Weekend Economists' Triskaidekaphobia Festival August 13-15, 2010

[Demeter]

It's hot. It's humid. I'm sick from the heat and didn't dare leave the house (bathroom) this afternoon for a job commitment. And rattlesnakes and grizzly bears have nothing on me for bad temper today.

Is it because it's the dreaded Friday the 13th? Or because autism affects the whole family, and it's been a hard week? Or just because my Central European genes simply can't take it any more?

I've got to think it's better in Poland. Probably. Oh, to live in a place that doesn't need air conditioning for the summer!

Anyway, to the matter at hand....

The market exhibited severe ambivalence today, the DOW ranging from 30 to the good, to 30 off, ending off 15 points. This pattern of endless seeking, no doubt the result of furious HFT to squeeze that last penny out of the beleaguered retail investors and the more rigidly defined mutual funds, has been ongoing for some time, and getting more frantic on those days when emotional despair doesn't drag the index to the Well of Despond, or the PPT doesn't drag it up to the skies on a super drug trip.

You know it cannot end well. It's like watching a car crash in slow motion. A perpetual Friday the 13th.

"Triskaidekaphobia (from Greek tris meaning "3," kai meaning "and," and deka meaning "10") is fear of the number 13; it is a superstition and related to a specific fear of Friday the 13th, called paraskevidekatriaphobia or friggatriskaidekaphobia.

The term was first used by I.H. Coriat in "Abnormal Psychology"

There is a common myth that the earliest reference to thirteen being unlucky or evil is from the Babylonian Code of Hammurabi (circa 1780 BCE), where the thirteenth law is omitted. In fact, the original Code of Hammurabi has no numeration. The translation by L.W. King (1910), edited by Richard Hooker, omitted one article:

If the seller have gone to (his) fate (i. e., have died), the purchaser shall recover damages in said case fivefold from the estate of the seller.

Other translations of the Code of Hammurabi, for example the translation by Robert Francis Harper, include the 13th article.

Some Christian traditions have it that at the Last Supper, Judas, the disciple who betrayed Jesus, was the 13th to sit at the table. However, the number 13 is not uniformly bad in the Judeo-Christian tradition. For example, the 13 attributes of God (also called the thirteen attributes of mercy) are enumerated in the Torah (Exodus 34:6–7). Some modern Christian churches also use 13 attributes of God in sermons.

Triskaidekaphobia may have also affected the Vikings—it is believed that Loki in the Norse pantheon was the 13th god. More specifically, Loki was believed to have engineered the murder of Balder, and was the 13th guest to arrive at the funeral. This is perhaps related to the superstition that if thirteen people gather, one of them will die in the following year. Another Norse tradition involves the myth of Norna-Gest: when the uninvited norns showed up at his birthday celebration—thus increasing the number of guests from ten to thirteen—the norns cursed the infant by magically binding his lifespan to that of a mystic candle they presented to him.

Ancient Persians believed the twelve constellations in the Zodiac controlled the months of the year, and each ruled the earth for a thousand years at the end of which the sky and earth collapsed in chaos. Therefore, the thirteenth is identified with chaos and the reason Persians leave their houses to avoid bad luck on the thirteenth day of the Persian Calendar, a tradition called Sizdah Bedar.

In 1881, an influential group of New Yorkers led by U.S. Civil War veteran Captain William Fowler came together to put an end to this and other superstitions. They formed a dinner cabaret club, which they called the Thirteen Club. At the first meeting, on Friday 13 January 1881 at 8:13 p.m., 13 people sat down to dine in room 13 of the venue. The guests walked under a ladder to enter the room and were seated among piles of spilled salt. All of the guests survived. Thirteen Clubs sprang up all over North America for the next 40 years. Their activities were regularly reported in leading newspapers, and their numbers included five future U.S. presidents, from Chester A. Arthur to Theodore Roosevelt. Thirteen Clubs had various imitators, but they all gradually faded from interest as people became less superstitious.

On Friday 13 October 1307, the Knights Templar were ordered to be arrested by Philip IV of France. The theory has been suggested, in the book Born in Blood: The Lost Secrets of Freemasonry by John J. Robinson, that the Templars went underground among masons in England and later developed into Freemasons. Because most of the founding fathers of the United States of America were Freemasons, it is possible the memory of the terror of that day is preserved in the Friday the 13th.

...In Romania, Greece and some areas of Spain and Latin America, Tuesday the 13th is considered unlucky."

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

Well, then. If you've had a rotten day--tell us all about it! And if you've been following the global economy, you know there is no such thing as a good day, anyway. Post what you've got!

[Demeter]

1. FAILED BANK LISTING

will go here. We could start a pool on how many will close--the (swimming) pool sounds like a good idea. I wonder if my stomach is up to it...

http://www.youtube.com/watch?v=w2mj-Sq2oeo

That looks refreshing!

[Demeter]

51. Wells Fargo Must Pay Consumers $203 Million in Overdraft Case

http://www.bloomberg.com/news/2010-08-11/wells-fargo-should-pay-203-million-in-overdraft-fees-lawsuit-judge-rules.html

A judge ordered Wells Fargo & Co. to stop manipulating debit-card transactions without consumers’ knowledge to increase revenue from overdraft fees while ruling the bank should pay about $203 million to customers because of the practice.

U.S. District Judge William Alsup in San Francisco sided with three customers who sued in 2007 on behalf of thousands of Californians charged overdraft fees. In a ruling yesterday, he agreed that the practice was unfair, deceptive and fraudulent.

In 2001, Wells Fargo, the largest U.S. home lender, changed the way it treated daily debit transactions and cash withdrawals so that transactions with the highest dollar amount posted first, rather than in the order they occurred, according to the complaint. The practice, allegedly intended to boost revenue from overdraft fees, led to customers overdrawing accounts by small amounts multiple times a day, according to the complaint.

Customers don’t “reasonably expect that they will have to pay up to 10 overdraft fees when only one would ordinarily be incurred,” Alsup wrote, deciding the case without a jury. The multiple fees are “so pernicious,” he said, that they should be allowed only if customers expected them and in this case “the proof is the opposite.”

[Demeter]

54. IMF blueprint for a global currency – yes really

http://ftalphaville.ft.com/blog/2010/08/04/306346/imf-blueprint-for-a-global-currency-yes-really/

FT Alphaville missed this IMF paper when it first came out in April, 2010.

http://www.imf.org/external/np/pp/eng/2010/041310.pdf


Which means, in the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency.

And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves.

The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF....

[Demeter]

63. ONE MEASLY BANK CLOSING, AGAIN

JUST LIKE LAST WEEK--THIS ONE'S FROM ILLINOIS, TOO. IT MAKES ONE WONDER--WHY IS ILLINOIS GETTING SUCH PECULIAR CONSIDERATION?

Palos Bank and Trust Company, Palos Heights, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation - Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Midwest Bank, Itasca, Illinois, to assume all of the deposits of Palos Bank and Trust Company.

The five branches of Palos Bank and Trust Company will reopen on Saturday as branches of First Midwest Bank...As of June 30, 2010, Palos Bank and Trust Company had approximately $493.4 million in total assets and $467.8 million in total deposits. First Midwest Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Palos Bank and Trust Company. In addition to assuming all of the deposits of the failed bank, First Midwest Bank agreed to purchase essentially all of the assets.

The FDIC and First Midwest Bank entered into a loss-share transaction on $343.8 million of Palos Bank and Trust Company's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $72.0 million. Compared to other alternatives, First Midwest Bank's acquisition was the least costly resolution for the FDIC's DIF. Palos Bank and Trust Company is the 110th FDIC-insured institution to fail in the nation this year, and the fourteenth in Illinois. The last FDIC-insured institution closed in the state was Ravenswood Bank, Chicago, on August 6, 2010.


SO, HAS SHEILA RUN OUT OF MONEY? SHE SURELY HASN'T RUN OUT OF INSOLVENT BANKS!

[Karenina]

2. Do I get a prize from Goldline for the first rec?

[Demeter]

3. I will research the topic of your choice

Public or private results? No guarantee of any kind of result...

[Demeter]

4. CHINATOWN!

Tetraphobia, fear of the number 4 – (phonetically similar to "death") in Korea, China and Japan, as well as in many other East-Asian and some Southeast-Asian countries, it is not uncommon for buildings (including offices, apartments, hotels) to lack floors with the number 4, and Finnish mobile phone manufacturer Nokia's 1xxx-9xxx series of mobile phones does not include any model numbers beginning with a 4.

[Demeter]

5. AgBank IPO officially the world’s biggest

Agricultural Bank of China officially completed the world’s largest ever initial public offering by fully exercising its over-allotment quota, bringing the total amount raised by the bank to about $22.1bn.

But claiming that title has been an arduous task for the bank, its underwriters and state-controlled Chinese institutional investors, who have struggled to keep AgBank shares in Shanghai and Hong Kong above the IPO price for the first 30 days of trading to avoid a claw-back of the over-allotment quota.
Read more >>
http://link.ft.com/r/OZMCDD/72QIUE/NRHD3/26Y63Z/XTCLTS/D5/t

[Demeter]

13. China Mobile search engine eyes market share

China’s official news agency and the world’s largest mobile operator are setting up a mobile search company together in an effort to grab market share following Google’s partial exit from the market
Read more >>
http://link.ft.com/r/KC2844/M9GT1B/T10SH/YHWTRW/IYRX0G/N9/t

[Demeter]

28. China shows further signs of slowing

China’s economy continued to slow in July even as consumer price inflation rose again, intensifying the debate about whether recent efforts to tighten policy have gone too far
Read more >>
http://link.ft.com/r/XYEWFF/EW39WD/52KB7/QFCSGP/JIFWZK/ID/t

[Demeter]

48. Regulators May Allow Some Foreign Banks to Underwrite More Bonds in China

http://www.bloomberg.com/news/2010-08-11/china-s-regulators-may-allow-some-foreign-banks-to-underwrite-more-bonds.html

...The e-mailed statement yesterday gave no timeframe for the review and didn’t say how many foreign banks will be able to underwrite bonds of non-financial institutions....

[Demeter]

6. EUROPA!

17 is an unlucky number in Italy, because in Roman digits 17 is written XVII, that could be rearranged to "VIXI", which in Latin means "I have lived" but can be a euphemism for "I am dead."<7> Cesana Pariol, the bobsleigh, luge and skeleton track used for the 2006 Winter Olympics, had turn 17 originally named "Senza Nome" ("without name" in (Italian)), but the turn was renamed in 2007 in honor of luger Paul Hildgartner.

[Demeter]

7. German economy surges in second quarter

Germany reasserted itself as the economic growth engine of the eurozone, after gross domestic product expanded at a stellar 2.2 per cent rate in the second quarter compared with the previous three months.

Buoyant exports, aided by a decline in the value of the euro, helped Europe’s largest economy post its fastest rise in decades, equivalent to an annualised rate of more than 8 per cent.

Read more >>
http://link.ft.com/r/9ULF66/HD1PSN/ULCJB/NSOSV1/XT01N1/B7/t

EDITORIAL REMARK:

GERMANY DID THE RIGHT THING--IT SOUGHT TO INTEGRATE EAST GERMANY INTO ITS ECONOMY FULLY, AND INVESTED AND PATIENTLY BROUGHT THEIR BROTHERS AND SISTERS INTO THEIR CIRCLE. THE GERMAN MODEL HAD NO "GREED IS GOOD" CLAUSE.

THIS INVESTMENT, PLUS NOT LETTING THE BANKS PUSH IT AROUND, AND NOT FORGETTING THE MASSIVE INFUSION THAT GERMANY RECEIVED SECOND-HAND THROUGH THE AIG BAILOUT FIASCO, AND NOT ABANDONING THE WORKERS AND MANUFACTURING AND KEEPING EXPORT QUALITY IN MIND, HAVE ALL PAID OFF.

IMAGINE IF THE US HAD BEEN SUCH A THOUGHTFUL, CARING NATION FOR ITS OWN PEOPLE AND ITS OWN ECONOMY.

WELL, IT USED TO BE...

http://www.youtube.com/watch?v=-b7qaSxuZUg

[Demeter]

17. Renewed fears hit eurozone economies

Fears about the health of Ireland and Greece are pushing the borrowing costs of highly indebted eurozone nations sharply higher
Read more >>
http://link.ft.com/r/OZMCDD/18X5OQ/3CWTA/3OI6FU/C5IZBD/MQ/t

[Demeter]

23. Drought to hit next Russian grain crop

Weather forecasters have warned that the drought that has devastated at least one quarter of Russia’s grain crops this summer is threatening to prevent sowing of next year’s crops
Read more >>
http://link.ft.com/r/OZMCDD/18X5OQ/3CWTA/3OI6FU/EWQM8F/MQ/t

[Demeter]

26. Ukraine considers cap on wheat exports

Ukraine, one of the world’s top grain exporters, is considering a cap on wheat exports in a move that would put added pressure on already surging global grain prices
Read more >>
http://link.ft.com/r/XYEWFF/EW39WD/52KB7/QFCSGP/XT03JH/ID/t

UKRAINE IS EUROPE'S BREAD BASKET--THIS ISN'T A GOOD SIGN

[Demeter]

33. ACS sells stake in Abertis to CVC

Spain’s largest builder reached a deal to sell a chunk of its stake in Spanish toll road operator Abertis to private equity fund CVC, freeing it to pursue its interest in Iberdrola
Read more >>
http://link.ft.com/r/S4XZQQ/EW39YT/204L2/QFCSOF/YHCPSP/SN/t

[Demeter]

55. Greek austerity measures hit GDP

http://english.aljazeera.net/business/2010/08/2010812142757247171.html

Greece's economy has shrunk by a further 1.5 per cent in the second quarter of the year, as the country felt the painful consequences of the government's drive to reduce its debts with aggressive austerity cuts...

