Weekend Economists Play End Games Labor Day Weekend 2011 (9/2-5)

[Demeter]

"It was the best of times, it was the worst of times..."

Scratch that. It's the worst of times. It is the End Times, the end of the world as we knew it and were born into.

Every culture above starvation level has a "history" of life, its start, its course between the forces of Good and Evil, and then, the collapse of existence. Those cultures at starvation level have a mythology of good times to come, in the future, or after death. Which kind of culture are we?

It's a mix.

• We have population groups so starved nutritionally, medically, educationally, that they are dying while the greater world doesn't lift a finger.
  
  
• We have groups so intellectually and morally starved, that they think it's a good thing that other people are starving, so they don't have to. Boy, have they got a surprise coming!
  
  
• And we have the Elite, who think it's perfectly proper to see that the first two groups vanish from the face of the earth to satisfy Elitist greed for More, More, More! because they will never know the feeling of Enough.
  
  
• Last, there are the Gadflies, who see the strings, the lies, the wrongness, and bat themselves silly trying to reach and teach the rest.

So, fellow gadflies, let us bat a few ideas around about Life and Death, the Twilight of the Gods, the Mayan calendar, and economics. We have 3.5 days to do it in...that should be a good start. Post your ideas here!

Gotterdammerung Finale

http://www.youtube.com/watch?v=146tTKSXu7s






It's The End Of The World As We Know It (and I Feel Fine...)

http://www.youtube.com/watch?v=_eyFiClAzq8

[Demeter]

1. While it is likely that no banks will fail tonight

It is VERY likely that we have seen the beginning of the end of the 17 banks that FHFA is suing for fraud in regards to the MBS sold to Fannie and Freddie.

I don't see how they can wiggle out of that one. Not to say that they won't try to pressure everybody and his Congressman until the foul deed is done.

[Demeter]

2. FHFA Sues 17 Banks Over Massive Mortgage Losses At Fannie and Freddie

http://www.forbes.com/sites/afontevecchia/2011/09/02/fhfa-sues-17-banks-over-massive-mortgage-losses-at-fannie-and-freddie/

Friday after the closing bell, and ahead of a Labor Day weekend, the Federal Housing Finance Agency confirmed it was suing 17 different financial institutions for misrepresenting the quality of mortgage backed securities sold to Fannie Mae and Freddie Mac.

Affecting major banks like Bank of America, JPMorgan Chase, Goldman Sachs and Citigroup, the suit alleges negligent misrepresentation, securities laws violations, and common fraud as they issued, bundled, and sold MBS to government sponsored enterprises....

The FHFA is not looking for repurchases, but rather is looking to retrieve losses on Fannie and Freddie’s loan portfolios. JPMorgan is being sued over $33 billion in securities, while Bank of America-Merrill Lynch is on the hook for almost $25 billion, and the Vampire Squid, Goldman Sachs, is in for $11.1 billion...UBS suffered the FHFA’s lawyers back in July when it was sued for the violations, with the FHFA looking for $900 million on a $4.5 billion portfolio. According to CNBC, the total amount involved in the current suit tops $120 billion. According to the NY Times, Fannie and Freddie lost over $30 billion as a result of the financial crisis, most of which was borne by taxpayers....

...a list of major institutions along with the value over which they are being sued for.



1. Ally Financial Inc. f/k/a GMAC, LLC ($6 billion)

2. Bank of America Corporation ($5 billion)

3. Barclays Bank PLC ($4.9 billion)

4. Citigroup, Inc ($3.5 billion)

5. Countrywide Financial Corporation ($26.6 billion, Countrywide was bought by Bank of America)

6. Credit Suisse Holdings (USA), Inc

7. Deutsche Bank AG ($14.2 billion)

8. First Horizon National Corporation ($883 million)

9. General Electric Company ($549 million)

10. Goldman Sachs & Co. ($11.1 billion)

11. HSBC North America Holdings, Inc. ($6.2 billion)

12. JPMorgan Chase & Co. ($33 billion)

13. Merrill Lynch & Co. / First Franklin Financial Corp. ($24.8 billion)

14. Morgan Stanley

15. Nomura Holding America Inc. ($2 billion)

16. The Royal Bank of Scotland Group PLC ($30.4 billion)

17. Société Générale ($1.3 billion)

[midnight]

71. I'm curious as to why Wells Fargo is not on this list...

[Demeter]

74. You aren't the only one...see just a few posts down

[midnight]

106. Thanks...

[plumbob]

95. Looks like a good start.

Sic 'em.

[Demeter]

3. Clusterstock adds

...Goldman Sachs, Deutsche Bank, Morgan Stanley, and (now BofA subsidiary) Merrill Lynch have also been sued for fraud for making "false and/or misleading statements" about the securities and the underlying loans. The FHFA has asked for unspecified punitive damages against the companies.

Noteworthy: It sounds like the House Financial Services Committee was kept in the dark on this, signifying that the FHFA is acting as an independent agency on this one. Also, lots of people are named as individuals in the lawsuits. The White House did not comment on the lawsuits Friday afternoon.

The lawsuits, and the others that will follow it, were anticipated as early as at least late yesterday when the NYTimes reported that banks would be sued for their roles in the mortgage crisis.

The lawsuits seek damages in the BILLIONS — with specific dollar amounts to be determined if FHFA victorious at trial.

The news sent U.S. financials down big time Friday morning, and is particularly bad for Bank of America, as they are already on shaky ground.

Here's the press release from the FHFA: SEE LINK

Read more: http://www.businessinsider.com/it-begins-fhfa-sues-barclays-and-bank-of-america-2011-9#ixzz1WqRwKdCb

[Demeter]

4. VIDEO from CNBC

http://video.cnbc.com/gallery/?video=3000043583

[Demeter]

5. Barclays, BofA, JPMorgan Sued by FHFA

http://www.bloomberg.com/news/2011-09-02/barclays-bank-of-america-are-sued-by-fhfa-over-mortgage-backed-securities.html

...In lawsuits filed today in New York state and federal courts and in federal court in Connecticut...FHFA is seeking to have some defendants refund the investments with interest and pay other damages, including punitive damages for alleged misconduct...

Fannie Mae and Freddie Mac have operated under U.S. conservatorship since 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency...

“The claims brought by the FHFA are unfounded,” said Frank Kelly, a spokesman for Frankfurt-based Deutsche Bank. “Fannie Mae and Freddie Mac are the epitome of a sophisticated investor, having issued trillions of dollars of mortgage-backed securities and purchased hundreds of billions of dollars more, often after hand-picking the loans they now claim should not have been included in the offerings.”

WELL, THEY CERTAINLY SHOULD HAVE BEEN. AND UNTIL THEY WERE PRIVATIZED, THEY PROBABLY WERE. HOPE THEY GET JOHNSON, WHO RAN FANNIE INTO THE GROUND, TOO.

[Demeter]

6. KABOOM!

http://4closurefraud.org/2011/09/02/kaboom-fhfa-sues-17-firms-to-recover-losses-to-fannie-mae-and-freddie-mac-filings/



http://www.youtube.com/watch?v=UbycvUQzVD8&feature=player_embedded

THEME FOR THE FIASCO

[Po_d Mainiac]

41. Will Buffett take a bath?

:hide:

[Demeter]

43. We'll just have to wait and see

Supposedly he's already made money on the deal, since the announcement goosed the stock significantly....the dirty old man of Omaha never takes baths, I expect. He just takes advantage.

[Po_d Mainiac]

45. ...

And get this - he dreamt up the idea to invest in Bank of America yesterday - in the bathtub.



Read more: http://www.businessinsider.com/berkshire-hathaway-to-invest-5-billion-in-bank-of-america-2011-8#ixzz1Wqu9ZWBW

[Demeter]

46. One of these days, some crook is gonna make him an offer he should refuse

and that may have been this week....

[Demeter]

47. my computer has been cranky ever since the last update, sorry

[Hawkowl]

49. Notice the abscence of Wells Fargo

Buffet's preferred bank. I don't think Buffet is going to lose. I'm just curious as to the game he is playing. Maybe he plans on getting first dibs on some of BofA's choice assets?

[Demeter]

54. That IS Odd

If they are going to sue GE, surely it's an oversight? Perhaps they are going to have a second filing....

[Demeter]

67. How a big US bank laundered billions from Mexico's murderous drug gangs

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.

During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.

The authorities uncovered billions of dollars in wire transfers, traveller's cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine....

MAYBE WELLS FARGO HAS BEEN NOMINATED TO FILL THE GAP LEFT BY THE DEMISE OF BCCI (BANK OF CROOKS AND CRIMINALS, INC. THE CIA'S BANKER?)

[Po_d Mainiac]

87. Look at it this way

The closing price of BAC was within a dime of his warrents agreement of $7.14 (after falling $0.66 for the day..Down 8%). Another similar sell-off without a share price recovery and $7/share may be a pipe dream. So that end of the deal may not work since the warrents are already close to being worthless.

Barfett may have also figured a sector move on the 'revelation' wood give WFC a 'sympathy' jump. At the time of the announcement he'd lost some $3/share from the $25/share he likely bought at. He got the bump up, but it quickly faded with yesterdays 'down the drain' rinsing of bank stocks.

His "guaranteed 6% on $5bil (or $300,000,00) could easily be more than washed out with further stock declines.

At this stage it appears the old fart crapped in the bathtub, and rinsed with the same water.

[Demeter]

11. Banks to avoid big shake-up until 2015 (THAT'S IN BRITAIN, FOLKS)

http://www.ft.com/cms/s/0/32acb8de-d3f1-11e0-b7eb-00144feab49a.html?ftcamp=rss#axzz1Wqa5n4ql

EXCEPT FOR THOSE UK BANKS NAMED IN ALL THOSE LAWSUITS....

[Demeter]

13. CORRECTION: 2 BANKS IN GEORGIA DOWN

Georgia Commerce Bank, Atlanta, Georgia, acquired the banking operations, including all the deposits, of Patriot Bank of Georgia, Cumming, Georgia, and CreekSide Bank, Woodstock, Georgia. The two banks were closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Georgia Commerce Bank.

Patriot Bank of Georgia had one branch, and CreekSide Bank had two branches. Due to the Labor Day holiday, the three branches of the two failed banks will reopen as branches of Georgia Commerce Bank on Tuesday, September 6...As of June 30, 2011, Patriot Bank of Georgia had approximately $150.8 million in total assets and $111.2 million in total deposits; and CreekSide Bank had total assets of $102.3 million and total deposits of $96.6 million. In addition to assuming all of the deposits of the two Georgia banks, Georgia Commerce Bank agreed to purchase essentially all of their assets.

The FDIC and Georgia Commerce Bank entered into loss-share transactions on the failed banks' assets. The loss-share transaction for Patriot Bank of Georgia covers $136.2 million of its assets, and the loss-share transaction for CreekSide Bank covers $69.2 million of its assets. Georgia Commerce Bank will share in the losses on the asset pools covered under the loss-share agreements...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Patriot Bank of Georgia will be $44.4 million and for CreekSide Bank, $27.3 million. Compared to other alternatives, Georgia Commerce Bank's acquisition of the two institutions was the least costly resolution for the FDIC's DIF.

The closings are the 69th and 70th FDIC-insured institutions to fail in the nation so far this year and the eighteenth and nineteenth in Georgia. The last FDIC-insured institution closed in the state was First Southern National Bank, Statesboro on August 19, 2011.

$96.5 M LOSSES FOR THE WEEKEND

[Demeter]

27. BNY Mellon ousts chief executive Kelly

Bank cites ‘differences in approach’ over management and appoints 30-year veteran Gerald Hassell as his successor

Read more >>
http://link.ft.com/r/H60H77/FKIVN8/Z87P0/XT1Y03/5VAJ3I/UP/t?a1=2011&a2=9&a3=1

[Demeter]

68. Regulators Ask Bank of America About Contingency Plans

http://www.nakedcapitalism.com/2011/09/regulators-ask-bank-of-america-about-contingency-plans.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

We quoted Tom Adams on the matter of the Buffett investment in the Charlotte bank:

This is being spun as good news for BofA but it is really a sign of just how much trouble they are in. This is step one of their rescue. The powers that be felt they could not wait any longer with BofA so damaged, and that a run or crisis was one bad news day away (earlier this week I predicted some rescue action within 2-3 weeks). Step two, some additional lifeline will show up in September. Step three will be a sale of Merrill.

