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marmar

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Gender: Male
Hometown: Detroit, Michigan
Home country: Citizen of the world whose address is in the U.S.
Current location: Detroit, Michigan
Member since: Fri Oct 29, 2004, 12:18 AM
Number of posts: 65,190

Journal Archives

Perpetual War: How Does This End?






Fed – Forget “Escape Velocity,” Not Gonna Happen, Ever


By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.


Wall Street’s and the media’s attention was riveted single-mindedly on whether or not the Fed would include in its statement the two words, “considerable time,” the two vaguest, stretchable latex words available that describe absolutely nothing and leave the door wide open for wishful thinkers of every stripe. That’s what the Fed’s gyrations since the financial crisis have so successfully accomplished; they have reduced the market, a place of price discovery, to a crummy joke.

The Fed delivered those two words, but during the press conference, Fed Chair Janet Yellen doused them with so many qualifiers that they’ve become even more meaningless, if that were even possible.

Wishful thinkers still see Yellen as a pure dove, while others worry that she has turned into a closet hawk who is afraid of letting this tsunami of free liquidity inflate asset bubbles and build up risks so immense that even a minor hiccup would bring down the entire financial system once again. And this time, under her watch.

Clearly, FOMC members, and particularly Yellen, would try hard to dodge blame. But after having printed $3 trillion, and after having forced short-term rates to near zero – and below the rate of inflation – for what likely will be more than six years, and after having messed with the markets throughout, they too can imagine that blame for the fiascos these policies might end up causing will be hard to dodge.

But beyond its crummy joke, the Fed has done something else: it has removed “Escape Velocity” – the economic surge in the US that has been falsely promised for five years in a row to rationalize soaring stock prices – from its vision of the future. ...............(more)

The complete piece is at: http://www.nakedcapitalism.com/2014/09/fed-forget-escape-velocity-not-gonna-happen-ever.html



An Accident Waiting to Happen: The $1 Trillion Leveraged Loan Market


from Naked Capitalism:


An Accident Waiting to Happen: The $1 Trillion Leveraged Loan Market
Posted on September 19, 2014 by Yves Smith


A new article in Bloomberg gives a well-researched overview of a mess-in-the-making that regulators are choosing to ignore: the leveraged loan market. For newbies, “leveraged loans” means “risky loans to big companies”. For the most part, they fund private equity buyouts and restructurings. The juicy fees on these financings, 1% to 5% of the amount raised, versus an average of 1.3% for junk bonds, is a big reason why none of the incumbents is particularly eager to change a market that is working just fine for them in its current, creaky form.

The problems with leveraged loans are twofold. The first is that they are in the stone ages from an operational standpoint. It takes an average of 20 days to settle a leveraged loan, up from just under 18 days in the last leveraged loan boom, the eve of the financial crisis in 2007. That contrasts with 3 days or fewer for junk bonds. When investors buy new loan participations, the delays can extend into months since investors make binding commitments to fund the loan but the underlying acquisition can be held up. That also means if interest rates rise between the time of commitment versus when the transaction settles, investors are stuck with having to fund a deal at a rate that is now below market, leaving them in a loss position on a mark-to-market basis from the get-go.

And get a load of this:

While buyers and sellers can trade stocks and bonds among themselves, they need the approval of corporate borrowers before they can exchange loans. Clerks must then update loan documents to reflect new lenders.

With loans, “there’s a high amount of faxing going on still,” said Virginie O’Shea, a senior analyst at Aite Group LLC in London. “People don’t realize that fax machines are still around in this day and age but they are.”


This primitive state of affairs results from the fact that loans are not securities and thus are not subject to the tender ministrations of the SEC, including its rules on settlement. And the Fed and OCC have politely not taken any apparent interest in this market. ...................(more)

The complete piece is at: http://www.nakedcapitalism.com/2014/09/accident-waiting-happen-1-trillion-leveraged-loan-market.html



Professor Richard Wolff: Socialism and Workers' Self-Directed Enterprises


Socialism and Workers' Self-Directed Enterprises
by Richard D. Wolff


​Global capitalism has huge problems coping with the second worst collapse in its history. Its extreme and deepening inequalities have provoked millions to question and challenge capitalism. Yet socialists of all sorts now find it more difficult than ever to make effective criticisms and offer alternatives that inspire.

Part of the problem lies with classic socialism as it evolved over the last 150 years. Positions and strategies that once mobilized the victims and critics of capitalism are no longer, by themselves, effective. Not only has capitalism changed, but its celebrants also developed powerful critiques of socialist theory and especially of actually existing socialisms such as the Soviet Union (USSR). Socialism has not responded well to capitalism’s changes nor to its critiques; it has not made the necessary strategic and tactical shifts. Nonetheless, socialism retains the means to overcome its problems with some long-overdue self-criticism and innovation.

By classic socialism I mean the tradition that differentiated itself from capitalism chiefly in terms of macro-economic institutions. Classic socialists defined capitalism as (1) private ownership of means of production and (2) distribution of resources and products by means of market exchanges. The socialist alternative entailed (1) socialized or public ownership of means of production (operated by the state as agent of the people as a whole) and (2) distribution of resources and products via state planning. Socialists attacked capitalism for the injustices, cyclical instability, and gross productive inefficiencies (e.g. unemployment, stagnation, etc.) that they traced to private enterprises and markets. In the socialists’ alternative, a workers’ state would control or own enterprises and plan the distribution of resources and products – in the democratically determined interests of the majority.

Such criticisms of capitalism and that transitional program to an alternative system rewarded socialists in their political, economic, and cultural work. Socialist movements spread across the countries of the world during the nineteenth and to the last third of the twentieth century. Socialists effectively challenged capitalism, often took and held political power, and influenced many academics, intellectuals, popular organizations, artistic projects, and so on. But now socialism’s growth in many places has stalled or reversed. ...........(more)

The complete piece is at: http://mrzine.monthlyreview.org/2014/wolff140914.html



Moyers: Climate Change You Can Believe In

by Bill Moyers and Michael Winship


Just as Sunday’s big People’s Climate March and next week’s UN global summit on climate converge here in New York City, the nation and world are experiencing weather of an intensity that should rattle the stubborn false convictions of even the most fervent climate change denier.

Terrible flooding in India and Pakistan, the worst in more than a century, with heavy monsoon rains, 500 lives lost and hundreds of thousands left stranded… thousands of wildfires ignited by severe drought in California and the West… flashfloods in Arizona… the punch of a hurricane pounding Mexico’s Baja coast, the strongest in nearly fifty years, battering locals and trapping tourists in their hotels without electricity.

We know it’s important not to confuse day-to-day weather patterns with climate, which measure variations of things like temperatures and humidity over long periods of time, but it’s clear that these disasters are made more powerful by global warming. The pain is only going to get worse for us and for future generations, unless we act now. Our governments must reduce those carbon emissions that are heating up the atmosphere before it’s too late.

But up to now, world leaders have refused to give global warming the crisis treatment that’s needed, even as the evidence mounts day by day. A draft report from the UN’s Intergovernmental Panel on Climate Change says that the vast amounts of greenhouse gases being released into the atmosphere will have “severe, pervasive and irreversible impacts,” and that we’re already seeing the effect in heat waves, floods and rising sea levels. Another UN report, this one from the World Meteorological Organization, says that amounts of carbon dioxide — the gas that traps heat in our atmosphere — are increasing even faster than scientists predicted, more than in the last 800,000 years at least. The accounting firm PriceWaterhouseCoopers has crunched the numbers and spots an “unmistakable trend” that puts us just twenty years away from catastrophe. “In a highly globalized economy,” they write, “no country is likely to be spared as the impacts of climate change ripple around the world…” ....................(more)

The complete piece is at: http://www.truth-out.org/opinion/item/26299-climate-change-you-can-believe-in



David Sirota: Too Big to Punish


by David Sirota


A few months ago, in a press conference about the felony conviction of Credit Suisse, Attorney General Eric Holder said, "This case shows that no financial institution, no matter its size or global reach, is above the law."