Greece's gross domestic has now fallen 3.5 per cent since this time last year, while the number of people out of work is up significantly from 8.5 per cent in May 2009....The jobless rate is now only marginally below the 10-year high of 12.1 per cent that it hit in February...

[Demeter]

57. Post-Anti-Americanism Europe can’t even be bothered to hate America any more. By Howard Fineman

http://www.informationclearinghouse.info/article26139.htm

...And when you read about America in European newspapers, what you are likely to find is a tone bordering on pity. The U.S. is depicted as a fraying empire of obesity, ignorance, debt, gridlock, stagnation, and mindless war. Sure, the iPad is cool, but it is evidence of what America was, not what it will be again. The stories are not angry, accusatory, or even ideological. It’s worse: they are condescendingly elegiac.

European disdain for the United States is centuries old, of course. But over the course of decades of traveling in the U.K. and on the continent, I have never gotten the sense that I got on a recently completed three-week trip to Italy, Greece, Turkey, and the Black Sea. America is no longer admired, imitated, or feared. We remain—for now—a safe haven for dollars (of which there are too many in the world). But we increasingly are seen less as a model or as an empire than as a cautionary tale of national neglect and decline.

Some Europeans can’t quite hide their schadenfruede. The British—whose publications and personalities are increasingly (and annoyingly) influential in the colony they lost 227 years ago—are global leaders in condescension (think Simon Cowell). But for America they add a special twist of bitter lemon to their analyses. It’s the triumph of the doddering older brother who no longer has to be grateful to his junior. Memories fade, and the Brits no longer feel they have to be kind out of homage to our having saved them from Hitler.

A couple of examples from the genre. Writing in the Guardian, Timothy Garton Ash sees a Third World shabbiness when he visits the United States. “Every time I come back to the United States,” the Oxford don writes, “the airports, the roads, the public spaces look more tattered, battered, old-fashioned. Modernity is no longer self-evidently here.”

MUCH MORE AT LINK

[Demeter]

72. More than one million people 'take out payday loans' (UK)

http://www.bbc.co.uk/news/business-10964043

Another economic export from the US?

[MattSh]

78. Demeter, the weather's likely not better this summer...

Predicted high today in Kiev. 98F

And don't forget Moscow. The first recorded 100F temperature occurred in 1920. The next 6 occurred this summer, 2010.

[Demeter]

80. I Figured As Much

You've got the Siberian High, we have the Bermuda High.

It hasn't been this awful since the long, hot summers of the '60's, which contributed to the rioting sparked by assassinations, police brutality, and inflation....

At least we haven't gotten back into assassinations on American soil. Yet. At least, not the blatant kind....

[MattSh]

94. A View from Kiev ~ The Thank You IMF edition.

So, we just got our new utilities bill with the new 50% IMF demanded increases in gas prices, and for those things dependent on the price of gas, like hot water. Yes, different parts of our utilities had, and still have, government subsidies. So, what's the damage? About 120 hriven a month, or $15. It's not that much for me, but I certainly liked the idea that our taxes were going to things like keeping the cost of living down, instead of some useless and pointless war somewhere. And, we can look forward to another 50% increase next April.

The irony of all this is that the increases are relatively small for those living in the relatively affluent cities, but a crusher for those in rural impoverished areas. And that's all a result of a well intentioned government policy gone bad.

During Soviet times, there generally wasn't a lot of help offered to those in rural impoverished areas. Possibly because they understood that if they tried to help everyone, the experiment called the USSR would have collapsed a lot sooner than it did. Or maybe it was just inertia. Or maybe they just didn't give a damn. Or they pretended that such problems couldn't happen here.

But then, the USSR did collapse. That impacted those in the relatively affluent areas the most, but had a much smaller impact on those in the countryside. So small that most probably saw no difference between the before and after. But one of the things the new independent Ukraine wanted to do was to show they were not the big, bad, USSR anymore, and that they could improve the lot of the impoverished countryside. So, they started a policy of rural gasification.

In impoverished areas, it was still very common in winter to heat with wood or with peat, as had been done for centuries. But government policy was now to bring gas heat to the masses, and maybe get the masses to sing the praises of independent Ukraine at the same time. With natural gas cheap and plentiful, it seemed like a no brainer.

But gas did not stay cheap and plentiful. With the new 50% increase in gas rates, the typical gas bill in winter will likely go from $100 to $150 dollars. Ouch. In the countryside, yearly income is often less than $2000, and pensioners must do on less than that. This is where gas subsidies really come into play. In the past, the $100 monthly bill was likely to be paid 15% by the resident, and 85% by the government. With the new rates, the ratios are 10% by the resident, and 90% by the government. The resident still pays $15, but what the government pays has gone from $90 to $135.

Now, I don't like paying the extra money. Who does? But is the IMF bailout really going to help the average person? As usual, that's doubtful. Much of it will go to bail out the same criminal classes that got bailed out in the USA.

Which brings me to the other story about natural gas prices. Earlier this year, the government negotiated a 30% price decrease in the price of Russian natural gas in return for a 25 year extension on the lease of the Russian navel base in Sevestapol, Ukraine. (I don't know the percentage of gas imported from Russia. Maybe 25 - 50%). With the 50% IMF increase in the news, you rarely hear about this 30% decrease anymore. Where did it go?

Besides the do-nothing middlemen getting their cut of the action, it's likely that much of that savings will go to fuel intensive industries, and not to the people. This will allow the products of these industries to cost less, making them more competitive, and keeping people employed. I'm all for that. But. There's always a but. There's still way too much outdated, over-polluting Soviet era factories around. Sadly, per normal operating procedure, the savings will not lead to newer, less polluting technologies being introduced earlier, even if the government passes laws demanding it. It will be more business as usual. Especially here, where corruption is epidemic, but at least it's called that, unlike in the USA. But at least here, the honesty and openness of the corruption is open and available to anyone with the means, unlike some places, where it's called lobbying, and everyone pretends that it's not the same thing.

Well that's all for now, except a this link, by Dmitry Orlov, dating from 2006. Some of you have seen it, some of you have not.

http://energybulletin.net/node/23259

And another short gem from Dmitry Orolov…

My grandfather had a donkey while he was living in Tashkent in Central Asia during World War II. There was nothing much for the donkey to eat, but, as a member of the Communist Party, my grandfather had a subscription to Pravda, the Communist Party newspaper, and so that's what the donkey ate. Apparently, donkeys can digest any kind of cellulose, even when it's loaded with communist propaganda. If I had a donkey, I would feed it the Wall Street Journal.

[Demeter]

95. For what it's worth, Poland's Heat Index is at 60F at the high point of the day (3 PM)

and Ann Arbor's is already at 78F with overcast skies at 9:30 AM.

So, it IS cooler in Poland!

[DemReadingDU]

132. Thanks, that was interesting

I'm just now getting around to reading the Weekend thread.
:hi:

[Demeter]

8. CAR TALK!

http://www.youtube.com/watch?v=I-h27xvUGbo

[Demeter]

9. Whitacre to step down as GM chief

The US government-backed carmaker, which is planning to return to public ownership via an IPO, reports its second successive profitable quarter with net earnings of $1.3bn for the three months to June
Read more >>
http://link.ft.com/r/KC2844/M9GT1B/T10SH/YHWTRW/D4E7BH/N9/t

YOUR TAX DOLLARS AT WORK

[Demeter]

79. Detroit Goes From Gloom to Economic Bright Spot By BILL VLASIC

I HAVE TO LAUGH AT THIS--AND WONDER IF BILL IS FROM THE PICKLE DYNASTY!

http://www.nytimes.com/2010/08/14/business/14auto.html

After a dismal period of huge losses and deep cuts that culminated in the Obama administration’s bailout of General Motors and Chrysler, the gloom over the American auto industry is starting to lift.

Jobs are growing. Factory workers are anticipating their first healthy profit-sharing checks in years. Sales are rebounding, with the Commerce Department reporting Friday that automobiles were a bright spot in July’s mostly disappointing retail sales.

The nascent comeback is far from a finished product. Foreign competitors are leaner and stronger, accounting for more than half of all car sales in this country. The sputtering economic rebound is spooking investors and consumers alike, threatening to derail some of Detroit’s gains. And talks next year on a new contract with the United Automobile Workers could revive old hostilities.

Still, the improving mood here reflects real changes in how Detroit is doing business — and a growing sense that the changes are turning the Big Three around, according to industry executives and analysts tracking the recovery...

[Demeter]

10. THE OIL BIDNESS

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

OR

http://www.youtube.com/watch?v=xUeXB0LBII0

OR

http://www.youtube.com/watch?v=JAXBWl3h5vU

[Demeter]

11. BP to pay record fine over Texas City

BP also agreed to allocate $500m to fix safety problems at the refinery and accepted a set programme of safety inspections and review by the US Occupational Safety and Health Administration
Read more >>
http://link.ft.com/r/KC2844/M9GT1B/T10SH/YHWTRW/BMYATU/N9/t

[Demeter]

14. KNOC signals intent as Dana spurns advances

South Korea’s national oil company signalled it was willing to launch a $1.7bn hostile takeover for the UK oil company
Read more >>
http://link.ft.com/r/KC2844/M9GT1B/T10SH/YHWTRW/KENDVB/N9/t

[Demeter]

16. Centrica boosts gas reserves with Suncor deal

British Gas owner to buy 97 natural gas wells and 42,000 acres of land in western Canada in a deal that will help vertically integrate its North American operation
Read more >>
http://link.ft.com/r/KC2844/M9GT1B/T10SH/YHWTRW/FX958B/N9/t

[Demeter]

22. Gulf fishermen put BP on the hook for losses

States most affected by the oil spill want the company to pay to help rebuild livelihoods
Read more >>
http://link.ft.com/r/OZMCDD/18X5OQ/3CWTA/3OI6FU/M9PIZR/MQ/t

[Demeter]

27. BP revenues to secure fund for damages

The UK oil group agrees to use its US earnings as collateral for the $20bn pot for victims of the gulf coast spill, which could give the White House an incentive to let it continue drilling
Read more >>
http://link.ft.com/r/XYEWFF/EW39WD/52KB7/QFCSGP/XT03JG/ID/t

[Demeter]

30. Sanctions choke supply of petrol to Iran

Tougher sanctions imposed by western states on Iran led to a halving of the country’s gasoline imports in July, according to the International Energy Agency
Read more >>
http://link.ft.com/r/XYEWFF/EW39WD/52KB7/QFCSGP/A7DCGC/ID/t

[Demeter]

107. Iran to dump dollar and euro reserves

http://www.sbs.com.au/news/article/1323407/Iran-to-dump-dollar-and-euro-reserves

Iran has announced plans to get rid of its US dollar and euro reserves in response to the latest UN sanctions over its contested nuclear program.

Vice-President Mohammad Reza Rahimi has also called Australians "a bunch of cattlemen" after it joined the 27-member European Union in imposing additional sanctions against Iran.

The UN Security Council imposed a fourth round of sanctions on Iran in June because of its refusal to halt uranium enrichment. Tougher unilateral US and European Union sanctions followed in July.

"To fight sanctions, we will remove the dollar and euro from our foreign exchange basket and will replace them with (the Iranian) rial and the currency of any country cooperating with us," Vice-President Mohammad Reza Rahimi told Iran's semiofficial Fars news agency on Monday. "We consider these currencies (dollar and euro) dirty and won't sell oil in dollar and euro."

MORE

[Demeter]

109. Iran: US will be driven out of Mideast

http://www.presstv.ir/detail.aspx?id=138173§ionid=351020101

Iran says the US will be forced to leave the Middle East in the face of increasing opposition to its overseas military bases and defeats in Iraq and Afghanistan.

In an interview with The New Yorker on Tuesday, Iranian President Mahmoud Ahmadinejad stressed that the situation in Afghanistan and Iraq demonstrated how Washington's "domineering policies" had been fruitless.

"Today, nations are extremely distressed by the presence of US military bases in their countries, and demand their closure. This is while just 40 years ago they welcomed the bases on their soil," the president's official website quoted his remarks.

"This means that America's military dominance is over," he added.

The president went on to criticize Washington for sacrificing the welfare of Americans and good relations with the Middle East through its unwavering support for Israel...

[Demeter]

56. Huge Oil Deposit Discovered in Northern Afghanistan (SURPRISE!)

http://www.tolonews.com/en/afghanistan/278-huge-oil-deposit-discovered-in-northern-afghanistan

Officials in the Ministry of Mines and Industries say their studies have shown that a large deposit of oil with the capacity of 2 billion barrels is discovered in northern Afghanistan

After the technical studies of this oil deposit is over, it will be handed over to the private sector, the Ministry says.

"We conducted two important geological operations which we call artificial earthquake, with the cooperation of our international professionals and with the help of the international community, to determine the exact volume of gas deposits in these areas," the Minister of Mines and Industries, Wahidullah Shahrani told TOLOnews.

The Ministry also said that it will soon start reconstruction of Shebirghan gas reservoir, in which $400 million will be spent, and also a new gas pipeline from Shebirghan to Balkh province will be set....

[Demeter]

91. Turkey backs gasoline sales to Iran despite sanctions

http://www.haaretz.com/news/international/turkey-backs-gasoline-sales-to-iran-despite-sanctions-1.307407

...The sale of gasoline, as well as other projects Turkey is planning with Iran, may indicate a shift in its energy policy to give priority to its energy-rich neighbors in the Middle East over conditions set by its traditional Western allies.

Any firms that sell gasoline to Iran could face retribution including a possible ban from accessing the U.S. financial system or denial of U.S. contracts, according to a document from the U.S. Treasury.

Tupras, Turkey's sole refiner and gasoline exporter which is owned by Koc Holding, declined to say whether the company had sold anything to Iran. The refiner buys 33 percent of its crude from the Islamic Republic, however.