Some readers rejected the idea that a Merrill separation would ever be in the cards, given that Bank of America has made a great deal of noise about how it has integrated the securities firm. But the fact is that Merrill, or any of the major capital markets players would be well nigh impossible to resolve without having serious market impact. Harvey Miller, the dean of the American bankruptcy bar, was quoted in Too Big Too Fail as saying that winding down a mere midsized US securities firm was a highly disruptive event. Not that Merrill would have to be wound down, but if the old BofA foundered and Merrill had been knit tightly into the commercial banking operations, it could be extremely difficult to reverse the deal.

A story in the Wall Street Journal indicates that the bank has considered some preliminary measures in its contingency plans:

Executives of the bank recently responded to the unusual request from the Federal Reserve with a list of options that includes the issuance of a separate class of shares tied to the performance of its Merrill Lynch securities unit, these people said. Bank of America purchased Merrill Lynch in 2009, and it has become the bank’s most profitable division.

Chief Executive Brian Moynihan isn’t expected to pull the trigger soon, if ever, on the creation of a so-called Merrill Lynch tracking stock. Such a move would raise money from investors but could be viewed as counter to Mr. Moynihan’s strategy of knitting together the disparate parts of the franchise into a cohesive whole. Its inclusion on the list as a theoretical option shows the bank is considering all possibilities as it wrestles with an array of problems weighing down its shares….

The Fed’s call for more documentation about what the bank might do in more-extreme circumstances was a response to uncertainty about a U.S. economic recovery and a downward swing in Bank of America’s share price earlier this year, one of these people said. It was a one-time request, although the Fed has done the same with other firms in the past.

Bank of America did the analysis at the Fed’s request in late July and early August and then provided the Fed with its menu of options, said people familiar with the situation. Some items, such as the tracking stock, were more theoretical than others.

Mr. Moynihan isn’t giving the tracking stock serious consideration at this point, said a person familiar with the situation, but he included it on the list to show the company has multiple levers to pull.

I must stress, as the Journal does, that no action of this sort appears to be imminent. However, Bank of America’s mortgage woes appear to be worsening by the day. If Europe goes into a full-blown crisis, investors will dump investments they perceive to be risky first and ask questions later, and BofA is very likely to be caught in the downdraft. One gets the strong impression that management does not appreciate how real this risk is. Thus while regulatory prodding to develop contingency plans is in theory a sound measure, in practice they won’t do much good if management refuses to believe that they might be needed.

[Ruby the Liberal]

97. Ha! To the contrary

The "integration" of BoA and ML was carefully crafted to maintain a firewall that could easily be unlocked and pushed in separate directions at the wave of a corporate directive with nary a sweat broken. It didn't take a computer genius to see the mechanics (and obvious reasons behind certain decisions).

It has been a running joke for years now.

[Demeter]

69. The More You Look, The More Bank Criminality You Find in Mortgage Land

http://www.nakedcapitalism.com/2011/09/the-more-you-look-the-more-bank-criminality-you-find-in-mortgage-land.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Associated Press reports that Guiford County, North Carolina register of deeds Joe O’Brien has found evidence of robosigning in his filed dating back to 1998. This is significant because:

Servicers did nothing on a one-off basis. If O’Brien found robosigned documents in his files that far back, it is certain there are other examples in other jurisdictions dating back that far.

It indicated the procedural abuses are much longer standing than virtually all commentators had assumed. I had thought it started with the 2002-3 refinancing boom, when servicers failed to staff up to meet big increases in volumes, which led to corners-cuttting in origination and eventually led to abuses in foreclosures. But this records search indicates the bad practices started much earlier and came to be applied over time on a more widespread basis.

The second sighting comes from American Banker’s Kate Berry, and provides additional confirmation of other reports that banks continue to engage in backdating of documents after having piously sworn to stop that sort of thing:

Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.

Many banks are missing the original papers from when they securitized the mortgages, in some cases as long ago as 2005 and 2006, according to plaintiffs’ lawyers. They and some industry members say the related mortgage assignments, showing transfers from one lender to another, should have been completed and filed with document custodians at the time of transfer.

“It’s one thing to not have the documents you’re supposed to have even though you told investors and the SEC you had them,” says Lynn E. Szymoniak, a plaintiff’s lawyer in West Palm Beach, Fla. “But they’re making up new documents.”

The banks argue that creating such documents is a routine business practice that simply “memorializes” actions that should have occurred years before. Some courts have endorsed that view, but others, such as the Massachusetts Supreme Judicial Court, have found that this amounts to a lack of sufficient evidence and renders foreclosures invalid.

It’s disturbing at this juncture that Felix Salmon more or less falls in with the bogus bank party line on “memorializing” (he finesses it by saying they need to do it “transparently”). I suggest he try talking to an attorney who is expert in securitizations and does not have opinion letter liability on this matter. The contracts that governed these deals were immutable and set forth in precise detail the steps various parties to the deal were required to perform. That included strict cutoff dates for getting the properly prepared notes and mortgages to the securitization trusts. Long-standing precedents for New York trusts (virtually all RMBS trusts are New York trust) call for delivery to the trust to be as perfect as possible. Since all securitization through at least the late 1990s did deliver all the notes and mortgages to the trusts as stipulated, there is no excuse for later changes in practice (as in if the parties wanted to simplify procedures for reasons of cost or convenience, they needed to change the governing agreements to reflect that).

Put it another way: what about the Statute of Frauds don’t you understand? And while some judges have sided with banks, the robosigning scandal and greater media coverage of mortgage abuses has led many jurists to be much less bank friendly than they were a mere year ago. The trend is moving decisively against, not for, the banks... As we have stressed in repeated past posts, the failure to get the notes to the securitization trusts by the cutoff date is not fixable by any legitimate means. Do you think banks and law firms would continue to fabricate documents, particularly in the wake of so much harsh media and Congressional scrutiny, if they had any other way out?

The failure to get the notes to the securitization trust correctly does NOT mean that no one has the right to foreclose. It does mean that the party that can foreclose is someone earlier in the securitization chain who was paid for the note but in effect, no one bothered to collect it from him. No one wants that party to foreclose because, first, it would prove that the securitization did not have the note and investors were misled, and second, there is no way to get the proceeds into the trust for the benefit of the investors....

[Demeter]

75. Iowa Says State AG Accord Won’t Release Banks From Liability

http://www.bloomberg.com/news/2011-09-02/iowa-s-miller-says-foreclosure-deal-won-t-release-banks-from-all-liability.html

VERY INTERESTING CAT FIGHT...IS IT A CAT FIGHT WHEN BOTH PARTIES ARE MALE?

The 50-state attorney general group investigating mortgage foreclosure practices won’t release banks from all civil, or any criminal, liability in a settlement, Iowa Attorney General Tom Miller said.

Miller said criticism of the multistate case was based on the “false notion” that its organizers were prepared to release the banks from all liability, including criminal liability. New York Attorney General Eric Schneiderman has been portrayed as resisting that position, Miller wrote in a letter to New York lawmakers who complained about Schneiderman’s removal from an executive committee working on the agreement.

“The negotiation committee, working on behalf of all 50 states, does not have any intention of constraining the office of the New York attorney general in any way, has not tried to do so and could not do so,” Miller said. “Schneiderman was removed from the executive committee because he has, over the last several months, undermined our efforts to reach an agreement.”

Schneiderman walked away from negotiations with the banks, Miller said. A spokesman for Schneiderman, Danny Kanner, declined to comment on Miller’s letter...

WHO YOU GONNA BELIEVE, TOM MILLER OR ERIC SCHNEIDERMAN? I FOLLOW THE MONEY...

[Demeter]

80. IA AG’s Office Whining That They’re Not Getting Credit for Settlement Bank of America Violated

http://www.emptywheel.net/2011/08/31/ia-ags-office-whining-that-theyre-not-getting-credit-for-settlement-bank-of-america-violated/

The folks desperately working to give the banks a Get Out of Jail Free card for their servicing abuses are trying hard to deny they’re not doing so.

Take this anonymous accusation from someone involved in the settlement talks claiming that opponents of the settlement are using innuendo to smear those participating in it.

Another person close to the talks, who like several others spoke on the condition of anonymity to discuss the situation more freely, said many in the group are “just exasperated. . . . This smear campaign of lies and innuendo, it’s uncalled for, it’s unprecedented, and it threatens substantial consumer harm.”

Aside from the fact that even if there were such a campaign it would not be unprecedented, since folks have tried to suggest Eric Schneiderman committed an impropriety by paying himself back for a campaign loan he made to his campaign....

[Demeter]

81. In 50-state foreclosure negotiations, dispute underlines basic questions

http://www.washingtonpost.com/business/economy/in-50-state-foreclosure-negotiations-dispute-underlines-basic-questions/2011/08/29/gIQAIiScqJ_print.html

A recent and acrimonious dispute among state officials over a possible legal settlement to address nationwide mortgage abuses is underscoring basic questions about what the effort should accomplish...In settling claims against the largest banks related to “robo-signed” foreclosure documents and other flawed paperwork, should officials seek to rectify all the wrongs of the mortgage crisis? How big a settlement is big enough? What approach will net the best deal for struggling homeowners?

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

...So many parties are involved that 50 people or more have regularly crowded into negotiating sessions held in hotel conference rooms in and around Washington. Some rounds have lasted more than eight hours. The state and federal officials, as well as the bank lawyers and executives who have crammed into the sessions, have a running joke that the negotiations resemble the Paris peace talks on Vietnam...Despite the intricate issues and numerous parties, officials say they are on the brink of securing a settlement that would revamp the way banks service millions of mortgages, lead to more loan modifications for troubled homeowners and extract roughly $20 billion in penalties that quickly could go toward foreclosure prevention efforts.

But New York Attorney General Eric Schneiderman has been arguing in favor of investigating an even wider range of mortgage-related practices, leading to “comprehensive resolution” that places homeowners and large investors in mortgage securities at the same table. He has suggested that officials involved in the 50-state talks have been too hasty in seeking a settlement and are at risk of releasing banks from future claims that go beyond the issues probed so far...If Schneiderman were to get his way, his critics warn, homeowners could end up at the same table as massive asset and investment management firms such as Pimco and BlackRock. The interests of ordinary homeowners could end up competing with those of financial heavyweights. Even more thorny legal issues, such as those related to the way pools of mortgages were bundled and sold to investors, would be injected into the discussions...Critics say such an approach would delay a final settlement, with no guarantee of helping homeowners at the end of the day...

[Demeter]

84. Matt Stoller: Sell America to China Faster, Says NY Fed Official, Schneiderman Foe Kathryn Wylde

http://www.nakedcapitalism.com/2011/08/matt-stoller-sell-america-to-communist-china-faster-says-new-york-fed-official-and-schneiderman-foe-kathryn-wylde.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The elite consensus in American politics is held together by a small group of well-paid and well-connected insiders who are marbled throughout the world of corporations, banks, government service, and elite nonprofits. Who are they? And what do they believe?

One way to start is to look at who is being recruited to attack Eric Schneiderman, the liberal New York Attorney General going after the big banks. Normally these people stay behind the scenes, but in this case, we’re getting a nice peak behind the curtain. The best example so far is Kathryn Wylde, the chief of the nonprofit Partnership for New York City, a big bank/corporate-funded lobbying group that advises political officials on how to build a more business-friendly New York.

Wylde, importantly, sits on the Board of the New York Federal Reserve as a Class C Director, the group that is supposed to represent “the public”. Yet, after Schneiderman got into a contentious legal fight with Bank of New York Mellon over foreclosure fraud, the bank literally referred reporters to Wylde for her comment. She even went so far as to confront Schneiderman at a funeral. Because she’s a director of the New York Fed, her actions reflect on the Fed. Let’s start there. Wylde is appointed, and can be fired, by the Federal Reserve Board in Washington, DC, according to Section 11(f) of the Federal Reserve Act (these Board members are Ben Bernanke, Janet Yellen, Elizabeth Duke, Dan Tarullo, and Sarah Bloom Raskin).

