positions in business schools “an attempt to ‘colonize’ the social sciences – to elbow ‘real people’ out of the analysis and replace them by rational self-maximizers” -- those equipped “with the ‘rigorous’ thinking, of which economists believed they were the ‘high priests’.” H. Thomas Johnson relates how this colonization in his field (management accounting) occurred:

“Managerial uses of accounting information…probably emanated from one primarily underlying cause – namely, the growing use of quantitative economic abstractions in national government planning during the 1940s. …It is not surprising, perhaps, that accounting professors in graduate business schools quickly saw an opportunity to capitalize on this belief in the merit of using economic statistics to run the national economy. After World War II, professors of accounting and finance in graduate business schools such as Harvard, Chicago, and Columbia started to show corporate executives how to use their accounting information to plan and control business activities in the same way that economists were showing government administrators how to use national accounting statistics to plan and control affairs of a national economy. In part this idea emanated from accounting professors who had received doctoral training in economics….But the idea also received impetus from accounting instructors, whose experience with wartime agencies had introduced them to advance use of operations research and mathematical economics…. Small wonder that immediately after World War II graduate business schools became immersed in ways to apply neo-classical economic models to accounting information in order to formulate a basis for decision making in business.” (Johnson & Bröms: 57).

While “The New Paradigm” transformed business school faculties, in business and industry multi-divisional forms of corporate organization burgeoned. Although before 1940 most big firms organized managerial hierarchies along functional lines, by the 1920s a few “M” or multidivisional firms had already come into existence. After WWII “M” form corporate organization structures multiplied at home and abroad. The scholar who drew these developments to the attention of business historians, and transformed the subject of management studies (Alfred D. Chandler, Jr.) wrote a seminal article on the subject for a 1961 issue of the Business History Review, that is, just as “M” form structures consolidated their presence in the business world. (Chandler & Redlich). Thereafter, in a number of publications, including the Pulitzer-Prize winning The Visible Hand (1977), Chandler established a towering reputation not only within his field but outside – among economists, and businessmen. He contended that huge corporations escaped the fate of bigness, i.e., inefficiency, by establishing managerial hierarchies that used various managerial instruments to monitor operations and attain efficiency through cutting transaction costs. The special feature of the multidivisional corporation was the introduction of a top level of management to supervise divisions by using balance sheets and income statements to drive the activities of divisional managers.
Finance and controller functions gained ascendency at every level of management. So did the use of the new quantitative instruments that were being devised and taught in think tanks and business schools. Johnson observed:

“Given this circumstance, successful managers believed they could make decisions without knowing the company’s products, technologies, or customers. They had only to understand the intricacies of financial reporting. … By the 1970s managers came primarily from the ranks of accountants and controllers, rather than from the ranks of engineers, designers, and marketers. moved frequently among companies without regard to the industry or markets they served. … A synergistic relationship developed between the management accounting taught in MBA programs and the practices emanating from corporate controllers’ offices, imparting to management accounting a life of its own and shaping the way managers ran businesses.” (Johnson and Bröms: 57)....

[Demeter]

87. CEPR responds to the IMF’s defense of its policies during the world recession Mark Weisbrot

http://www.paecon.net/PAEReview/issue51/Weisbrot51.pdf

The International Monetary Fund (IMF) presented a response to CEPR’s latest paper, which looked at the macroeconomic policies of 41 countries that currently have agreements with the Fund. Our paper had found that 31 of the 41 countries had implemented pro-cyclical policies, that is, either fiscal or monetary policies that would be expected to exacerbate an economic downturn, when such downturns were occurring in these countries.
The IMF response was presented by James Roaf (Deputy Division Chief, Emerging Markets, Strategy, Policy and Review Department), in a PowerPoint presentation and panel discussion on October 15, 2009.1 Most of the arguments, as well as graphs and charts, can also be found on the IMF web site,2 and in two recent papers.3