A Tupras official said, "For us, Iran is more important than America, because we get crude oil from them. We don't get anything from America."

[Warpy]

12. I've actually had rather a nice day

although the weather is blistering hot and I'm going to have to turn the swamp cooler on early.

I just finished a splurge purchase at Costco yesterday of wild Pacific brown prawns, butterflied and cooked in their shells in a bath of olive oil and garlic in the toaster oven. If you go to Costco, look for them this week, they are lovely.

Of course, it was Costco, so I have two more meals' worth in the frezer.

I've often suspected the phobia over the number 13 had more to do with the old lunar calendar, the calendar women's bodies follow, considered anathema to the patriarchal Romans and early Christians. Friday is self explanatory, as the day of the crucifixion. That's just me, though, looking for more woman hating bullshit from Rome, although the number might have had something to do with when and why the Templars bought it.

The best part of the day is finding out the Dow didn't take another dump, oil futures are down (meaning gas pump prices will be in a few days), and my life remains reasonably placid.

And the prawns were gorgeous.

[Demeter]

15. If I Can Get Up To Costco, I Will Look!

Love prawns.

[Demeter]

18. TECHNOLOGY

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

I ALWAYS WONDERED WHAT TECHNO MUSIC WAS--NOT SURE IF THIS REALLY IS IT...

[Demeter]

19. India deadline for BlackBerry crackdown

India warns it will block BlackBerry encrypted corporate e-mail and messaging services if local security agencies are not given access to them by the end of August
Read more >>
http://link.ft.com/r/OZMCDD/18X5OQ/3CWTA/3OI6FU/C5IZBW/MQ/t

I ALSO WISH I HAD KEPT UP ON THIS--WHAT IS IT ABOUT BLACKBERRY THAT MAKES THE ORIENTAL GOVERNMENTS FREAK OUT?

[Demeter]

127. India outsourcers angered by US job visa hike

http://www.physorg.com/news201019917.html

The 600-million-dollar legislation, signed into law Friday by US President Barack Obama, will nearly double visa fees for some Indian information technology workers entering the United States.

"The US is giving a very strong signal foreigners are not welcome," said Som Mittal, president of the National Association of Software and Services Companies (NASSCOM), which represents India's leading software exporters.

"The law is discrimination," Mittal told AFP.

OBVIOUSLY, SOME REMEDIAL ENGLISH LANGUAGE AND/OR POLITICAL ECONOMY LESSONS ARE NEEDED FOR THIS DELUSIONAL MAN.

[Demeter]

24. NHS to test 'intelligent medicines' (UK)

The health service is to begin testing high-tech pills containing microchips, with the aim of saving money by helping patients with heart failure to take their drugs regularly and in the right doses
Read more >>
http://link.ft.com/r/LVA6WW/3OD483/87I64/D4P5O5/UU8NML/82/t

[Demeter]

29. History of tools pushed back 1m years

Scientists say human tools are almost 1m years older than previously thought, following the discovery in Ethiopia of animal bones that were butchered 3.4m years ago with sharp stones
Read more >>
http://link.ft.com/r/XYEWFF/EW39WD/52KB7/QFCSGP/A7DCGV/ID/t

AND I HOPE THEY TOOK GOOD NOTES FOR WHEN WE RETURN TO THAT LEVEL OF TECHNOLOGY--NEXT YEAR.

[Demeter]

35. Scientists sound alarm over superbug

A new form of bacteria resistant to most antibiotics is spreading worldwide, scientists have warned
Read more >>
http://link.ft.com/r/S4XZQQ/XTM0PS/IEP5S/40I8IE/26ZTSH/JY/t

REPORTEDLY BROUGHT BACK BY "MEDICAL TOURISTS" GOING TO INDIA FOR CHEAP PLASTIC SURGERY...

[Demeter]

115. Ouster of HP’s Hurd: A Shot Across the Bow of Overpaid Cost Cutters?

http://www.nakedcapitalism.com/2010/08/ouster-of-hps-hurd-a-shot-across-the-bow-of-overpaid-cost-cutters.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The sudden departure of HP’s CEO Mark Hurd didn’t add up. Ethical lapses by CEOs demonstrating at least adequate performance get buried unless unfavorable media coverage won’t go away, or the internal damage is so great that his authority is impaired. Neither seemed to be the case with Hurd.

I hadn’t given the Hurd case much thought, and Joe Nocera has offered a persuasive two factor explanation:

http://www.nytimes.com/2010/08/14/business/14nocera.html

First was that the board had been put off by Hurd’s conduct in HP’s pretexting scandal of 2006 and was waiting for an opportunity to retaliate, made sense. Then the company, keen to stop leaks that appeared to originate with the board, hired consultants who then hired private detectives who engaged in impersonation to obtain phone records. Congressional investigations and state and Federal indictments followed, with the most visible casualties being HP chairman Patricia Dunn and its general counsel, Ann Baskin. However, Hurd was deeply involved in the pursuit of the leakers, and accelerated Dunn’s departure by threatening to quit if she didn’t leave (one must assume to make sure the bad PR stayed focused on her).

So per Nocera, the board saw at close range that Hurd was a viper in their midst, and they were on the lookout for a reason to be rid of him. And it appears he provided one, and it was more fundamental than expense violations. From the New York Times:

The consensus in Silicon Valley is that Mr. Hurd was despised at H.P…..“He was a cost-cutter who indulged himself,” was one description I heard. His combined compensation for just his last two years was more than $72 million — a number that absolutely outraged employees since their jobs were the ones being cut.

Rob Enderle, a well-known technology consultant, noted that in recent internal surveys, nearly two-thirds of H.P. employees said they would leave if they got an offer from another company — a staggering number. ….

Charles House, a former longtime H.P. engineer who now runs a research program at Stanford University, openly rejoiced when he heard that Mr. Hurd was leaving….As Mr. House saw it — indeed, as many H.P. old-timers saw it — Mr. Hurd was systematically destroying what had always made H.P. great. The way H.P. made its numbers, Mr. House said, was not just cutting any old costs, but by “chopping R.&D.,” which had always been sacred at H.P. The research and development budget used to be 9 percent of revenue, Mr. House told me; now it was closer to 2 percent. “In the personal computer group, it is seven-tenths of 1 percent,” he added. “That’s why H.P. had no response to the iPad.”

Mr. House was also offended by Mr. Hurd’s dictum that H.P. executives had to resign from all civic boards, as well as his decision to cut off many of H.P.’s philanthropic activities. “H.P. has always been a model corporate citizen,” Mr. House said.

Yves here. Nocera points out that the board didn’t want to cross Wall Street, since Hurd was delivering its vaunted numbers. But Gordon Smith at Conglomerate, along with others, criticizes the board for cowardice:

Apparently, the board was unwilling to make that case to its investors and the public, so they exaggerated his expense manipulation and paid him a bundle of cash to go away.

This isn’t the way the corporate governance system is supposed to work. The board is supposed to supervise the officers, make judgments about their performance, and act on those judgments. Traditionally, boards have not done this very well, often, we are told, because they are beholden to the CEO or because they just don’t care enough. The HP directors didn’t suffer from either of those shortcomings, and, to their credit, the directors acted. But if Nocera is right, their unwillingness to be forthright about the reasons for their action deprives us of an object lesson in good corporate governance and creates questions about their ability to lead the company in the future.

I’m a teeny bit more hopeful. The HP case admittedly presents special circumstances, a common executive failing (delivering short term results by consuming a company’s seed corn) in combination with a board unusually willing to look past his PR. And even though for the most part, the media is dutifully replaying the party line on why Hurd left, the real reasons are likely very well understood in the comparatively small circle of people who sit on large company boards.

I KNEW IT! I KNEW IT! SOUNDS LIKE PEYTON PLACE. AMERICAN CORPORATIONS ARE SUCH HELLHOLES...

[Demeter]

116. Gordon Gekko Reborn Nouriel Roubini

http://www.project-syndicate.org/commentary/roubini28/English

Nouriel Roubini is Professor of Economics at the Stern School of Business, NYU, Chairman of Roubini Global Economics (www.roubini.com), and co-author of the book Crisis Economics. He has a cameo role in Oliver Stone’s new film Wall Street: Money Never Sleeps.

READ HIS PRESCRIPTION FOR FINANCIAL REFORM AT LINK

[Demeter]

20. I'M FROM THE GOVERNMENT, AND I'M HERE TO HELP---R. REAGAN

http://www.youtube.com/watch?v=fGmsYxCF49c&feature=related

[Demeter]

21. US probes corruption in big pharma

The US Department of Justice is scrutinising payments by leading pharmaceuticals companies for hospitality, consultants, licensing agreements and charitable donations in markets around the world as part of a wide-ranging corruption probe
Read more >>
http://link.ft.com/r/OZMCDD/18X5OQ/3CWTA/3OI6FU/KEND2F/MQ/t

[Demeter]

36. How to jump-start American manufacturing

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/12/AR2010081204920.html?nav=rss_opinion/columns

President Obama observed last week that the U.S. manufacturing sector has "been hit hard for as long as folks can remember." In fact, the last time so few Americans worked in manufacturing was April 1941. Since the Great Recession began in December 2007, America has lost 16 percent of its manufacturing payroll jobs. While there has been a slight uptick in manufacturing jobs in the last seven months, only 11.7 million Americans work in this sector, down from 17.3 million 10 years ago. That's barely 9 percent of total U.S. nonfarm payroll jobs. More Americans now work in the leisure and hospitality industry....Fundamental to the revival of American manufacturing is international investment, both outward and inward. Such investment has long fostered the sector's dynamism and growth. The U.S. operations of multinational companies based here and abroad strengthen our manufacturing industry in several ways.

Start with U.S. multinationals operating in manufacturing. In 2007, the most recent year for which data are available, the U.S.-parent operations of these manufacturing firms made $173.5 billion in capital investments and conducted $157.2 billion in research and development. That was 58.4 percent of all private-sector research and development in America. They employed nearly 7.3 million Americans, at an average annual compensation of $78,164 -- more than 50 percent above the economy-wide average compensation.

Despite the common assertion that U.S. multinationals simply "export jobs" out of the United States, these firms' expansion abroad has tended to complement their U.S. operations. More international investment and employment in their foreign affiliates has tended to create more U.S. parent company investment and jobs as well. Our calculations from U.S. Bureau of Economic Analysis data show that from 1988 to 2007, employment in foreign affiliates rose by 5.3 million jobs -- while U.S. parent companies added nearly as many positions, 4.3 million. A 2009 study published in the American Economic Journal: Economic Policy analyzed all U.S. multinationals in manufacturing from 1982 to 2004 and found that each additional dollar in an affiliate's employee compensation generated, on average, an increase of about $1.11 in employee compensation at its parent company. Each additional dollar in an affiliate's capital investment generated an average increase of about 67 cents in its parent's capital investment.

In many U.S. multinationals, foreign and U.S. operations support and strengthen each other. A major reason for this is faster economic growth outside the United States. Rapidly growing countries present vast revenue opportunities for U.S. multinationals, opportunities that tend to boost affiliate and parent activity....


IF YOU CAN BEAR IT--AND IT'S PRINTABLE--LET ME KNOW WHAT YOU ALL THINK OF THIS DRIVEL.

[jtuck004]

68. Drivel report...

Robert M. Kimmitt (born December 19, 1947) was United States Deputy Secretary of the Treasury under President George W. Bush from 2005-2009, and a decorated Vietnam combat veteran. Dr. Matthew J. Slaughter is an American economist and former member of the Council of Economic Advisers to President George W. Bush from 2005-2007. Thus, they worked in a period of the most anemic period of job growth of any modern American presidency, ending with the loss of over 4 million jobs in the last year, subsequent to the tax cut that is the subject of current controversy. Chart from BLS here....

Dr. Slaughter is a published author. One of his books is "Globalization and the Perceptions of American Workers". A quick look on Amazon will verify that, unlike most other books, and despite the fact that it was written in 2001 and is only $19.00, there are no reviews. Perhaps one did not need to read a book to figure out what the perceptions of American workers would be on having their jobs shipped out of the country?

Basically, I think they are uniquely qualified to write an article praising one of the causes of unemployment in this country.

The article does address the importance of manufacturing to the American economy, yet it seems to praise "globalization" as a positive, even though globalization has been partially responsible for the loss of as many as 8 1/2 million manufacturing jobs in the past few years. Despite the praise, the statement that "Our calculations from U.S. Bureau of Economic Analysis data show that from 1988 to 2007, employment in foreign affiliates rose by 5.3 million jobs -- while U.S. parent companies added nearly as many positions, 4.3 million" indicates that, with a loss of 1 million jobs for every 5.3 million created outside the country, it would not be many decades before we would have no manufacturing jobs left in America at all. This loss is apparent in the chart at this site....

The authors note that every $1 in an "affiliate's employee compensation" generated $1.11 at it's parent company. Since 10% of households garner 42% of all income in the country, it is pretty clear that this goes not to the workers, but more likely to owners and managers of the business done outside this country.

One site credits the authors with getting their subject "half-right", here... From the article "While there has been a slight uptick in manufacturing jobs in the last seven months, only 11.7 million Americans work in this sector, down from 17.3 million 10 years ago. That's barely 9 percent of total U.S. non farm payroll jobs. More Americans now work in the leisure and hospitality industry. ". Where is the positive they seem to be trying to tell us about? That we can create more low-wage, no benefit jobs in hotels now that we have made room by getting rid of living wage jobs with good benefits in manufacturing?

This same site ends with the most important thing this article tells us. "Investments outside the U.S. do not revive manufacturing in America nor do they contribute to economic recovery. They support manufacturing jobs and manufacturing in foreign nations, increase the U.S. trade deficit, and deprive U.S. workers of good-paying manufacturing jobs."