Should she be fired? Let’s look at the facts. Wylde is subject to this restriction in the Federal Reserve Act.

“Class C Directors as Employees or Stockholders of Banks No director of class C shall be an officer, director, employee, or stockholder of any bank.”

The odds are high that she owns mutual funds or bank shares. She made $466,000 last year. Unless she has profligate spending habits, or is unusually risk averse, she probably has a decent sized investment portfolio, and if she invested along orthodox lines, a chunk of it would be diversified holdings of domestic stock, which would have to include bank shares. The NY Fed is pretty sloppy about its ethics issues. For instance, former NY Fed class C director and ex-Goldman co-chariman, Steve Friedman, bought Goldman shares while privy to and probably influencing Fed “save the bank” efforts in early 2008. Eliot Spitzer pointed to clear conflicts of interest regarding Jeff Immelt. You’d expect the Federal Reserve Board in DC to put a stop to this, but so far, it has allowed Wylde to continue in her role.

Wylde’s open opposition to New York attorney general Eric Schneiderma’s objecting to a proposed $8.5 billion Bank of America mortgage settlement appears to run afoul of these NY Fed bylaws.

“As a Reserve Bank directorship is a form of public service, directors also must limit their participation in partisan politics. Specifically, directors should not engage in any political activity or serve in any public office where such activity or service might:

associate the Reserve Bank with any political party or partisan political activity;
raise questions as to the director’s independence and ability to perform the duties of his or her position with the System; or
bring embarrassment to the Reserve Bank or the Federal Reserve System.

She’s violated these quite clearly. Meddling in the work of a law enforcement officer is obviously embarrassing and risks the independence of the system...MORE

[Demeter]

78. Nevada Lawsuit Shows Bank of America’s Criminal Incompetence

http://www.nakedcapitalism.com/2011/08/nevada-lawsuit-shows-bank-of-americas-criminal-incompetent.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

It’s pretty remarkable that Mr. Market shrugged off the devastating implications of the amended lawsuit filed by the Nevada attorney general, Catherine Masto against various Bank of America entities. As we’ve stated before, litigation by attorney general is significant not merely due to the damages and remedies sought, but because it paves the way for private lawsuits.

And make no mistake about it, this filing is a doozy. It shows the Federal/state attorney general mortgage settlement effort to be a complete travesty. The claim describes, in considerable detail, how various Bank of America units engaged in misconduct in virtually every aspect of its residential mortgage business.

The case argues on two tracks: it seeks to overturn the legal shield provided by a 2008 consent decree with Countrywide, since, in simple terms, Countrywide and BofA have flagrantly disregarded it. The case argues a separate series of claims, based on the same fact set, in case the consent decree is deemed to be operative.

The complaint describes abuses from the very outset of the securitization process: how borrowers were mis-sold mortgages (it describes how entire products were effectively predatory), how investors were misled as to their quality, how they were not conveyed properly to securitization trusts, how borrowers were subject to abusive servicing (as in charged improper and impermissible fees), how promises made under the old consent decree regarding mortgage modifications were violated (for instance, even though interest rate reductions were promised, instead modifications often resulted in HIGHER interest rates), and the filing of fraudulent paperwork to execute foreclosures...

MUCH MORE...TODAY'S MUST READ

[Demeter]

79. VoxEU: If banks should act as utilities, why not treat them as such?

http://www.nakedcapitalism.com/2011/09/voxeu-if-banks-should-act-as-utilities-why-not-treat-them-as-such.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Nobody thinks that utility-operating companies – whether in transport, such as railways, in energy, such as electricity, or telephone or water – are too big to fail. If they lose enough money and go bust, then, if another company cannot be found to take over the franchise, the government steps in to take over the operations. They keep the capital and (most of) the workers to continue running the utility. No one would think that it would make any sense to rip up the railway lines, electricity pylons, or water pipes, to sell them for scrap, and to push the skilled workers into unemployment. Nor is there any worry about utilities being too-big-to-fail.

Why is banking different?
The key reason is that its capital is fungible and can be quickly redeployed, unlike the water pipes, power stations, etc., of the utilities. The real danger with banking is the bankers’ ability to “gamble for resurrection”. With limited downsides from failure but enjoying the spoils from success, it is in the interest of both bankers and their shareholders to take on more risk than is socially desirable, especially when their stake in the business has already been eroded by losses. By the time that the bank has clearly become technically insolvent, it may well have run up far greater losses than any ordinary utility could aspire to emulate.

One answer, of course, is regulation. But regulation, whether by risk-weighted ratio control or by structural ring-fencing, has severe limitations; Anglo-Irish and Northern Rock were both, in effect, ring-fenced retail banks. If regulation is taken sufficiently far to ensure safety, creating narrow banks, it not only destroys the key utility function of such banks, i.e. credit allocation, but also leads to a major shift of business to non-regulated intermediaries, which can worsen both the fragility and the pro-cyclicality.

Prompt corrective action is needed
What needs to be done is bring intervention by the authorities forward in time: prompt corrective action, well before the bank’s managers can really drive it into the ground. A problem is that the available signals for doing so are quite faulty. The accounting value of equity capital is only available after a lag that can be far too long for comfort in fast-moving markets, and can be subject to all kinds of accounting tricks. On the other hand, the market value of equity can be subject to (temporary) manipulation, or to market over-reactions or flash crashes...

[Demeter]

7. And then, there was the Jobs Picture

Before today's reports, these were the feature articles:

The 10 States With the Best Economies in America

http://www.alternet.org/story/152187/the_10_states_with_the_best_economies_in_america?page=entire

1. North Dakota
   
2. Nebraska
   
3. Alaska
   
4. Iowa
   
5. South Dakota
   
6. Wyoming
   
7. Virginia
   
8. New Hampshire
   
9. Oklahoma
   
10. Hawaii

(So now we see why the Tea Party is going so strong...Demeter)DETAILS AT LINK

The 10 States With the Worst Economies In America

http://www.alternet.org/story/152234/the_10_states_with_the_worst_economies_in_america?page=entire

1. Mississippi
   
2. Nevada
   
3. West Virginia
   
4. California
   
5. Alabama
   
6. Florida
   
7. South Carolina
   
8. Michigan
   
9. Georgia
   
10. Kentucky
    (AND WHY THE TEA PARTY IS SO ENRAGED---DEMETER) DETAILS AT LINK
    
    
    
    

[Demeter]

8. Interactive Map: What States, Counties, Industries Have Job Growth?

http://globaleconomicanalysis.blogspot.com/2011/09/interactive-map-what-states-counties.html

[Demeter]

26. Poverty crisis in US gambling paradise

Joblessness in some parts of Las Vegas exceeds 20% and large numbers of people are focused on where their next meal will come from

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/DWKLH2/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

31. US employment market stalls

The US economy did not add any jobs in August and added fewer jobs in July than initially reported in a major blow to economic recovery hopes, according to US labour department statistics released on Friday.

The unemployment rate remained steady at 9.1 per cent, with 14m Americans unemployed. Economists had hoped for a 68,000 boost to non-farm payrolls.

Read more >>
http://link.ft.com/r/S4XZQQ/FKIMCL/WH2F8/GKW5HK/7A71CK/PJ/t?a1=2011&a2=9&a3=2

THE AUDACITY OF HOPE, INDEED. GONNA BE THE ALBATROSS AROUND HIS NECK FOR THE REST OF HIS LIFE....

[Demeter]

35. CHART SHOCK: The REAL Unemployment Rate Is 22%

http://dailybail.com/home/chart-shock-the-real-unemployment-rate-is-22.html



It's now above 23% with the August update. Details from John William's Shadow Stats.

Shadow Stats

The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

[Demeter]

37. US job growth grinds to zero

http://au.news.yahoo.com/thewest/a/-/world/10178579/us-creates-zero-jobs-in-rough-august/

The stuttering US economy added no jobs in August amid political budget battles that have sapped the confidence of US business, bleak official data showed Friday.

Economist raised new worries of recession after the Labor Department said that private sector employment, previously the main engine for job growth as revenue-strapped governments shed workers, "changed little" in most major industries last month.

A meager 17,000 private-sector jobs were added, down from a revised 156,000 in July. But that was offset by 17,000 jobs shed by government.

"The job machine has ground to a halt," said Joel Naroff at Naroff Economic Advisors...

PAGING TANSY GOLD...WE NEED YOUR FAMOUS STAMP HERE!

[Demeter]

58. Fatal Distraction by PAUL KRUGMAN

http://krugman.blogs.nytimes.com/2011/09/02/fatal-distraction/

Zero job growth, with unemployment still at nosebleed levels. Meanwhile, the interest rate on 10-year US bonds is down to 2.04%, and it’s negative on inflation-protected securities.

Aren’t you glad we pivoted from jobs to deficits a year and a half ago?

Meanwhile, on the other side of the pond, Is austerity killing Europe’s recovery? http://www.washingtonpost.com/business/economy/is-austerity-killing-europes-recovery/2011/08/31/gIQANPvCvJ_story.html?hpid=z2

After more than a year of aggressive budget cutting by European governments, an economic slowdown on the continent is confronting policymakers from Madrid to Frankfurt with an uncomfortable question: Have they been addressing the wrong problem?

Yah think?

Too bad there weren’t any prominent economists warning that the obsession with short-term deficits was a terrible mistake, that austerity would undermine hopes of recovery. Oh, wait.

The awful thing is that those of us who warned about all this — based not on some unorthodox doctrine, but on basic textbook macroeconomics — weren’t so much argued down as just ignored. Somehow, those with actual power were convinced that fiscal austerity wasn’t just an option but the only option, and that anyone arguing with that — even people like me and Joe Stiglitz, who had a few easy-to-understand credentials — were just not part of the serious discussion...

WE GOTTA GET DR. KRUGMAN HIS OWN COPY OF TANSY'S STAMP

[Demeter]

62. North Dakota’s Economic “Miracle”—It’s Not Oil

http://www.yesmagazine.org/new-economy/the-north-dakota-miracle-not-all-about-oil

...Oil is certainly a factor, but it is not what has put North Dakota over the top. Alaska has roughly the same population as North Dakota and produces nearly twice as much oil, yet unemployment in Alaska is running at 7.7 percent. Montana, South Dakota, and Wyoming have all benefited from a boom in energy prices, with Montana and Wyoming extracting much more gas than North Dakota has. The Bakken oil field stretches across Montana as well as North Dakota, with the greatest Bakken oil production coming from Elm Coulee Oil Field in Montana. Yet Montana’s unemployment rate, like Alaska’s, is 7.7 percent.

A number of other mineral-rich states were initially not affected by the economic downturn, but they lost revenues with the later decline in oil prices. North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008. Its balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts. It also has the lowest foreclosure rate and lowest credit card default rate in the country, and it has had NO bank failures in at least the last decade.

If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.

Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state....

[Pale Blue Dot]

101. Forced Part-Time Workers Increased 5.12% in August 2011

August's unemployment report is worse than the big fat zero in job growth. People being forced into part-time jobs skyrocketed by 430,000 in a month, to a tally of 8,826,000 people. That's a 5.12% monthly jump. People in part-time jobs due to slack work conditions increased 146,000, or 2.5%. Slack business conditions cause employers to cut hours of their employees. People who could only get a part-time job but want and need full time, increased by 219,000, which is a whopping 8.7%.