Yet, earlier this month, the Obama administration announced its proposal to waive some of the possible sanctions against Credit Suisse. The little-noticed waiver, which was outlined in the Federal Register, comes amid criticism that the Obama administration has gone too easy on major financial institutions that break the law.

In its announcement outlining the waiver, the Department of Labor notes that Credit Suisse "operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts" and in "using sham entities" to hide money.

Under existing Department of Labor rules, the conviction could prevent Credit Suisse from being designated a Qualified Professional Asset Manager. That designation exempts firms from other federal laws, giving them the special status required to do business with many pension funds. The Obama administration's is proposing to waive those anti-criminal sanctions against Credit Suisse, thereby allowing Credit Suisse to get the QPAM designation needed to continue its pension business. ..................(more)

The complete piece is at: http://www.creators.com/liberal/david-sirota/too-big-to-punish.html



The Wheel Turns, the Boat Rocks, the Sea Rises: Change in a Time of Climate Change


from TomDispatch:


The Wheel Turns, the Boat Rocks, the Sea Rises
Change in a Time of Climate Change

By Rebecca Solnit


There have undoubtedly been stable periods in human history, but you and your parents, grandparents, and great-grandparents never lived through one, and neither will any children or grandchildren you may have or come to have. Everything has been changing continuously, profoundly -- from the role of women to the nature of agriculture. For the past couple of hundred years, change has been accelerating in both magnificent and nightmarish ways.

Yet when we argue for change, notably changing our ways in response to climate change, we’re arguing against people who claim we’re disrupting a stable system. They insist that we’re rocking the boat unnecessarily.

I say: rock that boat. It’s a lifeboat; maybe the people in it will wake up and start rowing. Those who think they’re hanging onto a stable order are actually clinging to the wreckage of the old order, a ship already sinking, that we need to leave behind.

As you probably know, the actual oceans are rising -- almost eight inches since 1880, and that’s only going to accelerate. They’re also acidifying, because they’re absorbing significant amounts of the carbon we continue to pump into the atmosphere at record levels. The ice that covers the polar seas is shrinking, while the ice shields that cover Antarctica and Greenland are melting. The water locked up in all the polar ice, as it’s unlocked by heat, is going to raise sea levels staggeringly, possibly by as much as 200 feet at some point in the future, how distant we do not know. In the temperate latitudes, warming seas breed fiercer hurricanes. ...............(more)

The complete piece is at: http://www.tomdispatch.com/post/175896/tomgram%3A_rebecca_solnit%2C_what_to_do_when_you%27re_running_out_of_time/#more



A Public Bank Option for Scotland


A Public Bank Option for Scotland

Posted on September 17, 2014
by Ellen Brown


Scottish voters will go to the polls on September 18th to decide whether Scotland should become an independent country. As video blogger Ian R. Crane colorfully puts the issues and possibilities:

The People of Scotland have an opportunity to extricate themselves from the socio-psychopathic global corporatists and the temple of outrageous and excessive abject materialism. However, it is not going to be an easy ride . . . .

If Alex Salmond and the SNP are serious about keeping the Pound Stirling as the Currency of Scotland, there will be no independence. Likewise if Scotland embraces the Euro, Scotland will rapidly become a vassel state of the Euro-Federalists, who will asset strip the nation in the same way that, Greece, Ireland, Portugal and Spain have been stripped of their entire national wealth and much of their national identity.


To achieve true independence, Crane suggests the following, among other mandates:

* Establish an independent Central Bank of Scotland.
* Issue a new Scottish (Debt Free) Currency.
* Settle any outstanding debt with new Scottish Currency.
* Take Scotland out of the EU.
* Take Scotland out of NATO.
* Establish strict currency controls for the first 3 years of independence.
* Nationalize the Scottish oil & gas industry.
* Re-take control of the National Health Service.
* Establish a State Employment Agency to provide work/training for all able-bodied residents.