[Demeter]

69. Thank You, Jtuck! EVERYBODY PLEASE FOLLOW THE LINKS ABOVE

That was an outstanding response to my request! I hope you sent the same information to the Washington Post: such misinformation in the national record should not go unchallenged!

And please bring us more of the same when you have a chance. My abilities in this effort are limited by both time and the lack of anything but a very basic economic grounding which limits my ability to understand and research anything except the most superficial developments.

If more proof was needed that the inmates are running the asylum, this is it.

[jtuck004]

75. I am just as limited in my economic grounding, maybe more...

so I rely on other people's web sites, and read a lot when I can ;)

[Demeter]

70. It is better to post twice and delete

Than to never post at all, and lose your train of thought. My computer tried to freeze up on me--but I subverted it. Not sure how....but something must have rubbed off!

[jtuck004]

73. ok, so I'm going to try fixing that link here

Chart Here...

Sorry it took so long - got too much going at once.

hope that helps

[Demeter]

37. A history lesson from Elizabeth Warren

http://www.salon.com/technology/how_the_world_works/2010/08/13/warren_clinton_and_dodd/index.html

....In a book she wrote with her daughter, Warren tells the story of how first lady Hillary Clinton vowed in a private meeting to help fight a bankruptcy bill pending in Congress that Warren warned would dismantle vital protections for families. President Bill Clinton subsequently vetoed the bill. But when the bankruptcy bill came back before the Senate in 2001, Sen. Hillary Rodham Clinton voted in favor. The lesson for Warren was that even a sympathetic ally could be swayed by wealthy special interests. "As New York's newest senator, however, it seems that Hillary Clinton could not afford such a principled position ... Big banks were now part of Senator Clinton's constituency. She wanted their support, and they wanted hers," Warren wrote....

[Demeter]

38. Fed Official Warns of Starting a Cycle of Boom and Bust

http://www.nytimes.com/2010/08/14/business/economy/14fed.html

...Thomas M. Hoenig, the president of the Federal Reserve Bank of Kansas City, dissented on Tuesday when the Federal Open Market Committee, which sets monetary policy, voted 9-1 to invest proceeds from the Fed’s mortgage-bond portfolio in longer-term Treasury debt. The decision was the central bank’s clearest signal yet that its confidence in the pace of the economic recovery was waning.

“Monetary policy is a useful tool, but it cannot solve every problem faced by the United States,” Mr. Hoenig said in a town-hall-style meeting in Lincoln, Neb. “In trying to use policy as a cure-all, we will repeat the cycle of severe recession and unemployment in a few short years by keeping rates too low for too long.”

Mr. Hoenig added: “I wish free money was really free and that there was a painless way to move from severe recession and high leverage to robust and sustainable economic growth, but there is no short cut.” ...

[Po_d Mainiac]

61. The NYT is shit off on this piece :puke:

Where are these quotes?:grr:

"Of course the market wants zero rates to continue indefinitely," Hoenig said in prepared remarks during a speech in Lincoln, Neb. "They are earning a guaranteed return on free money from the Fed by lending it back to the government through securities purchases."

"It gives me pause, for example, that after the recent devastating experience of the global banking crisis, regulatory authorities are already backing off initial attempts to strengthen international capital requirements for these largest banks and financial firms," Hoenig said. Capital is the money banks keep to guard against losses.

http://www.huffingtonpost.com/2010/08/13/federal-reserve-pursuing_n_681540.html

Fuck you NYT....:middle finger held high:

[Po_d Mainiac]

62. More the NYT didn't think was worth printing

We are recovering from a horrific set of shocks, and it will take time to 'right the ship,'" he said. "Moreover, the financial and economic shocks we have experienced did not 'just happen.' The financial collapse followed years of too-low interest rates, too-high leverage, and too-lax financial supervision as prescribed by deregulation from both Democratic and Republican administrations."

The economy was "out of balance," Hoenig said. Some of the ways that may contributed to the imbalances include:

The real fed funds rate averaged 1.6 percent between 1991 and 1995, 0.37 percent between 2001 and 2005 and -1.0 percent from 2008 to the present, hardly a tight policy environment.


Gross federal debt increased from 60 percent to 75 percent of nominal GDP.

Consumer debt increased from 63 percent to 94 percent of nominal GDP.

Nonfinancial debt increased from 189 percent of nominal GDP at the start of the
decade to 234 percent by December 2008.

Between 1993 and 2007, the average leverage of the 20-largest financial institutions in the U.S. (total assets-to-tangible equity capital) increased from 18- to-1, to over 25-to-1, reaching as high as 31-to-1.

The U.S. increased its debt to the rest of the world dramatically from 4.87 percent to 24.32 percent of nominal GDP.

[Demeter]

64. NYT Can't Tell the Truth Now!

It would make all their past issues a lie!

[Po_d Mainiac]

96. This article is worse than a lie

By taking statements out of context they distorted/twisted/mangled Hoenig's message.

I disagree with his premise that we are in recovery mode, but do agree with his assertion that the zilch Fed rate has had little effect on the broader economy (outside of padding the TBTF scumbags purses) The numbers he uses to show that employment and job creation is improving, fails to take into consideration that there is still a serious lag regarding the numbers of jobs needed as new workers enter the work force.

He is spot on with his assertion that if there is to be a recovery, investments have to be made in the private sector.

." Getting rid of Wall Street's guaranteed source of profit -- borrowing from the central bank and investing that in treasuries -- "tells the market that it must again accept risks and lend if it wishes to earn a return," Hoenig said.

And if you are one of the "suckers" that didn't use your home as a credit card, and spent prudently, he is is the only voice stating that you should be able to earn some interest without having to enter one of the casinos for the chance of a return.

He is also the sole voting FOMC member to be telling Bumhanky and his shills that TBTF is just plain to fucking big. At least there is one fellow that is willing to toss the squid and rest of "God's workers" under the bus instead of working class America.

"I am hopeful but realistic regarding whether next time things will be different," said Hoenig, a longtime critic of the Obama administration's attempts to end Too Big To Fail. By contrast, Hoenig believes the nation's giant financial institutions should be broken up into several pieces.

The Fed's Board of Governors in Washington disagrees.

His use of the term "next time" speaks volumes.

When the Fed Chair and Governors are walking towards their just reward :FRSP: he deserves to be in the crowd watching.

[Hawkowl]

103. Nah....

I think Mr. Hoenig is living in fantasyland. He still thinks it's all about monetary policy and interest rates. Stupid. Stupid. Stupid Fed. There will be no more boom--EVER. Until the structural problems of this bust are corrected.

[Po_d Mainiac]

104. Hoenig is the only one with a clue.....the NYT just fucked with your head..n/t

[Hawkowl]

105. Point taken

You are correct.

[Po_d Mainiac]

126. I almost fell for it as well.

One of the voices told me the guy from KC had a bit of working cranial tissue, and was not one of the scarecrows.
:hi:

[Demeter]

44. SEC enforcement division granted permanent subpoena powers

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/11/AR2010081106274.html

...Until last year, members of the enforcement division usually had to appear before the agency's five commissioners to request permission to issue a subpoena. Many investigators said this policy slowed down work on important cases because investigators would sometimes have to wait weeks to get such approval.

Last August, the SEC announced a one-year trial program in which the commissioners delegated subpoena power to the enforcement director, Robert Khuzami. He subsequently gave that authority to a number of deputies.

"This means that if defense counsel resist the voluntary production of documents or witnesses, or fail to be complete and timely in responses or engage in dilatory tactics, there will very likely be a subpoena on your desk the next morning," Khuzami said at the time.
ad_icon
Click here!

On Wednesday, the agency made the delegation of subpoena power permanent, saying it has led to "increased efficiency" as and improved "communication and coordination in addressing pertinent legal and policy issues."

Technically, the enforcement division has gained the power to issue formal orders of investigation, which allow for the serving of subpoenas. Without such an order, subjects of SEC probes cannot be forced to testify under oath or furnish documents. Still, the agency conducts many probes on an informal basis, and companies routinely turn over information voluntarily....

[Demeter]

74. Celebrating Social Security's 75th Anniversary by saving it; by Joan McCarter Daily Kos

http://www.dailykos.com/storyonly/2010/8/13/892783/-Celebrating-Social-Securitys-75th-Anniversary-by-saving-it?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailykos%2Findex+%28Daily+Kos%29&utm_content=My+Yahoo

Seventy-five years ago to tomorrow, Social Security was signed into law. Dems are marking that anniversary by going on the offensive:

http://thehill.com/blogs/blog-briefing-room/news/114091-dems-will-mark-social-securitys-75th-with-offensive-against-gop

Democrats plan to mark the 75th anniversary of Social Security on Friday by attacking some Republicans' plans to change the long-standing entitlement program.

Democrats will play up some Republicans' calls to privatize part or all of Social Security, which Democrats allege is a cornerstone of the GOP approach to the program.

The efforts on Friday will cap off the second of six theme weeks Democrats have maintained as part of their summer recess strategy. The Obama administration and Democratic leaders in Congress are expected to join with outside groups and party committees to go after the GOP.

Toward this end, the DSCC has created a scorecard showing what privatizing Social Security now would mean in the states where candidates and incumbents are running this cycle. It shows how many seniors would lose out:

* Arkansas – John Boozman (620,040)
* Colorado - Ken Buck (663,894)
* Florida – Marco Rubio (3,669,375)
* Iowa – Chuck Grassley (574,315)
* Indiana – Dan Coats (1,157,821)
* Kentucky – Rand Paul (870,206)
* Louisiana – David Vitter (770,217)
* Missouri - Roy Blunt (1,137,581)
* Nevada – Sharron Angle (390,553)
* North Carolina – Richard Burr (1,698,677)
* Ohio – Rob Portman (2,074,384)
* Pennsylvania – Pat Toomey (2,530,211)
* Wisconsin – Ron Johnson (1,033,096)

With these priceless quotes:

* Sharron Angle, who said Social Security is “hard to justify”{KNPR, State of Nevada, 5/19/2010]

* Ken Buck, who called Social Security “horrible, bad policy” {Politico, 6/28/10]

* Rand Paul and Ron Johnson, who have both likened Social Security to a “Ponzi Scheme” {Washington Monthly, 7/15/2010; Johnson’s speech at the Winnebago County Republicans’ Lincoln Day Dinner, March 21, 2010]

* Rob Portman, who said the Bush proposal to invest savings in risky Wall Street accounts was “very sound” {CNBC, Kudlow and Company, 1/3/07]

With Social Security on the Catfood Commission's chopping block, this hard push by Dems is good news. After making this big of a show over protecting and strengthening Social Security from the Republicans, Democrats would decimate their prospects for 2012 and beyond should they backtrack on this commitment. They seem to have some recognition of that, which is the good news. Point of evidence, DCCC Chair Chris Van Hollen has taken raising the retirement age off the table:

http://www.huffingtonpost.com/2010/08/12/dccc-chair-dems-will-poun_n_680473.html

"The consensus position in the caucus is we can preserve the existing structure of Social Security including the retirement age," said the Maryland Democrat. "And that is where we are. Obviously, people have, whenever they talk about the issue, there are different ideas. But it was very clear from the statements that we made as the Democratic caucus on the front steps of the Capitol that we believe that we should not be changing the retirement age."

This is a critical issue for America's future--for all of us. Current Social Security recipients are pretty safe, barring the Congress and White House going insane and passing an immediate privatization plan (you saw how well that worked for Bush). The fight for Social Security now is a fight for a secure retirement for all generations of Americans. It's a fight to make sure Social Security as we know it has a 100th, 125th, and even a 200th anniversary.

[Demeter]

77. THIS QUOTE TIES INTO THE NEXT POST

http://thehill.com/blogs/blog-briefing-room/news/114091-dems-will-mark-social-securitys-75th-with-offensive-against-gop


A spokesman for Boehner fired back over the Social Security theme.

"Washington Democrats' circular firing squad isn't taking an August recess. Desperate and flailing, Democrats will end the week by attacking their own leaders, including Vice President Biden, Majority Leader Steny] Hoyer, and Majority Whip James] Clyburn — all of whom have pushed to raise the Social Security retirement age," said Michael Steel, a spokesman for the Ohio Republican.

[Demeter]

76. Democratic Party elites' days are numbered By David Sirota

http://www.salon.com/news/opinion/feature/2010/08/13/elites_days_numbered/index.html

Michael Bennet's narrow victory in Colorado is further proof that the Democratic establishment's grip is slipping...

Call me an '80s junkie, but when I saw the results of this week's closely watched Colorado election, I immediately thought of "Spaceballs." In that Mel Brooks masterpiece, a Darth Vader spoof named Dark Helmet says, "Evil will always triumph because good is dumb." Make it "dumb and broke," and you have a powerful explanation for incumbent Democratic Sen. Michael Bennet's narrow victory over former state legislator Andrew Romanoff.

In the 20 months since being appointed to fill the vacated Senate seat of now-Interior Secretary Ken Salazar, Bennet became one of Congress' top recipients of corporate cash. A wealthy businessman who had never held elected office before, he ultimately raised and spent almost $6 million on his campaign — more than any other primary candidate in the history of Colorado. He was additionally aided by the Democratic National Committee and Organizing for America’s phone banking, by President Barack Obama’s full-throated endorsement, and by the built-in advantages that come with a taxpayer-financed Senate office.

Romanoff, by contrast, swore off special-interest money from the beginning. As a former state House Speaker with a deep grass-roots network throughout Colorado, he constructed a scrappy campaign on less than $2 million of mostly small-dollar, in-state contributions. In the relatively few ads he was able to afford, he juxtaposed his own progressive economic platform against Bennet's odious Senate votes to protect the big banks, oil firms and health insurance companies that Americans despise and that financed Bennet’s campaign.