Part time workers who need full time income is the ultimate hidden wage arbitrage. They count as employed, the job counts as a payroll job, yet in terms of wages and earnings, these people are hurting. It's bad enough one simply cannot make it on a full-time minimum wage job, period, in the United States. Forced to go part-time and your income can be cut in half. Involuntary Part-time also isn't a good sign for the economy. Slack business conditions as a reason for involuntary part-time work is often the predecessor to being laid off completely.

http://www.economicpopulist.org/content/forced-part-time-workers-increased-512-august-2011

[hamerfan]

113. Great stuff!

Thanks for this, PBD! The article really strikes home. For the last 9 months I've been in a forced part-time job. Letting my employer know I wanted full time work, even without benefits, was no good. And you can't make it on 30 hours a week of crap pay, but it was the only job out there it seemed.
Tomorrow I start a new full time job, with benefits, at a new employer. Yay! When I gave my two week notice, my old employer made the comment that I was ungrateful. I bit my tongue.
Forced part-timers seems to be hugely under-reported problem, that sooner or later will be forced into the open, so economists can again be "shocked" at the "unexpected" news.
hamerfan

[Demeter]

9. If Ever There Was a Need for Humor...

[Demeter]

32. Neal Boortz -- (1945- ) Radio talk show host, columnist

"How many Catholic schools do you think teach the students to question the authority of the Pope?

Do you believe Christian schools teach students to question or challenge
the authority of Jesus Christ?

Do military schools teach the cadets to challenge the authority of superior officers?

Well, why should we then expect government schools to teach children to question the authority of government?"



MAYBE BECAUSE THEY WEREN'T "GOVERNMENT SCHOOLS"? AT LEAST, NOT UNTIL LATELY...

[Demeter]

33. Labor Day Officially Moved to China: First U.S. Holiday to be Outsourced

http://www.borowitzreport.com/2011/09/02/labor-day-officially-moved-to-china/

BEIJING (The Borowitz Report) – Labor Day, one of America’s most beloved and longest-celebrated holidays, has been officially moved to China, U.S. officials confirmed today.

The Labor Day celebrations are expected to kick off Monday afternoon in Beijing with a barbeque attended by over seven million people and presided over by former NBA star Yao Ming.

The transfer of Labor Day to China represents the first time in American history that an entire holiday has been outsourced, experts said.

“It may be just as well,” said the University of Minnesota’s Davis Logsdon, who has lectured extensively on Labor Day traditions. “It’s been getting harder and harder for Americans to remember what labor is.”

MORE AT LINK

[Demeter]

61. Just Because You're Paranoid Doesn't Mean They Aren't Out to Get You

[Demeter]

10. Morgan Stanley’s Doomed Baldwin CDOs Thwarted ‘Natural Process’

http://www.bloomberg.com/news/2010-05-14/morgan-stanley-shorted-doomed-baldwin-cdos-lacking-natural-curbs-on-risk.html

In June 2006, a year before the subprime mortgage market collapsed, Morgan Stanley created a cluster of investments doomed to fail even if default rates stayed low -- then bet against its concoction.

Known as the Baldwin deals, the $167 million of synthetic collateralized debt obligations had an unusual feature, according to sales documents. Rather than curtailing their bets on mortgage bonds as the underlying home loans paid down, the CDOs kept wagering as if the risk hadn’t changed. That left Baldwin investors facing losses on a modest rise in U.S. housing foreclosures, while Morgan Stanley was positioned to gain.

“I can’t imagine anybody would take that bet knowingly,” said Thomas Adams, a former executive at bond insurers Ambac Financial Group Inc. and FGIC Corp. who is now a partner at New York-based law firm Paykin Krieg & Adams LLP. “You’re overriding the natural process of risk-mitigation.”

FROM May 13, 2010 !

[Demeter]

12. RECOVERY? WHAT RECOVERY?

Hopes for global recovery take a hit

The global manufacturing recovery appears to have come to a grinding halt in August, according to a series of surveys across Asia and Europe

Read more >>
http://link.ft.com/r/G8OTZZ/080U4U/YGZ3O/S3F9XM/5VANLU/UP/t?a1=2011&a2=9&a3=2

[Demeter]

39. We Are in 'Worse Situation' Than in 2008: Roubini

http://www.cnbc.com/id/44368995

The world’s developed economies are trapped at the “stall speed” of low growth and need to have greater fiscal stimulus and less austerity to kick-start growth, leading economist Nouriel Roubini told CNBC Friday.

Speaking at the Ambrosetti Forum on the shores of Lake Como, near Milan, Roubini said in an interview: “We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.”

Roubini, known for his bearish views on the world economy, thinks that there is a 60 percent chance of a second recession imminently. Economic data of recent weeks presents a mixed picture. MIXED PICTURE?

[Demeter]

40. Sharp slowdown in world manufacturing

http://www.wsws.org/articles/2011/sep2011/econ-s02.shtm...

A new batch of economic data released Thursday reaffirms that the world economy is slowing disastrously. Manufacturing activity in Europe shrank for the first time in two years in August, while Canada announced that its economy contracted in the second quarter.

The global manufacturing purchasing managers index, a closely watched indicator of world manufacturing output, fell once again in August, according to figures released by JPMorgan and Markit. The index, which fell from 50.7 in July to 50.1 in August, is now only a hairline above the level of 50 that is traditionally taken to mean contraction. The global index came out on the same day as the release of manufacturing purchasing managers indexes from the Eurozone, China, and the United States, most of which showed a significant slowdown in manufacturing.

Manufacturing in the euro area contracted for the first time in two years. The index hit 49.0 last month, down from 50.4 in July, and significantly below the estimates of economists, who had predicted a reading of 49.7. The index for Germany, the Eurozone’s economic powerhouse, hit a 23-month low of 50.9, barely avoiding contraction. Ireland, France, Italy, Spain, and Greece all posted readings below fifty. France’s manufacturing purchasing managers index hit 49.1, its lowest level in 25 months. Greece and Spain, whose economies are reeling from the impact of the European debt crisis, recorded among the lowest readings, at 45.3 for Spain and 43.3 for Greece.

Chris Williamson, Chief Economist at Markit, the firm that compiled the Eurozone statistics, said that the figures signaled “an end to the manufacturing recovery which began in October 2009.”

[Demeter]

63. There's No Housing Bottom In Sight

http://www.businessinsider.com/no-housing-bottom-in-sight-2011-9

At the end of June 2011, macromarkets.com released the results of a poll in which 108 leading economists and housing market analysts were asked to predict the direction of home prices from now until 2015...All except four of them predicted that housing markets around the country would hit bottom no later than the end of 2012 before climbing again. Only one of them thought that home prices would not hit bottom until the end of 2013.

By way of contrast, a survey of consumers released in May by trulia.com and realtytrac.com found that 54% thought that a housing market recovery would not occur until “2014 or later.”

My premise is simple: There is no housing bottom in sight. To test this assertion, let’s take a brief look at three major metro markets and see what I’ve found...RESULTS AT LINK

Read more: http://www.minyanville.com/businessmarkets/articles/housing-market-home-prices-home-prices/9/1/2011/id/36233?page=full#ixzz1WtHoRTOe

[Demeter]

64. Canadian Economy Shrinks For First Time Since 2009; Recession Next?

http://www.zerohedge.com/news/canadian-economy-shrinks-first-time-2009-recession-next

Don't look know but Canada just confirmed the first signal of a recession, after its GDP printed negative (on expectations of an unchanged number) for the first time since Q2 2009, due to a drop in exports and oil output, most of it blamed naturally on "transitory" factors.

Odd how the US used the transitory line for months until it all turned out to be permanentory.

What, however, is truly hilarious is the continued denial to look facts in the face as confirmed by the following three Canadian sellside analysts, who seem positively giddy that the number was major miss to expectations: their take home, just like as in the case of Canadian banks having some of the lowest TCE ratios in the world: "ignore it."

Perhaps when next quarter Canadian GDP prints negative again, and the economy is officially in a recession, then the delightful comedy crew of what passes for "analysts" up north will have some words of caution finally... As for whether a recession confirmation in 3 months will be negative for the same banks which are downplaying both the GDP and its risk to their near world record leverage, we leave to the far more erudite, and far less shoot-from-the-hip Globe and Mail....

ECONOMISTS' REPORTS FOLLOW

[Demeter]

65. Bloody September Courtesy of Lee Adler of the Wall Street Examiner

The following paragraphs are free excerpts from today’s Wall Street Examiner Professional Edition Treasury update:

http://wallstreetexaminer.com/get-instant-access-to-real-time-insights/

As I estimated last week, the Treasury needed more cash than originally scheduled, or originally forecast by the TBAC. It announced a big cash management bill on Monday, and another one on Thursday to be auctioned next week. That should be enough for now, but revenues appear to be going off a cliff, with declines in withholding taxes now at the point where withholding is down year to year in real terms. That’s after being up strongly in May. It suggests that the US “conomy” entered recession over the past couple of months. Meanwhile, while the evidence suggests that the conomy has already been in recession, mainstream conomist pundits continue to argue about whether the conomy will have a double dip or not. While they are trying to figure it out, the damage to the financial markets is fait accompli, and will get worse.

Month to date excise taxes as of August 31 were down by 10%, compared with virtually unchanged at the end of July. Part of this was due to the temporary expiration of the aviation excise tax from July 23 to August 5, when it was reinstated. Since the tax was again being collected since August 7, most of the decline in the tax does appear to be due to less driving, drinking, smoking, air travel, and firearms purchases, in other words, all the fun stuff, among other things. The data suggests that the economy fell off a cliff in August.



Corporate taxes were down 23%, month to date versus last year. This is a sharp deterioration from the year to year change at the end of July when it was only down 17%. Because these are estimations based on the most recent quarterly activity, they suggest weakening economic activity. However, we must note that July and August are not months when quarterly taxes are due. The last big collection month was June. September is the next.



This is scandalous considering the outsized corporate profit reports. We have a serious problem of corporate undertaxation in the US, and an even bigger perceptual problem thanks to the politicians who call for no new taxes on “job creators.” The problem with that little rhetorical flourish is that the truth is that they are job destroyers and job exporters. If they are creating jobs, they certainly are not in the US.

[Demeter]

66. The Imminent Failure Of The Eurozone

http://www.zerohedge.com/contributed/imminent-failure-eurozone

You know those movies with the bomb set to a timer ticking down to øø.øø where the sweaty hero nervously cuts one wire at a time while holding his breath and then at øø.ø1 he stops the bomb? Well Europe is like that except that the bomb goes off and kills everyone.



Our planet has a problem. Its leading economies, the U.S., Japan, and the E.U. are declining. That is, about one-sixth of the world's population is losing ground. These big economies are the ones that lead the rest of the world, including China. Countries like China, India, and Brazil depend on the health of the big economies to keep buying their products and commodities so they can grow and generate wealth for their citizens. What is especially concerning is the blow-up that is about to happen in Europe. It is not something that is happening "over there." In a world that is so interconnected financially and by trade, a sinking Europe is everyone's concern...Their problems are much the same as ours with a twist. Their governments and central banks have also pursued reckless monetary and fiscal policies and now, effect is following cause. They have more or less followed the same policies as has the U.S., much to the same end. They spent large, engaged in Keynesian fiscal stimulus in a bailout attempt, ran up huge debts and deficits, and their economies are in decline. (I WOULDN'T CALL THAT "STIMULUS", BAILING OUT BANKSTERS, KEYNESIAN, NOR WOULD ANY HONEST ECONOMIST--THIS GUY IS A LIBERTARIAN OR WORSE--DEMETER) The EMU started on the idea that it would bind the EU closer. In essence it was a political decision rather than an economic decision. They passed a stern rule that said no state could run of deficits of more than 3% of their GDP. Except for Estonia, Finland, and Luxembourg, all countries, including Germany, now exceed the limit. Thus their politicians sacrificed fiscal probity for political gains.



EU Debt-Deficit as share of GDP

They have hit the wall: Greece will soon default on their sovereign debt. On Tuesday, yields on one year Greek bills reached 60%. It is a sign that investors have no faith in the Greek government's ability to repay their debt. The EU, ECB, and the IMF are trying to establish a European Financial Stability Facility (EFSB) in order to further bail Greece out. They have already pledged €110 billion and they are trying to put another package together of €109 billion. But Finland insists that Greece puts up additional collateral, which is not possible. Since the collateral would be part of the bailout money, it would be, in essence, Germany and France guaranteeing Finland's contribution...Greece has missed every fiscal target it or its saviors has had. They are trying to get their deficit down to 7.6% of GDP through more austerity measures, but it looks like they will miss again (est. 8.5+%). Basically they are asking the Greeks to do something they don't want to do, and they will no doubt take to the streets again in protest...If they default, then that opens a can of worms. European banks, other than Greek banks, hold €46 billion of Greek sovereign debt. Belgium's Dexia hold Greek sovereign debt equal to 39% of its equity; for Germany's Commerzbank, it's about 27%. On top of that, EU banks are into private Greek companies for about €94B (France, €40B; Germany €24B). According to the Wall Street Journal, the total market cap of all EU banks was just €240. The same article also points out additional unknown liabilities to insurers and investment banks.

