Weekend Economists Skool Daze, May 27-30, 2011

[Demeter]

Where does the time go? Not only do we see May slipping away, and Summer (anywhere but here) cooking along with the Memorial Day barbecues across this great nation, but schools are wrapping it up for the summer.

"School days, school days
Dear old golden rule days
Readin' and 'ritin' and 'rithmetic
Taught to the tune of the hickory stick
You were my queen in calico
I was your bashful barefoot beau
And you wrote on my slate
"I love you, so"
When we were a couple of kids...MORE AT LINK WITH MUSIC

Music by Gus Edwards; Lyrics by Will D. Cobb, 1907

http://kids.niehs.nih.gov/lyrics/schooldays.htm

NOW, that was a time of innocence...well, we have all been cured of that, well down into the primary grades.

We are in a time of revolution. The very concept of public education, the cornerstone of our new nation, implemented by our Founding Fathers of the Enlightenment, is under attack by so-called Americans, so-called business/Capitalists, who think that by destroying this first rung on the upward mobility ladder, they will always be on top and no whippersnapper with taxpayer-funded learning will ever challenge their dominance.

It's back to the Middle Ages, without any of the resources that existed then, nor any of the advances that exist now. It's not just "No soup for you!"...these are the real Nazis. If you aren't among their self-selected group, you are cattle, no, less than dirt.

If I were a betting girl, I'd bet those Nazis are gonna get more than a whupping. Just like their 20th century forebears.

As for me, in my next incarnation, I'm aiming for this school:



I think I've got the "witch" part down pretty good!

[Demeter]

1. TONIGHT'S FORECAST: NO BANKS TO CLOSE

After all, it IS a national holiday weekend....

[burf]

16. It appears the FDIC waited

until you retired for the evening to shutdown a bank today.

On Friday, May 27, 2011, First Heritage Bank, Snohomish, WA was closed by the Washington Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

Source: FDIC.gov

Clever devils they are, unfortunately not clever enough to put some of the crooks in jail where they belong.

[Demeter]

18. OOPS! I HOPE THEY GOT OVERTIME THEN.

First Heritage Bank, Snohomish, Washington, was closed today by the Washington State Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Columbia State Bank, Tacoma, Washington, to assume all of the deposits of First Heritage Bank.

Due to the Memorial Day holiday, the five branches of First Heritage Bank will reopen on Tuesday as branches of Columbia State Bank...As of March 31, 2011, First Heritage Bank had approximately $173.5 million in total assets and $163.3 million in total deposits. Columbia State Bank will pay the FDIC a premium of 0.75 percent to assume all of the deposits of First Heritage Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.

The FDIC and Columbia State Bank entered into a loss-share transaction on $142.2 million of First Heritage Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $34.9 million. Compared to other alternatives, Columbia State Bank's acquisition was the least costly resolution for the FDIC's DIF. First Heritage Bank is the 44th FDIC-insured institution to fail in the nation this year, and the second in Washington STATE.

[Demeter]

2. Year Four of the Silent Depression

http://dissentmagazine.org/online.php?id=492

...They’ve saved the financial system. (BIG WHOOP) Nonetheless, the Western industrial world is crumbling...I call our situation a silent depression, analogous to the silent depression of 1974–84, which French economists called la crise. During la crise, there was massive deindustrialization in the heavy industries that had formed the postwar mode of production, and satiation where there had been rapid growth in the consumer durables that were its mode of consumption. La crise became normal, a second stage of postwar capitalism. New leading industries developed—information technology, speculative finance—and with them a new mode of consumption based on debt and income inequality. That stage of capitalism worked for a while, then turned desperate after 2000. High technology became less revolutionary, and high finance lurched from bubble to bubble; the rich couldn’t eat up all that the economy could produce. That stage came to an end in 2007–8.

Like its predecessor, the current silent depression means that not enough jobs are created to provide full employment. Since over two-thirds of workers in OECD countries are employed in the service sector (a figure even higher in countries like the United States and France), that’s where jobs have been destroyed. That sector isn’t going to pull us back to full employment. Most of the new jobs created in it and other sectors are part-time and precarious. To get us out of this mess and into a new stage of capitalist accumulation, new modes of production and consumption must be constructed out of new and recycled materials.

...That is why the economic and social project of the French Socialist Party (PS) for the 2012 elections is so interesting. It’s premise is that the economy needs to be straightened out, and it proposes a new model for development—a model that aims for growth, innovation, and durability. This isn’t the kind of growth the United States underwent in the last stage of capitalism: starter mansions and SUVs, fueled by consumer debt. It’s not growth driven by massive increases in consumption, directly or indirectly, like what France tried from 1974 to 1976, after which the need to protect its currency forced leaders to be “fiscally responsible.” Even in those years, government deficits played a supporting rather than lead role in public discourse. Now the PS doesn’t oppose the center-right’s targets for deficit reduction. But it maintains that deficits are inevitable and must support modest growth, which is needed to cut into mass unemployment. They propose to raise potential growth of GDP from 1.5 percent to 2.5 percent a year—modest and balanced growth, not growth on steroids.

The hallmark of the PS’s project is investment, directed into the sectors that can lead to an ecologically sustainable future, like energy. France is already (though belatedly) investing somewhat in generating electricity from wind and from solar panels. The French are also looking to second-generation biofuels (not ethanol). These industries were keys to the 2007 national conference in France on sustainable development, partly implemented and opposed by most of the corporate sector and the EU. The big catch, of course, is nuclear energy. France is a world leader in nuclear energy construction, which generates most of its electricity, but the PS’s potential allies among the Greens are either cool to or virulently against nuclear energy. So the program straddles the issue; you can’t get out of the already-built plants but shouldn’t build more, and in addition to finding new sources of energy you have to conserve it (which will require investment, too)...

[Demeter]

3. Libya sovereign fund suffers big losses

Libya lost billions of dollars on sophisticated financial products sold to Muammer Gaddafi’s sovereign wealth fund by some of the world’s leading financial institutions, according to a confidential Libyan government document.

Read more >>
http://link.ft.com/r/OZMCDD/0GH8LM/CWSVD/728EK6/RNS1HR/PJ/t?a1=2011&a2=5&a3=25


OKAY----

THIS PUTS A WHOLE NEW PERSPECTIVE ON THE LIBYAN ADVENTURE.....

IS OBAMA UNDER ORDERS TO MAKE GADDAFI GO AWAY, TO COVER UP THE THREAT GADDAFI REPRESENTS TO THE BANKSTERS?

[westerebus]

6. Slush fund imbalance?

The grease that makes the politics go round and round must come from some where.

Not that French or American banks would know anything about money laundering. Just saying.

[Demeter]

9. More Detail:

Banks and hedge funds led by France’s Société Générale are named in about $5bn (£3bn) of deals involving the oil-rich nation, some of which had resulted in heavy losses by the middle of last year. One of the most striking losses, outlined in an internal report for the Libyan Investment Authority, was a 98.5 per cent fall in the value of the sovereign wealth fund’s $1.2bn equity and currency derivatives portfolio.

The disclosures – in a document obtained by the campaign group Global Witness – raise more questions about the west’s enthusiastic engagement with Libya, in spite of the Gaddafi regime’s reputation for brutality and corruption...

The report for managers of Libya’s sovereign wealth fund, dated June 30 last year, said its bank and hedge fund investment products had fallen in value from about $5bn to roughly $3.5bn, out of the body’s total assets of $53.3bn...Three deals set up by SocGen had plunged from an initial value of $1.8bn to $1.05bn, the report said, with a $1bn Europe-focused product losing 43 per cent of its value in the preceding three months alone. Investments in products bearing the names of JPMorgan, Credit Suisse and BNP Paribas also showed significant falls in market value. Structured products are typically derivatives-based transactions tailoring investments to a client’s specific demands. SocGen said it could not comment on individual customers and deals, adding that it dealt with many sovereign funds and complied with all applicable rules and regulations...


Many Libyan government bodies, including the LIA, are in turmoil because of the civil war. Officials are mostly reluctant to talk publicly...Many of the LIA’s assets are frozen under the international sanctions against the regime. The US and Britain have frozen more than $55bn, out of total Libyan foreign assets estimated at $150bn. The LIA is also a shareholder in Pearson, owner of the Financial Times. The LIA management report also reveals that the authority had significant interests in some of London and New York’s most prominent hedge funds. The LIA invested $300m with Och-Ziff, the New York-listed hedge fund manager. Och-Ziff declined to comment.

[Demeter]

10. AND: UK and France to deploy 16 gunships for Libya

France and Britain are putting 16 helicopters on standby to launch attacks on Muammer Gaddafi’s regime in Libya amid claims in the west that his grip on power is weakening

Read more >>
http://link.ft.com/r/6NPSBB/JIDRAB/OFBYP/QFECBC/C5AQQQ/50/t?a1=2011&a2=5&a3=27

THIS IS A DIRTY LITTLE WAR! I AM BEGINNING TO THINK THAT IT'S ALL BLACKMAIL ON GADDAFI'S PART, RETRIBUTION ON FRANCE AND UK AND US PART FOR, WITH THE ADDED BONUS OF REPLACING A DEFECTING PUPPET.

[Demeter]

11. Internet chiefs unite against regulation

Zuckerberg and Schmidt combine to resist proposed new rules to ‘civilise’ the internet, championed by G8 host French president Nicolas Sarkozy

Read more >>
http://link.ft.com/r/6NPSBB/JIDRAB/OFBYP/QFECBC/RNSGG1/50/t?a1=2011&a2=5&a3=27


THE MORE I KNOW ABOUT SARKOZY, THE LESS I LIKE HIM....

[Demeter]

14. US Planned Libyan Regime Change 10 Years Ago

U.S. General Wesley Clark (Ret.), explains that the Bush Administration planned to take out 7 countries in 5 years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, Iran. VIDEO AT LINK

http://www.informationclearinghouse.info/article28199.htm

[Demeter]

17. Rebels rob Libyan bank

http://seattletimes.nwsource.com/html/nationworld/2015138899_libya25.html



"Let me put this way: We robbed our own bank," said Ali Tarhouni, the U.S.-educated finance minister for the rebels, who ordered the March heist. Tarhouni, 60, who until earlier this year was a low-key economics lecturer at the University of Washington in Seattle, said the bank heist serves as an illustration of the rebels' ingenuity, wherewithal and organizational skills. It's proof, he said, that they are ready to run the nation.

I THINK MY IRONY METER JUST BROKE, YET AGAIN. READY TO PLAY WITH THE BIG BOYS, ARE THEY? GOLDMAN, GEITHNER, BERNANKE AND ALL THE BANKSTERS?--DEMETER

By drilling a hole in the wall and hiring a locksmith to play with the combination, rebel leaders turned the Gadhafi government's own money into the lifeblood of their uprising...When Tarhouni saw the cash, he said his first thought was, "I am in trouble. That's not enough to run an economy in a war."
The money — more than $500 million in two safes — stayed in the bank, in a new rebel account, said Ahmed el-Sharif, a former consultant to the Central Bank of Libya, whom the rebels briefly appointed as the bank's governor in April. Efforts to supplement those funds with oil revenues have so far been unsuccessful. Tarhouni is hunting for the really big sums, as much as $165 billion, he estimates, that Gadhafi and his government placed in banks, investment firms, hedge funds and other institutions across the globe... Now they are asking foreign governments — including the United States — to use seized Libyan assets to fund a rebellion that in three months has evolved from political protest into a protracted military showdown...On Tuesday, the United States emphasized its support for the rebels by asking them to open an office in Washington, a gesture just short of formal recognition... But as the rebels struggle to fund their fight, the United States and other Western powers have done little to help them financially.

The White House has asked the Senate Foreign Relations Committee to draft a bill to take a portion of the frozen assets — between $150 million and $180 million — and put it to use in Libya as humanitarian aid. But the legislation faces stiff opposition from Sen. Richard Lugar, R-Ind., who has serious concerns about the "ramifications of taking the funds of what is still another sovereign nation," said spokesman Mark Helmke.

Lugar and other members of Congress are concerned about U.S. involvement in a Libyan civil war and the administration's lack of consultation with Congress. The rebels have asked for pledges of up to $3 billion in loans and aid, and have received substantial promises from Kuwait, Qatar and others. Officials in the United States and other countries have sidestepped questions about the legality of the rebels' decision to help themselves to state funds.

[Demeter]

4. NY Fed probes Goldman unit

The New York Federal Reserve is investigating allegations that the mortgage servicing arm of Goldman Sachs failed to conduct appropriate reviews before denying borrowers a chance to lower their payments through a government loan modification programme.

A person familiar with the Goldman unit concerned, Litton Loan of Houston, Texas, said loans were denied without the proper review under a “denial sweep” strategy devised to clear a backlog of applications.

Read more >>
http://link.ft.com/r/9ULF66/OJ9RO2/YGZ3O/XTN77V/KEKJJD/1G/t?a1=2011&a2=5&a3=25

[burf]

5. First rec!!!!!!!

Good evening Demeter!

[Demeter]

7. Good Evening, Burf!

If you like, you may claim the honor of selecting next weekend's topic/theme/ whatever....

My computer is giving me fits. I think i wants the weekend off.

[Demeter]

8. Ain't it the Truth!

Of course, it helps if you think independently, too!

[Demeter]

12. Obama calls for joint effort on freedom

Barack Obama insisted that US and UK had a special responsibility to spread their shared values in the world

Read more >>
http://link.ft.com/r/UXDMSS/72CZZY/204L2/V1RA74/3OB2EK/HK/t?a1=2011&a2=5&a3=26

CHECK, PLEASE!

[Demeter]

13. Former President Clinton Retracts Default Comments

http://online.wsj.com/article/SB10001424052702304520804576347404145929250.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsFifth



...Speaking at the Washington conference, sponsored by the Peter G. Peterson Foundation, Mr. Clinton said, "If we defaulted on the debt once for a few days, it might not be calamitous. But if people thought we were literally not going to pay our bills anymore, then they would stop buying our debt."

That echoed GOP arguments that lawmakers can negotiate over an increase in the government's borrowing limit until the last possible minute—and even risk a default—without major consequences. Mr. Clinton's remarks strayed not only from the Obama White House position, but also from his own administration's view during a similar battle in the 1990s....

After hearing Mr. Clinton's comments on Wednesday, White House Chief of Staff Bill Daley and Gene Sperling, director of the National Economic Council, spoke with aides to Mr. Clinton and advised that he clarify his thinking, two people said. The former president did so that afternoon....