The IMF’s first argument is that its policies have been “countercyclical, not procyclical!” as expressed in the PowerPoint presentation. The IMF’s presentation backs this up by looking at 15 emerging market countries and stating that program countries “Expanded fiscal deficits in 14 of 15” cases.4 Similarly, the IMF’s review of crisis policies in low-income countries finds that “Close to two-thirds of the programs designed in 2007-09 increased the level of spending over time.”5

How can this be reconciled with CEPR’s finding that 31 of 41 countries with current policies have implemented counter-cyclical policies? After all, we are all using the same data, which comes from IMF documents and databases.
There are two main reasons for the competing claims. First, the IMF is ignoring its agreements that were signed in 2008, when the world economy was sliding into recession. This is when most of the 31 agreements with pro-cyclical policies were signed. As we acknowledged in our paper, in many cases the pro-cyclical policies, such as reducing the fiscal deficit, were later loosened. However, since there are up to four to six months, and sometimes longer, before such agreements are reviewed, the decision to tighten fiscal and/or monetary policy during the downturn can still be expected to cause damage.

Second, the IMF’s response to CEPR’s paper, as well as its own papers, did not deal with monetary policy, but instead was limited to fiscal policy. Although 14 of the 31 countries where pro-cyclical policies were found had both pro-cyclical fiscal and monetary policies, there were seven countries that only had pro-cyclical monetary policy. In many cases, tightening monetary policy during an economic downturn can be at least as damaging as tightening fiscal policy....

[Demeter]

88. A man for this season? Keynes Walden Bello

http://www.paecon.net/PAEReview/issue51/Bello51.pdf


...Given the primordial drive of the profit motive to transform living nature into dead commodities, it is increasingly doubtful that the reconciliation of ecology and economy can be done under capitalism—even under the state-managed technocratic capitalism promoted by Keynes....


Sheer poetry!

[bread_and_roses]

94. very good indeed. i personally think capitalism is in its death throes

- though that does not mean that a more sane alternative is around the corner. Feudalism ain't capitalism either, and that may well be where we're headed. Feudalism in its most primitive form, with a "strong man" sitting on a hill and working the plebes to death for not much more gain than food for himself and his warriors.

[Demeter]

89. Economic theory and the crisis* Alan Kirman

http://www.paecon.net/PAEReview/issue51/Kirman51.pdf

The first thing that comes to mind as one follows the debate among economists about the crisis is that economic theory was locked into a bubble that has now burst. The reactions have either been to ignore this and just to wait for the crisis to pass or to herald the return of one of our old heroes, Keynes. Economists seem to be victims of extremely short memories and an inability to anticipate the next theoretical development. We periodically come to believe that we have hit upon the “right model” and that all previous efforts can be consigned to the wastebasket of history. When the current model turns out to be completely at odds with reality, the reflex reaction is to go back to the previous model and to chide the modernists for having lost sight of it. A number of economists have tried to add a little historical perspective (in particular Reinhart and Rogoff (2008) have argued that this crisis is but one of many similar events), but the debate overall remains very short-sighted and ideologically motivated.

All of this seems to be misplaced. Suppose we accept that economic theory, like the economy, is a complex adaptive system. We should then expect to see it continually evolving to take into account both new theoretical insights and the evolution of the economy itself. We will not see theory evolving into a given model that more closely represents the economy since the economy itself is changing. However, we might expect theory to evolve to at least be able to envisage the occurrence of the major crises that periodically shake the economy, and this is where the problem with the response that “we have seen all this before” arises. If we believe that such crises are an inherent feature of the evolution of economies, then surely we should develop models that incorporate them. We might then avoid the usual habit of falling back on the standard equilibrium notions and claim that some major exogenous shock has hit the system. The latter rarely identifies the shock, and it is now widely recognised that almost every significant turning point in all of the major stock price indices was accompanied by no notable news, and hence no shock at all...

[burning rain]

95. k

.