The International Accounting Standards Board (IASB) has warned banks they need to write down, or mark-to-market, the Greek debt they hold. Whether they do or don't doesn't matter. The fact is that these banks are undercapitalized and in trouble. Their "stress tests" are a fiction. Liquidity is starting to shrink in their banking system because of these jitters. Rabobank, for example, said it is growing cautious about interbank lending – now limited to overnight loans. More banks are stepping up to the ECB window for funds. Overall, credit is starting to tighten. Nervous Greek depositors are withdrawing funds from their banks. Rich Greeks never trusted their banks.

In other words the Europeans have created a problem that they can't solve, easily at least. Here are their alternatives: SEE LINK

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

The EU faces an insolvable problem, but it is one they created. You can't have a monetary union without a fiscal union. At least when no nation is obligated to play fair. They either terminate the EMU or paper it over. There is no other practical fix, at least when economies of member states are declining.

[Demeter]

72. U.S. newborn death rate tied with Qatar

http://www.msnbc.msn.com/id/44333054/ns/health-childrens_health/#

THIS IS NOT A GOOD THING

[Demeter]

76. Hoover’s Great Depression

http://www.nakedcapitalism.com/2011/09/hoovers-great-depression.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

From the August 1932 Republican Nomination Acceptance Speech by Herbert Hoover:

[Demeter]

82. IMF Estimates Show Damage To European Banks

http://www.gfmag.com/latestnews/latest-news-old.html?newsid=1.1233858E7


The International Monetary Fund said that European banks' balance sheets suffered serious damage from their holdings of troubled euro zone sovereign debt, in estimates that attracted rebuttals from euro zone authorities, the Financial Times reported Wednesday.

The IMF's draft version of its regular Global Financial Stability Report contained an estimate that showed that marking sovereign bonds to market would reduce European banks' tangible common equity by around EUR200 billion ($287.49 billion), a drop of 10-12%, the newspaper said, citing two officials.

The impact could be increased substantially, perhaps doubled, by the knock-on effects of European banks holding assets in other banks, the report added.The European Central Bank and euro zone governments have rejected the estimates, calling them partial and misleading, according to the newspaper.

The final version of the IMF report will be published in three weeks(SEPT. 21ST), just before the Fund's annual meetings, and is subject to revision depending on the debate between fund staff and the board, the newspaper said...

[hamerfan]

14. Musical interlude

Hell: On Earth As It Is In Hell. (Total disclosure: I know the lead guitarist). Cool video though

http://www.youtube.com/watch?v=EpkuYxyYM2A

A portent of things to come? Who knows....

[Demeter]

22. Wonderful! And so apropos!

[Demeter]

15. US deficit forecast falls below estimates

The US 2011 deficit is forecast to fall substantially below previous estimates through a combination of spending cuts and higher-than-expected revenues

Read more >>
http://link.ft.com/r/G8OTZZ/080U4U/YGZ3O/S3F9XM/TULXER/UP/t?a1=2011&a2=9&a3=2

[Demeter]

16. US and Bahrain secretly extended defence deal

The agreement governing fifth fleet’s home port, due to expire next month, was renewed and now lasts until 2016

Read more >>
http://link.ft.com/r/G8OTZZ/080U4U/YGZ3O/S3F9XM/HYEOAA/UP/t?a1=2011&a2=9&a3=2

[Demeter]

17. Italy cobbles together austerity compromise

Deal relies heavily on renewed crackdown on tax evasion to achieve goal demanded by European Central Bank of balanced budget by 2013

Read more >>
http://link.ft.com/r/G8OTZZ/080U4U/YGZ3O/S3F9XM/ZG6QFS/UP/t?a1=2011&a2=9&a3=2

[xchrom]

50. ECB's Trichet says Italy must meet budget targets

http://www.independent.co.uk/news/world/europe/ecbs-trichet-says-italy-must-meet-budget-targets-2348671.html

European Central Bank President Jean-Claude Trichet pressed Italy today to deliver on its promises to get its strained public finances in order, saying it was essential to restore fragile market confidence.

Speaking as Italian bonds have come under renewed pressure in recent days, Trichet repeated a warning that Prime Minister Silvio Berlusconi's centre-right government had to meet last month's pledge of a clear plan to balance the budget by 2013.

"This is absolutely decisive to consolidate and reinforce the quality and the credibility of the Italian strategy and its creditworthiness," he told a conference in the northern Italian town of Cernobbio.

The European Central Bank, which has been buying Italian bonds in the market to try to hold down yields and stop borrowing costs for the euro zone's third largest economy spiralling out of control, has been stepping up its warnings that Rome must act quickly.




*****good luck italy.

[Demeter]

55. Or What?

Surely there's a stick in that threat somewhere....

[Demeter]

18. Restaurants in Greece refuse to pay VAT rise

Steep rise in duty on hospitality sector is part of fiscal package agreed in return for the country’s second European Union financial rescue

Read more >>
http://link.ft.com/r/G8OTZZ/080U4U/YGZ3O/S3F9XM/160S3N/UP/t?a1=2011&a2=9&a3=2

[Demeter]

19. Brazil makes unexpected interest rate cut

Central bank brings its seven-month tightening cycle to an end as the country prepares for slower growth and a sharp deterioration in global markets

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/9753U6/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

20. China manufacturing gets domestic boost

After falling to a 28-month low in July manufacturing in China has rebounded slightly on the back of strong domestic demand

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/QNPZMS/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

21. US defence contractors ‘waste’ $12m a day

Report says more than $60bn misspent in past 10 years, exacerbating fears in Washington over fiscal discipline ahead of looming budget cuts


Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/2OCQSH/MQ/t?a1=2011&a2=9&a3=1

AND THAT'S NOT COUNTING THE STUPID WARS

[Demeter]

42. The All-Time 10 Worst Military Contracting Boondoggles

http://motherjones.com/mojo/2011/09/contractor-waste-iraq-KBR

After three years, the bipartisan Commission on Wartime Contracting completed its business this week. In its final report to Congress (PDF), it estimates that the federal government has lost between $31 and $60 billion to contractor fraud and waste since the wars in Afghanistan and Iraq started. "The government was not prepared to go into Afghanistan in 2001 or Iraq in 2003 using large numbers of contractors, and is still unable to provide effective management and oversight of contract spending," said commission co-chairman Michael Thibault.

Beyond its bureaucratic title ("Inattention to contingency contracting leads to massive waste, fraud, and abuse"), the most interesting chapter of the commission's 248-page report reads like a greatest-hits list of expensive bloopers that make that famous $600 Pentagon toilet seat look like a bargain. In ascending order of egregiousness, here are the top 10 war-contractor boondoggles detailed in the report:

10. Welfare for warlords
9. The world's most expensive road
8. This old base
7. Rent-a-ripoff
6. The Kabul bank bust
5. Never leave a mandarin behind
4. Soldiers of misfortune
3, 2, 1. KBR, KBR, KBR (THANK YOU, DICK CHENEY YOU WAR CRIMINAL SOB TRAITOR!)

DETAILS AT LINK

[Demeter]

23. IMF and eurozone clash over estimates

Fund’s analysis that claims banks have been damaged by holding European sovereign debt has been strongly rebutted by the ECB and eurozone

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/5VAJFT/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

24. Syrian businessmen fear slow economic death

With fresh EU sanctions against Damascus about to be announced, anxiety among the country’s powerful business elite is growing

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/TUL5X3/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

25. Portugal promises biggest cuts in decades

Lisbon has announced new austerity measures designed to cut Portugal’s budget deficit to almost zero in under five years

Read more >>
http://link.ft.com/r/8P1R88/B5X6KY/06MUC/0GHPZO/8ZMNUA/MQ/t?a1=2011&a2=9&a3=1

[Demeter]

28. Apple attacked over pollution in China

Environment groups say the US technology company uses suppliers with public records of environmental violations

Read more >>
http://link.ft.com/r/H60H77/FKIVN8/Z87P0/XT1Y03/9753LF/UP/t?a1=2011&a2=9&a3=1

[Demeter]

29. Sun sets on solar-power group Solyndra

Californian company files for bankruptcy protection, leading Republicans to attack the use of government loan guarantees to stimulate growth

Read more >>
http://link.ft.com/r/H60H77/FKIVN8/Z87P0/XT1Y03/XHGKEB/UP/t?a1=2011&a2=9&a3=1

[Demeter]

30. Volvo and Siemens in electric car tie-up

The vehicle will be available for testing by year end and the Swedish company will deliver up to 200 vehicles for further testing in 2012

Read more >>
http://link.ft.com/r/H60H77/FKIVN8/Z87P0/XT1Y03/160EJ4/UP/t?a1=2011&a2=9&a3=1

[bread_and_roses]

34. great theme. 5th Rec here. But I'm reeling just reading the subject lines

nothing here to add at the moment - I've been working so hard these past weeks I have hardly had time to think... hope to contribute later, though the weekend is shaping up busy and I work on Monday - a very exhausting yearly Labor Day stint...but not complaining - I'm one of the lucky ones, I have a job. And it even pays ...unlike this:

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

Yesterday, I posted an item titled “How Not to Solve the Jobs Problem.” The case in point is President Barack Obama’s embrace of a state program called Georgia Works, which tries to turn unemployment insurance into a kind of sing-for-your-supper “workfare” program.

[Demeter]

36. It takes a perverse kind of discipline to do this column

and when I feel punished enough by the news, I stop.

Hope you get a break. You need it for your continued health.

[bread_and_roses]

86. It takes REMARKABLE discipline to do this thread -

not to mention all the work you do keeping us updated all week. You have my infinite admiration. And thanks for the kind words. Life happens to be rather hard right now in a lot of ways, but so it is for just about everyone - always excluding our corporate masters, of course.

We labor on - to what end, who knows? I keep thinking SOMETHING has to give, to break - nothing shatters this on-going illusion of "normalcy" - not melting in the arctic, not another oil sheen, not Fuki/Japan, not the RN's out there battling Wall St, not Obama ignoring 1,000 arrests in front of the WH, not a "real" unemployment rate of - whatever it's calculated to be now?

Just what/where is the "tipping point?"

[Demeter]

38. When debt levels turn cancerous By Ambrose Evans-Pritchard

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011744/when-debt-levels-turn-cancerous/

Now we know where the tipping point lies. Debt becomes poisonous once it reaches 80pc to 100pc of GDP for governments, 90pc of GDP for companies, and 85pc of GDP for households. From then on, extra debt chokes growth.
...Stephen Cecchetti and his team at the Bank for International Settlements have written the definitive paper rebutting the pied pipers of ever-escalating credit. “The debt problems facing advanced economies are even worse than we thought.”



The basic facts are that combined debt in the rich club has risen from 165pc of GDP thirty years ago to 310pc today, led by Japan at 456pc and Portugal at 363pc. “Debt is rising to points that are above anything we have seen, except during major wars. Public debt ratios are currently on an explosive path in a number of countries. These countries will need to implement drastic policy changes. Stabilization might not be enough.”

Demographic atrophy and aging costs will make this even nastier. “Rising dependency ratios put further downward pressure on trend growth, over and above the negative effects of debt.”



Why has it happened?

1) Restrictions on credit have been “systematically removed” since the 1970s. (ie Gordon Brown’s 120pc mortgages and other such idiocies)

2) Greenspan’s “Great Moderation” fooled us all into thinking the world was free of risk.

3) The “Asian Savings Glut” pulled down real bond yields. (The BIS is being too kind to its masters — central banks — who also pulled down short rates for fifteen years, catastrophically so in my view).