Arguments against independence include that Scotland’s levels of public spending, which are higher than in the rest of the UK, would be difficult to sustain without raising taxes. But that assumes the existing UK/EU investment regime. If Scotland were to say, “We’re starting a new round based on our own assets, via our own new bank,” exciting things might be achieved. A publicly-owned bank with a mandate to serve the interests of the Scottish people could help give the newly independent country true economic sovereignty. ....................(more)

The complete piece is at: http://ellenbrown.com/2014/09/17/a-public-bank-option-for-scotland/



Naomi Klein: One Way or Another, Everything Changes


via truthdig:


One Way or Another, Everything Changes

Posted on Sep 17, 2014
By Naomi Klein


The following is excerpted from “This Changes Everything: Capitalism vs. the Climate” by Naomi Klein. Copyright © 2014 by Naomi Klein. Reprinted by permission of Simon & Schuster, Inc. All Rights Reserved.

“Most projections of climate change presume that future changes—greenhouse gas emissions, temperature increases and effects such as sea level rise—will happen incrementally. A given amount of emission will lead to a given amount of temperature increase that will lead to a given amount of smooth incremental sea level rise. However, the geological record for the climate reflects instances where a relatively small change in one element of climate led to abrupt changes in the system as a whole. In other words, pushing global temperatures past certain thresholds could trigger abrupt, unpredictable and potentially irreversible changes that have massively disruptive and large-scale impacts. At that point, even if we do not add any additional CO2 to the atmosphere, potentially unstoppable processes are set in motion. We can think of this as sudden climate brake and steering failure where the problem and its consequences are no longer something we can control.”

—Report by the American Association for the Advancement of Science, the world’s largest general scientific society, 2014 1


“I love that smell of the emissions.”

—Sarah Palin, 2011



A voice came over the intercom: would the passengers of Flight 3935, scheduled to depart Washington, D.C., for Charleston, South Carolina, kindly collect their carry-on luggage and get off the plane.

They went down the stairs and gathered on the hot tarmac. There they saw something unusual: the wheels of the US Airways jet had sunk into the black pavement as if it were wet cement. The wheels were lodged so deep, in fact, that the truck that came to tow the plane away couldn’t pry it loose. The airline had hoped that without the added weight of the flight’s thirty-five passengers, the aircraft would be light enough to pull. It wasn’t. Someone posted a picture: “Why is my flight cancelled? Because DC is so damn hot that our plane sank 4” into the pavement.”3

Eventually, a larger, more powerful vehicle was brought in to tow the plane and this time it worked; the plane finally took off, three hours behind schedule. A spokesperson for the airline blamed the incident on “very unusual temperatures.”4

The temperatures in the summer of 2012 were indeed unusually hot. (As they were the year before and the year after.) And it’s no mystery why this has been happening: the profligate burning of fossil fuels, the very thing that US Airways was bound and determined to do despite the inconvenience presented by a melting tarmac. This irony—the fact that the burning of fossil fuels is so radically changing our climate that it is getting in the way of our capacity to burn fossil fuels—did not stop the passengers of Flight 3935 from reembarking and continuing their journeys. Nor was climate change mentioned in any of the major news coverage of the incident.

I am in no position to judge these passengers. All of us who live high consumer lifestyles, wherever we happen to reside, are, metaphorically, passengers on Flight 3935. Faced with a crisis that threatens our survival as a species, our entire culture is continuing to do the very thing that caused the crisis, only with an extra dose of elbow grease behind it. Like the airline bringing in a truck with a more powerful engine to tow that plane, the global economy is upping the ante from conventional sources of fossil fuels to even dirtier and more dangerous versions—bitumen from the Alberta tar sands, oil from deepwater drilling, gas from hydraulic fracturing (fracking), coal from detonated mountains, and so on. ...............(more)

The complete piece is at: http://www.truthdig.com/arts_culture/item/one_way_or_another_everything_changes_20140917



Professor Richard Wolff's Economic Update: "Corporations are the Problem" (audio link)


Listen: http://rdwolff.com/content/economic-update-corporations-are-problem


by Richard Wolff.
PUBLISHED ON SEPTEMBER 14, 2014

Updates on Market Basket workers' victory, top paid asset managers, FED report debunks "recovery," Chipotle's gross inequality, Montreal corruption, and Russia/China economic alliance. Major discussion: Part 2 on socialism's new directions. Response to listeners on franchising, capitalist growth, advertising and consumer desires.



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