Alas, it wasn’t enough. The Bennet campaign’s ads obscured the incumbent’s true record, and because those ads were backed with so much money, Romanoff's spots were like a pin dropping at a Metallica concert, and the challenger lost...Considering Bennet's wealth, corporate fundraising, incumbency and presidential support, it is astounding that a whopping 46 percent of this bellwether state's Democratic voters cast their ballots against him, against their own party's establishment and against their own party’s president...

FIGHT FIERCELY, DEMOCRATS!

[Demeter]

117. A GOOD-GUY DEMOCRAT TO WATCH: (Brad Miller of NC)

AND HERE'S WHY:

http://www.nytimes.com/2010/08/15/business/economy/15gret.html?_r=1&ref=business

[DemReadingDU]

25. Automatic Earth: Bubble Psychology and Lessons from History

8/13/10 Bubble Psychology and Lessons from History
Those who do not learn the lessons of history are destined to repeat them.

Stoneleigh discusses famous quotes from the Great Depression, and a few economic graphs

http://theautomaticearth.blogspot.com/2010/08/august-13-2010-bubble-psychology-and.html



We are just past the point labeled 'Return to Normal'

Click link for larger graph.
http://people.hofstra.edu/Jean-paul_Rodrigue/images/Manias%20Bubbles.pdf

[kickysnana]

31. My theme this week is "so close and yet so far.."

The promised cooler weather keeps getting pushed later and later. Weatherpersons are such teases. We had sci-fi thunderstorms where the lighting never stopped rumbling for 30 minutes at a shot. Hardly any sleep so I am not much good today. The good news is that we did not get hit and our windows did not get blown in in the initial front.

A relative emailed me that they were going to come by and pay back a debt from 2007 but then they got too hot and I would hear from them sometime later. (Left out was, unless the car breaks down, black-sheep daughter gets another DUI, or someone talks them out of it.)

I dared step on the scale today to see if the 10 lbs I put on in May and June during my Dad's final illness was water weight gain. It wasn't.

The sibling tasked with handling Dad's estate only does personal business on weekdays and is out of touch at various hobbies on the weekends and keeps forgetting that another sibling never does business on weekdays only on weekends. So the estate has not been filed, the stocks and house value are dropping daily and there is nothing I can do about it.

But then I come here where misery has company and I can find intelligent analysis and conversation, (mostly.)

BTW Friday The 13th is a lucky day in our family as my mother was born on a Friday the 13th. Just not materially lucky.

[Demeter]

32. One of You Has Got to Bend

Good luck!

[kickysnana]

34. LOL Its 2 of the other 4 siblings. I am a bystander. n/t

[Demeter]

39. Stocks end worst week in six with another down day

http://news.yahoo.com/s/nm/20100813/bs_nm/us_markets_stocks

[Demeter]

40. Foreign Bank Borrowing in Commercial-Paper Market Increases

http://online.wsj.com/article/SB10001424052748704407804575425591022794222.html?mod=dist_smartbrief

Foreign banks are back as major borrowers in the short-term U.S. commercial-paper market, according to Federal Reserve data released Thursday, as investors resumed lending to them after European banks passed stress tests last month.

Several European banks had been shut out of this market in May as investors feared the banks' solvency could be in danger because of their holdings of bonds from Greece, Spain and other struggling European countries.

Financial services' share of the $1 trillion commercial-paper market has risen to its highest level since April, and foreign banks' borrowing has risen to its highest level since March, the data show.

Chris Conetta, head of global commercial paper at Barclays Capital in New York, said "a significant portion" of the rise was attributable to "increased demand for European bank paper since the EU stress tests." Renewed demand for Spanish and Italian paper was particularly notable, he said...

[Demeter]

41. 30-year mortgage rates hit another low: 4.44%

http://www.usatoday.com/money/economy/housing/2010-08-12-mortgage-rates_N.htm

That's the lowest since Freddie Mac began tracking rates in 1971.

[Demeter]

49. HUD Offers Interest-Free Loans to Reduce Foreclosures

http://www.bloomberg.com/news/2010-08-11/hud-offers-1-billion-in-no-interest-loans-to-borrowers-facing-foreclosure.html

The Obama administration will offer $1 billion in zero-interest loans to help homeowners who’ve lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas.

The Department of Housing and Urban Development plans to make loans of as much as $50,000 for borrowers “in hard hit local areas” to make mortgage, tax and insurance payments for as long as two years, according to a statement released today. The Treasury Department will also provide as much as $2 billion in aid under an existing program for 17 states and the District of Columbia, according to the statement.

The initiatives will help “a broad group of struggling borrowers across the country and in doing so further contribute to the administration’s efforts to stabilize housing markets and communities,” Bill Apgar, HUD’s senior adviser for mortgage finance, said in the statement.

The new loan program, funded under the Wall Street overhaul President Barack Obama signed into law last month, is part of a broader effort to aid unemployed homeowners in the wake of the worst economic crisis since the Great Depression. The $2 billion in Treasury aid announced today doubles the amount already sent to housing agencies in states with unemployment rates at or above the national average during the past 12 months....


SOUNDS LIKE A SINKHOLE WITHOUT A BOTTOM TO ME


“A program of this size is not going to make a large difference, but it’s a bridge,” said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. “We need the housing market to stabilize, because the better the housing market is the stronger the economic recovery is going to be.”

[Demeter]

42. American unemployment, Forgotten men: The jobless recovery, long prophesied, is here

http://www.economist.com/node/16805946

In July, 52,000 fewer people were employed on non-farm payrolls than in July 2009, the month in which it is estimated the American economy climbed out of recession.

[Demeter]

87. The Horror Show By BOB HERBERT (MORE ON UNEMPLOYMENT)

http://www.nytimes.com/2010/08/10/opinion/10herbert.html

"...At some point we’re going to have to claw our way out of this denial. With 14.6 million people officially jobless, and 5.9 million who have stopped looking but say they want a job, and 8.5 million who are working part time but would like to work full time, you end up with nearly 30 million Americans who cannot find the work they want and desperately need..."

[Demeter]

43. Currencies: Race to the bottom (WE'RE #1!)

http://economist.com/node/16792926

THREE months ago, when Europe’s debt crisis had markets panicking about sovereign risk, it seemed that all roads led to the dollar. The greenback was rising against the other big global currencies, the yen, pound and euro. Its role as the world’s reserve currency seemed an inestimable advantage when investors were unsure where they could safely park their cash. Within the rich world, America’s economy looked the best of a bad bunch. The stage seemed set for a dollar rally.

How quickly things have changed. On August 11th the dollar fell to a 15-year low against the yen of ¥84.7. It perked up against the euro to $1.29, though that was still much weaker than the $1.19 it reached in early June when euro-revulsion was at its worst (see chart 1). The ground the greenback has lost in recent weeks owes to a run of weaker data about the economy, not least on jobs ....

[Demeter]

45. Chapter 11 Benefits Battles Get Fierce

A TYPICALLY STUPID WSJ NO-INFO-CONTENT HEADLINE....SORRY

http://online.wsj.com/article/SB10001424052748704268004575417520408879834.html?mod=dist_smartbrief

...a federal appeals court has given... thousands of Visteon retirees some potential relief. In mid-July, the Third U.S. Circuit Court of Appeals of Philadelphia reversed decisions that allowed Visteon to terminate benefits for more than 6,000 retirees without taking certain legal steps in bankruptcy court.

The ruling means that roughly 2,100 retirees should resume receiving health-care and life-insurance coverage, so long as Visteon remains under bankruptcy-court protection, which could last at least another month or so, and possibly longer. Other retirees have filed court papers arguing they, too, should be covered by the appeals court decision.

The appeals court denied Visteon's request to rehear the case. A Visteon spokeswoman said the company believes the decision applies only to the retirees who appealed to the third circuit; Visteon plans to reinstate benefits for those former workers until it exits from bankruptcy proceedings. But it is Visteon's "intention to ultimately terminate these benefits," she said....

VERY IMPORTANT ARTICLE--MUST READ!

[Demeter]

46. AIG Offloads Large Chunk Of Consumer Credit Arm

http://www.forbes.com/2010/08/11/aig-fortress-investment-markets-equities-insurance.html?boxes=marketschannelnews

Insurer sells 80% of American General Finance to Fortress, does not disclose financial terms.

[Demeter]

47. Wall Street Has Much at Stake in GSE Overhaul

http://www.onwallstreet.com/news/wall-street-2668254-1.html

..."Wall Street made a very large amount of money for a very long time on complex activity revolving around Fannie and Freddie," said Alex J. Pollock, a resident fellow at the American Enterprise Institute and former president and chief executive of the Federal Home Loan Bank of Chicago. "Like everything, MBS began life as a great innovation, and as time goes on, standardization or normalization turned it into a bread-and-butter business. But when you're dealing with $5 trillion of paper, including MBS and straight debt, and that paper churns all the time, and on top of that, they have huge hedging activity … it can't be ignored."....

WONKY AND DETAILED

[Demeter]

50. Goldman Sachs Needn't Worry About Financial Regulation

http://www.forbes.com/forbes/2010/0830/outfront-goldman-sachs-volcker-obama-catch-me-if-can.html?boxes=businesschannellighttop

Watch Goldman Sachs turn new financial regulations into profit centers.

[Demeter]

66. Goldman CEO, others get millions from options

http://www.reuters.com/article/idUSTRE67C4XQ20100813?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29

Goldman Sachs Group Inc on Friday said several top company officials, including Chairman and Chief Executive Lloyd Blankfein, exercised stock options this week and obtained millions of dollars of profits by selling the resulting shares, regulatory filings show.

Blankfein exercised 90,681 stock options at a strike price of $82.875, and obtained a $6.09 million gross profit by selling the resulting shares on Wednesday at prices between $148.97 to $152.00.

In similar options exercises and sales, President Gary Cohn exercised 73,653 options and had a $4.95 million profit, Chief Financial Officer David Viniar exercised 67,326 options and had a $4.52 million profit, and General Counsel Gregory Palm exercised 47,895 options and had a $3.22 million profit.

Goldman said the options were granted in November 2000 and scheduled to expire this November. It disclosed the transactions in U.S. Securities and Exchange Commission filings.

[Demeter]

52. Californians' income falls for first time since WWII

Government statisticians have put a number on Californians' paycheck pain last year: about $40 billion.

The federal Bureau of Economic Analysis said personal incomes of Golden State workers fell by that amount in 2009 compared with the previous year – the state's first year-to-year decline since World War II. In the Sacramento region, income was off about $800 million.

The bureau said 2009 income statewide totaled $1.56 trillion, down about 2.5 percent from $1.6 trillion in 2008. The 2009 level also came in just under the 2007 total.

California's decline was a third more than the national 1.8 percent personal income drop, reflecting the relative intensity of the state's recession.

Read more: http://www.sacbee.com/2010/08/11/2950736/californians-lost-out-on-40-billion.html#ixzz0wWtfC9qZ

[Demeter]

53. Company job openings drop for 2nd straight month

http://news.yahoo.com/s/ap/20100811/ap_on_bi_ge/us_job_openings

[Demeter]

58. Is This Finally The Economic Collapse? By Keith R. McCullough

http://www.informationclearinghouse.info/article26138.htm

...Points of economic collapse are generally crystal clear in the rear-view mirror. Professional politicians in Japan have been telling stories for 20 years as to why they can prevent economic stagnation. In the US, the storytelling started in 2007. All the while, stock market and real-estate prices have repeatedly rallied to lower-highs, then collapsed again, to lower-lows.

Despite the many differences between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm -- debt as a percentage of GDP. Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return....

MORE DOOM AND GLOOM AT LINK

[Demeter]

59. Party Like Its 1929 By Mike Whitney

http://www.informationclearinghouse.info/article26145.htm

On Tuesday, the Fed announced that it will reinvest the proceeds from maturing mortgage-backed securities (MBS) into US Treasuries. The process is called Quantitative Easing. In theory, Q.E. increases inflation expectations so that consumers spend more and rev up the economy. That's the theory. But adding to bank reserves when the banks are already loaded to the gills, achieves nothing. It doesn't put money in the hands of people who will spend it, generate more economic activity or increase growth. It's a big zero. Oddly enough, the Fed even admits this. According to an article in Bloomberg News, "The Central Bank posted a paper co-written by Seth Carpenter, associate director of the Fed’s monetary-affairs division, finding that the “quantity of reserve balances itself is not likely to trigger a rapid increase in lending.” No "increase in lending" means no credit expansion and no rebound. Thus, QE will have no real impact.

From the FOMC Statement:

"Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.....

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability."

There's not a glimmer of light in the Fed's statement, and yet, "the Committee anticipates a gradual return to higher levels of resource utilization". But how? And on what is the Fed basing its prediction? Certainly not the data. Maybe tea leaves? The truth is the economy is in very bad shape and getting worse. This is from Wednesday's New York Times:

"The government’s preliminary estimate for economic growth in the second quarter is likely to be revised substantially lower...."Combining the bigger-than-expected trade deficit with other weak data suggests that Q2 growth was only 1.2 percent rather than the 2.4 percent originally estimated, placing the economy on even shakier ground than it seemed,” wrote Nigel Gault, chief United States economist at IHS Global Insight." (New York Times)

The Fed has dramatically revised its growth forecast downward since its last meeting. The fiscal stimulus is petering out and inventory restocking is nearly over. Now the economy will have to stand on its own without the support of fiscal and monetary aid. But is it strong enough? Households are still patching their balance sheets, credit is tight, and businesses have no incentive to invest due to flagging demand. So where's the growth going to come from? If the government does not provide more stimulus, asset prices will tumble, unemployment will rise, and the economy will contract.

This is from Wednesday's Wall Street Journal:

"A Wall Street Journal survey found that by a two-to-one margin Wall Street economists see deflation as a bigger threat to the U.S. economy over the next three years than inflation.

“Deflation is dangerously close,” said David Resler of Nomura Securities, one of 53 economists surveyed by the Wall Street Journal. Among economists who answered the question, nearly two-thirds said that deflation poses the bigger risk to the economy over the next three years; the remainder said inflation is the bigger threat. That compares to an April survey, when the economists were split 50/50 over whether inflation or disinflation posed the bigger risk over the next year." ("WSJ Survey: Risks of Deflation on the Rise, Fed on Hold Longer", Phil Izzo, Wall Street Journal)

The looming risk of deflation is what makes the future so "unusually uncertain". (Bernanke words) But investors don't like uncertainty, which is why they pulling their money out of equities and moving it into bonds. That's also why the flight to safety has continued for more than 2 years since the crisis began. No one knows what the policy is or what the rules are. It's catch-as-catch-can. At the same time, falling bond yields are a referendum on Bernanke's performance. Historic low yields on Treasuries indicate that the Fed has been unable to restore confidence or allay investor fears. Recent surveys of small business owners (National Federation of Independent Business) and CEO's show that confidence continues to plunge. Consumer confidence is in the dumps, too. Bottom line: No one has faith in the Fed's approach.

Bernanke hoped that restarting his bond purchasing program would convince Wall Street that he was prepared to provide as much liquidity as needed. But traders saw through the ruse. The bond market cast its ballot immediately, driving yields into the ground. Investor pessimism pushed the 10-year below 3% while 2 year Treasuries slumped to historic lows. Investors are betting that the economy is headed into another vicious cycle of debt-liquidation and depression. They don't believe the Fed can stop the freefall, so they are shifting into risk-free liquid assets.

It took the stock market a bit longer to grasp what was going on, but 24 hours later, the rout on Wall Street began. Shares plunged throughout the session pushing down the Dow Jones 265 points by the end of the day. The other indexes were battered as well. The dollar strengthened on fears of deflation while bond yields on short-term notes fell sharply. Bernanke thinks the economy can muddle through on its own, but Wall Street isn't buying it. They want more monetary stimulus, and they want it now.


PARTY LIKE ITS 1929

This is from David Rosenberg's "Breakfast with Dave":

"I know this sounds a bit dire, but little has changed from where we were a year ago......we had a huge bounce off the lows, but we had a similar bounce off the lows in 1930. The equity market was up something like 50% in the opening months of 1930, and while I am sure there was euphoria at the time that the worst of the recession and the contraction in credit was over, it’s interesting to see today that nobody talks about the great run-up of 1930 even though it must have hurt not to have participated in that wonderful rally. Instead, when we talk about 1930 today, the images that are conjured up are hardly very joyous. I’m not saying that we are into something that is entirely like the 1930s. But at the same time, we’re not in Kansas any more." ("Not in Kansas Anymore", David Rosenberg, Gluskin Schef)

The economy is on the rocks and another round of quantitative easing won't help. The Obama administration will have to toughen up and push through another fiscal stimulus program. It's the only way. QE, low interest loans, zero rates, consumer subsidies, tax cuts or more bank reserves will not do the trick. Private sector deleveraging is beginning to accelerate, which means that economic contraction is unavoidable unless government spending increases substantially for an extended period of time. The budget deficits are going to balloon. Get used to it. That's what it will take to get back on track. Obama's stimulus was never big enough. Experts like Paul Krugman, Joseph Stiglitz and Obama's-own Christiana Romer figured it would take roughly $1.4 trillion to suck up the excess capacity in the system and really put a dent in unemployment. $787 billion is a pittance compared to the $6 trillion in home equity and $4 trillion in retirement funds that were lost in the housing bubble flameout. When that much money vanishes from the system, it takes time to regroup. It blows a hole in personal balance sheets and forces people to cut back on spending. That's why the personal savings rate has skyrocketed to 6.4% in a matter of months. People are strapped and trying to pull themselves of the red. It's government's job to give them a hand.

Here's an excerpt from a report by Goldman Sachs:

"The economic landscape has changed significantly during the last two months. The macroeconomic data that seemed to indicate improvement in April and May deteriorated sharply in June and early July. Cutting our 2011 EPS estimate to $89 represents a reversal for us and reflects the more challenging economic environment we now face compared with the backdrop just a few months ago."

Bernanke maintains the recovery is on track and that the economy is slowly improving, but as economist Dean Baker points out, demand has been weak throughout the crisis and is showing no signs of a rebound. Here's Baker:

"Growth has been boosted over the last 4 quarters by an inventory cycle as firms went from depleting to building their inventories. This cycle has now ended. Inventory growth is unlikely to accelerate further in the quarters ahead. This means that GDP growth will be close to final demand growth. Final demand growth has averaged 1.2 percent in the last four quarters and was 1.3 percent in the most recent quarter. There is no obvious reason to expect that the rate will increase in the near future." (Dean Baker, CEPR)

Bernanke's no-jobs, no-growth recovery has run aground. Now we need a real solution, a fiscal solution; a solution that will lower unemployment, put the country back to work and restore public confidence in government. And there's not much time to act either. As pessimism spreads and economic atrophy sets in, the prospect of a general fall in the price level becomes more likely. That will lead to more layoffs, more excess capacity, more plummeting asset prices, more debt-liquidation, more defaults and more bankruptcies. It's up to Obama and Co. to get this thing right and change course fast. Otherwise, we'll be back in the soup.

[Tansy_Gold]

60. I was born on Wednesday, the 13th

But had my 13th birthday on a Friday, and my 30th birthday on a Friday, so I have no fear of these days. They're kinda fun.

Politics in my quiet little mostly conservative world has suddenly become interesting. This thing with County Supervisor Bryan Martyn has sparked my curiosity. At least it provides welcome diversion.

[Demeter]

65. Which Month, Tansy?

We could celebrate your birthday with a special weekend event!

[Tansy_Gold]

67. October. 1948.

Also on Friday in the year 2000.

I'm sure others who were born on 13ths have similar conjunctions or whatever you wanta call 'ems.

Now I'm going outside to see if I can spot any Perseids.



TG, NTY

[Demeter]

71. Good Heavens, Woman. I didn't ask the year!

Marking down the date in my calendar...

[Tansy_Gold]

111. Ain't no secret! ;-) n/t

[DemReadingDU]

113. Mine is shortly after yours

January 1949. In another month, I'm applying for social security.

We figured to start taking SS now, because the gov would be less likely to take it away if already receiving it. My siblings may not be so fortunate to receive any social security because they are all younger than me.

[Demeter]

81. What a Government Can Do With Its Own Bank: The Remarkable Model of Commonwealth Bank of Australia

http://www.truth-out.org/what-a-government-can-do-with-its-own-bank-the-remarkable-model-commonwealth-bank-australia62054

Virg Bernero, the mayor of Lansing, Michigan, just won the Democratic nomination for governor of his state, making a state-owned Bank of Michigan a real possibility. Bernero is one of at least a dozen candidates promoting that solution to the states' economic woes. It is an innovative idea, with little precedent in the United States. North Dakota, currently the only state owning its own bank, also happens to be the only state sporting a budget surplus, and it has the lowest unemployment rate in the country; but skeptics can write these achievements off to coincidence. More data is needed and, fortunately, other precedents are available from other countries.

One of the most dramatic is the Commonwealth Bank of Australia, which operated successfully as a government-owned bank for most of the 20th century, until it was privatized in the 1990s. The Commonwealth Bank's creative founders demonstrated that a government-backed bank can make loans without capital. Denison Miller, the bank's first governor, was fond of saying that the bank did not need capital because "it is backed by the entire wealth and credit of the whole of Australia."

The Commonwealth Bank's accomplishments were particularly remarkable considering that for its first eight years, from 1912 to 1920, it did not have the power to issue the national currency - unlike the US Federal Reserve, which acquired that power in 1913. The Commonwealth Bank was, thus, in the same position as a state of the United States or a member country of the European Union (think Greece), which also lack the power to issue their own currencies. Operating without that power and without startup capital, the Commonwealth Bank funded both massive infrastructure projects and the country's participation in World War I. According to David Kidd, writing in a 2001 article titled "How Money Is Created in Australia":

"Australia's own government-established Commonwealth Bank achieved some impressive successes while it was '"the peoples" bank,' before being crippled by later government decisions and eventually sold. At a time when private banks were demanding 6% interest for loans, the Commonwealth Bank financed Australia's first world war effort from 1914 to 1919 with a loan of $700,000,000 at an interest rate of a fraction of 1%, thus saving Australians some $12 million in bank charges. In 1916 it made funds available in London to purchase 15 cargo steamers to support Australia's growing export trade. Until 1924 the benefits conferred upon the people of Australia by their Bank flowed steadily on. It financed jam and fruit pools to the extent of $3 million, it found $8 million for Australian homes, while to local government bodies, for construction of roads, tramways, harbours, gasworks, electric power plants, etc., it lent $18.72 million. It paid $6.194 million to the Commonwealth Government between December, 1920 and June, 1923 - the profits of its Note Issue Department - while by 1924 it had made on its other business a profit of $9 million, available for redemption of debt. The bank's independently-minded Governor, Sir Denison Miller, used the bank's credit power after the First World War to save Australians from the depression conditions being imposed in other countries.... By 1931 amalgamations with other banks made the Commonwealth Bank the largest savings institution in Australia, capturing 60% of the nation's savings."

Harnessing the Secret Power of Banking for the Public Good

The Commonwealth Bank was able to achieve so much with so little because its first Governor, Miller, and its first and most ardent proponent, King O'Malley, had both been bankers themselves and knew the secret of banking: that banks create the "money" they lend simply by writing accounting entries into the deposit accounts of borrowers....

ANOTHER "MUST READ" ARTICLE...THE COLONIES ORIGINALLY HAD SUCH A SCHEME, SINCE BRITAIN WAS DEMANDING SPECIE PAYMENTS FOR ALL IMPORTED GOODS. OTHERWISE, THE LOCALS COULDN'T HAVE DONE ANY TRADING BETWEEN THEM, AND THEY ALL WOULD HAVE BEEN REDUCED TO BARTER OR OTHER STARVATION-INDUCING STOP-GAPS. IT WORKED GREAT UNTIL THE BRITISH BANKERS GOT THE BRITISH GOVERNMENT TO SHUT IT DOWN...SEE FOLLOWING POST!

[Demeter]

82. The Founding Fathers, Colonial Script, the Federal Reserve and the National Debt

http://1zipmont.wordpress.com/the-status-quo/the-founding-fathers-colonial-script-the-federal-reserve-and-the-national-debt/

Note: This story has been beat to death on the INTERNET. I must have read a hundred different versions of it, and consequently I’m somewhat reluctant to even post it. But there definitely is a story here, and an important one. This is my version of it. I do my best to include that which there seems to be consensus on, omitting some details which either seemed less significant or more controversial. Have at it.


In Ayn Rand’s “Atlas Shrugged”, Rand describes what an incredibly unique advancement America represented at its outset, that “for the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work…” that for the first time “there appeared the real maker of wealth…” and that “No other language or nation had ever used these words before; men had always thought of wealth as a static quantity—to be seized, begged, inherited, shared, looted of obtained as a favor. Americans were the first to understand that wealth has to be created.”

On September 17, 1787, as he was leaving Independence Hall in Philidelphia, Benjamin Franklin was asked by a citizen.” What have you given us ?” Franklin replied, “A republic, if you can keep it.” What were some of the events leading up to Franklin’s famous statement?

Several decades earlier, in the 1750s, the Colonies were very prosperous. There was no income tax, no unemployment, and stable prices. When asked to explain this prosperity to leaders back in the motherland, Benjamin Franklin replied;

“That is simple. In the Colonies we issue our own money. It is called Colonial Script. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one”.

1764, the production of Colonial Script was made illegal by the Currency Act, passed into law in England (of course due to pressure from the Bank of England) prohibiting the Colonies from issuing their own money, ordering them to use only the money that was provided (in insufficient quantities) by the English bankers. Benjamin Franklin said,

“In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed”.

The effect that the English bankers were having on the Colonies was by far the most significant reason for the Revolutionary War in 1775, in contrast to what is taught in our history books. Benjamin Franklin was clear about this;

“The colonies would gladly have borne the little tax on tea and other matters had it not been for the poverty caused by the bad influence of English bankers on the parliament which has caused, in the colonies, hatred of England and the revolutionary war”.

Although the Declaration of Independence was made in 1776, it wasn’t until the Treaty of Paris in 1783 that the new sovereign nation was recognized. The Colonies were once again free to control their own currency. In 1787, the founding fathers made certain that the control of currency was provided for in the United States Constitution. Article 1, section 8, paragraph 5, states;

“The Congress shall have the power to coin money and to regulate the value thereof”.

It’s clear that the issuance of currency is of utmost importance to any free society. The abuse and/or exploitation of the issuance of currency has been alluded to by a great many influential people throughout history. And although the Colonies had gained their independence, the fledgling country was far from out of the dark. Enter the looters (to borrow Rand’s terminology) of the era, the Rothschilds. The Rothschilds were expert looters, ie: they had figured out how to enrich themselves at the expense of people who actually worked and produced.

“Permit me to issue and control the money of a nation, and I care not who makes its laws.”

Mayer Amschel Rothschild

It has been said that “the wealth of Rothschild consists of the bankruptcy of nations” . It has also been said that “the 19th century was the age of the Rothschilds”, and estimated that during this period the Rothschilds owned as much as half of the world’s total wealth. Though this is a bit hard for me to believe, suffice to say that they were extremely wealthy and powerful. They were bankers, yet they controlled and manipulated entire governments because they controlled “national banks” and thus the issuance of currency. Benjamin Disraeli characterized Nathan Rothschild as “the lord and master of the money markets of the world, and of course virtually lord and master of everything else.”

Nathan Rothschild ran the Bank of England during the period when the 13 Colonies sought their independence. He understood the potential of the new fledgling country in North America and the problems it could pose to imperial England in the future. Though the British could easily have crushed the Colonies in the American Revolution, they didn’t need to. England would be better served by allowing independence and establishing a “national bank” on the United State’s soil which England would control. Alexander Hamilton, the Minister of Finance, supported the idea of such a bank, but Thomas Jefferson, the Secretary of State, strongly opposed it. Jefferson’s opposition to central bankers is legendary;

“I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt.”

“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”

“If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

President Washington eventually sided with his Finance Minister, under the premise that making funds available for business and strengthening the national economy was desirable, and the cleverly named The Bank of the United States was established in 1791 with a 20 year charter. When the charter ran out in 1811, Congress voted against its renewal on the grounds that it was unconstitutional.. The Bank of England, under the direction of Nathan Rothschild, declared that either the renewal of the charter be granted, or the United States would find itself in “a most disastrous war“. Nevertheless, on March 4,1811 the Bank of the United States was dissolved. And on January 20, 1815, President Madison vetoed another bill that would have created a second National Bank. But finally, on January 8, 1816, faced with the financial hardship from the War of 1812 (just as Nathan Rothschild had promised …) Congress approved another national bank.

In 1832, President Andrew Jackson vetoed another move to renew the charter of the ‘Bank of the United States’ . As a result the bank went out of business in 1836. President Jackson was the only one of our presidents whose administration totally abolished the National Debt.

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal God, I will rout you out!”

When asked what he felt was the greatest achievement of his career Andrew Jackson replied, “I killed the bank!”

James Garfield became President in 1881. With regard to the European bankers, he said:

“Whosoever controls the volume of money in any country is absolute master of all industry and commerce… And when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”

Today our central bank is call ed “The Fed” or ‘Federal Reserve’, again a clever and intentionally misleading name. (Similarly the “Bank of England” is nothing of the sort, but cleverly named to instill confidence in the populace. The bank sold shares to “private investors“, the names of which were never disclosed.) After signing the act in 1913, President Wilson said;

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men . We have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world, no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”

“Since I entered politics, I have chiefly had men’s views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.”

( both from The New Freedom: A Call for the Emancipation of the Generous Energies of a People (New York and Garden City: Doubleday, Page and Company, 1913)

Just after the Federal Reserve Act was passed, Congressman Charles Lindbergh said,

“the act established the most gigantic trust on earth. When the President signs this bill, the invisible government of the monetary power will be legalized” … “the greatest crime of the ages is perpetrated by this banking and currency bill.”

The international bankers had created a currency panic in 1907 in order to get the American people to swallow the idea of the ‘Federal Reserve’ in classic Hegelian dialectic form. In 1911, John Moody’s ”The Seven Men” was in McClure’s Magazine. In it he states

“Seven men on Wall Street now control a great share of the fundamental industry and resources of the United States. Three of the seven men, J.P. Morgan, James J. Hill, George F. Baker, head of the First National Bank of New York belong to the so-called Morgan group; four of them, John D. and William Rockefeller, James Stillman, head of the National City Bank, and Jacob H. Schiff on the private banking firm of Kuhn, Loeb Company, to the so-called Standard Oil City Bank group…the central machine of capital extends its control over the United States…The process is not only economically logical; it is now practically automatic.”

Consider the function of the Fed. Today’s dollar is “fiat money”, meaning it is not backed by anything of value (gold) as it used to be, but it is backed only by government decree, by the “full faith and credit” of the United States government. What are the economic effects of printing money carte blanche, ie: uninhibited by the need to have something of real value (and therefore something of limited supply…) behind the currency? With gold backing, there is something quantifiable behind our money, something of precise value that keeps money creation and thus economic growth in check. Currently, getting more money is as easy as turning on the printing presses (incurring more debt…) printing dollars by pure fiat, ‘out of thin air’, as it were. Problem is, our government has to issue bonds to get those dollars. This arrangement is great for whoever is running The Fed… whoever is receiving the bonds… but not so great for the government that issues them. In making good on the bonds they issue, our government not only has to pay full face dollar value (on dollars that cost about 5 cents for the Fed bankers to print) but interest as well! The US Government, (ie: you and I) gets strapped with the bill each time the “Fed” turns on its printing presses. In this manner, our government is taken to the cleaners by our own central bank. To add insult to injury, every time new dollars are printed and the money supply increases, your income and savings are worth less. This has been referred to as a “stealth tax”.

In lockstep our national debt goes through the roof, increasing tens of thousands of dollars every second – billions of dollars every day. And is it a coincidence that we see a massive acceleration of national debt in the early 1970s, precisely when President Nixon announced that the government was abandoning the Bretton Woods Agreement (August 15, 1971), removing gold backing from the dollar? Check out any graph of our national debt. The correlation is pretty hard to miss.

Draw your own conclusions . . .

[DemReadingDU]

83. Robert Prechter: 1987 ALL OVER AGAIN?

8/11/10
Robert Prechter of Elliott Wave International says the current chart pattern in the equity markets is eerily similar to the August 1987 chart pattern:

click link for video, appx 6 minutes
http://pragcap.com/1987-all-over-again?utm_source=twitterfeed&utm_medium=twitter

[Demeter]

86. We'd be damn lucky if it was "only" like a rerun of 1987

Talk about grasping at straws.

[Demeter]

84. HUMOR, INTENTIONAL

As opposed to all the above (It's laugh or cry, folks--vomiting is frowned upon)

[Demeter]

85. Dilbert commenting on modern business practice

[Po_d Mainiac]

102. The Hindenburg Omen Has Arrived

[Demeter]

88. CLIMATE CONTROL

Our material world is suffering even as our financial world--the two are intertwined, in fact.

[Demeter]

89. Greenland ice sheet faces 'tipping point in 10 years'

http://www.guardian.co.uk/environment/2010/aug/10/greenland-ice-sheet-tipping-point?intcmp=122

"The fall-out would be felt thousands of miles away from the Arctic, unleashing a global sea level rise of 23ft (7 metres), Alley warned. Low-lying cities such as New Orleans would vanish."

MAYBE THAT'S WHY THERE'S NO REBUILDING GOING ON?

[Demeter]

90. Radioactive smoke? Russia wildfires rage near Chernobyl

http://www.csmonitor.com/World/Europe/2010/0811/Radioactive-smoke-Russia-wildfires-rage-near-Chernobyl

Greenpeace says Russia wildfires are spreading across six provinces that were heavily contaminated by the 1986 Chernobyl disaster. One Russian official accused Greenpeace of 'panic-mongering.'

....When the Chernobyl reactor melted down, the resulting steam explosion poured atomic radiation equal to 100 Hiroshima bombs into the air, much of which settled on surrounding regions of Ukraine, Russia, and Belarus. Though the immediate Chernobyl zone is not currently menaced, environmentalists say dozens of fires have spread around contaminated Russian regions, including Bryansk, Kaluga, Tula, Oryol, and Ryazan...

"In an eerie way, bureaucrats issued standard, sterile phrases that citizens should protect themselves from the smog by wearing face masks that are saturated with water, avoid jogging in the morning, and to stay home," said an editorial in the Moscow business daily Vedomosti on Wednesday. "Perhaps the calmest of all Moscow officials was Mayor Yury Luzhkov, who spent most of the smog-filled days on vacation in Europe, although he swears that he was in full control of the situation."


TAKE CARE OF YOURSELF AND FAMILY, MattSh!

[Demeter]

92. Russia's Agony a "Wake-Up Call" to the World By Stephen Leahy

http://www.informationclearinghouse.info/article26130.htm

[Demeter]

98. GOING AGAINST THE GRAIN

the outcomes of climate disruption include agriculture disruption

[Demeter]

99. Wheat Prices go up 50 Percent-Repercussion for Ghana

http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=187949

[Demeter]

100. The Great Grain Robbery By Chris Mayer

http://dailyreckoning.com/the-great-grain-robbery/

In 1972, Russia’s wheat crop failed. Russia had to dip into the global grain markets to meet demand. Before Washington knew the plight of its Cold War adversary, Russia bought up all of the surplus wheat in the US. Dubbed “The Great Grain Robbery,” Russia’s purchases sent grain prices soaring around the world.

Grain prices soon hit 125-year highs in Chicago. In a 10-month span, soybeans went from $3.31 to $12.90 a bushel. Food prices around the world rose 50% in 1973.

Some of the old traders are wondering if it’s happening all over again.

On Thursday, wheat prices hit $7.25 a bushel, a 71% increase since the June low. It’s the biggest one-month jump in three decades. The last time prices got this high was during the food crisis in 2008. (Wheat prices topped out at $13 then.) You may recall the ensuing food riots across the globe from Haiti to Egypt to Bangladesh.

Russia is again the center of attention. The worst heat wave and drought in a century has baked crops to a crisp in Russia, Ukraine and Kazakhstan. These three are among the biggest exporters of wheat in the world. They provide critical food supplies to the largest importing regions in the world – the Middle East and North Africa.

In some areas of Russia, the heat and lack of rain killed half the crop. Withered wheat stalks litter the usually fertile fields along the Volga River. This is one of the world’s breadbaskets. Russia and the Ukraine alone were supposed to supply 18% of the world’s wheat. Now it looks like Russia’s exports could drop to zero.

Originally, forecasts called for 81-85 million metric tons of wheat, rye, barley and other crops. Now the Russian Grain Union says 72-78 million. Skeptics abound on that number, which looks too optimistic. The head of Glencore, the giant grain-trading house, thinks the real number will be closer to 65 million tonnes....

[Demeter]

101. Russian drought could push up food prices

http://www.guardian.co.uk/business/2010/aug/09/russian-drought-wheat-prices

Russia is the world's second largest producer of barley after the EU and the cereal crop is used by many farmers as animal feed...

[Demeter]

93. From Marx to Goldman Sachs: The Fictions of Fictitious Capital By Michael Hudson

http://www.informationclearinghouse.info/article26131.htm

ANOTHER 'MUST READ' ARTICLE FROM A 'MUST READ' ECONOMIST.

In contrast to industrial capital (tangible means of production), bank loans, stocks and bonds are legal claims on wealth. These financial claims do not create the surplus directly, but are like sponges absorbing the income and property of debtors – and expropriate this property when debtors (including governments) cannot pay. “Usury centralises money wealth,” Marx elaborated. “It does not alter the mode of production, but attaches itself to it as a parasite and makes it miserable. It sucks its blood, kills its nerve, and compels reproduction to proceed under even more disheartening conditions. … usurer’s capital does not confront the laborer as industrial capital,” but “impoverishes this mode of production, paralyzes the productive forces instead of developing them.”

DAS CAPITAL, VOLUME 3 CITATIONS

A point arrives at which bankers and investors recognize that no society’s productive powers can long support the growth of interest-bearing debt at compound rates. Seeing that the pretense must end, they call in their loans and foreclose on the property of debtors, forcing the sale of property under crisis conditions as the financial system collapses in a convulsion of bankruptcy.

THIS IS A LONG ESSAY--I MAY BE FORCED TO READ ENGELS (SOB)

[Demeter]

97. Peter Schiff: "We're in the Early Stages of a Depression"

http://www.fool.com/investing/general/2010/08/09/peter-schiff-were-in-the-early-stages-of-a-depress.aspx


....Schiff stands alone again with a bleaker diagnosis for the economy: an inflationary depression.

In an interview, Schiff, president and chief global strategist of Euro Pacific Capital, a candidate for U.S. Senate in Connecticut, and author of the new book How an Economy Grows and Why It Crashes, said he thinks the government's policies -- massive fiscal stimulus and a zero interest-rate policy -- have put the U.S. on a track for a collision course.

As such, to protect one's wealth, Schiff recommends divesting U.S. assets and dollar-denominated debt in favor of emerging markets. He likes natural resources economies like Australia, Norway, and Canada....

[Zenlitened]

122. Robert Reich: "Forget a Double Dip. We’re Still in One Long Big Dipper."

"...Not since the government began to measure the ups and downs of the busines cycle has such a deep recession been followed by such anemic job growth. Jobs came back at a faster pace even in March 1933 after the economy started to “recover” from the depths of the Great Depression. Of course, that job growth didn’t last long. That recovery wasn’t really a recovery at all. The Great Depression continued. And that’s exactly my point. The Great Recession continues."

Link:
http://robertreich.org/post/953941192/forget-a-double-dip-were-still-in-one-long-big

[kickysnana]

106. Warpy appreciation post

Everyday as I read posts on DU, especially on the Economy I find that Warpy has already been there and written hard hitting, spot on commentary. It takes a lot of nerve and patience to go up against the rabid deniers in GD so my hat is off to you.

[Demeter]

108. HEAR, HEAR!

I second the notion!

[DemReadingDU]

112. I third it!

[Dr.Phool]

114. Fourthed!

[Demeter]

130. You Could Say She Operates at "Warp Speed"!

[jotsy]

110. I rec'd this thread

...last night!

[Demeter]

118. Australia fact of the day

http://www.marginalrevolution.com/marginalrevolution/2010/08/australia-fact-of-the-day.html

Which country's stock market has been the best performer in the world -- not just over the past year or decade, but over the last 110 years?

It's Australia, which stands above all others in its combination of higher returns and lower volatility...

[Zenlitened]

119. SOCIAL SECURITY

(Demeter, I hope I'm not overstepping by creating a new subsection -- Z. :hi: )

[Zenlitened]

120. Japan, Checking on Its Oldest, Finds Many Gone

Hmmm.... Combine a moribund economy, millions of people no longer "needed" to do what work there is, add in the vulnerability that often comes with age... and you get fraud, neglect and missing persons. Imagine that!

But, hey... at least the mythology has been held intact. Er, um, that is... up to now.

This story in today's New York Times caught my eye for a number of reasons. One of them being the current "debate" over Social Security here in the USA.