4) Tax policies favour debt; ie corporate debt in Europe, or mortgages in the US, as well as a host implicit debt subsidies and guarantees (Fannie Mae and Freddie Mac?) MORE AT LINK

[Demeter]

44. I'm getting hungry, folks

After a hard, long day of dragon-slaying I just had to get this thread going to feed my mind, but now the body is demanding equal time. I suppose that right after feeding, it will demand sleep, too. I think you have enough to start...and as always, an open invitation to add to the pot of bad news or witty art....and if I don't get back until morning, have a good night.

Remember we are all going to survive these bastards, because we are too stubborn to quit and too stupid to die. And we help each other.

[notGaryOldman]

48. You're either insane or you have money

At least, that's how it was explained to me. ;-)

[Demeter]

56. Personally, Based on Observation

I think that the Obscenely Wealthy are completely, criminally insane. Without exception.

[xchrom]

51. it's the weekend -- how lovely.

:donut:

[jtuck004]

52. For some Labor Day just isn't complete without S'mores...

_______________________________

What you said about together, Demeter - that's the key.

"There is no reason why good cannot triumph as often as evil. The triumph of anything is a matter of organization. If there are such things as angels, I hope that they are organized along the lines of the Mafia."

Kurt Vonnegut

[DemReadingDU]

53. Good toon, so true

Ok, I'm off to Indiana, no Internet until Monday.
Enjoy the holiday weekend, I fear something evil is soon coming this way.

[Demeter]

57. It always is

The test of character is how the individual, community, nation, world deals with it.

[Demeter]

59. The counterfeit culture - why collapse is inevitable By Mike Adams Editor of NaturalNews.com

http://www.naturalnews.com/033491_counterfeit_culture.html

Through a devolving web of greed, self-serving power and a departure from fundamental ethics, Western culture has, over the last hundred years, become the counterfeit culture.

Nothing is real anymore -- not the food, not the money, and certainly not the evening news. And because it's not real, it's not sustainable. That's why it's headed for collapse, which is all too real, as many people are about to find out.

In the mean time, here are some observations about the counterfeit culture in which we all frustratingly find ourselves. It's all about corporations, governments and institutions being "in the business of" counterfeiting something -- faking something or pretending to create something of value when they really aren't. Ring a bell?

1. The Federal Reserve is in the business of counterfeiting money.
   
   The mainstream media is in the business of counterfeiting news.
   
   
2. The pharmaceutical industry is in the business of counterfeiting medicine (Biopracy! They are stealing molecules from nature then counterfeiting their own patented variations.)
   
   
3. The medical schools are in the business of counterfeiting medical degrees. (When a doctor graduates from medical school, he still knows virtually nothing about nutrition.)
   
   
4. Doctors are in the business of counterfeiting false medical authority.
   
   
5. The mega-sized food corporations are in the business of counterfeiting food. (Processed cheese food product, anyone?)
   
   
6. The global consumer product companies are in the business of manufacturing counterfeit consumer products such a "baby oil" (which is really a petroleum product). AT LEAST IT ISN'T MADE OUT OF BABIES!--DEMETER
   
   
7. Social networks like Facebook are in the business of counterfeiting friends. (Please LIKE this article, okay?)
   
   
8. Cookie-cutter home builders are in the business of constructing counterfeit homes out of plywood, styrofoam and sheetrock... many these homes will not be standing in just 20 years.
   
   
9. Local city councils are in the business of counterfeiting power. (Obey or be punished!)
   
   
10. Public schools are in the business of counterfeiting school diplomas. (Huh? What? Who needs to learn how to write, anyway?)
    
    
11. The Pentagon is in the business of counterfeiting war. (Don't have a war to fight? Bomb the World Trade Center and blame it on someone!)
    
    
12. Mainstream historians are in the business of counterfeiting history. (Everything you were taught about history in public school is a lie...)
    
    
13. The globalist banksters are in the business of counterfeiting debt. (You thought it was money, didn't ya? But it's really just debt.)

[bread_and_roses]

115. That would be funny if it wern't all too close to true...

...although your baby oil aside did make me LOL.

[Demeter]

60. Say "No" to Euro-TARP By Mike Whitney

http://www.informationclearinghouse.info/article29016.htm

The Bundestag will have one chance to stop Angela Merkel's plan to provide hundreds of billions of dollars to underwater EU banks that made bad bets on sovereign bonds. If the German parliament fails to block Merkel on September 23, then--under the expanded powers of the the European Financial Security Facility ( EFSF)-- insolvent banks will be bailed out and the costs will be passed on to eurozone taxpayers.

Despite her populist bloviating ("We won't be bullied by the markets"), Merkel is a devout Europhile committed to a fiscal union ruled by bankers and bondholders, a Banktatorship. Presently, she is doing whatever she can to hurry the process along before hostile bond vigilantes roil the markets and bring the EU banking system crashing down. This is from Der Spiegel:

"In a situation of market panic, the EFSF has to act quickly," Holger Schmieding, chief economist of Berenberg Bank, told the Financial Times Deutschland. "It could happen overnight or on a weekend." Guntram Wolff of the Brussels-based think tank Bruegel agreed. Parliamentary approval "must not take too long." ("Parliamentary Influence over Euro Bailouts 'Naive'", Der Spiegel)

Sound familiar? US Treasury Secretary Henry Paulson used the same strategy after Lehman Brothers collapsed in 2008 in order to blackmail congress out of $800 billion via the TARP bailout. Once again, the fear of a financial meltdown is being invoked to stealthily extort money from working people. Here's a clip from another article in Der Spiegel:

"The banks are in fact in a bad way. Most of them still have a lot of Spanish, Italian, Portuguese and Irish sovereign bonds on their balance sheets, and it is not entirely clear whether these will ultimately be repaid in full. That in turn is fueling distrust among the financial institutions themselves and many have stopped lending each other money. They are only being kept alive because the European Central Bank (ECB) is making an unlimited amount of money available to them and are accepting securities as collateral that many investors no longer consider to be safe.

Better capitalization for the banks could alleviate this mistrust, because more equity means that the banks could better absorb losses from their sovereign debt business. Those institutions that are not strong enough to raise the money themselves on the capital market would have to be helped out with public money. There is hardly an institution that is better suited for that job than the EFSF." ("The Euro Rescue Fund Needs More Powers", Der Speigel)

This excerpt is wrong in so many ways, it's hard to know where to begin. Look, this is capitalism. No one cares if you lose your shirt on shabby investments or not. Just keep it to yourself. No whining.

Second, the EFSF was set up to prevent nations from defaulting, not banks. The idea that bond speculators can be compared to representative governments is laughable. The banks are in trouble because they made poor decisions and now must face painful haircuts on their investments. Shareholders will be wiped out and debts will have to be restructured. It's not the end of the world...What Merkel and Co. want to do is turn the system on its ear and transform the EFSF into a permanent off-balance sheet SPV (Special Purpose Vehicle) authorised to distribute public money to failing banks. And it's all being done to keep their sketchy banker friends from losing money. So, behind all the baloney about "fiscal unity" and "consolidation of state finances", lurks the ugly truth that the eurozone is a two-tiered system whose financial architecture is identical to Enron. There's nothing democratic about a system that rewards profligate elites while shunting the losses off onto workers. That's just plain old kleptocracy. The German Chancellor is joined in her struggle by colleagues at the ECB and the IMF. In fact, newly-appointed IMF chief, Christine Lagarde, is leading the charge for Euro-TARP, which may explain why she was rushed through the nomination process after Dominique Strauss Kahn stepped down pending his investigation on rape charges in New York...

MORE AT LINK

[Demeter]

70. One in 25 business leaders may be a psychopath, study finds

I'M SURE THERE'S A "NOT" MISSING IN THAT HEADLINE, AS IN

"ONE IN 25 BUSINESS LEADERS MAY NOT BE A PSYCHOPATH"

http://www.guardian.co.uk/science/2011/sep/01/psychopath-workplace-jobs-study

"Psychopaths really aren't the kind of person you think they are.

"In fact, you could be living with or married to one for 20 years or more and not know that person is a psychopath.

"We have identified individuals that might be labelled 'the successful psychopath'.

"Part of the problem is that the very things we're looking for in our leaders, the psychopath can easily mimic.

"Their natural tendency is to be charming. Take that charm and couch it in the right business language and it sounds like charismatic leadership."

I KNOW HOW TO FIND OUT...JUST CROSS ONE, OBJECT TO HIS PLANS. THEN YOU KNOW IF YOU'VE MARRIED A PSYCHOPATH...HE GOES BATSHIT INSANE AND DECOMPENSATES, AS THE LINGO GOES.

[Hugin]

85. Ya, everywhere I look, there's another High Functioning Psychopath in a position of power.

Way back, I learned from personal experience that the only real treatment for dealing with one involves distance. You put as much distance between yourself and a psychopath as possible.

They're like Zombies... No place is safe only places that are safer.

[westerebus]

89. Counter point.

How to find out? Decline to attend a vacation with your spouse's family. Upon hearing this news,SHE goes into a rage screaming about how you don't support her decisions and why you are inconsiderate, lack any feelings whatsoever, and are in all probability a psychopath.

[Demeter]

73. The Politics of Debt Repudiation: Pouring the Red Ink Down the Sink by MIKE WHITNEY

http://www.counterpunch.org/2011/09/01/pouring-the-red-ink-down-the-sink/

The US consumer’s decade-long spending spree has ended, but there’s still an ocean of red ink left to mop up. And with housing prices falling and unemployment tipping 9 per cent, it will take longer to clear the family balance sheet than many had anticipated.

Traditionally, the government has helped to ease the pain of deleveraging by providing fiscal stimulus to boost economic activity and lower the real cost of debt. But Capital Hill is now in the grips of deficit hawks who frown on such Keynesian remedies, so households and consumers will have to fend for themselves and pay-down debts as best as they can or default when repayment is no longer possible . That’s bad news for the economy that depends on consumers for 71 percent of GDP. Without a healthy consumer, the economy will face years of sluggishness and stagnation.

U.S. household debt as a share of annual disposable income is currently 115 percent, down from the peak of 135 percent in 2008. But, while consumers are making headway in paring down their debts, there’s still a lot of work to do. Economists believe that the figure will eventually return to its historic range of 75 percent, which means slower growth for years to come unless someone else makes up the difference in spending...

[Demeter]

77. I know it's too early to care, but DOW Futures down 257 right now...

In fact, ALL market futures are down, substantially...

http://www.bloomberg.com/markets/stocks/futures/

[Po_d Mainiac]

91. pssst....

That's only about 30pts below the 4pm close

Down 257 is vs Thursdays 4pm closing number .......:rofl:

[Demeter]

93. Are You sure about that?

I just looked in this morning....

[Po_d Mainiac]

96. Ayuh, I'm more than sure.....the trading world (futures) stops at 4:30pm EDT Friday

The close Friday was 11,240....futures currently stand at 11,208

Bloomfart's chart always stays frozen over the weekend.

Look at this one below
http://www.finviz.com/futures_charts.ashx?t=YM&p=m5

[Po_d Mainiac]

103. look now n/t

[Demeter]

104. I believe you

Thanks for the pointers.

[Po_d Mainiac]

119. look again..-256..u got u'r wish!

Better make sure there ain't a pony tethered to the door knob.

[Hawkowl]

92. Next week = Blood bath

September 7th, Germany's high court issues ruling on the legality of Germany bailing out the rest of the EU. Greece's yield on its 1 year bond just hit 79%! All the banks and bankers being sued for fraud by the US government. Saber rattling about Iran from such countries as France?!? And a big dose of hopium from Obama, whenever Congress can fit him in? There is a huge divergence between US treasuries and the the S&P which must be closed by either raising interest rates or a falling stock market.

Oddly enough, I think we are just getting warmed up. :popcorn:

[Demeter]

94. It's not like we haven't been Anticipating

It's just been the cleverness of the puppet masters at evading and delaying the inevitable.

[Demeter]

83. The Dragons Are Getting Restless...I'll be back (odds are)

Keep on keeping on, all!

[Pale Blue Dot]

88. The Great Bank Robbery

NEW YORK – For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. In the United States, the sum stands at an astounding $2.2 trillion for banks that have filings with the US Securities and Exchange Commission. Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.