In the statement, Mr. Clinton's spokesman, Matt McKenna, said the former president "inadvertently misspoke" and "did not in any way mean to suggest that a default would not be highly damaging for the economy even for a very short period of time...What he meant to say was that if a vote to extend the debt limit failed in advance of a default, that might not be harmful for a couple of days, but that if people thought that we might actually default, that in his words 'we were literally not going to pay our bills anymore,' then they would stop buying our debt."

OBAMA LEAVES THE COUNTRY, AND THE BIG DOG TRACKS MUD INTO THE HOUSE...

[Demeter]

25. Investors protect against US default

http://www.ft.com/intl/cms/s/0/7f4afae4-87c9-11e0-a6de-00144feabdc0.html#axzz1NUOeUacw


Traders and investors have stepped up purchases of insurance against a US sovereign debt default, amid heated political wrangling over raising the US debt ceiling.

The gross value of derivatives contracts that pay out in the event of a US default has doubled from year ago levels, according to the Depository Trust and Clearing Corporation, which collects data on global trading of credit default swaps (CDS).

It reached $24bn at the end of last week, up from $22.7bn a week earlier and much higher then the year ago level of slightly less than $12bn.

Traders would be on the hook for a maximum payout of $4bn in a default, once contracts are netted against each other, according to the DTCC....


I WONDER HOW THAT WORKS. DO THEY GET PAID OFF IN DOLLARS? IF SO, IS THERE ANY POINT TO THAT?

[Demeter]

15. to sleep, perchance to dream

see y'all in the morning...

[Demeter]

19. Replacing Strauss-Kahn; "Pro-bank bailout" Lagarde is a shoo in By Mike Whitney

http://www.informationclearinghouse.info/article28188.htm

French Finance Minster Christine Lagarde has emerged as the front-runner in the race to replace ex-IMF chief Dominique Strauss-Kahn. She is a champion swimmer, an accomplished attorney, and a competent bureaucrat. She's also a friend of Wall Street who will ferociously defend the interests of big capital. Research assistant for the far-right American Enterprise Institute Jurgen Reinhoudt notes that under "France's free-market oriented economics minister"..."the top income tax rate was cut and, in a frontal assault on the 35-hour workweek, overtime work for hourly workers was made tax-free." (Don't Give Up on Sarkozy Just Yet, AEI)...But Lagarde has not moved to the head of the pack due to her anti-worker bias alone, but because she's a trusted insider who will implement the IMF's privatization and structural adjustment programs without challenging their merit. Strauss-Kahn's promises of "reform" at the fund were a constant source of anxiety for big finance. Lagarde won't make that same mistake. She won't go off the reservation, consort with progressives like Joseph Stiglitz, or veer from her script. Here's how The Guardian summed up Lagarde's impressive resume:

"Christine Lagarde stands for protecting big banks.....she's the most pro-bank bailout of the lot.

"The Americans are going to try and put in White House adviser David Lipton as number two. Lipton is Mr Bank Bailout. He worked for Citigroup. If they put in Lagarde and Lipton, what does that say? We are going with the total bank protection plan. That would be a disaster." ("IMF under growing pressure to appoint non-European head", The Guardian) http://www.guardian.co.uk/business/2011/may/19/imf-pressure-appoint-non-european-head

According to the New York Times Lagarde is not only a snappy dresser, but has plenty of friends in Washington and Wall Street. Here's an excerpt from the NYT:

"Ms. Lagarde, the former head of the Chicago-based law firm Baker & McKenzie, lived in the United States for 25 years. Tall and stylish, with a shock of silver hair and a penchant for Chanel jackets, she is as connected and as respected in Washington and on Wall Street as in Europe." (A Favorite Emerges for Helm of I.M.F., New York Times)

Not surprisingly, Lagarde supports weaker regulations so that banks and other financial institutions can continue to rake in windfall profits while increasing the risks to the broader economy...Lagarde has also taken a hardline approach to problems in Greece and rejects the idea of debt forgiveness or restructuring. She believes that bondholders and bankers must be repaid regardless of the costs to Greek workers who have suffered through 3 years of Depression, 18% unemployment, savage cutbacks in social services, massive privatization of public assets, and a debt-to-GDP ratio that gets worse every year the belt-tightening continues. Lagarde appears to believe that the people who blew up the financial system should be rewarded for their efforts...So the belt-tightening will intensify under Lagarde, which is a signal to bankers that she can be trusted to protect their interests, and all the talk about "soft restructuring" or reforms a la Strauss-Kahn will end...There will be no more talk about replacing the dollar with SDRs (Special Drawing Rights) either. Lagarde is not going to rock the boat. The only reforms she'll be working on are "labor reforms", a familiar buzzword among the financial elite for union busting...

[Demeter]

33. G-8 to meet with Egypt and Tunisia leaders

Leaders of the world's eight biggest industrial democracies will meet Friday with heads of two of the newest and most fragile ones, as the old world order looks for ways to help democracy take hold in Egypt and Tunisia, and perhaps beyond, across the Middle East and North Africa.

The leaders of the Group of Eight — Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States — will meet with the new prime ministers of the first countries of the Arab Spring to overthrow their authoritarian governments: Essam Sharaf of Egypt and Beji Caid Essebsi of Tunisia.

In this seaside resort built for the rich and famous, the established leaders will weigh how they can steer desperately needed aid to countries where poverty exacerbated by revolution could threaten new upheaval, while also prodding the fledgling democracies to adopt proven models of open government and free markets...The most pressing need is financial aid; the two already weak economies have been hit by a drop in tourism amid the region-wide turmoil. Egypt's new government, for example, says it needs $12 billion.

President Barack Obama, who has proposed $2 billion in U.S. aid, hopes other countries and international organizations will follow suit. The European Commission has said it will add $1.75 billion to a fund that helps countries in its "neighborhood," presumably aimed at North Africa. The G-8 summit also could request the International Monetary Fund to chip in.

Read more: http://www.mcclatchydc.com/2011/05/26/114839/g-8-leaders-to-meet-with-egypt.html#ixzz1Nh1TG8ve

[Demeter]

34. DOMINIQUE - song econoparody from versusplus.com on DOMINIQUE STRAUSS-KAHN

http://www.youtube.com/watch?feature=player_embedded&v=24a-Qb327ok#at=11

[Demeter]

35. More Versus Plus

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

http://www.youtube.com/watch?v=42sTeuIEaak&feature=related

http://www.youtube.com/watch?v=s9ZlxsEioUA&feature=related

[Demeter]

20. FINAL POST: The People vs. Goldman Sachs Matt Taibbi PART 6

http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511?page=6

...(SENATOR) Levin couldn't believe what he was hearing. "Heck, yes, I was offended," he says. "Goldman's CEO claimed the firm 'didn't have a massive short,' when the opposite was true." First of all, in Goldman's own internal memoranda, the bank calls its giant, $13 billion bet against mortgages "the big short." Second, by the time Sparks and Co. were unloading the Timberwolves of the world on their "unicorns" and "flying pigs" in the summer of 2007, Goldman's mortgage department accounted for 54 percent of the bank's risk. That means more than half of all the bank's risk was wrapped up in its bet against the mortgage market — a "massive short" by any definition. Indeed, the bank was betting so much money on mortgages that its executives had become comically blasé about giant swings on a daily basis. When Goldman lost more than $100 million on August 8th, 2007, Montag circulated this e-mail: "So who lost the hundy?"...This month, after releasing his report, Levin sent all of this material to the Justice Department. His conclusion was simple. "In my judgment," he declared, "Goldman clearly misled their clients, and they misled the Congress." Goldman, unsurprisingly, disagreed: "Our testimony was truthful and accurate, and that applies to all of our testimony," said spokesman Michael DuVally. In a statement to Rolling Stone, Goldman insists that its behavior throughout the period covered in the Levin report was consistent with responsible business practice, and that its machinations in the mortgage market were simply an attempt to manage risk.

It wouldn't be hard for federal or state prosecutors to use the Levin report to make a criminal case against Goldman. I ask Eliot Spitzer what he would do if he were still attorney general and he saw the Levin report. "Once the steam stopped coming out of my ears, I'd be dropping so many subpoenas," he says. "And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them."...I ask what inconsistencies jump out at him. "They keep claiming they were only marginally short, that it was more just servicing their clients," he says. "But it sure doesn't look like that." He pauses. "They were $13 billion short. That's big — 50 percent of their risk. It was so completely disproportionate."..Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn't make a massive short bet and didn't bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a "big short" and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?...This issue is bigger than what Goldman executives did or did not say under oath. The Levin report catalogs dozens of instances of business practices that are objectively shocking, no matter how any high-priced lawyer chooses to interpret them: gambling billions on the misfortune of your own clients, gouging customers on prices millions of dollars at a time, keeping customers trapped in bad investments even as they begged the bank to sell, plus myriad deceptions of the "failure to disclose" variety, in which customers were pitched investment deals without ever being told they were designed to help Goldman "clean" its bad inventory. For years, the soundness of America's financial system has been based on the proposition that it's a crime to lie in a prospectus or a sales brochure. But the Levin report reveals a bank gone way beyond such pathetic little boundaries; the collective picture resembles a financial version of The Jungle, a portrait of corporate sociopathy that makes you never want to go near a sausage again.

Upton Sinclair's narrative shocked the nation into a painful realization about the pervasive filth and corruption behind America's veneer of smart, robust efficiency. But Carl Levin's very similar tale probably will not. The fact that this evidence comes from a U.S. senator's office, and not the FBI or the SEC, is itself an element in the worsening tale of lawlessness and despotism that sparked a global economic meltdown. "Why should Carl Levin be the one who needs to do this?" asks Spitzer. "Where's the SEC? Where are any of the regulatory bodies?"

This isn't just a matter of a few seedy guys stealing a few bucks. This is America: Corporate stealing is practically the national pastime, and Goldman Sachs is far from the only company to get away with doing it. But the prominence of this bank and the high-profile nature of its confrontation with a powerful Senate committee makes this a political story as well. If the Justice Department fails to give the American people a chance to judge this case — if Goldman skates without so much as a trial — it will confirm once and for all the embarrassing truth: that the law in America is subjective, and crime is defined not by what you did, but by who you are.

[xchrom]

21. brilliant! nt

[Demeter]

22. WikiLeaks: Saudis often warned U.S. about oil speculators

http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html

When oil prices hit a record $147 a barrel in July 2008, the Bush administration leaned on Saudi Arabia to pump more crude in hopes that a flood of new crude would drive the price down. The Saudis complied, but not before warning that oil already was plentiful and that Wall Street speculation, not a shortage of oil, was driving up prices...The Saudis... have struck a steady theme for years that something should be done to curb the influence of banks and hedge funds that are speculating on the price of oil, according to diplomatic cables made available to McClatchy by the WikiLeaks website....A McClatchy investigation earlier this month showed the extent to which financial institutions now influence the price of oil. Until recently, end users of oil — such as airlines, refineries and other consumer of fuel — accounted for about 70 percent of oil trading as they tried to hedge against price fluctuations. Today, however, speculators who'll never take possession of a barrel of oil account for that 70 percent of oil futures trading, and the volume of speculative trading has grown fivefold.


The WikiLeaks documents also shed light on other aspects of Saudi Arabia's oil industry...One document said that Saudi Arabia has boosted its excess capacity — the difference between the amount of oil it could produce and the amount it pumps for its clients — from 2 million barrels per day to 4 million, a margin that offers assurance that there'll be little disruption to oil supplies from political unrest in places such as Libya, where oil production has ground to a halt.

Another quotes the chief economist of Saudi investment bank Jadwa Investment as estimating in June 2008, shortly before oil prices peaked, that the kingdom earned more than $1 billion a day from oil. Another quotes Aramco's treasurer as saying the state oil company had its own Europe-based global investment fund that in April 2008 had assets worth $60 billion.

A fourth document quotes the Saudi assistant petroleum minister as expressing concern to Ambassador James Smith that Saudis could be "greened" out of the U.S. market. The minister noted in 2009 that the United States for the first time had consumed more ethanol than it did Saudi oil.

[Demeter]

23. Former Nasdaq executive Donald Johnson pleads guilty to fraud for insider trading DETAILS

http://www.washingtonpost.com/business/economy/former-nasdaq-executive-pleads-guilty-to-fraud/2011/05/26/AGjUeGCH_story.html

...Johnson placed illegal trades from his computer at Nasdaq offices in New York, using an online brokerage account in his wife’s name, the Securities and Exchange Commission said. From 2006 to 2009, he reaped more than $755,000 in illegal profits, the SEC said.

..From his perch at Nasdaq’s “market intelligence desk,” Johnson received advance word of market-moving corporate developments such as changes in company leadership, earnings reports and the fact that a drug for hypertension had won approval from the Food and Drug Administration, the government said.

...Johnson thought he could get away with the insider trading by using his wife’s account, placing relatively small trades just a couple of times a year, said Neil H. MacBride, the U.S. attorney for the Eastern District of Virginia.

In violation of Nasdaq policy, Johnson never disclosed the brokerage account in his wife’s name to the organization, the SEC said.

[Demeter]

24. Does This Ease Your Worries?: US GDP from 1870-2008

http://economistsview.typepad.com/economistsview/2011/05/does-this-ease-your-worries-us-gdp-from-1870-2008.html

http://economistsview.typepad.com/.a/6a00d83451b33869e201538eb9f86e970b-800wi

The graph only goes through 2008. Here's a picture of more recent data:

http://economistsview.typepad.com/.a/6a00d83451b33869e20154328cf515970c-800wi

Again, though we are beginning to grow at trend rate again and that's better than the free fall we were in, there is a lot of ground to make up. That requires a period of growth in excess of trend, and there's nothing to indicate that will happen anytime soon.

This looks about right to me (though I should note that in the past these forecasts have been overly optimistic):

http://economistsview.typepad.com/.a/6a00d83451b33869e201538eba1b1a970b-800wi

WELL, AS THE MUTUAL FUNDS ALWAYS SAY: PAST PERFORMANCE IS NO GUARANTEE OF FUTURE EARNINGS....

[Demeter]

26. A Thematic Song --Post Some, Everyone!

http://www.youtube.com/watch?v=An1-ntyBcz8

[DemReadingDU]

27. Taibbi - Wikileaks: Speculators Helped Cause Oil Bubble

5/26/11 Matt Taibbi - Wikileaks: Speculators Helped Cause Oil Bubble

Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of '08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators. According to the McClatchy report, the Wiki cables show that Saudi ministers repeatedly told Bush administration officials that increasing production might be counterproductive.

The cables show that at the height of the bubble, in May 2008, U.S. officials met in Riyadh with the Saudi assistant petroleum minister, Prince Abdulazziz bin Salman bin Abdulaziz al Saud, who told the U.S. he was "extremely worried" that high prices would destroy the demand for crude.