TOKYO — Japan has long boasted of having many of the world’s oldest people — testament, many here say, to a society with a superior diet and a commitment to its elderly that is unrivaled in the West.

That was before the police found the body of a man thought to be one of Japan’s oldest, at 111 years, mummified in his bed, dead for more than three decades. His daughter, now 81, hid his death to continue collecting his monthly pension payments, the police said.

Alarmed, local governments began sending teams to check on other elderly residents. What they found so far has been anything but encouraging.

...To date, the authorities have been unable to find more than 281 Japanese who had been listed in records as 100 years old or older.

Link:
http://www.nytimes.com/2010/08/15/world/asia/15japan.html?_r=1&hp

It's been my experience that most old folks (particularly the extremely old) don't want much. A comfortable chair with a decent view, a patch of ground to stroll around on and maybe tend a few plants. A few friends and loved ones to talk to.

Most don't want the obscenely intrusive, expensive and ultimately pointless end-of-life medical "care" that we somehow consider normal in the U.S. today.

A good life... some peace, quiet and simple enjoyments toward the end... and a dignified exit. That's all most people want.

But the Billionaire Boys, with their seething hatred off all things FDR, can't abide the thought of them having even that. Why? Because the Billionaire Boys are just evil little shits, who take take take and consider people, even whole communities, as merely something for them to exploit, use up and discard.

We've got to remember: Virtually everything the Billionaire Boys are screeching about Social Security is a LIE. Not a difference of opinion or perspective. They're telling flat-out lies.

And they've got to be stopped.

[Demeter]

124. Amazing report from Japan

Woodathunkit?

[Zenlitened]

121. In Address, Obama Defends Social Security

Yes, I'm in the deeds-not-words camp. And I believe it was just flat-out DUMB (even as a "chess move") to include sworn foes of Social Security in his deficit commission.

But it's encouraging to see that Pres. Obama recognizes that DC pols are playing with dynamite when they talk of tearing down Social Security.

From the New York Times:

WASHINGTON — President Obama has taken the lead in a Democratic offensive on Social Security, warning that Republicans will revive efforts to privatize what is perhaps the government’s most popular program if they seize control of Congress in the November elections.

“I’ll fight with everything I’ve got to stop those who would gamble your Social Security on Wall Street,” Mr. Obama said on Saturday in his weekly national address. “Because you shouldn’t be worried that a sudden downturn in the stock market will put all you’ve worked so hard for — all you’ve earned — at risk.”

Link:
http://www.nytimes.com/2010/08/15/us/politics/15address.html?scp=2&sq=social%20security&st=cse

[Demeter]

125. I Think It's Far More Sinister

I think the O man speaks with forked tongue.

[Dr.Phool]

128. He's in campaign mode again.

Please disregard after the election, and the Cat Food Report comes out.

[Demeter]

123. Not at all!

Creativity is much to be encouraged and admired! This is OUR thread--DU notwithstanding.

[Demeter]

129. Geithner and Bernanke's Possibly Criminal Roles Lehman Brothers Scandal Rocks the Fed Mike Whitney

http://www.informationclearinghouse.info/article24984.htm

March 15, 2010 "Information Clearing House" -- After a year-long investigation, court-appointed bank examiner Anton Valukas has produced a deadly 2,200 page report which details the activities that led to the Lehman Brothers bankruptcy. The report is a keg of dynamite. The question now is whether anyone in government has the nerve to light the fuse. Valukas provides powerful evidence that Lehman executives were involved in “balance sheet manipulation” by implementing an arcane accounting procedure called “Repo 105” which masked the bank's true financial condition from investors and regulators.

According to Valukas, Lehman was “Unable to find a United States law firm that would provide it with an opinion letter permitting the true sale accounting treatment" using Repo 105. So, Lehman executives went outside of the country in an effort to enlist the support of a London law firm that would approve the procedure.

It is impossible to overstate the significance of Valugas's findings. The report exposes the opaque but central role of the repo market which provides essential short-term loans for financial institutions. (Lehman used repos to conceal the full extent of its collapse, by dint of the amount of leverage it was using, meaning the pitiful asset anchor tethered to a vast zeppelin of debt) More importantly, it shows the cozy and, very probably criminal relationship between the country's main regulatory bodies and the Wall Street behemoths. The activities of the New York Fed (NYFRB), which at the time was headed by Timothy Geithner, is particularly suspect in this regard. The report should trigger an immediate Congressional investigation, probing the whole affair and most importantly the role of the Fed.

Naked Capitalism's Yves Smith, who has apparently sifted through all 2,200 pages of the report, has done some first-rate analysis of the details. Here's an excerpt from her Friday posting:

"Quite a few observers... have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. ....The unraveling isn’t merely implicating Fuld (Lehman’s CEO) and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abettingLehman in accounting fraud and Sarbox violations....

“We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down .....

“…at a minimum, the NY Fed helped perpetuate a fraud on investors and counterparties. This pattern further suggests the Fed, which by its charter is tasked to promote the safety and soundness of the banking system, instead, via its collusion with Lehman management, operated to protect particular actors to the detriment of the public at large.

“And most important, it says that the NY Fed, and likely Geithner himself, undermined, perhaps even violated, laws designed to protect investors and markets. If so, he is not fit to be Treasury secretary or hold any office related to financial supervision and should resign immediately." (Naked Capitalism)

Repeat: "Accounting fraud", "collusion", "aiding and abetting." This is strong language from a woman who spent than 25 years in the financial services industry, alternately working at Goldman Sachs, McKinsey & Co., and Sumitomo Bank. Smith typically chooses her words carefully and is not easily given to hyperbole. Yves Smith again: "Here is the part of the report that discussed how the Fed aided and abetted Lehman misconduct:

“The Examiner questioned Lehman executives and other witnesses about Lehman’s financial health and reporting, a recurrent theme in their responses was that Lehman gave full and complete financial information to Government agencies, and that the Government never raised significant objections or directed that Lehman take any corrective action.

“So get this: even though Lehman dressed up its accounts for the great unwashed public, it did not try to fool the authorities. Its games playing was in full view to those charted with protecting investors and the financial system.

"So what transpired? The SEC (which has never had much expertise in credit markets -- a major regulatory problem) handed assessing Lehman over to the Fed, which bent over backwards to give it a clean bill of health." (Naked Capitalism)

What did Geithner and Bernanke know, and when did they know it. It appears that they either knew what was going on at Lehman and looked the other way or acted as the "chief enablers" of accounting fraud. (ie--The Repo 105-charade) Here's an excerpt from the New York Times which clarifies the point:

"Newly released report on the collapse of Lehman Brothers ... sheds surprising new light on Lehman’s dealings with the New York Fed. Lehman engaged in a series of transactions with the New York Fed that were similar to the ones that drew criticism from the bankruptcy court examiner who investigated its collapse. The examiner, Anton R. Valukas, drew no conclusions about the transactions with the Fed, and focused instead on deals that were known inside Lehman as “Repo 105.”

But the report by Mr. Valukas nonetheless raises fresh questions about the role of the New York Fed in supporting Lehman during the frantic months leading up to its collapse. It suggests that Lehman executives believed the Fed would be able to help the bank avert disaster and provide it with a business opportunity.

“Bernanke and Co. may have ‘saved the day’ ” a Lehman executive, Geoffrey Feldkamp, wrote in an e-mail message to a colleague in March 2008, according to the report. Neither Ben Bernanke, the chairman of the Federal Reserve, nor Treasury officials saved Lehman, of course. But it was that month that the Fed started a special lending program open to Wall Street banks like Lehman that could not borrow directly from it. The Fed also lowered its standards for the kinds of collateral that it would accept against such short-term loans.

“Lehman, desperate for financing, seized its chance. It packaged billions of dollars of troubled corporate loans into an investment called Freedom CLO. Then, in a series of transactions, it shifted Freedom back and forth to the New York Fed, in exchange for cash. Those moves helped make Lehman look healthier.

“Essentially, Lehman was able to temporarily warehouse illiquid investments that were worrying its investors at the New York Fed in return for cash. The Fed created this facility immediately after the near collapse of Bear Stearns. Some suspect that other banks engaged in similar maneuvers.

A spokesman for the New York Fed said the loan facility was created to help the entire financial system and prevent the problems at one bank from cascading. The collateral accepted from Lehman met the Fed’s standards, he added. A third party valued it, the Fed accepted it and then reduced prices to limit the risk." ("Fed Helped Bank Raise Cash Quickly", Eric Dash, New York Times)

The excerpt from the NY Times deserves a second reading. The so-called lending facility that the Fed set up was called the Primary Dealer Credit Facility or PDCF. It was established to provide short-term lending for financial institutions after the secondary market froze and banks became reluctant to lend to each other. The Fed arbitrarily (and, perhaps, illegally) expanded the rules for "only" accepting the highest rated bonds and securities as collateral, and became (what zero hedge calls) "the enabler of last resort". The Fed's willingness to take any manner of mortgage-backed sludge in exchange for US Treasuries turned out to be the lifeline for underwater banks whose vaults were loaded with the worthless paper. This is why Fed keeps resisting demands for an independent audit, because it would prove that Bernanke "knowingly" paid huge sums of money for dodgy assets.

When the PDCF first opened for business, the Wall Street tycoons could see that their friend at the Fed was riding to the rescue. Lehman boss Dick Fuld, who could not conceal his delight, crowed, “The Federal Reserve’s decision to create a lending facility for primary dealers and permit a broad range of investment-grade securities to serve as collateral improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table.”

Indeed. Economist and author Michael Hudson summed it up like this for CounterPunch:

"Today, there’s only one market for junk: the Federal Reserve, which has lent $1.3 trillion in cash for trash, no questions asked. This amount exceeds the forecast Obama medical care plan for the next decade. No money for health insurance, but all for the junk-mortgage lenders."

Is there really any doubt that Tim Geithner at the New York Fed, or Bernanke knew that Lehman was trading its junk assets to finance its ongoing operations? Doesn't that in-itself constitute a cover up or "intentionally" misleading investors? And, if Lehman was exchanging garbage to feign solvency, then it seems likely that the other investment giants were engaged in the same type of charade. (Which implies that the ratings agencies were culpable, as well)

Here again is the crucial excerpt from the Valukas report which suggests that--at the very least--the NY Fed (Geithner) was involved in a vast cover-up which eventually ended in the nation's largest bankruptcy followed by a global market crash.

"The Examiner questioned Lehman executives and other witnesses about Lehman’s financial health and reporting, a recurrent theme in their responses was that Lehman gave full and complete financial information to Government agencies, and that the Government never raised significant objections or directed that Lehman take any corrective action.......Although various Government agencies had information that raised serious questions about Lehman’s reported liquidity and about the sufficiency of its capital and liquidity to withstand stress scenarios, the agencies generally limited their activities to collecting data and monitoring.

“After March 2008 when the SEC and FRBNY BEGAN ONSITE DAILY MONITORING of Lehman, the SEC deferred to the FRBNY to devise more rigorous stress-testing scenarios to test Lehman’s ability to withstand a run or potential run on the bank.5753 The FRBNY developed two new stress scenarios: ‘Bear Stearns’ and ‘Bear Stearns Light.’ 5754 Lehman failed both tests.5755 The FRBNY then developed a new set of assumptions for an additional round of stress tests, which Lehman also failed.5756 However, Lehman ran stress tests of its own, modeled on similar assumptions, and passed.5757 It does not appear that any agency required any action of Lehman in response to the results of the stress testing." (My emphasis.)

This is the huge scandal: collusive government officials who operate as de facto agents for an industry saturated with corruption and conflicts of interest. Connived at the coverup of Lehman’s true position because he doesn't work for the 10 million people who are now standing in unemployment lines, or the 35 million people who are now on food stamps, or the 6 million people who have lost their homes to foreclosure, or the hundreds of millions of people who have seen the home equity evaporate, their retirement funds plunge and their hopes for the future dashed so that a handful of insatiable landsharks could fatten their bank accounts in the Cayman Islands.

Michael Hudson, the ex-Wall Street economist and author of Super Imperialism: The Economic Strategy of the American Empire put the Lehman case into perspective with observations he made to me via e mail on Sunday. I think it summarizes the big picture admirably:

“When predators have exhausted the economy, they turn on each other. The result is financial cannibalism. After all, who else is it possible to get money from in today's negative equity environment?

“If the media are missing anything, it’s that the game is over. The financial institutions are taking their money and running. They know it's over. And the only source of cashing out is the US Treasury and Fed.

“My solution:There is an easy place to start, that can take only a few weeks. That is to look at the Fed's $1.3 trillion in cash-for-trash swaps. If these prove to be junk mortgages for which the Fed has given good US Treasury bonds, at the proverbial taxpayer expense, then the Fed and Treasury administrators should have criminal charges brought against them, the accounting firms of the companies pledging these junk mortgages and other financial junk should be closed down and RICO charges brought, and the banks themselves should be wiped out. I have urged the appropriate Washington oversight committee to open an investigation along these lines."

Well said, Dr Hudson! If investigators can prove that the Fed exchanged US treasuries for MBS securities and other toxic assets that they knew were worth less than the amount they provided via short-term loans,(repos) then it is reasonable to assume that the Bernanke's quantitative easing (QE) program operated under the same guidelines. That means, that the $1.25 trillion QE program--which was supposed to extend credit to consumers and businesses--was actually a scam designed to transfer a gigantic load of capital to the very people who gamed the system and precipitated the biggest financial meltdown since the Great Depression. Without question, that misallocation of capital has deepened the recession and sent unemployment skyrocketing. We need to get to the bottom of this.

YES, WE DO. WHAT HAS HAPPENED SINCE MARCH? NOTHING!

[Demeter]

131. And That''s a Wrap, Folks

I hope that it was enlightening, if not heart-lifting. And I hope that the heat wave breaks for us all--before there's blood in the streets!