That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees. Such transfers represent as cunning a tax on everyone else as one can imagine. It feels quite iniquitous that bankers, having helped cause today’s financial and economic troubles, are the only class that is not suffering from them – and in many cases are actually benefiting.

Mainstream megabanks are puzzling in many respects. It is (now) no secret that they have operated so far as large sophisticated compensation schemes, masking probabilities of low-risk, high-impact “Black Swan” events and benefiting from the free backstop of implicit public guarantees. Excessive leverage, rather than skills, can be seen as the source of their resulting profits, which then flow disproportionately to employees, and of their sometimes-massive losses, which are borne by shareholders and taxpayers.

In other words, banks take risks, get paid for the upside, and then transfer the downside to shareholders, taxpayers, and even retirees. In order to rescue the banking system, the Federal Reserve, for example, put interest rates at artificially low levels; as was disclosed recently, it also has provided secret loans of $1.2 trillion to banks. The main effect so far has been to help bankers generate bonuses (rather than attract borrowers) by hiding exposures.

http://www.project-syndicate.org/commentary/taleb1/English

[sce56]

90. Toons tell the tale

[xchrom]

98. China is still waiting for inflation to peak

http://blogs.reuters.com/george-chen/2011/08/31/china-is-still-waiting-for-inflation-to-peak/

How time flies. It’s already the end of August and speculations naturally arise about what China’s inflation reading will be for this month.

The most optimistic view these days is that the August Consumer Price Index (CPI) could decline to below 6 percent. The most pessimistic view I’ve heard is that growth has slowed down in August, but probably only to 6.2 percent or 6.3 percent.

But, why should we care about the August CPI so much? One month cannot tell the whole story.

The reason we care so much is because if the August CPI growth slows down (we will see the official release of August economic data in the coming weeks), it’s good news for the central bank as well as for the ordinary people in China who have been fighting with fast inflation for more than three years already. But, it’s not good enough.

[xchrom]

99. Services Industry in U.S. Probably Grew at Slowest Pace Since January 2010

http://www.bloomberg.com/news/2011-09-04/services-probably-expanded-at-slower-pace-u-s-economy-preview.html

Service industries in the U.S. probably expanded in August at the slowest pace in more than a year, adding to concern the recovery is losing steam, economists said before a report this week.

The Institute for Supply Management’s non-manufacturing index fell to 51 last month, the lowest since January 2010, from 52.7 in July, according to the median of 59 forecasts in a Bloomberg News survey ahead of the Sept. 6 release. A reading of 50 is the dividing line between expansion and contraction. A Sept. 8 report from the Commerce Department may show the trade deficit shrank from the highest level since October 2008.

The recovery risks stalling without a pickup among the non- manufacturing industries that account for about 90 percent of the economy. A stagnant labor market and bleaker business and consumer sentiment may require more effort from President Barack Obama and Federal Reserve Chairman Ben S. Bernanke to spur growth.

[Pale Blue Dot]

100. Even Goldman Sachs Now Expects A Tremendous Financial Collapse

Goldman Sachs (GS) is doing it again: telling the public that everything is going to be just fine, but meanwhile advising their top clients to bet on a huge financial collapse.

On August 16, a 54-page report by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at The Wall Street Journal got their hands on a copy and have filled us in on some of the details. It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering.

In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse, and that there are large numbers of financial institutions in Europe that are on the verge of collapse. If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

There is a tremendous amount of fear in the global financial community right now. As I wrote about the other day, the financial world is about to hit the panic button. Things could start falling apart at any time. Most of these big banks will not publicly admit how bad things are, but privately there is a whole lot of freaking out going on.

http://seekingalpha.com/article/291405-even-goldman-sachs-now-expects-a-tremendous-financial-collapse

[Demeter]

102. I overdid it Saturday

So today I'm trying to recover. The dragons won one, yesterday.

I was standing in a thunderstorm 10 PM outside a 24 hour grocery, wondering why I thought I was still 25 and capable of overdoing like that.

The power in the store went out during checkout, which made for a second checkout at a register manned by a human.

Small branches litter the roads today, and some power outages lasted. Electricity merely blinked frequently at our place, shutting down the computer...it appears we are getting the skirts of Tropical Storm Lee all the way up here.

The heat wave is broken, at least. In the 70's today. Tomorrow is the BBQ and pool closing, and then winter sets in...

[Demeter]

105. We'll be back tomorrow (off and on)

Happy Unlabor Day!

[Demeter]

107. Summer Rerun: Bankruptcy Cramdown Defeated: Banksters Again Prevail Over Real Economy

http://www.nakedcapitalism.com/2011/09/summer-rerun-ankruptcy-cramdown-defeated-banksters-again-prevail-over-real-economy.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

This post first appeared on April 30, 2009

In another disheartening development on the banking front, the Senate defeated legislation giving judges the authority to modify residential mortgages in bankruptcy.

Note that the popular description is often misconstrued in short form descriptions. Judges would not have had open-ended authority to make changes. The construct is that mortgages are collateralized loans. The mortgage balance is written down in bankruptcy to the value of the collateral, and the excess is added to the unsecured creditor claims.

This is also not an arcane process. It’s used in commercial bankruptcies and lending against boats, for instance. Ever hear any complaints about this practice in Chapter 11?

It was the best hope for cutting the Gordian knot of mortgage securitizations. First, it would allow for decisions on a case-by-case basis. Second, the servicer would get paid (fees are well established for court action in foreclosure). Third, the fact that a judge could force a principal writedown would give servicers air cover to do deep principal reductions, which Walter Ross, who owns the biggest third party servicer, has found do much better (in terms of borrowers paying on time) than the shallower mods coming out of government sticks and carrots.

This is not good news at all. It bodes ill for the housing recovery (the sooner prices bottom, the better; all these phony programs and fighting to find ways to suck more income out of hopelessly underwater borrowers is anti-recovery. The history of past bank crises shows that bankruptcies and debt restructurings are a necessary step to recovery. Trying to impede that puts the interest of the banksters ahead of the collective good. But why should we be surprised? This has been the modus operandi since the crisis began.

From Bloomberg:

The U.S. Senate rejected a measure that would let bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the legislation would increase loan costs.

The proposed “cram-down” amendment to a housing bill was defeated today in a 51-45 vote, with 12 Democrats among the 51 opponents. The measure needed 60 votes to pass over Republican objections. The House passed its version 234-191 on March 5.

“These bankers who brought us into this crisis are literally shunning and stiff-arming the people who are facing foreclosure,” said Senator Richard Durbin of Illinois, sponsor of the legislation and the chamber’s second-ranking Democrat.

The defeat is a setback for President Barack Obama’s administration, which included cram-down in the anti-foreclosure plan aiming to help 9 million homeowners. The mortgage industry has twice succeeded in helping to kill the proposal since Durbin first introduced it in 2007. The senator said today “this is not the last time” he will raise the issue.

Democrats led by Durbin had sought a compromise on the measure with JPMorgan Chase & Co., Wells Fargo & Co., Bank of America Corp., the American Bankers Association and Financial Services Roundtable. The lenders that scuttled the negotiations are “surviving today because of taxpayers’ dollars,” Durbin said. The three banks he named received $95 billion in U.S. aid.

“It’s clear that part of the mortgage industry was never interested in meeting us halfway, as negotiations went forward, they moved the goalpost back and back,” said Senator Charles Schumer, a New York Democrat.

An older trader’s saying is “little pigs get fed, big pigs go to slaughter.” In this case, the parasite is successfully sucking the life of of the host.

[Demeter]

108. A Preview of Thursday's Jobs Speech: He's Got Nothin' By Stephanie Kelton

http://neweconomicperspectives.blogspot.com/2011/09/preview-of-thursdays-jobs-speech-hes.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+EconomicPerspectivesFromKansasCity+%28Economic+Perspectives+from+Kansas+City%29&utm_content=Google+Reader

Three months ago, when the May employment report revealed that the economy added just 54,000 jobs, President Obama urged the American people "not to panic." (I urged the opposite here.) Now the August report is in, and oh what we wouldn't give for 54,000 new jobs. The Republicans blame it all on uncertainty -- employers are worried about the threat of new regulations and higher taxes, so they won't risk parting with their mountains of (record-high corporate) profits (Mike Norman debunks the Republican argument here.). Obama essentially agrees with the Republicans.

First he blamed the doomsdayers for pointing out that the recovery was faltering, saying that their dismal warnings only hamper confidence, causing people to spend less and save more. Then he blamed lackluster job growth on the uncertainty that was created during the standoff over raising the nation's debt-ceiling limit. Striking a deal to cut trillions in future demand (oops - I mean nasty deficits) was supposed to restore confidence among sellers. Like the Republicans, President Obama (is it really necessary to distinguish the two any longer?) also believes that red tape and regulation are major deterrents to the recovery and that ratifying some free trade deals and overhauling our patent laws will provide a substantial boost to the economy. Unlike the Republicans, the president also wants to see more spending on infrastructure and an extension of the payroll tax cut (possibly to include employers this time), but there is nothing truly bold or imaginative in any of this -- certainly nothing that is going to prevent a double-dip (if it hasn't happened already), and nothing that's going to create millions of jobs within any reasonable time frame.

So what will we hear on Thursday? Look mostly for carrots with small price tags. Probably a lot of talk about confidence, (un)certainty and incentives. (Don't make a drinking game out of it, or you're liable to miss the second half of the speech.)

Fortunately, there's plenty of time to craft something different. Here -- courtesy of Warren Mosler -- is a great template. It's the speech Warren says he would deliver if he were president. (Hey, there's an idea.)

My fellow Americans,

let me get right to the point. I have three bold new proposals to get back all the jobs we lost, and then some. In fact, we need at least 20 million new jobs to restore our lost prosperity and put America back on top.

First let me state that the reason private sector jobs are lost is always the same. Jobs are lost when business sales go down. Economists give that fancy words- they call it a lack of aggregate demand. But it's very simple. A restaurant doesn't lay anyone off when it's full of paying customers, no matter how much the owner might hate the government, the paper work, and the health regulations. A department store doesn't lay off workers when it's full of paying customers, And an engineering firm doesn't lay anyone off when it has a backlog of orders. Restaurants and other businesses lay people off when their customers stop buying, for any reason.

So the reason we lost 8 million jobs almost all at once back in 2008 wasn't because all of a sudden all those people decided they'd rather collect unemployment than work. The reason all those jobs were lost was because sales collapsed. Car sales, for example, collapsed from a rate of almost 17 million cars a year to just over 9 million cars a year. That's a serious collapse that cost millions of jobs.

Let me repeat, and it's very simple, when sales go down, jobs are lost, and when sales go up, jobs go up, as business hires to service all their new customers.

So my three proposals are specifically designed to get sales up to make sure business has a good paying job for anyone willing and able to work. That's good for businesses and all the people who work for them. And these proposals are bipartisan. They are supported by Americans ranging from Tea Party supporters to the Progressive left, and everyone in between. So listen up!

My first proposal if for a full payroll tax suspension. That means no FICA taxes will be taken from both employees and employers. These taxes are punishing, regressive taxes that no progressive should ever support. And, of course, the Tea Party is against any tax. So I expect full bipartisan support on this proposal. Suspending these taxes adds hundreds of dollars a month to the incomes of people working for a living. This is big money, not just a few pennies as in previous measures. These are the people doing the real work. Allowing them to take home more of their pay supports their good efforts. Right now take home pay is barely enough to pay for food, rent, and gasoline, with not much left over. When government stops taking FICA taxes out of their pockets, they'll be able to get back to more normal levels of spending. And many will be able to better make their mortgage payments and their car payments, which, by the way, is what the banks really want - people who can make their payments. That's the bottom up way to fix the banks, and not the top down bailouts we've done in the past.


And the payroll tax holiday is also for business, which reduces costs for business, which, through competition, helps keep prices down for all of us, which means our dollars buy more than otherwise. So a full payroll tax holiday means more take home pay for people working for a living, and lower costs for business to help keep prices and inflation down, so sales can go up and we can finally create those 20 million private sector jobs we desperately need.