The Wiki documents show that the Saudis had long ago concluded that this increased investor flow was a threat to disrupt the markets. An embassy cable from 2007 recounted a meeting U.S. officials had with Yasser Mufti, an Aramco planner. "The Saudi analysts indicated a link between higher oil prices and the influx of investor funds into the oil markets," it read. The cables also show that the Saudis urged the Americans to enact reforms to rein in Wall Street, calling for speculative limits and other changes. It also showed that some Saudi officials believed that speculation added as much as $40 to the oil price during the height of the bubble.

More on this to come later. Given the surge in commodities prices in the last year (which may in part have caused the rise in food prices that led to disturbances in the Middle East) and the Obama administration's seeming reluctance still to rein in speculators, it's remarkable that this issue doesn't get more press. It'll be interesting to see how much ink these Wiki cables get.

more...
http://www.rollingstone.com/politics/blogs/taibblog/wikileaks-cables-show-speculators-behind-oil-bubble-20110526

[AnneD]

28. I may be one of the last people in America to experience.....

a one room school house.

When I was in New Mexico , there was a very small very isolated part of the county. The parents did not want to bus the kids so far so they had a one class elementary school. There were about 8 kids. I traveled out with the speech pathologist. She would do her thing and I would screen the kids and give them health lesson. I enjoyed seeing them as much as they did me. They were closing the school the next year when the teacher retired. I went so they would know me and have a familiar face when they went to the big school. Sure enough they all came to see me the next year. They loved my big office and it really help them transition the next year. I only went out one day a month, but it was a treat for me.

I had totally forgot about that until this thread. Thank for helping me remember a pleasant time. It was great because it fostered team work. The older ones helped the younger ones and those that caught on helped explain it to those that didn't. As a result, kids reached a higher level of learning.

[Demeter]

29. The Education Researchers Are Always Looking for that "One Size Fits All"

but with people, one size doesn't fit all, never has, never will. Unless we're talking king-size bedsheets for togas, and even so, the smaller people would be more comfortable with full or twin...

When the concept of sorting according to ability or need was deemed "unfair" (unfair to whom? one might ask), the teacher's job became impossible. Tracking is the only thing that kept me sane. And even so, I was mostly self-taught.

[Demeter]

30. Nervous investors demand bigger returns

http://news.yahoo.com/s/nm/20110528/bs_nm/us_markets_weekahead

The world looks a lot more dangerous than it did only a few months ago and signs are that U.S. stock investors are starting to demand more for the added risk.

(BUT WHAT IF THERE IS NO MORE?---DEMETER)

With important manufacturing and jobs data due next week, it could start to get even riskier. That means nervous investors are likely to keep a lid on equity prices this year as they grapple with slowing global growth and a host of geopolitical risks from the Arab Spring to debt defaults in the euro zone.

The actions of some big Wall Street banks best show the shift in the risk-reward nexus. Over the last two weeks, UBS, Citigroup and Goldman Sachs have effectively lowered their view of what investors will be willing to pay for a dollar of corporate earnings this year... the expected price-to-earnings ratio was already below what investors have historically been willing to pay for S&P 500 earnings. The average trailing P/E ratio is 15.6 over the last five years and 19.2 since 1988, according to Standard & Poor's.

Golub argues that a batch of weak economic data pointing to slowing manufacturing, a weak housing market and stubbornly high unemployment is weighing on investor sentiment. Weakness in commodity markets and rotation into defensive sectors of the stock market testify to that shift.

ENTRAIL READINGS AT LINK

[Demeter]

31. Obama, GOP unveil competing plans for job growth

BUT ACTUALLY, NEITHER PLANS DOES ANYTHING FOR OPENING UP JOBS---ALL THEY DO IS CUT EXPENSES FOR CORPORATIONS LARGE ENOUGH TO FUND THE ELECTIONS...TO INCREASE EMPLOYMENT, ONE MUST INCREASE THE DEMAND FOR GOODS AND SERVICES, WHICH MEANS YOU MUST GET MONEY TO THE PEOPLE WHO NEED IT TO SPEND...

http://www.washingtonpost.com/business/economy/obama-gop-unveil-competing-plans-for-job-growth/2011/05/26/AG3aDKCH_story.html?hpid=z1

READ THEM AND WEEP. IT'S TOO DEPRESSING TO EVEN EXCERPT.

[Demeter]

32. Took the Kid to See Pirates of the Carribean 4

It was rather surreal, as usual, but as our friend said, not insufferable like #3.

We saw it in 3-D, which was done rather artistically, so it added to the film, instead of detracting.

And it's raining, again. Sigh.

[bread_and_roses]

36. Youth unemployment: "The Obama administration...just doesn’t care"

http://www.commondreams.org/view/2011/05/28-2

Unemployment and underemployment here is still up around 20% overall, and it is much higher among young people. Black youth unemployment fell so far in 2011 to an official rate of 44% from 50% last year (because so many young workers just gave up trying to find work)! Among Latino youth, the official unemployment rate is stuck at around 30%. Overall, youth unemployment, according to the official Labor Department figures, is 20%, but remember, the official rate does not count those who are working part time who want full-time work, and does not count those who have given up looking for work...

... As an “unnamed White House official” put it at a press briefing recently

..."some of the protests in the region are deeply rooted in a lack of individual opportunity and economic growth, as well as a suppression of political rights.

“We also know from our study of the past that successful transitions to democracy depend in part on strong foundations for prosperity, and that reinforcing economic growth is an important way of reinforcing a democratic transition.”

That analysis clearly applies equally to the impoverished inner cities of the US, and indeed increasingly to the entire population of young Americans, who are seeing national policies, state policies and corporate lobbying -- all focused on cutting taxes and boosting corporate profits -- rob them of their futures.

I think what Mr “unnamed White House official” must mean - given the obvious lack of concern for the plight of jobless and lack of opportunity on these shores - is that there must be sources of profit for the privateers as yet untouched in those countries, and they see them as the next frontier .... here, not so much. First, Neo-liberalism reigns virtually uncontested, and the young, old, disabled, poor, unemployed can rot for all they care - they don't even have to pretend, here, as he notes in the article, with youth, labor, and so-called "progressives" supine, who do they have to fear?

While the recently revolutionary youth and their allies in the Mideast must be lied to about the goals of TPTB.

edit for clarity (I hope)

[bread_and_roses]

38. I meant this as a reply to Demeter's post #31

Also, realized that I forgot to include the title, author, and subject line quote in the body:
http://www.commondreams.org/view/2011/05/28-2 (same article as previous)

Jarring Disconnect: If Joblessness and Hopelessness Undermine Democracy in the Middle East, What About Here at Home?
by Dave Lindorff
...The Obama administration knows what the problem is. It just doesn’t care.

[Demeter]

37. How to destroy the web of Debt TODAY'S MUST READ

http://golemxiv-credo.blogspot.com/2011/05/how-to-destroy-web-of-debt.html

NOTE TO THE PEOPLE WHO HAVE NOTHING BETTER TO DO THAN COUNT PARAGRAPHS--THIS ARTICLE/BLOG HAS NO COPYRIGHT INVOCATION. IT IS AS FREE AS ANY OF US. MAYBE EVEN MORESO.

Here's a question for you. Why have we heard nothing in the media or parliament about A People's or a Sovereign Debt Jubilee? Is it because a People's Debt Jubilee is simply a nice but unworkable fantasy dreamt up by crackpot bloggers like me?

This is what I have been wondering. And then in response to the Jubilee article, a regular contributor to this blog, Hawkeye, wrote to me and suggested I take a look at "The Great EU Debt Write Off".

The web site contains details of a 'proof of concept' study of the Jubilee idea done by Professor Anthony Evans and his colleagues at The ESCP Europe Business School. The study used up to date figures from the IMF and the Bank of International Settlement (BIS) to see what would happen if Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany simply cross cancelled all the foreign debt they owed each other - a Sovereign debt jubilee.

The web of mutually destroying debt they studied looks something like this. The image is from a New York Times article called Europe's Web of Debt. (The original article has a larger version)




Professor Evans said what he and his colleagues found "was astounding".

* The countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
* Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt
* Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
* France can virtually eliminate its debt – reducing it to just 0.06% of GDP



Among the 'debtor' nations a Debt Jubilee means Ireland reduces its debt load to from 130% of GDP to under 20%! That would virtually wipe out the crippling cuts being forced upon the Irish. While even among the 'Creditor' nations France benefits by nearly eliminating its debt. So the French people too would benefit. Which does beg the question - who is benefiting by enforcing all the debts? I'll give you one guess.

Of course there can always be a devil lurking in the detail ready to spoil a happy ending, so I called Professor Evans and asked him about his methods and their limitations.

First thing he pointed out is that by 'All Foreign Debt" he included foreign debts held by Private banks. But as he also said, considering that in many countries the Tax Payer owns large chunks of the Private banks in question and so the line between truly sovereign and private bank debt is already blurred and sadly we 'own' both.

Professor Evans said the main limitation they had was not being able to determine the duration or rates of the different bonds for different countries. So he was cancelling debts which although of the same capital amount would have been worth different amounts because of different interest rates and durations. Understandably this makes him wary of making too much of his results. However he did agree that on such large gross amounts, such interest rates and duration differences could be considered marginal. In the grand scheme of the massive debt reductions achieved the differences of rate and duration could be justifiably seen as a small cost to bear for the over all gain.

So there are grounds for criticizing his findings. BUT the criticisms are not so large that they derail the force of the findings. The simple fact of the matter is that the PEOPLE of all our nations would be immensely better off. They would not be facing crippling austerity cuts, nor be being forced into selling their National heritage and wealth at Fire Sale prices to the very banks who are the cause of the debt crisis, and who will profit from the fire sales.

Which brings us back to the reason there has been no discussion at all of a Debt Jubilee. Keeping the debts is going to profit the banks and their bond holders. Not only that, but making sure there is no discussion of mutual debt cancellation, and thereby keeping sovereign debt levels as high as possible, gives those on the political Right, the perfect crowbar they have wished for but never had, for forcing through a political agenda of privatizing and destroying the social fabric of welfare. An agenda for which they never quite got a mandate through the ballot box.

That is why the debts are being maintained and why there has been no discussion of any alternative. Our politicians are 'protecting' the debts and those whose will profit from their payment over and above the welfare of the people they are supposed to serve.

The bankers don't want any discussion of mutual debt cross cancellation because it would force a necessary deleveraging. The bankers do not want deleveraging because leverage is the secret of how the bankers make their profits and without it they wouldn't look nearly so smart. The reason debt cancellation would force deleveraging is because much of the debt which would be cancelled is currently being held on bank books as an 'asset' serving to underpin yet more loans and debt. So start cancelling debt and the bankers pyramid of leveraged debt begins to crumble. The fact that it has to crumble if we are to recover without being crippled with trying to pay unpayable debts never gets a mention in banker-world.

A second reason bankers don't like cancelling debt is that what would quickly get revealed is which banks are the walking dead kept alive by transfusions from us. At the moment they are all hiding each others debts.

Think about it - they all want the debts they owe each other to be paid in full - but since they can't afford to pay them, they have got our politicians to make US pay all the debts they owe to each other, for them.

I don't think our government's have any interest in protecting us. They may say they do, and may make noises about 'necessary measures' but they seem mind-blind to any alternatives to what the bankers whisper in their ears. So here are a few ideas the bankers won't like AT ALL.


As a start let us say that we will only consider paying debts which we can see. What I mean by that is the debts we are expected to pay must be transparently clear to us. They must be in an auditable form not held in mystery SIV's in off-shore in tax havens. They must be held on balance sheet, not off it and on shore where we can inspect and audit them.

These are perfectly reasonable and entirely enforceable requests. We, the public simply want to be sure that what we are being asked to pay, is in a place and form such that we can verify for ourselves that the debts are legal, above board and ours to pay.

If the bond holders have nothing to hide then they have nothing to fear. Any bond holder who refused and any debt which was kept off-shore and un-auditable would not be payed. It would be not even be considered for counting against other debt it would simply be zeroed. Simple, fair, clear, transparent and legal.

First thing this would do is destroy tax evasion and avoidance. Every nation would get a colossal windfall of tax THAT SHOULD HAVE BEEN PAID IN THE FIRST PLACE. That would help the austerity a bit.

Second there has been so much fraud, so much of it now clearly known and documented, that only a cretin would pay 'debts' on faith. Show me the paper or go away.

It is a fact that the vast bulk of the global stock pile of wealth and particularly debt backed 'wealth' is held off-shore in tax havens and Banking secrecy jurisdictions. Why? Why should we pay debts to people who won't pay their taxes?

[DemReadingDU]

39. Is there any 'real' money?

Seems like all funny money when every country seems to owe debt to every other country. The debt appears to be growing exponentially, and still debts are being passed from country to country.

And yet this graph is only for the PIIGS. There are so many more countries owing debt to even more countries...France, Germany, Britain, U.S., China, Japan, others.

This model is unsustainable, it is anybody's guess how much longer we can continue before it implodes.

[Demeter]

40. There Are Goods and Services

Money is just a way of keeping track of them.

It's the interest that is killing us all.

[westerebus]

47. Here in lies the problem.

Credit Default Swaps.

The banks who enabled consumers into indebtedness under the guise of everyone can have what they want when they want it, bet against the very same consumers.

The sales pitch in its current from is that these very same consumers must accept austerity as there is too much debt on the books.

What happens to the banks that hold these credit default swaps if Jubilee occurs?

Yes, most CDSs never settle.

Except the ones the banks who are counter party must settle. AIG anyone?

Only this time the consumer was/is the state or nation-state.

A mother of all frauds.

Consumers, taxpayers by any nation state definition, are being propagandized into the false hope there is a solution that doesn't include a radical change of course from what is purposed by the banks and the political parties' in power.

Simply. It is us or them.

[chervilant]

68. hmph!

The uber wealthy would have a proverbial major league COW IN THE FLOOR if this actually happened...

[Demeter]

73. May We All Live To See It!

[chervilant]

111. Well,

I suspect that we'll be seeing something soon--if not a cohesive, planned approach to 'fixing' our global economic behaviors, then the catastrophic reordering that will be the culmination of the wee rumblings we've already witnessed.

[Pale Blue Dot]

41. Bailout Troika Finds "Greece Missed All Fiscal Targets" - Next Steps: Game Over?

Germany's Der Spiegel seems hell bent on getting sued to hell and back by Greece. After a few weeks ago it "broke" the news of a secret meeting that would consider the expulsion of the country from the Eurozone, it is once again stirring passions with an article claiming that Greece has missed all fiscal targets agreed under its bailout plan, according to a mission from an international inspection team, putting further funding for Athens at risk, Reuters summarizes. "The troika (aka the International Monetary Fund, the European Commission and the European Central Bank) asserts in its report to be presented next week that Greece had missed all its agreed fiscal targets," weekly Spiegel magazine reported in a prerelease. In other words, this could be the political game over for Greece, whose fate as has been disclosed recently, is intimately tied with the perception that it is following the troika's demands for fiscal change. If the three key bailout institutions are already leaking that Greece is done, next week could well be the beginning of the end for the €. In about 48 hours, even as America is enjoying a Monday off (or precisely because to that, to avoid a market panic), the European market could be digesting a very bitter pill of testing just how well pre-provisioned all those German, French and Dutch banks really are.

http://www.zerohedge.com/article/spiegel-greek-hit-piece-2-bailout-troika-finds-greece-missed-all-fiscal-targets-next-steps-g

[Demeter]

42. Since the Plan Was Designed to Fail...

We are graced by your weekend appearance, PBD! Hope it's a good holiday for you!

I am so disheartened by the news, I am having a hard time even reading it, let alone posting.

[bread_and_roses]

43. That's been my constant state lately. But here's something a bit more hopeful

http://www.commondreams.org/view/2011/05/27-5

The New-Economy Movement
by Gar Alperovitz

institutions whose priorities are broader than those that typically flow from the corporate emphasis on the bottom line. At the cutting edge of experimentation are the growing number of egalitarian, and often green, worker-owned cooperatives. Hundreds of “social enterprises” that use profits for environmental, social or community-serving goals are also expanding rapidly....

For-profits have developed alternatives as well. There are, for example, more than 11,000 companies owned entirely or in significant part by some 13.6 million employees. Most have adopted Employee Stock Ownership Plans; these so-called ESOPs democratize ownership, though only some of them involve participatory management. ...

... Obviously, any movement that urges changing the system faces major challenges. Apart from the central issue of how political power might be built over time, three in particular are clearly daunting: first, many new-economy advocates concerned about global warming and resource limits hold that conventionally defined economic growth must be slowed or even reversed...

A related problem concerns the labor movement....

A third and very different challenge is presented by traditional environmental organizations. ...

Article is worth reading - my own grim view is that the author over-estimates the current impact of these initiatives. And that it is all too little, too late. Still, one is marginally comforted by knowing that human adaptability is still operative, however futile the effort.

Recently, cleaning out a lot of old paperbacks that have just disintegrated over time (as all paperbacks do) I decided to keep the the old Firefox books I have for my daughter - being "trade" paperbacks they are larger, better constructed, and though showing the wear of time still intact and readable. Should she survive whatever is coming down the road, at least she'll have a resource for how to do a lot of things that people have forgotten.

(have to laugh at myself - saying this a hopeful post and then ending up here - but what can one do? My capacity for denial is pretty limited.)

[Pale Blue Dot]

83. The Greek "Ultimatum": Bailout (For The Bankers) And (Loss Of) Sovereignty

So after one year of beating around the bush, it is finally made clear that, as many were expecting all along, the ultimate goal of the Greek "bailouts" is nothing short of the state's (partial for now) annexation by Europe. According to an FT breaking news article, "European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens. People involved in the talks said the package would also include incentives for private holders of Greek debt voluntarily to extend Athens’ repayment schedule, as well as another round of austerity measures." Thus Greece is faced with the banker win-win choice, of not only abandoning sovereignty, a first in modern "democratic" history, in the pursuit of "Greek" policies that are beneficial for Europe, or not get a bailout, which would only serve to prevent senior bondholder impairments. How could Greek leaders and its population possibly not accept such an attractive option which either leaves the country as another Olli Rehn protectorate, or forces it to not bailout Europe's overleveraged banker class. In essence Europe is now convinced, just like Hank Paulson was on September 14, 2008, that the downstream effects from letting Greece implode are manageable. But the key development is that the Greek bankruptcy, which from the beginning, and as Peter Tchir's note below demonstrates, was always simply a Greek choice, was just made that much easier.

http://www.zerohedge.com/article/greeces-ultimatum-bailout-bankers-or-loss-sovereignty

I love this thread Demeter. Thank you!

[Demeter]

87. The Greeks Have a Word for It: Dilemma!

If I were a Greek (and believe me, we are all Greeks in our dealings with the banksters) I'd tell them where to get off.

I'd nationalize the Greek banks and shut them down on holiday, default on any outside banksters, and start printing drachmas.

Will the mighty Greeks lead Europe to democracy yet again?

Thanks PBD! I do it for the love....

[Pale Blue Dot]

85. Record turnout for 'Indignant' protesters in Athens

Greeks inspired by the Spanish “Indignant” or “Indignados” movement held their largest protest so far in Athens on Sunday, which some estimates put as high as 100,000 people, although a more accurate assesment seemed to be that those taking part exceeded 30,000.

No official figure was given for the number of people packing into Syntagma Square in front of Parliament but it was clear that the protest was by far the largest since the movement began on Wednesday.

Then, some 20,000 people were thought to have taken to the streets of the capital but it was clear that on Sunday, the numbers were much larger. The protest remained peaceful, as people sang, chanted slogans against the country’s politicians and austerity measures and aimed gestures at Parliament.

Greece’s deputy Prime Minister Theodoros Pangalos had earlier dismissed the significance of the country’s ‘Indignant’ movement.

http://ekathimerini.com/4dcgi/_w_articles_wsite1_11818_29/05/2011_392649

[Demeter]

44. Black Sea Wheat May Not Halt Rally

http://online.wsj.com/article/SB10001424052702304520804576347230988481532.html?mod=dist_smartbrief


...The Russian government has indicated that it may allow grain exports as early as July in a bid to clear away excess stocks, freeing up much-needed storage space. The upcoming harvest, which begins in September, is forecast to total 85 million to 90 million metric tons of grain, 40% more than last year...Viktor Zubkov, Russia's deputy prime minister, this week said there is "a large degree of probability" the government will allow exports for the first time since August. Analysts predict exports could hit 10 to 15 million tons in the 2011-2012 crop year, which begins in June, up from around four million tons shipped in 2010-2011, before the Kremlin stunned world markets by banning exports. Any decision from Russia will follow a move by neighboring Ukraine to free up exports. Wednesday, ministers in Kiev voted to remove export quotas, potentially allowing about two million tons of wheat into the market over the next few months and making way for eight to nine million tons of exports in the next crop year. Some analysts say the arrival of tens of millions of tons of cheap Black Sea wheat may damp prices in the second half of 2011...Until the drought last year, Russia and Ukraine were key suppliers to wheat-hungry countries in North Africa and the Middle East, which have been forced to buy from Europe and the U.S. instead. Their export curbs helped trigger a surge in prices many blame for sparking the wave of unrest that has swept the Arab world and toppled governments across the region this year.


Yet any decision to free Black Sea exports is unlikely to take the shine off the current weather-driven rally, say analysts. European wheat prices have surged 36% from their lows of two months ago, while U.S. prices soared 24% from a three-month low in March...

The worst drought to hit Europe for decades has cut hopes for crops in France, Germany, the U.K. and Poland, which make up 65% of output in the European Union, the world's largest wheat-producing region. Parts of Europe received less than 40% of average rainfall this spring and forecasters say futures in Paris may revisit February's three-year highs of €281 per ton if crops receive no water in the next fortnight.

Across the Atlantic, dealers are voicing growing concern that rain-related delays to plantings in the northern U.S. and Canada and dry weather in the southern Plains may harm production from the two major exporters...On Thursday, the International Grains Council, an intergovernmental group that tracks the grain trade, lowered its estimate of U.S. wheat production for 2011-2012 by 1.5 million tons to 56 million tons. Some analysts fear losses could be much larger after flooding from the Mississippi River affected 3.6 million hectares of farmland...And with hopes for next year's global harvest diminishing day by day as European and U.S. farmers struggle to combat what Mother Nature has to throw at them, some analysts believe even the return of Black Sea wheat may not be enough to fill the shortfall in international markets.

[Demeter]

45. Made in America: Manufacturing Jobs Are Coming Home

http://www.thefiscaltimes.com/Columns/2011/05/26/Made-in-America-Manufacturing-Jobs-Are-Coming-Home.aspx

I'LL BELIEVE IT WHEN THE CAPITAL EQUIPMENT COMES INTO PORT...

The tale of American manufacturing has long been one of woeful decline. Just about a year ago, China replaced the U.S. as the world’s No. 1 maker of things, and that seemed a sure sign that the glory days had faded for good. But all of a sudden the talk is of a “manufacturing renaissance,” to quote a new study by the Boston Consulting Group.

The BCG study, “The Return of U.S. Manufacturing,” makes an interesting case. China’s wages are rising by 15 to 20 percent a year, while its productivity will improve at half that rate. The yuan is gaining in value, too, and Chinese-made products are destined to become more expensive. There is a shortage of skilled workers even in major manufacturing centers such as Shanghai and Tianjin...In the U.S., wage increases have been minimal for years and will remain at 3 percent or so annually. U.S. productivity will remain higher than China’s by a wide margin, and government incentives are also a factor in attracting U.S. manufacturers back home. “Reinvesting in the U.S. will accelerate,” the study says, “as it becomes one of the cheapest locations for manufacturing in the developed world.”

The math that went into this study is impressive, and it works like this: Right now, labor costs in China are slightly less than half those of the U.S. when the difference in productivity is factored in. In five years’ time, labor costs on the mainland will be 70 percent of the U.S. figure. Counting costs such as inventory and shipping, the study says, the Chinese cost advantage will drop to single digits or disappear entirely...It’s a convergence theory of a kind, and one forecasted result is that outsourcing jobs to China will turn out to have a beginning, middle, and end. “China will no longer be the default low-cost location for supplying the U.S. market,” the BCG study asserts. “The economics are becoming marginal for many products.”

MUCH ANECDOTAL VERBIAGE

*

The question is obvious: Do Americans want to make their country a low-cost production platform? Ford is coming (fractionally) home because it can pay auto workers $14 an hour—about 10 bucks less than it paid them when it eliminated those jobs. Henry Ford famously thought his workers should be able to afford the products they made; he believed in a vital middle class. So other questions are obvious, too: What will a manufacturing renaissance, if it arrives, do for this country’s middle-income wage-earners? What will a decade or so of intense outsourcing have cost them in net terms when the jobs come home?

[Demeter]

46. FEMA could run out of rebuilding money

http://www.usatoday.com/news/washington/2011-05-26-FEMA-disaster-relief-funds_n.htm

The federal government could run out of money to help communities such as Joplin, Mo., rebuild from the recent devastating tornadoes and flooding.

The Federal Emergency Management Agency (FEMA) has $2.4 billion in its Disaster Relief Fund to last through Sept. 30 and is seeking $1.8 billion for the fiscal year that begins Oct. 1. Lawmakers from both parties say those sums are not enough to pay for the billions in damage caused by the extraordinary string of weather-related disasters this spring...

[Demeter]

48. Gold Companies May Face $100 Billion Liability for Sick Miners

http://www.bloomberg.com/news/2011-05-25/gold-companies-may-face-100-billion-liability-for-ill-south-africa-miners.html

...silicosis, a scarring of the lungs caused by prolonged exposure to the dust found in South African mines now run by companies such as Anglo American-founded AngloGold Ashanti Ltd. (ANG), Gold Fields Ltd. (GFI) and Harmony Gold Mining Co...

South Africa’s highest court on March 3 ruled that ex- miners such as Willie can seek redress from companies that operated under an apartheid-era system to use cheap black labor in the world’s deepest mines.

While the ultimate number of claims and their size is impossible to determine, mining companies may face a liability of as much as $100 billion, Leon Esterhuizen, an analyst at RBC Capital Markets in London, said in a May 6 note to clients. A settlement at a significantly lower level is more likely, he said in a May 16 interview.

“The whole risk really depends on whether these people putting these claims up can prove negligence by the mining companies,” he said...“The judgment potentially opens the floodgates for claims,” said Warren Beech, a lawyer at Webber Wentzel Attorneys in Johannesburg who is not involved in the litigation. “You could be looking at an average of 1 to 2 million rand a claim.”...RBC’s Esterhuizen based his May 6 estimate on the assumption that there are 300,000 potential claimants, each suing for at least 2 million rand...The number of gold miners in South Africa peaked at 489,000 in 1983, according to the Department of Mineral Resources. The mines today employ about 160,000 people, according to the Chamber of Mines, which represents mining companies.

QUITE AN EDUCATION ABOUT GOLDMINES IN THIS ARTICLE...

[Demeter]

49. Michael Hudson: Breakup of the euro? Is Iceland’s rejection of financial bullying a model for Greece

SUNDAY'S MUST READ!

http://www.nakedcapitalism.com/2011/05/michael-hudson-breakup-of-the-euro-is-iceland%E2%80%99s-rejection-of-financial-bullying-a-model-for-greece-and-ireland.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Last month Iceland voted against submitting to British and Dutch demands that it compensate their national bank insurance agencies for bailing out their own domestic Icesave depositors. This was the second vote against settlement (by a ratio of 3:2), and Icelandic support for membership in the Eurozone has fallen to just 30 percent. The feeling is that European politics are being run for the benefit of bankers, not the social democracy that Iceland imagined was the guiding philosophy – as indeed it was when the European Economic Community (Common Market) was formed in 1957.

By permitting Britain and the Netherlands to blackball Iceland to pay for the mistakes of Gordon Brown and his Dutch counterparts, Europe has made Icelandic membership conditional upon imposing financial austerity and poverty on the population – all to pay money that legally it does not owe. The problem is to find an honest court willing to enforce Europe’s own banking laws placing responsibility where it legally lies.

The reason why the EU has fought so hard to make Iceland’s government take responsibility for Icesave debts is what creditors call “contagion.” Ireland and Greece are faced with much larger debts. Europe’s creditor “troika” – the European Central Bank (ECB), European Commission and the IMF – view debt write-downs and progressive taxation to protect their domestic economies as a communicable disease.

Like Greece, Ireland asked for debt relief so that its government would not be forced to slash spending in the face of deepening recession. “The Irish press reported that EU officials ‘hit the roof’ when Irish negotiators talked of broader burden-sharing. The European Central Bank is afraid that any such move would cause instant contagion through the debt markets of southern Europe,” wrote one journalist, warning that the cost of taking reckless public debt onto the national balance sheet threatened to bankrupt the economy. Europe – in effect, German and Dutch banks – refused to let the government scale back the debts it had taken on (except to smaller and less politically influential depositors). “The comments came just as the EU authorities were ruling out investor ‘haircuts’ in Ireland, making this a condition for the country’s €85bn (£72bn) loan package. Dublin has imposed 80 percent haircuts on the junior debt of Anglo Irish Bank but has not extended this to senior debt, viewed as sacrosanct.”

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

*This article is an excerpt from Prof. Hudson’s upcoming book, “Debts that Can’t be Paid, Won’t Be,” to be published later this year.

[Demeter]

50. Greece Aid Is Under Threat, Europe Finance Chief Says

http://online.wsj.com/article/SB10001424052702304520804576346670146307278.html?mod=dist_smartbrief

A top euro-zone policy maker suggested the International Monetary Fund may withhold its next payment on Greece's €110 billion ($155 billion) bailout, rattling financial markets with questions about whether a new Greek payments crisis is imminent...Luxembourg Premier Jean-Claude Juncker, who heads the conclave of euro-zone finance ministers, suggested Thursday that an important review of the bailout program might conclude that Greece doesn't have enough loan commitments to carry it through the next 12 months.

If that happens, he said, the IMF's rules could stop the fund from contributing its share of the next slug of bailout money, due to be paid out to Greece on June 29.

The review, from the so-called troika of officials from the European Commission, European Central Bank and IMF, is due to be presented next week. "I don't think that the troika will come to the conclusion that this"—12 months of funding commitments for Greece—"is certain," said Mr. Juncker, speaking at a conference in Luxembourg.

In that case, the IMF would expect other euro-zone governments to step in and cover the funds. Drumming up that financing would be hard in countries such as Germany and Finland, he said...

[Demeter]

52. Greece set for severe bail-out conditions

European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens.

But Lorenzo Bini Smaghi, ECB executive board member, said talk about Greece reneging on debt commitments “has been very damaging” and suggests “that investing in the euro area is unsafe.”

Read more >>
http://link.ft.com/r/2SRI11/BMZEW7/06MUC/YH3XAU/IYW1FF/HK/t?a1=2011&a2=5&a3=29

[Demeter]

105. Will Greeks Defy Rape and Pillage By Barbarians Bankers? An E-Mail from Athens

http://www.nakedcapitalism.com/2011/05/will-greeks-defy-rape-and-pillage-by-barbarians-bankers-an-e-mail-from-athens.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Even if they get their way, the rescue package is certain to fail to forestall an eventual default or restructuring because none of these rescues is a rescue. When the banks got in financial trouble, they got to borrow at discount rates. If Greece were to borrow from the ECB, say at 2% over the EBC’s policy rate, instead of the punitive rates on offer, it would look a hell of a lot more viable near term. I’m not saying that this is the best or only remedy, but the ECB is also blocking a restructuring, specifically, anything that would be deemed to be a credit event. Clearly the concern is not Greek CDS; John Dizard has pointed otu that the level of Greek CDS is miniscule, less than 2% of the outstanding debt, so what happens to the CDS writers is simply noise compared to what happens to the bonds themselves. The concern seems to be setting a precedent, that the ECB seems desperate to maintain the fiction that no eurozone sovereign will default or restructure (and these are hardly the only options; a voluntary restructuring would get the job done).

Another reason this rescue is not a rescue is that one of its major elements, that of stripping Greece of assets, is unlikely to raise the €50 billion expected. The demands here are astonishing. Greek premier George Papandreou agreed to only €5 billion of asset sales a year ago; the best state owned assets are expected to fetch at best €15 billion. Trust me, if that’s all you can get from the best properties, anything else that can be cobbled together is likely to be worth at most half that in toto. So it’s not hard to foresee that the receipts from the infrastructure sales are likely to fall short by about half.

And the notion that the invading banker hoards are going to “supervise” tax collection is sure to mean that they will make certain that they are first in getting tax receipts. As various readers have pointed out, lower middle and middle class Greeks have taxes withheld from wages; it’s the rich and the participants in the black economy that escape. It is far fetched to think that foreign involvement will improve matters; indeed, I’d expect everyone who can to operate out of the black economy as an act of rebellion.

Greece looks to be on its way to be under the boot of bankers just as formerly free small Southern farmers were turned into “debtcroppers” after the US Civil War. Deflationary policies had left many with mortgage payments that were increasingly difficult to service. Many fell into “crop lien” peonage. Farmers were cash starved and pledged their crops to merchants who then acted in an abusive parental role, being given lists of goods needed to operate the farm and maintain the farmer’s family and doling out as they saw fit. The merchants not only applied interest to the loans, but further sold the goods to farmers at 30% or higher markups over cash prices. The system was operated, by design, so that the farmer’s crop would never pay him out of his debts (the merchant as the contracted buyer could pay whatever he felt like for the crop; the farmer could not market it to third parties). This debt servitude eventually led to rebellion in the form of the populist movement...

[Demeter]

51. Great. Today We Had the Tornado Siren Go Off

with the flood warnings holding for another day. The storm has passed us, with barely a shower. The humidity is at migraine level, though, and there's been some impressive thunder and lightning.

Tomorrow is expected to hit 90+F.

[burf]

53. We are looking at a similar

forecast for tomorrow.

The water level here is so high we can't get to some of our fields. But on a positive note, the cows are enjoying the pastures we can use.

[Demeter]

55. Send your cows down here to graze

When the mowers tried to cut the grass (between showers) we ended up with grass soup.

[Demeter]

54. A Better Way to Make Bankers Pay for Crises?

http://www.nakedcapitalism.com/2011/05/a-better-way-to-make-bankers-pay-for-crises.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Since the crisis, there has been lots of debate on what to do about incentives in the financial services industry with little in the way of action. That’s because we maintain the fiction that major capital markets firm are private sector companies. Despite the fact that they enjoy subsidies vastly in excess of other industries, we can’t possibly treat them like the welfare queens they are and ride herd on their compensation levels. But it’s still worth pondering the issue of what ought to be done, since pretty much every investor I know expects another big crisis in two to five years. We had better get it right next time.

The germ of a very interesting idea came in a VoxEU paper last March which I had wanted to highlight and somehow let slip. One of the problems with the big end of financial services industry is that it is highly interconnected, so if one firm gets in serious trouble, it is likely to bring the whole network down. Yet because bankers have perverse incentives (annual pay cycles and business unit level pay for most producers, both of which encourage narrow views of risks), banks routinely try to shift risk onto their counterparites, which is fine in normal times, but a destructive posture when markets become risky (the blow up of AIG and the monolines is a classic example)...

........................................

Crisis contracts are designed specifically for members of the bank’s management. The nature of a crisis contract is as follows:

Definition of a crisis: A crisis occurs when the average equity capital in the banking system (relative to the assets) falls below a critical predefined threshold...When a crisis occurs, the top managers of major or highly interconnected banks contribute a portion of their earnings from the previous years to a rescue fund for the recapitalisation of the banking system.

[Demeter]

56. Will Labor Costs Return to Trend?

http://economistsview.typepad.com/timduy/2011/05/will-labor-costs-return-to-trend.html

First, Bloomberg reports on signs that wages may be accelerating. It’s worth bearing in mind that we’re talking about modest stuff — if the employment cost index accelerates to 2 percent, that’s still just productivity growth, and hardly a sign of runaway inflation...2 percent is hardly anything to be concerned about. As Krugman notes, this is just productivity growth. It is the next issue I struggle with – should we care if, at least in the short run, wages accelerate at a rate faster than productivity growth?

Note the path of unit labor costs since 1983:


http://economistsview.typepad.com/.a/6a00d83451b33869e201538eca72df970b-320wi

Further note how far below trend we are:

http://economistsview.typepad.com/.a/6a00d83451b33869e20154329d92b0970c-320wi

Constrained unit labor costs probably have no small role in these kinds of stories: “The bright side is that there’s a clear dichotomy between the health of corporate America and the economy,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $53 billion. “We’ve softened somewhat. Still, profits remain good and there’s M&A activity. That tells me that we’re not going to see a huge move in stocks in either direction.”

To return to trend, unit labor costs would need to accelerate at a rate greater than trends. That this might come at the expense of corporate profits does not upset me. It will, however, upset the Fed, who will tighten policy in response, as they will assume – not without reason – that profits will not suffer. Firms will simply pass on the wage gains in the form of higher prices. Which leaves me wondering again how income will be transferred back to employees? Under what circumstances might we expect unit labor costs to revert to trend? Especially if the Fed remains in a trigger-happy state of mind?

[Demeter]

57. Wages Poised to Rise in U.S. as Paychecks for Temps Get Bigger

http://www.bloomberg.com/news/2011-05-26/wages-poised-to-rise-in-u-s-as-paychecks-for-temps-get-bigger.html

Staffing agencies are charging companies more for temporary workers, a possible harbinger of a bump up in salaries for permanent employees later this year...

[Demeter]

58. Alwaleed Says Saudi Arabia Seeks Oil Price of $70-$80 a Barrel

http://www.bloomberg.com/news/2011-05-28/alwaleed-says-saudi-arabia-seeks-70-to-80-oil-to-preserve-sales-to-west.html

Prince Alwaleed bin Talal said an oil price of $70 to $80 a barrel is in the best interests of Saudi Arabia because it diminishes the urgency in the U.S. and Europe to develop alternative energy sources. “We don’t want the West to go and find alternatives,” Alwaleed, a nephew of Saudi King Abdullah, said in an interview on CNN’s “Fareed Zakaria GPS,” scheduled for broadcast today. “The higher the price of oil goes, the more they have incentives to go and find alternatives.”

The rebellion in Libya, political turmoil in Bahrain and speculative buying are responsible for driving oil prices to more than $100 a barrel, Alwaleed said. Crude for July delivery rose 36 cents to settle at $100.59 a barrel on the New York Mercantile Exchange May 27. Prices have increased 35 percent in the past year.

Alwaleed, who owns Citigroup Inc. shares and ranks 26th on Forbes magazine’s list of the world’s richest billionaires with a net worth of $19.6 billion, said he continues to invest in the U.S. and that the nation is “down, for sure, but it is not out.” Standard & Poor’s lowered its U.S. credit-rating outlook on April 18 to negative, citing the widening budget deficit.

Saudi Arabia needs to enact laws that allow for greater public participation in government, Alwaleed said. U.S. President Barack Obama’s administration is seeking to encourage pro-democracy movements inspired by those that ousted longtime leaders in Tunisia and Egypt as part of the so-called Arab Spring to create broader, regional changes.

[Demeter]

59. Groups sue FDA to stop Big Ag antibiotic abuse—and it just might work

http://www.grist.org/industrial-agriculture/2011-05-25-groups-sue-fda-to-stop-big-ag-antibiotic-abuse-just-might-work

...a coalition of environmental groups including the Center for Science in the Public Interest, Food Animal Concerns Trust, Public Citizen, Union of Concerned Scientists, and the Natural Resources Defense Council (NRDC) has decided to sue. According to a blog post by the NRDC's Executive Director Peter Lehner, the goals are simple:

We want the FDA to follow its own safety findings and withdraw approval for most non-therapeutic uses of penicillin and tetracyclines in animal feed. We also want the agency to respond to the petitions to withdraw approval of non-therapeutic uses in animal feed of other antibiotics important to human health.

This lawsuit will have no bearing on the use of antibiotics for treating sick animals. We simply want to end the practice of giving these critical disease fighters to healthy livestock when it's not medically necessary.

While this may cause eyerolls among some who look at this as "just another lawsuit," there's something very important going on with the courts and contested science right now. As it happens, one of the main roles of a judge is as "finder of fact." In practice, this means that judges determine whether scientific evidence is compelling enough to force government action.

In several recent cases, the courts have decided that environmentalists and reformers were right -- and industry was wrong. It was, after all, the Supreme Court that ultimately forced the EPA to regulate carbon dioxide and other greenhouse gases (however fitfully the agency has done it). More relevant to this case, it has been the federal courts -- including the Supreme Court -- that have forced the USDA to consider things like gene flow and economic harm from contamination of organic crops by genetically modified seeds. Indeed, the courts are currently holding the USDA's feet to the fire on its entire regulatory process surrounding genetically modified seed -- much to the consternation of the biotech industry (not to mention senior administration officials). Oh, and the courts recently determined that, yes, milk treated with artificial growth hormones is worse than regular milk -- as activists have claimed for decades.

And so, it may be that the courts hold the key to forcing the FDA to finally act on antibiotics in livestock. It's one thing to ignore industry pressure -- which is something the FDA is utterly unable to do. It is another thing to ignore a court order by a federal judge. It's a shame that our politics and our regulatory environment are now so toxic to reform that even commonsense changes like preserving life-saving drugs for human use can be controversial. For the moment, judges, who are forced to treat peer-reviewed scientific evidence with the respect it deserves, may be the only hope.

[Demeter]

60. If Linda Green Signed Your MA Mortgage--You May Get a Free House!

http://www1.whdh.com/features/articles/hank/BO145706/#ixzz1NR5mJUdw

[Demeter]

61. Fed’s Use of $80 Billion Facility as Subsidy Vehicle Confirms Regulatory Deficiencies

http://www.nakedcapitalism.com/2011/05/feds-use-of-80-billion-facility-as-subsidy-vehicle-confirms-regulatory-deficiencies.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

TIMMY AND UNCLE BEN HAVE A SLUSH FUND...AND THIS BABY IS OBAMA'S.

[Demeter]

62. IF YOU HAVEN'T SIGNED YET--ADVOCATE FOR ELIZABETH WARREN

http://act.boldprogressives.org/sign/sign_warrent_recessappointment/?source=wsw

[Demeter]

66. House GOPer Blasted for Calling Elizabeth Warren a Liar

http://motherjones.com/mojo/2011/05/elizabeth-warren-mchenry-congress-liar

You won't find more of a spectacle on Capitol Hill than what happened in a House hearing Tuesday featuring consumer watchdog Elizabeth Warren, the White House aide building the new Consumer Financial Protection Bureau.

At the hearing, House Republicans, and Rep. Patrick McHenry (R-NC) in particular, accused Warren of lying to Congress about her role in the settlement negotiations between mortgage servicing companies and state attorneys general. Warren has repeatedly described her role as an advisory one: "We gave advice when asked." House GOPers, however, continue to claim that she has unduly influenced the settlement talks, and then lied to Congress about the extent of her role in previous testimony.

Then the hearing got really ugly. At around 2:15 p.m., Warren said her time was up and she had to go, based on what McHenry's staff had told her staff. McHenry said that wasn't the case, and then accused Warren of lying again, this time about the hearing schedule.

THEY'VE GOT THE VIDEO! SEE LINK

[Demeter]

72. Why Are Republicans So Keen to Persecute Elizabeth Warren?

http://www.nakedcapitalism.com/2011/05/why-are-republicans-so-keen-to-persecute-elizabeth-warren.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The House Oversight and Government Reform Committee session ... with the Republican’s favorite punching bag, Elizabeth Warren, managed to notch abuse up to a level that is politely described as unseemly or more accurately called Republican Derangement Syndrome.

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

The reactions to Warren, both on the right and left, are becoming divorced from reality. She has assumed iconic status as a lone mediagenic figure in the officialdom who reliably speaks out for the average person, a Joan of Arc for the little guy. And she drives the right crazy because she is rock solid competent and plays their game better than they do. She sticks to simple, compelling soundbites and images without the benefit of Roger Ailes and Madison Avenue packaging, and she speaks to an even broader constituency, Americans done wrong by the banks, than they target. No wonder they want to burn her at the stake.

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

And do these Republicans have the foggiest understanding of Dodd Frank or banking regulators? It appears not, which means they also must have incompetent staffers, since any good subordinate’s job is to keep his boss from looking stupid. For instance, Representative Ann Marie Buerkle had a long windup question (meaning she was largely speechifying) criticizing Warren for having job postings where the pay levels were considerably higher than those for similar-skill-level Federal jobs. Warren explained that the compensation levels were set not by her but by Dodd Frank, using the salary grades in place for other Federal banking regulators. Buerkle simply refused to listen to Warren’s response and simply rephrased her question as a more pointed accusation that Warren was being irresponsible and wasting government money...The Republicans also demonstrated ignorance of the process by which legislation is interpreted and implemented (they seem to see Warren as some sort of “decider”) and accused the CFPB of having unprecedented power when in fact it is the only banking regulator that is hobbled by the need to get approval from the FSOC and a budget ceiling. The most peculiar bit was her being hectored for things that were not her doing, such as the five year term for the CFPB director and the fact that it is self funded (both part of Dodd Frank and the norm for banking regulators), the afore-mentioned pay scales, or for CFPB directives drafted by Congress.


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

The Democrats were trying hard, perhaps a bit too hard, to back her up in the face of gratuitous nastiness. They for the most part got good substantive points in but sometimes came off as fawning...Warren’s opponents both inside and outside the Administration see power only in institutional terms: that if she ultimately does not head the CFPB, she cannot have much impact. But they miss the fact that the more they fight with her, the more they enhance her status as spokesman for ordinary Americans. No matter what she does next, her most potent weapon is her ability to continue reframing the debate.

[Demeter]

80. One-Time Warren Foe Now Pressuring Obama To Give Her Recess Appointment

http://tpmdc.talkingpointsmemo.com/2011/05/one-time-warren-foe-now-pressuring-obama-to-offer-her-recess-appointment-to-head-consumer-bureau.php

The head of the Oklahoma Banker's Association -- a one-time Elizabeth Warren skeptic who believed she was "akin to the Antichrist" -- is now asking President Obama to provide her a recess appointment to direct the new Consumer Financial Protection Bureau.

"I write to encourage you to appoint Elizabeth Warren as the first Director of the Consumer Financial Protection Bureau, and to do so with a 'recess appointment' at the first opportunity," wrote Roger Beverage -- President and CEO of the OBA -- in a May 19 letter to Obama, provided to TPM. "In light of the action taken by the forty-four senators who have stated they will oppose any nominee to serve as Director of the new Bureau unless certain changes are made to the Bureau's structure, I encourage you to wait no longer and give Elizabeth a recess appointment before the July 21st transfer date."

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

Beverage has become the archetype for financial industry advocates whom Warren has won over. He and his colleagues had been led to believe that Warren "was akin to the Antichrist." But after meeting and working with her, he's thrown his full support her way, despite some continuing disagreements.

"As an advocate for banks, I've not always agreed with some of her statements," Beverage wrote. "I have come to know her since her current duties began last September, and I am convinced she clearly recognizes the importance of community banks and small credit unions to the nation's economic recovery and how they fit into her vision to protect American consumers and their families. ... In my view she is far and away the best qualified person to lead it as it begins its historic mission."

[Pale Blue Dot]

84. I signed on Friday! nt

[plumbob]

112. Thank you!

She really is our last hope.

[Demeter]

63. FRACKING: How gas drilling contaminates your food

http://www.salon.com/food/feature/2011/05/18/fracking_food_supply/index.html

[Demeter]

64. Alan Simpson Still Confused About Social Security Numbers

IS IT RABID PARTISANSHIP, CORPORATE TOADYING, OR JUST SENILITY?

http://www.huffingtonpost.com/2011/05/25/alan-simpson-social-security_n_867110.html

EVERYBODY GET OFF HIS LAWN!

[Demeter]

65. Anne Sinclair's millions keeping accused rapist husband Dominique Strauss-Kahn out of jail

Sinclair's steadfastness has left many scratching their heads.

"Most women would have kicked him to the curb," said Brooklyn psychologist Dr. Jeffrey Gardere, who specializes in couples in distress. "One can only hope that her saving him makes him see the light."

"If he expects her to help because he has gotten away with this kind of behavior in the past, there is no hope for him psychologically," Gardere said.

Read more: http://www.nydailynews.com/news/ny_crime/2011/05/23/2011-05-23_stand_by_your_homme_li_imf_chiefs_wife_supportive_li_her_estimated_worth_is_1b_l.html#ixzz1Nn1pq1VQ


THE JUICY NEWS!

[Demeter]

67. Governments Have Been Covering Up Nuclear Meltdowns for 50 Years to Protect Nuclear Power Industry

http://www.washingtonsblog.com/2011/03/governments-have-been-covering-up.html

....
1980s Studies and Hearings

In 1982, the House Committee on Interior and Insular Affairs received a secret report received from the Nuclear Regulatory Commission called "Calculation of Reactor Accident Consequences 2".

In that report and other reports by the NRC in the 1980s, it was estimated that there was a 50% chance of a nuclear meltdown within the next 20 years which would be so large that it would contaminate an area the size of the State of Pennsylvania, which would result in huge numbers of a fatalities, and which would cause damage in the hundreds of billions of dollars (in 1980s dollars).

Those reports were kept secret for decades...

MUCH MORE

[Demeter]

70. Fukushima Station Considered as Site for Nuclear Graveyard

http://www.bloomberg.com/news/2011-05-26/fukushima-may-become-graveyard-for-radioactive-waste-from-crippled-plant.html

Japan’s atomic energy specialists are discussing a plan to make the Fukushima Dai-Ichi nuclear plant a storage site for radioactive waste from the crippled station run by Tokyo Electric Power Co. The Atomic Energy Society of Japan is studying the proposal, which would cost tens of billions of dollars... The society makes policy recommendations to the government...

Local authorities in Fukushima, 220 kilometers (137 miles) north of Tokyo, aren’t aware of a proposal to make the Dai-Ichi station a nuclear waste storage site, said Hisashi Katayose, an official at the prefectural government’s disaster task force. He declined to comment.

Building storage for radioactive waste at Fukushima could take at least 10 years, said Morokuzu, one of 50 people on a cleanup panel that includes observers from Tokyo Electric and the Trade Ministry. Tokyo Electric would need five years to complete decontamination of the reactors, which includes removal of hydrogen to prevent explosions, he said.

Japan’s three storage facilities for highly radioactive waste are at Rokkasho, at the northern tip of the country’s largest island of Honshu, and a nearby site at Sekinehama. The third site is at Tokaimura in Ibaraki prefecture, near Tokyo...As the sites are for intermediary use, the nation is still searching for a deep underground storage site for the waste, according to the World Nuclear Association. The selection is due to be completed by 2025 and become operational from 2035, the London-based association says...Japan’s efforts to find other places to store high-level nuclear waste included offering 2 trillion yen ($17 billion) over 60 years to the town of Toyo on Shikoku island to accept a facility. The proposal in 2007 was backed by Mayor Yasuoki Tashima in his re-election bid. He lost.

[Demeter]

69. HOMELAND SECURITY, MY EYE! US to store passenger data for 15 years

THE LOGICAL QUESTION IS: WHY?

THE ILLOGICAL ANSWER: BECAUSE THEY CAN?

http://www.guardian.co.uk/world/2011/may/25/us-to-store-passenger-data

agreement 'violates basic European principles'

The personal data of millions of passengers who fly between the US and Europe, including credit card details, phone numbers and home addresses, may be stored by the US department of homeland security for 15 years, according to a draft agreement between Washington and Brussels leaked to the Guardian.

The "restricted" draft, which emerged from negotiations between the US and EU, opens the way for passenger data provided to airlines on check-in to be analysed by US automated data-mining and profiling programmes in the name of fighting terrorism, crime and illegal migration. The Americans want to require airlines to supply passenger lists as near complete as possible 96 hours before takeoff, so names can be checked against terrorist and immigration watchlists.

The agreement acknowledges that there will be occasions when people are delayed or prevented from flying because they are wrongly identified as a threat, and gives them the right to petition for judicial review in the US federal court. It also outlines procedures in the event of anticipated data losses or other unauthorised disclosure. The text includes provisions under which "sensitive personal data" – such as ethnic origin, political opinions, and details of health or sex life – can be used in exceptional circumstances where an individual's life could be imperilled.

The 15-year retention period is likely to prove highly controversial as it is three times the five years allowed for in the EU's PNR (passenger name record) regime to cover flights into, out of and within Europe. A period of five and a half years has just been negotiated in a similar agreement with Australia. Germany and France raised concerns this week about the agreement and the unproven necessity for the measure....

[Demeter]

71. NOT FROM THE ONION: Flogging Could Answer U.S. Prison Problems

I DOUBT THE ONION WOULD CONSIDER THIS EVEN REMOTELY AN APPROPRIATE TOPIC FOR HUMOR, BUT IT IS RATHER FUNNY...AS WELL AS PECULIARLY NARROW-SIGHTED.

http://www.bloomberg.com/news/2011-05-25/flogging-could-answer-u-s-prison-problems-seriously-books.html

[bread_and_roses]

97. Our retreat into the Dark Ages continues apace

We've already embraced torture, mercenaries, execution by executive decree, the abandonment of Habeas Corpus, rule by Oligarchy - my capacity for surprise is exhausted.

[Demeter]

74. The War on Inflation

http://economistsview.typepad.com/timduy/2011/05/the-war-on-inflation.html

Way back in 2009, spencer at Angry Bear noted that labor payments as a share of output have been falling since the early 1980’s. Can this situation ever be reversed if the Fed steps on the brakes every time workers get a little too confident for their own good?

[Demeter]

75. Politicians Are Abnormally Good Stock Pickers

http://www.businessinsider.com/politicians-are-abnormally-good-stock-pickers-2011-5?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+clusterstock+%28ClusterStock%29&utm_content=Google+Feedfetcher

A new study out notes that:

Four university researchers examined 16,000 common stock transactions made by approximately 300 House representatives from 1985 to 2001, and found what they call "significant positive abnormal returns," with portfolios based on congressional trades beating the market by about 6 percent annually.

...

A study of senators by the same team of researchers five years ago found members of the higher chamber even better at beating the market -- outperforming it by about 10 percent, an amount the academics said was "both economically large and statistically significant."

I suppose they are good at stock investing for the same reason Hillary Clinton was a savvy commodities trader, and Obama was good at playing poker with Illinois lobbyists.

If the guys who set my property taxes want to bet on something, anything, I'm willing to post great odds. Just be sure to remember me, you know, later.

[Demeter]

76. Top Colleges, Largely for the Elite

http://www.nytimes.com/2011/05/25/business/economy/25leonhardt.html?ref=business

...More than seven years ago, a 44-year-old political scientist named Anthony Marx became the president of Amherst College, in western Massachusetts, and set out to change its admissions policies. Mr. Marx argued that elite colleges were neither as good nor as meritocratic as they could be, because they mostly overlooked lower-income students.

For all of the other ways that top colleges had become diverse, their student bodies remained shockingly affluent. At the University of Michigan, more entering freshmen in 2003 came from families earning at least $200,000 a year than came from the entire bottom half of the income distribution. At some private colleges, the numbers were even more extreme.

In his 2003 inaugural address, Mr. Marx — quoting from a speech President John F. Kennedy had given at Amherst — asked, “What good is a private college unless it is serving a great national purpose?”

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

...he mentioned a Georgetown University study of the class of 2010 at the country’s 193 most selective colleges. As entering freshmen, only 15 percent of students came from the bottom half of the income distribution. Sixty-seven percent came from the highest-earning fourth of the distribution. These statistics mean that on many campuses affluent students outnumber middle-class students. “We claim to be part of the American dream and of a system based on merit and opportunity and talent,” Mr. Marx says. “Yet if at the top places, two-thirds of the students come from the top quartile and only 5 percent come from the bottom quartile, then we are actually part of the problem of the growing economic divide rather than part of the solution.”

[Demeter]

77. Public Schools Charge Kids for Basics, Frills

http://online.wsj.com/article/SB10001424052748703864204576313572363698678.html?mod=WSJ_hp_LEFTTopStories

Karen Dombi was thrilled when her three oldest children were picked for student government this year—not because she envisioned careers in politics, but because it was one of the few programs at their public high school that didn't charge kids to participate...The Dombis had to pay to register their children for basic courses such as Spanish I and Earth Sciences, to get them into graded electives such as band, and to allow them to run cross-country and track. The family's total tab for a year of public education: $4,446.50.

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

Though public schools have long charged for extras such as driver's education and field trips, many are now asking parents to pay for supplies needed to take core classes—from biology-lab safety goggles to algebra workbooks to the printer ink used to run off grammar exercises in language arts. In some schools, each class comes with a price tag, to be paid at registration. Some schools offer installment plans for payment. Others accept credit cards—for a processing fee.

Public-school administrators say the fees—some of which are waived for low-income families—allow them to continue to offer specialty classes and activities that would otherwise fall to the budget ax. Some parents support that approach, saying they'd rather pay for honors physics or drama than see those opportunities eliminated altogether.

Some educators, too, argue that fees are good public policy. In a time of fiscal austerity, they say it's not fair to ask taxpayers to fund an all-inclusive education that offers Advanced Placement Art History, junior varsity golf and fourth-year German with little regard for the cost...

[Demeter]

78. Fed Investigating Goldman Over Possible HAMP Mortgage Mod Violations

http://www.nakedcapitalism.com/2011/05/fed-investigating-goldman-over-possible-hamp-mortgage-mod-violations.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The Financial Times discusses a curious development, namely, that the New York Fed is making an inquiry into allegations that Goldman’s mortgage servicing unit, Litton Loan Services, failed to comply with HAMP guidelines. Readers may recall that HAMP Is the half-baked Do Something About the Mortgage Crisis program designed to give homeowners “permanent” year payment reduction mods, which is a kick the can down the road strategy.

In HAMP, servicers routinely asked borrowers to send the same documentation multiple times and assured borrowers they were likely to get a mod, only to refuse them. The worst is that many homeowners wound up worse off since they were not told that when the reduced payment trial mod ended, they would be asked to fork over the foregone portion of the payments plus late fees, pronto. Servicers often encouraged borrowers to use the savings to pay down other debt, thus assuring the homeowner would be unable to catch up and would lose their home.

The reason the Fed inquiry is curious is not that there were abuses; they were rampant. But HAMP was a voluntary program, and to encourage banks to participate, my understanding is there were no penalties for failure to adhere to its requirements, save Treasury could claw back incentive payments. Last August, when there had been a good deal of unfavorable press about HAMP, Treasury officials acknowledged that banks had gamed the program, but then maintained they had no power to do anything.

In fact, there are ways to pursue bank misconduct under HAMP, but it falls under more conventional notions of consumer protection rather than HAMP program guidelines per se. For instance, when the banks provided statements to consumers about how HAMP worked and then failed to adhere to them, that can probably be characterized as a consumer fraud...While it is good to see the normally somnambulant Fed rouse itself, this inquiry is….weird. Why is the Fed in charge, as opposed to Treasury or the OCC? Why doe the Fed suddenly think it has a basis for action on HAMP when the Treasury, which had been under pressure to look serious, said it was hamstrung? The most curious bit is that the Fed seems to have been prompted to act by the Financial Times letting the central bank know it had found some dirt. While this response is likely to be regulatory theater, the Fed seemed to be a tad more responsive to the FT than to most American press. Maybe we should encourage whistleblowers to send their damning information to the pink paper.

[Demeter]

79. The Government Is Preventing Private Housing Finance

http://www.theatlantic.com/business/archive/2011/05/the-government-is-preventing-private-housing-finance/239539/

A major investor explains that the market wants to return to mortgage securitization and won't demand very high interest rates...

[Demeter]

81. California Establishes Mortgage Fraud Task Force

http://www.nakedcapitalism.com/2011/05/california-establishes-mortgage-fraud-task-force.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

In further proof that attorneys general are abandoning the 50 state attorneys general investigation, California AG Kamala Harris announced that she is establishing a 25 person mortgage fraud task to look into abuses across the spectrum, from the individual borrower level to practices, such as questionable transfers to trusts when the securitizations were formed, that hurt investors.

Note that the defection of a second Democrat (Harris follows New York’s AG Eric Schneiderman in creating her own effort) from the AG investigation is particularly significant. A number of Republicans joined at the 11th hour and were never on board with the premise of talks, so their defection is expected. By contrast, the AGs from solidly Democratic states were expected to stay the course. The fact that the AGs from two major states have effectively left the talks confirm what we have said all along: that the negotiations were not serious precisely because no investigations had been conducted.

We applaud this step forward by Harris, since it shows at least some public servants are taking mortgage abuses seriously.

[Demeter]

106. Today’s New… “But, You Didn’t Make Your Payment” Exemption to the Law

http://mandelman.ml-implode.com/2011/05/today%E2%80%99s-new%E2%80%A6-%E2%80%9Cbut-you-didn%E2%80%99t-make-your-payment%E2%80%9D-exemption-to-the-law/

A RIGHTEOUS RANT ON THE SLIPPERY SLOPE OF LAWLESSNESS

[Demeter]

82. Gotta go walk the dog

The grandpuppy is sleeping over for a couple of nights...sweet dreams, all!

[Pale Blue Dot]

86. Carl Icahn Confesses That The "System Is Not Working Properly", Warns Of Another "Major Problem"

Confirming our ongoing observations that the pursuit of leveraged beta is the only game in town ("Levered Beta Uber Alles: NYSE Borse Margin Debt Jumps To Three Year Highs, Investor Net Worth Remains At Record Lows") is this surprising confession by hedge fund titan Carl Icahn, who not only warns that the levels of leverage achieved in the current centrally planned regime is as bad as it ever was, and that some form of Glass-Steagall should return, but that, stated simply, the entire "system is not working properly." His warning, stated in a very politically correct fashion, is that "there could be another major problem" either next week, or next year. Which is not surprising: after all not only has anything changed, but the very same drivers of risk that nearly crashed capitalism in Q3 2008, are back and arguably stronger than ever. That the Fed is the last recourse mechanism preventing an all out systemic wipe out probably should not be a source of comfort to anyone. In the end, the Fed, as any other authoritarian institution promoting central planning, will always lose.

Relevant transcript:

"I do think that there could be another major problem. Now, will it happen next week, next year, i don't know and certainly nobody knows, but i don't think that the system is working properly. I really find it amazing that we're almost back to where it was, where there's so much leverage going on in the investment banks today. There's just way too much leverage and way too much risk-taking, with other people's money. I know a lot of my friends on Wall Street will hate my saying this, but the Glass Steagall thing or something like it wasn't a bad thing. In other words, a bank should be a bank. Investment bankers should be investment bankers. Investment bankers serve a purpose, raising capital and whatever, but i think today, and i know a lot of people won't like hearing this, what's going on today, i think we're going back in the same trap, and i will tell you that very few people understood how toxic and how risky those derivatives were. CDS were extremely risky the way they were used, and you look at Wall Street and you say, hey, they did it, but then you can't really blame the Wall Street guys. You can't blame a tiger. If you take a fierce man-eating tiger and put him in with a lot of sheep, you can't blame the tiger for eating the sheep. And that's the nature of the tiger. And that's the nature of Wall Street. I'm not saying they're bad but that's their nature, and the government should regulate finance."

http://www.zerohedge.com/article/carl-icahn-confesses-system-not-working-properly-warns-another-major-problem-coming

[Demeter]

88. Does Icahn Mean He Can't Make Money, or That He Can't Protect His?

very interesting...

[Pale Blue Dot]

104. Mark Mobius Echoes Carl Icahn: "There Is Definitely Going To Be Another Financial Crisis"

In an almost verbatim repeat of Carl Icahn's words of caution which we noted yesterday, Templeton's legendary chairman Mark Mobius said that "another financial crisis is inevitable because the causes of the previous one haven’t been resolved" during a luncheon (menu included herb crusted chicken breast with cheese and tomato sauce, mashed potato and green vegetables, seasonal salad) at the Foreign Correspondents’ Club of Japan in Tokyo. Bloomberg reports: "There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes." Unlike Icahn, Mobius stopped short of calling for a return to Glass-Stegall and a repeal of the abominable Gramm-Leach-Bliley which unleashed the era of zero margin derivatives and financial system neutron bombs. On the other hand, it is nice of Messrs Icahn and Mobius to speak up now, two years after the ongoing systemic instability transferred $3.5 trillion in capital from current and future taxpayer generations to the present financial elite. We do, however, forgive them because in their better late than never contrition, they join the likes of Zero Hedge who since January of 2009 have warned, over and over, that nothing in the structure of capital markets has changed, and that the market could any day open not only bidless, but broken beyond even Brian Sack-ian band aid repair.

Mobius, as seems to be the conventional wisdom these days, focuses on the $600 trillion or so in OTC derivatives as the next source of systemic jeopardy:

http://www.zerohedge.com/article/mark-mobius-echoes-carl-icahn-there-definitely-going-be-another-financial-crisis

[Demeter]

89. Key bond yields fall amid global growth fears

Fall of 14%-15% in 10-year yields, the benchmark market interest rates for government bonds, has coincided with a sharp fall in inflation expectations in US, UK, Germany and Japan

Read more >>
http://link.ft.com/r/P75VYY/XT12G6/3CWTA/WLF4Y4/3OBKYJ/W1/t?a1=2011&a2=5&a3=30

[Demeter]

90. Increase in UK executive pay sparks anger

Heads of FTSE 100 companies took home median earnings of 32 per cent more last year while workers suffered the most prolonged squeeze in real wages since the 1920s

Read more >>
http://link.ft.com/r/P75VYY/XT12G6/3CWTA/WLF4Y4/72OE99/W1/t?a1=2011&a2=5&a3=30

[Demeter]

91. Russian banks target eastern Europe

Acquisitions in the region are being eyed up in a bid to take advantage of the continued weakness of some western institutions amid the financial crisis

Read more >>
http://link.ft.com/r/P75VYY/XT12G6/3CWTA/WLF4Y4/C5ARN3/W1/t?a1=2011&a2=5&a3=30

SOME LONDON BANKERS ARE GONNA BE REALLY MAD ABOUT THIS POACHING BY MOTHER RUSSIA.

[Demeter]

92. Japan to invest in quake-struck auto-parts industry

The state-backed Development Bank of Japan is setting up a fund to help the country’s auto-parts industry recover from the earthquake and tsunami

Read more >>
http://link.ft.com/r/P75VYY/XT12G6/3CWTA/WLF4Y4/6V6IQS/W1/t?a1=2011&a2=5&a3=30

[Demeter]

93. Vietnam and China oil clashes intensify

Tensions between China and Vietnam escalated as each nation accused the other of violating its sovereignty in the oil-rich South China Sea

Read more >>
http://link.ft.com/r/IOCBMM/4064KX/ULCJB/0GUD9W/JIXLBU/W1/t?a1=2011&a2=5&a3=30

THIS IS GOING TO END BADLY FOR VIETNAM--BUT WOULD US HEGEMONY BEEN ANY BETTER? THEN IT WOULD HAVE BEEN US VS. CHINA DIRECTLY...

"WHETHER THE STONE HITS THE PITCHER, OR THE PITCHER HITS THE STONE, IT'S GOING TO BE BAD FOR THE PITCHER"

---SANCHO PANZA, MAN OF LA MANCHA.

[Demeter]

94. Doctors and dentists tell patients, "all your review are belong to us"

http://arstechnica.com/tech-policy/news/2011/05/all-your-reviews-are-belong-to-us-medical-justice-vs-patient-free-speech.ars

When I walked into the offices of Dr. Ken Cirka, I was looking for cleaner teeth, not material for an Ars Technica story. I needed a new dentist, and Yelp says Dr. Cirka is one of the best in the Philadelphia area. The receptionist handed me a clipboard with forms to fill out. After the usual patient information form, there was a "mutual privacy agreement" that asked me to transfer ownership of any public commentary I might write in the future to Dr. Cirka. Surprised and a little outraged by this, I got into a lengthy discussion with Dr. Cirka's office manager that ended in me refusing to sign and her showing me the door.

The agreement is based on a template supplied by an organization called Medical Justice, and similar agreements have been popping up in doctors' offices across the country. And although Medical Justice and Dr. Cirka both claim otherwise, it seems pretty obvious that the agreements are designed to help medical professionals censor their patients' reviews. The legal experts we talked to said that the copyright provisions of these agreements are probably toothless. But the growing use of these agreements is still cause for concern. Patients who sign the agreements may engage in self-censorship in the erroneous belief that the agreements bar them from speaking out. And in any event, the fact that a doctor would try to gag his patients raises serious questions about his judgment...In any event, we think censoring patients is the wrong way for doctors to deal with online criticism. Consumers understand that no business satisfies 100 percent of its customers, and the medical profession is no different. If a dentist is worried that negative reviews will harm his reputation, he should respond by providing more information about his practice to prospective patients, and by encouraging his satisfied patients to post positive reviews online. The revelation that he is trying to censor his patients' reviews will do far more damage to his reputation than an occasional negative review ever could.


The agreement that Dr. Cirka's staff asked me to sign on that February morning began by claiming to offer stronger privacy protections than those guaranteed by HIPAA, the 1996 law that governs patient privacy in the United States. In exchange for this extra dollop of privacy, it asked me to "exclusively assign all Intellectual Property rights, including copyrights" to "any written, pictorial, and/or electronic commentary" I might make about Dr. Cirka's services, including on "web pages, blogs, and/or mass correspondence," to Dr. Cirka. It also stipulated that if Dr. Cirka were to sue me due to a breach of the agreement, the loser in the litigation will pay the prevailing party's legal fees...This seemed fishy to me, so I asked for more information. I had a long conversation with Dr. Cirka's office manager, who insisted that the agreement was not intended to censor the truthful reviews of Dr. Cirka's patients. Rather, she said, it gave Dr. Cirka a tool to remove fraudulent reviews. She said they were especially concerned about non-patients (such as competitors, ex-spouses, or former employees) writing fake reviews to damage Dr. Cirka's business. She didn't have a good answer when I pointed out that the agreement's text didn't say anything about fraudulent reviews. She also couldn't explain how the agreement could bind non-patients, who by definition will not have signed it. In fact, she seemed genuinely puzzled by my objections and gave the impression that I was the first person to raise these concerns. But she wouldn't budge on letting me see Dr. Cirka without signing, and she refused to give me a copy of the agreement so I could seek legal advice. Needless to say, I said "no thanks" and am now in the market for a different dentist.



Courts are unlikely to find the agreement to be a valid transfer of copyright. That's probably because the agreement isn't likely to hold up in court. Ars talked to Wendy Seltzer, a fellow at Princeton's Center for Information Technology who founded the Chilling Effects clearinghouse for copyright takedown notices. She said a medical professional seeking to use the copyright assignment to censor a review would have at least two serious legal problems. First, courts are unlikely to find the agreement to be a valid transfer of copyright. Blanket, prospective copyright assignments can be valid, but only in certain circumstances. For example, employees can assign any works created on the job to their employer. But online reviews don't fit into any of the usual categories of "works made for hire," and any doctor who claims her patients write reviews on her behalf is likely to be laughed out of court. Second, even if the assignment is valid, courts are likely to find that review sites are entitled to publish them under copyright's fair use doctrine...Seltzer told Ars that a dentist who tried to remove the review of someone who hadn't signed the agreement would face particularly severe problems in court. Under the "notice and takedown" procedure spelled out in the Digital Millennium Copyright Act, the person seeking to have material removed must certify, under penalty of perjury, that he holds the relevant copyrights. But if the author of a review never signed an agreement, then a doctor's claims to hold the copyrights would be a blatant lie, and he would face penalties under the DMCA...When Ars asked Schultz about medical professionals who ask their patients to sign these agreements, he was scathing. "It's completely unethical for doctors to force their patients to sign away their rights in order to get medical care," he said. He pointed out that patients seeking treatment can be particularly vulnerable to coercion. Patients might be in acute pain or facing a life-threatening illness. Such patients are in no position to haggle over the minutia of copyright law.

EVEN MORE AT LINK

[Demeter]

95. Why Christine Lagarde should never be head of the IMF

http://www.telegraph.co.uk/finance/comment/liamhalligan/8543964/Why-Christine-Lagarde-should-never-be-head-of-the-IMF.html

..I have previously argued it would be "a historic mistake" if the new IMF boss was a European. I robustly maintain that view. After all, the emerging markets now account for four-fifths of the world's population and almost half of global GDP. Since 2008, they have also commanded a higher share of world trade than the West. After years of economic out-performance, these countries now have around three-quarters of the world's currency reserves and, in stark contrast to debt-mired Western countries, generally boast healthy sovereign balance sheets.

The IMF specializes in fiscal bail-outs. Putting fairness and morality aside, it should be heavily influenced, and regularly run, by well-qualified nationals of the countries with the most fiscal strength. However much we deny it, and whatever the extent to which our ratings agencies are cowed by politicians, that seriously undermines the case for a Western candidate. When the IMF began, the West perhaps had much to teach the rest of the world about running a capitalist society – and the fiscal muscle and moral authority to impose our will. Those days have gone. Several of the big Western nations are now bankrupt in all but name, their sovereign debt markets reliant on printed money. Commercially, we are losing ground and our moral authority is depleted. We are showing the world how NOT to run a capitalist society. Yet our leaders sail on, oblivious to such realities, claiming the top jobs almost as their birthright.

This week I want to stress that the next IMF boss, while not hailing from the West, also shouldn't be a politician. Many argue that the case for a politician, especially a European politician like Lagarde, is currently very strong. For the first time ever, much of the IMF's lending is in Europe – given the continent's disgraceful sovereign debt crisis. So, we are told, the new Fund boss must understand and pay due deference to the nuances of European politics, in order to defuse the EU's fiscal time-bomb – a bomb that could easily explode, sending shockwaves across the world. Such reasoning is the basis of claims that Strauss-Kahn, impeccably connected across Europe and a political animal manqué, was a "superb" IMF boss. Yet such reasoning is absurd. The IMF works properly not when it is loved by the countries it is lending to, but when it is banging political heads together to get myopic, economically illiterate politicians to face up to fiscal realities. Unless the IMF is seen as tough – even unreasonably tough – then it isn't doing its job.

An IMF that colludes with the political classes isn't enacting reform. It is simply helping the politicians bury their mistakes and kick any problems into the long grass where they will fester. The IMF should be respected – even feared. It is for the politicians to stand up and face the political music – explaining to their electorates why harsh actions are needed and why nations can't go on living beyond their means...Perhaps the most dangerous type of politician to run the Fund is a politician still hankering after high office. Strauss-Kahn, of course, was using the post and the influence it bestowed over trillions of dollars of bail-out cash, as a platform for a French presidential bid. As such, he turned the IMF into a soft-credit society for the eurozone's periphery nations, holding the single-currency together for the benefit of his Franco-German friends. Strauss-Kahn's continued insistence on "just one more bail-out", rather than forcing Greece, Portugal and the rest to face up to genuine debt-restructuring, also made sure that the losses stayed with plebian taxpayers, rather than being shifted on to Europe's banks. He could have called in the favour, no doubt, when the need came to finance his campaign for the ultimate prize....MORE

[Demeter]

96. The Problem With Christine Lagarde

http://baselinescenario.com/2011/05/26/the-problem-with-christine-lagarde/

The EU has just over 30 percent of the votes in this quasi-election; the US has another 16.8 percent and seems willing to keep a European at the fund if an American can remain head of the World Bank. It should be easy for Ms. Lagarde to now travel round the world engaging in some old-fashioned horse trading, along the lines of: Support me now, and I or the French government will get you something suitable in return, either at the IMF or elsewhere...But Ms. Lagarde has a serious problem that may still derail her candidacy, if there is ever any substantive, open, or transparent discussion of her merits. There is major design flaw in the eurozone and Ms. Lagarde is the last person that non-European governments should want to put in charge of helping sort that out.

Ms. Lagarde is explicitly being put forward as someone who can represent the interests of the eurozone – at a time when the eurozone needs help. And it really is the eurozone as a whole – including France – that needs help, not just a couple of errant countries (Greece, Ireland, Portugal, and whoever might be next in line for market fears about its government debt and growth prospects). The founding assumption for the eurozone in 1999, which became a myth during the early 2000s, is that eurozone countries would converge in terms of productivity levels – to put it starkly, Greece would become very much like Germany. In that view of Europe, it did not much matter if some countries within the eurozone ran current account surpluses while others ran large deficits. The deficit countries could finance themselves with loans from the surplus countries, the reasoning went, because they would use the money for productive investments and economic growth would allow them to keep their debt levels relative to GDP under control.

None of this happened...The eurozone in its first iteration has failed to operate as intended. Unless you think Greece can now experience a miraculous productivity transformation, the eurozone leadership needs to make a choice. Do they integrate more, including with generous fiscal transfers to poorer, less dynamic member countries, where people do not like to pay taxes; or do they ease some countries out of the integrated financial system, creating two tiers of participation in the euro currency area – in which some eurozone countries cannot borrow from the European Central Bank?

Either way, the International Monetary Fund can potentially help with loans and with technical advice. But such money belongs to the international community – there are 187 member countries after all...Ms. Lagarde personifies the strategy of gambling for eurozone resurrection with other people’s money. Why would taxpayers in US and elsewhere want to support her on this basis?

MORE

[Demeter]

98. Marshall Auerback: To Save the Euro, Germany Has to Quit the Eurozone

http://www.nakedcapitalism.com/2011/05/marshall-auerback-to-save-the-euro-germany-has-to-quit-the-eurozone.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Marshall Auerback, a portfolio strategist, hedge fund manager, and Roosevelt Institute fellow

When the euro was launched, leading German politicians used to argue, with evident relish (and much to the chagrin of the British in particular), that monetary union would eventually require political union. The Greek crisis was precisely the sort of event that was expected to force the pace. But, faced with a defining crisis, Ms Merkel’s government is avoiding airy talk of political union – preferring instead to force harsh economic medicine down the throats of the reluctant Greeks, Irish, Portuguese and Spanish electorates. This is becoming both economically and politically unsustainable. If the objective is to save the currency union, perhaps policy makers are looking at this the wrong way around. In the end, paradoxically, to save the European Monetary Union, the least disruptive way forward would be for the Germans, not the periphery countries, to leave...
Let’s leave aside the politics for a moment as there are many who believe that a German exit from the euro zone in effect means the end of the euro because a number of other countries would leave.


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

So consider this exercise solely from an economic context: The likely result of a German exit would be a huge surge in the value of the newly reconstituted DM. In effect, then, everybody devalues against the economic powerhouse which is Germany and the onus for fiscal reflation is now placed on the most recalcitrant member of the European Union. Germany will likely have to bail out its banks, but this is more politically palatable than, say, bailing out the Greek banks (at least from the perspective of the German populace)...To be sure, this will not come without some cost to Germany: Germany will probably save its banking system at the expense of destroying its export base. The newly reconfigured DM will soar against the euro and become the ultimate safe haven currency. This will mitigate the write-down impact of the inevitable haircuts on euro-denominated debt, because the euro (assuming it is retained by the remaining euro zone countries) will fall dramatically. Even if the euro itself vaporizes, the Germans simply will pay back debt in the old currencies, likely fractions of their previous value. And the German populace would likely find it far more palatable to be bailing out its own banks (as it did during the reunification period), as opposed to spending German taxpayer funds to recapitalize the banking systems of a bunch of Mediterranean “profligates”...

Once divorce from the euro is complete, Germany will regain its fiscal freedom. This is itself something the Germans should celebrate, providing their government takes advantage of their newfound fiscal freedom. Remember, once it returns to the Deutsche Mark (DM), Germany becomes the issuer, as opposed to the user of a currency, as is the case under the euro, and is fully sovereign in respect of its fiscal and monetary policy. Consequently, the German government can offset the external shock by running large government budget deficits, which will add new net financial assets to the system (adding to non government savings) available to the private sector. Germany might well decide not to adopt this course of action, given its historic resistance to aggressive fiscal policy, but it will no longer be bound by any of the institutional constraints inherent in the European Monetary Union...In the meantime, the rest of the euro zone gets a huge boost to competitiveness via a (likely) substantial fall in the euro against the newly reconstituted DM. Also, the resultant potential instability means that the ECB would likely have to stand ready to backstop all of the bonds to prevent this from becoming a fully-fledged crisis, but it would encounter less political resistance to doing so, given the absence of a restraining German voice in the European Monetary Union.

It seems like an odd way to consider the problem, but the paradox of the current situation suggests that an exit from the euro zone of its strongest member, rather than its weakest links, might well be the optimal means of saving the euro, in the absence of a fully fledged return to separate national currencies.

[Demeter]

99. Against Learned Helplessness By PAUL KRUGMAN

http://www.nytimes.com/2011/05/30/opinion/30krugman.html?_r=2&hp

Unemployment is a terrible scourge across much of the Western world. Almost 14 million Americans are jobless, and millions more are stuck with part-time work or jobs that fail to use their skills. Some European countries have it even worse: 21 percent of Spanish workers are unemployed... This is a continuing tragedy, and in a rational world bringing an end to this tragedy would be our top economic priority. Yet a strange thing has happened to policy discussion: on both sides of the Atlantic, a consensus has emerged among movers and shakers that nothing can or should be done about jobs. Instead of a determination to do something about the ongoing suffering and economic waste, one sees a proliferation of excuses for inaction, garbed in the language of wisdom and responsibility...So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility... who is talking seriously about job creation these days? Not the Republican Party, unless you count its ritual calls for tax cuts and deregulation. Not the Obama administration, which more or less dropped the subject a year and a half ago. The fact that nobody in power is talking about jobs does not mean, however, that nothing could be done.

Bear in mind that the unemployed aren’t jobless because they don’t want to work, or because they lack the necessary skills. There’s nothing wrong with our workers — remember, just four years ago the unemployment rate was below 5 percent...

For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners. We could try to get inflation back up to the 4 percent rate that prevailed during Ronald Reagan’s second term, which would help to reduce the real burden of debt...So there are policies we could be pursuing to bring unemployment down. These policies would be unorthodox — but so are the economic problems we face. And those who warn about the risks of action must explain why these risks should worry us more than the certainty of continued mass suffering if we do nothing.

In pointing out that we could be doing much more about unemployment, I recognize, of course, the political obstacles to actually pursuing any of the policies that might work. In the United States, in particular, any effort to tackle unemployment will run into a stone wall of Republican opposition. Yet that’s not a reason to stop talking about the issue. In fact, looking back at my own writings over the past year or so, it’s clear that I too have sinned: political realism is all very well, but I have said far too little about what we really should be doing to deal with our most important problem. As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle.

[Demeter]

100. Morgenson Runs Peterson Institute Propaganda Against “Entitlements”, Medicare & Social Security

I DON'T KNOW HOW, BUT THIS PETERSON GUY IS GOING TO COME TO A HORRIBLE END...AND THE BIG DOG CAUGHT FLEAS FROM HIM?

http://www.nakedcapitalism.com/2011/05/morgenson-runs-peterson-institute-propaganda-against-entitlements-meaning-medicare-and-social-security.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Peterson Foundation’s well-funded campaign to gut Social Security and Medicare...the government deficits and the need to take Serious Measures to get them under control, which of course means reducing entitlements, in particular Social Security and Medicare. ...

YVES RIPS GRETCHEN TO SHREDS!

[Demeter]

101. Bill Black: In Praise of Sorkin’s Praise of Lowenstein’s Praise of Financial CEOs

http://www.nakedcapitalism.com/2011/05/bill-black-in-praise-of-sorkin%E2%80%99s-praise-of-lowenstein%E2%80%99s-praise-of-financial-ceos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Roger Lowenstein has just taken the brave step of praising the failure to prosecute elite financial managers for fraud as a demonstration of the greatness of America. Lowenstein declares (1) that Blankfein was right – Goldman really was doing “God’s work,” (2) virtually no financial elites committed crimes, (3) any crimes they may have committed were trivial and played no material role in causing the crisis, (4) those that wish to hold fraudulent elites accountable for their crimes are (a) financially illiterate, (b) paranoid conspiracy theorists equivalent to those claiming the U.S. attacked the twin towers on 9/11, (c) a threat to our democracy and constitutional rights, and (d) engaged in “punishing profit,” (5) the prosecutors who refuse to bring criminal charges where they find elite frauds are the heroes safeguarding our democracy and constitutional rights, (6) the FBI is conducting a “serious” investigation of the elite financial frauds (despite points one through four above), and (7) the crisis was caused by “society” – because we’re all guilty no one should be held accountable – except those paranoids who want to destroy America’s greatness by prosecuting financial CEOs on fraud charges.

BILL GOES ON FROM THERE--WE DIG THE DIRT, WHEREVER IT MAY LIE!

[bread_and_roses]

102. A few gems from today's "Regressive Antidote"

Just to whet your appetite - it can be read in full at either the site http://www.regressiveantidote.net/ or over at Common Dreams

Dispatches from the End of Empire
by David Michael Green

...The good news is that the Republican Party is showing some serious signs of preparing for self-immolation.

The bad news is that that leaves us with Barack Obama and the other Republican Party as an ‘alternative’.

Such is the state of America at the end of empire. ...

...You can bet the house that any politician who makes it his or her business to speak and legislate on your sexuality is, in fact, secretly one of the most twisted vines in the jungle. Count on it. ...

...This country is fighting three or four wars at the moment (or is it more? – I’m a professor of international relations, and I can’t even keep an accurate count)...

...As to the present, the only folks on the planet capable of making Obama look like a political giant just happen to be the same folks going for the Republican Party presidential nomination. ...

[Demeter]

103. Arizona Land Sells for 8% of Price Calpers Group Paid at Peak

http://www.bloomberg.com/news/2011-05-27/arizona-land-sells-for-8-of-price-calpers-group-paid-at-peak.html

A 10,200-acre (4,100-hectare) desert site in Arizona sold for $32.5 million this week, five years after a group with investors including the California Public Employees’ Retirement System paid $400 million for the land...

[westerebus]

107. There is no deflation.

There is no deflation.

There is no deflation.

There is no deflation.

Inflation must happen.

Inflation will save us.

The Bernank will make the inflation.

There is no deflation.

Growth will happen with the inflation.

Inflation growth will save us.

The Bernank will make the inflation growth to save us.

There is no deflation.

There is no deflation.

QE made the S&P inflation.

QE 3 will save the growth inflation.

There is no deflation.

The Bernank must do the QE 3 to make the inflation growth and save the S&P.

The S&P will save us.

There is no deflation.

The HFT will save us.

The HFT growth inflation QE 3 will save us.

The Bernank will make it so.

There is no deflation.

[Demeter]

109. What kind of beads goes with that?

Rosary, Tibetan prayer beads, or maybe, Greek worry beads?

[westerebus]

110. I'd go with Greek.

Seems fitting.

[Demeter]

108. Well, I Have to Go Run the BBQ Now

Our annual (3rd year) event. I doubt there will be anything left of me tonight, so I bid you all a good week, and keep on posting!

At least, we can set the records straight.