My second proposal is for a one time $150 billion Federal revenue distribution to the 50 state governments with no strings attached. This will help the states to fill the financial hole created by the recession, and stay afloat while the sales and jobs recovery spurred by the payroll tax holiday restores their lost revenues. Again, I expect bipartisan support. The progressives will support this as it helps the states sustain essential services, and the Tea Party believes money is better spent at the state level than the federal level.

My third proposal does not involve a lot of money, but it's critical for the kind of recovery that fits our common vision of America. My third proposal is for a federally funded $8/hr transition job for anyone willing and able to work, to help the transition from unemployment to private sector employment. The problem is employers don't like to hire the unemployed, and especially the long term unemployed. While at the same time, with the payroll tax holiday and the revenue distribution to the states, business is going to need to hire all the people it can get. The federally funded transition job allows the unemployed to get a transition job, and show that they are willing and able to go to work every day, which makes them good candidates for graduation to private sector employment.

Again, I expect this proposal to also get solid bipartisan support. Progressives have always known the value of full employment, while the Tea Party believes people should be able to work for a living, rather than collect unemployment.

Let me add here that nothing in these proposals expands the role or scope of the federal government. The payroll tax holiday is a cut of a regressive, punishing tax, that takes the government's hand out of the pockets of both workers and business. The revenue distribution to the states has no strings attached. The federal government does nothing more than write a check. And the transition job is designed to move the unemployed, who are in fact already in the public sector, to private sector jobs. There is no question that these three proposals will bring the increase in sales we need to usher in a new era of prosperity and full employment.

The remaining concern is the federal budget deficit. Fortunately, with the bad news of the downgrade of US Treasury securities by Standard and Poors to AA+ from AAA, a very important lesson was learned.

Interest rates actually came down. And substantially. And with that the financial and economic heavy weights from the 4 corners of the globe made a very important point. The markets are telling us something we should have known all along. The US is not Greece for a very important reason that has been overlooked. That reason is, the US federal government is the issuer of its own currency, the US dollar. While Greece is not the issuer of the euro.

In fact, Greece, and all the other euro nations, have put themselves in the position of the US states. Like the US states, Greece and other euro nations are not the issuer of the currency that they spend. So they can run out of money and go broke, and are dependent on being able to tax and borrow to be able to spend. But the issuer of its own currency, like the US, Japan, and the UK, can always pay their bills. There is no such thing as the US running out of dollars. The US is not dependent on taxes or borrowing to be able to make all of its dollar payments. The US federal government can not go broke like Greece. That was the important lesson of the S and P downgrade, and everyone has seen it up close and personal and they all now agree. And now they all know why, with the deficit at record high levels, interest rates remain at record low levels. Does that mean we should spend without limit and not tax at all? Absolutely not! Too much spending and not enough taxing will surely drive up prices and inflation.

But it does mean that right now, with unemployment sky high and an economy on the verge of another recession, we can immediately enact my 3 proposals to bring us back to a strong economy with good jobs for people who want them. And some day, if somehow there are too many jobs and it's causing an inflation problem, we can then take the measures needed to cool things down. But meanwhile, as they say, to get out of hole we need to stop digging and instead implement my 3 proposals.

So in conclusion, let me repeat these three, simple, direct, bipartisan proposals for a speedy recovery:

• A full payroll tax holiday for employees and employers
  
  
• A one time, per-capita, $150 billion revenue distribution to the states
  
  
• And an $8/hr transition job for anyone willing and able to work to facilitate the transition from unemployment to private sector employment as the economy recovers.

Thank you.

[bread_and_roses]

117. "We need work that makes sense and work that sustains us"

Text

Published on Monday, September 5, 2011 by CommonDreams.org
Labor Pains: ­What Obama Won't Say In His Jobs Speech
by Lucinda Marshall

... It is that sort of thinking that has led us to a place where too many people have no job or have dead-end, low paying jobs doing things and making things that make absolutely no sense while at the same time, hunger is at epic levels in this country and elsewhere. If you’re a woman, so sorry, but you will not be achieving pay equity until 2109. Too many people have lost their homes and now the government owns most of the Monopoly mortgages and there is no one to buy them. It is expensive if not impossible to insure our own health and our children do not have the resources they need to learn and when they cannot find jobs, the only option for many is to join the military which is bleeding our coffers dry while sending our children off to bleed to death for faux reasons that make no sense at all. The education system is so desperate, that moms can be convicted of the heinous crime of trying to send their child to a better school. Our air is barely breathable. Our roads are falling apart, our water system is barely functional, we power all the things that we buy with filthy, dangerous forms of energy. This isn’t an economy–it is what the death throes of human society looks like.

We do not need more jobs so we can spend more. We need work that makes sense and work that sustains us, not work that just feeds the cycle that is sucking us dry and de facto enslaving us.

... This Labor Day we need to re-focus our goals to include not only just jobs, but also just work that values what sustains and enables us, and moves us away from work for the sake of economic ‘growth’ (which has become a hollow euphemism for lining corporate coffers) and that merely perpetuates the hamster wheel of what ails us.

[Demeter]

109. China bought back a lot of BofA assets

http://news.yahoo.com/china-bought-back-lot-bofa-assets-report-192015616.html

A consortium that included the Chinese government was the biggest buyer of a 5 percent stake in China Construction Bank Corp sold last month by Bank of America, the Financial Times reported on Sunday. The State Administration of Foreign Exchange, the National Social Security Fund and Citic Securities bought the CCB shares, the FT said, citing unnamed sources.

The Chinese government role has been a closely guarded secret as it comes amid fears that Chinese bank stocks will raise additional capital and dilute the stakes of current investors, the FT said. There has been concern that loans and other assets held by CCB and other Chinese banks are vulnerable to losses in a possible slowdown of the Chinese economy.

CCB has been the world's second-largest bank by market value.

Bank of America agreed to sell 13.1 billion CCB shares -- half of its stake -- because of its own drive to raise capital to make up for losses from mortgage loans made during the U.S. housing boom. Bank of America, the biggest U.S. bank by assets, will get $8.3 billion cash from the sale.

Trading volume in CCB shares surged after the sale, suggesting to some in the market that about one-third of the shares sold by Bank of America went to hedge funds and other institutional investors. Temasek Holdings, a Singapore state investor, and Seatown, a related investment firm, were among previously reported buyers of the CCB shares.

[Demeter]

110. QE3 no silver bullet for markets

http://news.yahoo.com/qe3-no-silver-bullet-markets-070923834.html

Friday's jobs report that showed hiring in the United States unexpectedly ground to a halt in August is increasing speculation the U.S. Federal Reserve will move to stimulate the economy. But will it help stocks?

Fed action -- if it happens -- is no longer viewed as the elixir for the stock market it once was. Wall Street tumbled over 2 percent on Friday as investors fretted more about the economic outlook rather than looking ahead to another round of Fed bond buying. Next week, the question of whether the Fed will step up to the plate with another round of quantitative easing will take center stage with a highly anticipated speech from President Barack Obama. That could make for another volatile week.

This time last year, anticipation of a second round of quantitative easing, or QE2, sparked an almost uninterrupted rally that lifted the S&P 500 around 30 percent from August to May...What a difference a year makes. Confidence in policy makers is sapping away as the economy languishes, the United States grapples with the loss of its top-notch credit rating, and the European Union seems to be coming undone at the seams. Wall Street sees an 80 percent chance the Federal Reserve will intervene in the bond market to lower long-term interest rates, according to a Reuters poll on Friday.

But Friday's action in the stock market signaled that equity investors do not see that prospect as silver bullet for their woes. The broad-based S&P 500 index fell 2.5 percent on the day...MORE DRIVEL AT LINK

[Demeter]

111. More data to come on the ‘zero’ jobs market

http://www.marketwatch.com/story/more-data-to-come-on-the-zero-jobs-market-2011-09-04-17070?siteid=YAHOOB

When traders return from the Not-Much-Labor Day break, they’ll be greeted with more data to confirm or refute whether the job market is the zero that a key government report suggested.

Reports on the services sector, job openings and jobless claims as well as the anecdotes contained in the Fed’s Beige Book all will provide more context on the Labor Department’s report that no jobs outside the farm sector were created in August. See story on August jobs report.

This week’s data, though not as closely followed by the market as the nonfarm payrolls report, are worth examining because historically they have done a pretty good job assessing the labor market (and also because President Barack Obama on Thursday is due to give a major speech outlining initiatives to bolster the jobs market.)

On a scale of 1 to -1, the correlation between the employment component of the Institute for Supply Management’s non-manufacturing report and the Labor Department’s nonfarm payrolls number is a strong 0.87, according to data compiled by Haver Analytics...Job openings data from the Labor Department, released Wednesday, has a less-strong 0.60 correlation, which makes sense considering that’s only one side of the labor market. And the monthly average of jobless claims data, due Thursday, has a strong -0.76 correlation with payrolls (which means, when claims fall, payrolls go higher, and vice versa, which is what one would expect)...

[Demeter]

112. Avoiding Last Place: Some Things We Don't Outgrow

http://www.npr.org/2011/09/04/140116142/avoiding-last-place-some-things-we-dont-outgrow?ft=1&f=1001

People near the bottom of the socioeconomic ladder often oppose policies that help those below them, according to a new paper from the National Bureau of Economic Research. The phenomenon is called "last-place aversion."

Ilyana Kuziemko, one of the authors of the paper and an economics professor at Princeton University, tells NPR's Laura Sullivan that last-place aversion is what it sounds like.

"It's the basic human need to avoid feeling like we ourselves are in last place," she says. "Or maybe, put a bit more negatively, it's our need to feel like there's at least one person we can feel superior to or look down on."

Kuziemko says it's similar to the childhood fear of being picked last in gym class. That feeling, she says, "probably doesn't go away just because we grow up."

MORE

[bread_and_roses]

114. "Stocks Are Down! Obama’s Unpopular! Wait, Who Gives a F...

http://www.commondreams.org/view/2011/09/04-3

Stocks Are Down! Obama’s Unpopular! Wait, Who Gives a F&*@?!
by Kai Wright

Labor Day weekend began with a familiar whimper: The economy created exactly zero jobs in August....
... Officialdom continues to think, talk and most importantly act like this is a crisis of theories... All of that is, at this point, entirely meaningless.

This crisis is about scraping together rent this month and putting gas in your car this week and feeding your kids tonight...

...For a growing number of largely black neighborhoods with Depression level unemployment and mass foreclosures, it’s about resignation with the fact that you’ve been strip mined and left to rot by the investors and politicians who everybody seems to think face the toughest choices in this recession.

Strip mined and left to rot - doesn't that about describe it as well as anything? Of course, we'll never hear even a hint of the blasted wasteland in communities of color from our President Mealy-Mouth, President Trite Sound Bite, President "of all the people..." (with $$, that is).
(edit: forgot the link)

[bread_and_roses]

116. "the shock news late last week that no new jobs were created in America last month. "

http://www.guardian.co.uk/business/2011/sep/05/stock-markets-fall-imf-chief-warns-crisis

Stock markets fall again as IMF chief warns of crisis

• FTSE 100 down by nearly 2.5%
• Banks and miners see big falls, RBS down 10.5%
• Lagarde calls for recapitalisation of Europe's banks
• China slowdown hits commodity groups
• Weak US jobs data still worrying traders

... Concerns over the weak US jobs market also dogged investors, following the shock news late last week that no new jobs were created in America last month. Chris Weston, institutional trader at IG Markets, said Friday's disappointing non-farm payroll numbers continued to cast a shadow.

"Shock" ? What shock? I wasn't shocked. The phantom "job creation" they've been touting has been - IMHO - just reshuffling the near-empty board a bit - or maybe rearranging the dry, hard, stripped bone in Mother Hubbard's cubbord to make it look like something. It sure as hell was no "shock" to me - I would have put the Labor Depts figures up there in that post with the other "fakes" - food, news, etc.

[DemReadingDU]

118. Maybe they couldn't get away with lying about creating phantom jobs again

So instead of reporting less jobs, then it was determined that 0 jobs created.

Maybe it is being setup to be a big decline for this month?
:eyes: