Weekend Economists "In Like Flynn" June 17-19, 2011

[Demeter]

Due to popular demand (and believe me, Tansy Gold is popular around the Marketeers!) we celebrate the life and times of Errol Leslie Thomson Flynn, Born: 20-06-1909, Died: 14-10-1959 in Vancouver, British Columbia, Canada. His Birth Place: Hobart, Tasmania, Australia.

Flynn was the son of a prominent Australian marine biologist and zoologist Theodore Thomson Flynn, a biologist, and Marrelle Young, an adventurous young woman and supposed descendant of a sailor on HMS Bounty... As such, he was sent to the best schools available—and was expelled from virtually all of them. Flynn's restless, rebellious nature carried over into his early adulthood, as he unsuccessfully pursued such professions as government official, plantation overseer, gold miner, and journalist. In 1933 an Australian film producer saw some photographs of Flynn and offered the ruggedly handsome 24-year-old the role of the mutineer Fletcher Christian in the semidocumentary feature In the Wake of the Bounty. Encouraged by this experience to pursue acting as a career, Flynn joined England's Northampton Repertory Company, which led to a few roles in British films and ultimately to a contract with Warner Bros. in Hollywood. When Robert Donat dropped out of the title role in the expensive adventure film Captain Blood (1935), Warners took a chance on Flynn, thereby assuring stardom for him. Although he hadn't really planned on an acting career, Flynn become a star with his very first film. Typecast as a dashing, fearless adventurer, he went on to star in such colourful costume dramas as The Charge of the Light Brigade (1936), The Adventures of Robin Hood (1938), and The Sea Hawk (1940) and also such big-budget westerns as Dodge City (1939) and They Died with Their Boots On (1941).

During the shooting of The Private Lives of Elizabeth and Essex, Flynn and co-star Bette Davis had some legendary off-screen fights.

When Flynn became a naturalised American citizen on 15 August 1942, he also became eligible for the military draft, as the United States had entered World War II eight months earlier. Grateful to the country that had given him fame and wealth, Flynn attempted to join every branch of the armed services. But Flynn had several health problems. His heart was enlarged, with a murmur, and he'd already suffered at least one heart attack. That was not all: he had recurrent malaria (contracted in New Guinea), chronic back pain (for which he self-medicated with morphine and later, with heroin), lingering chronic tuberculosis, and numerous venereal diseases. Flynn, famous for his athletic roles and promoted as a paragon of physical beauty, was classified 4-F – unqualified for military service for not meeting the physical fitness standards...he instead acted the part of a soldier in such films as Desperate Journey (1942) and Objective, Burma! (1945).

This created a public image problem for both Flynn and Warner Brothers. Flynn was often criticised for his failure to enlist while continuing to play war heroes in films. The studios' failure to counter the criticism was due to a desire to hide the state of Flynn's health.

Almost as soon as he arrived in Hollywood, Flynn established a reputation as an irrepressible drinker, carouser, and womanizer. His reputation as a womaniser led to the expression "In like Flynn"...He was well known for having wild parties and was eventually brought up on a statutory rape charge, in 1942, by teenagers Betsy Hansen and Peggy Satterlee. The trial took place in January and February of 1943, and Flynn was cleared of the crime, but he suffered both personally and in his career... he was acquitted as a result of the flamboyant legal maneuvers of his attorneys. Inevitably, his self-indulgence caught up with him; in his later Hollywood films he appeared haggard, distracted, and far older than his years. He also lost a great deal of money in a variety of ill-advised business ventures and headed to England and Europe in hopes of revitalizing his career.

Returning to America in 1956, he was something of a self-parody, but still won some acclaim and brief resurgence of movie popularity with his brilliant performances in The Sun Also Rises (1957), The Roots of Heaven (1958), and Too Much, Too Soon (1958); in each film, he played a wasted, self-destructive drunkard, and some critics suggested that he wasn't acting. He also hosted an Anglo-American television anthology, The Errol Flynn Theater (1957), the nature of which allowed him to display a hitherto untapped versatility.

As a curious postscript to his life of adventure, Flynn went to Cuba in late 1958 to meet with the rebel leader Fidel Castro. Flynn was a great supporter of Castro and narrated a short movie titled Cuban Story:The Truth About Fidel Castro Revolution, one of his last works as an actor.He also made a cheaply filmed paean to Fidel Castro, Cuban Rebel Girls (1959).

He wrote a remarkably candid (if often wildly inaccurate) autobiography, My Wicked, Wicked Ways (1959), which was published just months after his death from alcoholism and contains humorous anecdotes about Hollywood. Flynn wanted to call the book 'In Like Me', but his publishers refused.

Flynn was married three times and was the father of four; his son, Sean, was a photojournalist who disappeared in 1970 while covering the war in Southeast Asia.

Errol Flynn is interred in Forest Lawn Memorial Park Cemetery, in Glendale, California. Both of his parents survived him.

http://www.thebiographychannel.co.uk/biographies/errol-flynn.html


http://www.biography.com/articles/Errol-Flynn-9297594

See also: http://en.wikipedia.org/wiki/Errol_Flynn

Flynn co-starred with Olivia de Havilland in eight films: Captain Blood (1935), The Charge of the Light Brigade (1936), The Adventures of Robin Hood (1938), Four's a Crowd (1938), Dodge City (1939), The Private Lives of Elizabeth and Essex (1939), Santa Fe Trail (1940), and They Died with Their Boots On (1941)

[Demeter]

1. TWO BANKS DOWN

McIntosh State Bank, Jackson, Georgia, was 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 Hamilton State Bank, Hoschton, Georgia, to assume all of the deposits of McIntosh State Bank.

The four branches of McIntosh State Bank will reopen on Saturday as branches of Hamilton State Bank...As of March 31, 2011, McIntosh State Bank had approximately $339.9 million in total assets and $324.4 million in total deposits. Hamilton State Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of McIntosh State Bank. In addition to assuming all of the deposits of the failed bank, Hamilton State Bank agreed to purchase essentially all of the assets.

The FDIC and Hamilton State Bank entered into a loss-share transaction on $242.1 million of McIntosh State Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $80.0 million. Compared to other alternatives, Hamilton State Bank's acquisition was the least costly resolution for the FDIC's DIF. McIntosh State Bank is the 46th FDIC-insured institution to fail in the nation this year, and the thirteenth in Georgia. The last FDIC-insured institution closed in the state was Atlantic Southern Bank, Macon, on May 20, 2011.


First Commercial Bank of Tampa Bay, Tampa, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of First Commercial Bank of Tampa Bay.

The two branches of First Commercial Bank of Tampa Bay will reopen on Monday as branches of Stonegate Bank...As of March 31, 2011, First Commercial Bank of Tampa Bay had approximately $98.6 million in total assets and $92.6 million in total deposits. Stonegate Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of First Commercial Bank of Tampa Bay. In addition to assuming all of the deposits of the failed bank, Stonegate Bank agreed to purchase essentially all of the assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $28.5 million. Compared to other alternatives, Stonegate Bank's acquisition was the least costly resolution for the FDIC's DIF. First Commercial Bank of Tampa Bay is the 47th FDIC-insured institution to fail in the nation this year, and the sixth in Florida. The last FDIC-insured institution closed in the state was Coastal Bank, Cocoa, on May 6, 2011.

[Demeter]

2. ON THIS DAY IN 1885: Statue of Liberty arrives

Originally known as "Liberty Enlightening the World," the statue was proposed by French historian Edouard Laboulaye to commemorate the Franco-American alliance during the American Revolution. Designed by French sculptor Frederic Auguste Bartholdi, the 151-foot statue was the form of a woman with an uplifted arm holding a torch. In February 1877, Congress approved the use of a site on New York Bedloe's Island, which was suggested by Bartholdi. In May 1884, the statue was completed in France, and three months later the Americans laid the cornerstone for its pedestal in New York. On June 17, 1885, the dismantled Statue of Liberty arrived in the New World, enclosed in more than 200 packing cases. Its copper sheets were reassembled, and the last rivet of the monument was fitted on October 28, 1886, during a dedication presided over by U.S. President Grover Cleveland.

On the pedestal was inscribed "The New Colossus," a famous sonnet by American poet Emma Lazarus that welcomed immigrants to the United States with the declaration, "Give me your tired, your poor, Your huddled masses yearning to breathe free, / The wretched refuse of your teeming shore. / Send these, the homeless, tempest-tossed to me. / I lift my lamp beside the golden door." Six years later, Ellis Island, adjacent to Bedloe's Island, opened as the chief entry station for immigrants to the United States, and for the next 32 years more than 12 million immigrants were welcomed into New York harbor by the sight of "Lady Liberty." In 1924, the Statue of Liberty was made a national monument.

http://www.history.com/this-day-in-history

FOR THOSE AMONG US WHO HAVE NO INTEREST WHATSOEVER IN THE DASHING ERROL FLYNN...POOR SOULS.

[Johnny Harpo]

3. AYE...Captain Blood starring...Errol Flynn not be be confused with...

Timmy G who is trying to drain our blood.

Where's an Errol Flynn when you one?

[Demeter]

4. Forget The Galleon Group Trial(s) — Sky Capital Will Be The Trial of 2011

http://blogs.forbes.com/walterpavlo/2011/06/17/forget-the-galleon-group-trials-sky-capital-will-be-the-trial-of-2011/?partner=yahoofpapp

With both trials for those involved in the Galleon Group having resulted in guilty verdicts, it is time to move on to other drama in the courtroom. Sky Capital’s Ross Mandell (former CEO) and Adam Harrington (former broker) will go on trial in a federal courtroom in Manhattan defending themselves against charges of conspiracy, securities fraud, wire fraud and mail fraud (The full monty). To date, four others have pled guilty to various charges related to securities fraud (Michael Passaro-Sky Capital Broker, Arn Wilson – Sky Capital Broker, Robert Grabowski – Thornwater Company and Stephen Shea – Sky Capital President & COO). All but Shea are cooperating with federal authorities and are likely to testify against the defendants.

According to an earlier report by Bloomberg, the group indicted was accused of manipulating shares in two Sky Capital companies traded on the Alternative Investment Market (AIM) of the London Stock Exchange. Losses to investors were stated to be over $140 million. “The manipulation was designed to make it appear that there was more demand” for the stock of the two companies “when in fact there was not,” Acting U.S. Attorney Lev Dassin in New York said in a press release.

On the surface this looks like another roundup of the usual Wall Street suspects involved in a white-collar crime, except for one thing, Ross Mandell is no usual suspect and he is not backing down from this fight.

Mandell was arrested on July 8, 2009 and has proclaimed his innocence ever since. His defense lawyer, Jeffrey Hoffman of Hoffman & Pollok, LLP in New York, most likely gave Mandell the standard advice, “Don’t talk to anyone about the case.” Unlike other clients Hoffman has had, this was not going to be easy advice to follow for an outspoken Ross Mandell. Since his arrest, Mandell has put out a series of videos on everything from his own innocence, to corruption on Wall Street, to a “buy” recommendation on gold (he got that one right). He has even pitched his story of life awaiting trial as a reality TV series, “Facing Life”. Mandell could go to federal prison for up to 25 years if convicted.

[Demeter]

5. REAL RADIATION NUMBERS OUT OF JAPAN

The intrepid Japanese, knowing that their government would never do anything, have been collecting radiation data and correlating it...

http://www.dailykos.com/story/2011/06/16/985938/-eSci:-Unsafe-Radiation-Found-Near-Tokyo,-Vast-Area-of-Japan-Contaminated?via=siderec

[Demeter]

6. Friday Film Review: The Sea Hawk By Jayne

Since Flynn’s birthday is next week, I thought I’d review another of his Warner Brothers swashbucklers. Released in 1940, it bears little resemblance to the Raphael Sabatini novel of the same name. Instead, it was supposed to be a take on the war that had just begun in Europe with Spain standing in for Nazi Germany and England once again standing alone against tyranny.

English privateer Geoffrey Thorpe (Errol Flynn) and his men capture a Spanish galleon which is carrying a new ambassador, Don Jose (Claude Rains), along with his half English niece Dona Maria (Brenda Marshall) to England. Though they are safely delivered to the court of Queen Elizabeth I (Flora Robson), Don Jose’s protests to the Queen cause her to rein in the actions of her loyal privateers. All but Thorpe who presents her with too great a temptation with his plans to raid a Spanish gold shipment crossing the Isthmus of Panama.

But there’s a traitor, Lord Wolfhingham (Henry Daniell), at the English court and word is leaked to the Spanish who are ready when Thorpe and his crew arrive. Taken back to Spain, they are tried and condemned as galley slaves. When word reaches England of his fate, Dona Maria mourns him as lost. But Thorpe and his men engineer a daring escape and sail for England with news of treachery and the growing Spanish Armada. Can he reach the Queen in time to allow England to be ready?

As I said, the film bears little resemblance to the Sabatini novel (which is great, BTW) and instead tries to bolster Britain and sway the US to their support. Here historical England is the brave, plucky nation standing against Spanish European oppression just as Britain was then holding out against the sweep of Germany and Italy. I think the character of Lord Wolfhingham (note it’s not Walsingham who was one of Elizabeth’s most loyal cabinet ministers) is supposed to stand in for those who admired the Nazis before the war started and who tried to neutralize Britain...

http://dearauthor.com/features/film-reviews/friday-film-review-the-sea-hawk/#comments

SUBMITTED BY TANSY GOLD FOR PRESIDENT.

[Johnny Harpo]

8. Supporting Tansy Gold for President and............

waiting to hear about the planks in her platform.

[Demeter]

7. The A-List: Greek crisis threatens European decade of economic implosion

Mohamed El-Erian:

From day one, immense challenges faced the coalition of international institutions that opted for a liquidity approach to address Greece’s debt solvency problems.

Now that this coalition is stumbling and bickering publicly, the outlook for Greece has taken a significant turn for the worse. Even as Greek Prime Minister George Papandreou prepares to reshuffle his cabinet, he must know his nation’s predicament is now extremely hard to reverse.

Read more >>
http://link.ft.com/r/8P1R88/B57LMM/NRHD3/RN9GPE/7208HE/FW/t?a1=2011&a2=6&a3=17

[Demeter]

9. Italy Says Goodbye to Nuclear Energy, Joining Germany

http://www.alternet.org/newsandviews/article/616885/italy_says_goodbye_to_nuclear_energy%2C_joining_germany/#paragraph4

Italy will not return to nuclear power any time soon, as Italian voters Monday rejected a referendum proposal by the government of Silvio Berlusconi to restart the country's moribund nuclear energy program.

The year after the 1986 Chernobyl nuclear disaster, Italy decided to decommission its four nuclear power plants, and the last one was shuttered in 1990.

Berlusconi reversed this decision in 2008. Former Industry Minister Claudio Scajola had proposed building as many as 10 new nuclear reactors.

But in view of Japan's nuclear disaster triggered by the March earthquake and tsunami, Berlusconi announced a one-year moratorium on plans for new reactors. But with the referendum he expressed his intention to rekindle Italy's nuclear energy program. The Berlusconi government had planned to get 25 percent of Italy's energy mix from nuclear power by 2020. Italian voters have now blocked that plan. Italy, heavily dependent on imports for its energy needs, now receives about 10 percent of its energy by importing power generated by nuclear power plants in France...

[Demeter]

10. Corrupt officials took $124bn out of China

Around 17,000 Communist party cadres, police, judicial officers and state-owned enterprise executives fled the country between the mid-1990s and 2008

Read more >>
http://link.ft.com/r/S4XZQQ/QNR70N/K91WR/26T7F3/JIK5Q7/82/t?a1=2011&a2=6&a3=17

[Demeter]

11. INGDirect catapults Capital One into big league

Capital One is poised to cement its position among the largest US banks with a $9bn deal to buy ING Direct, ING’s online banking arm

Read more >>
http://link.ft.com/r/WDI4RR/JEYON2/87I64/UUR6R3/QFSIFL/6C/t?a1=2011&a2=6&a3=17

[kickysnana]

12. Oh s__t! n/t

[Demeter]

16. Ditto

I've been a very satisfied customer for years. I am not expecting that to continue.

[bread_and_roses]

13. He's no Errol Flynn, but Robert Reich's " Economy in Two Minutes" not bad

Not perfect, but not bad for two minutes:

http://www.commondreams.org/video/2011/06/17-0

The Truth About The Economy In 2 Minutes

Former Labor Secretary Robert Reich said he could explain the problems with the economy in less than 2 minutes, 15 seconds—and he did it (with illustrations to boot). It’s great! Check it out.

[Hotler]

46. +1 n/t

[xchrom]

14. sigh -- he was such a pretty man.

:loveya:

[xchrom]

15. Greek debt crisis: Juncker warns of contagion

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-06-18-08-04-42

BERLIN (AP) -- The Greek debt crisis could spread to at least five other European countries - including Belgium or even Italy - if it is not cautiously managed, the head of the euro group warned Saturday.

Jean-Claude Juncker told the German daily Sueddeutsche Zeitung that nudging private creditors to contribute to the next Greek bailout package could be considered a "default" by rating agencies - and that would have extreme consequences for Europe as a whole.

Juncker, the prime minister of Luxembourg who also chairs the group of 17 eurozone finance ministers, was quoted as saying that a Greek bankruptcy "could prove contagious for Portugal and Ireland, and then also for Belgium and Italy because of their high debt burden, even before Spain."

"We are playing with the fire," he told the paper.

[Demeter]

41. Burn, Baby, Burn

get it over with.

[Demeter]

17. Anxiety keeps the super-rich safe from middle-class rage

http://www.guardian.co.uk/commentisfree/2011/may/18/super-rich-middle-class-rage

The pay gap at the top should change the terms of political trade. But the squeezed middle must first learn to look up...Why aren't we more angry? Why isn't blood running, metaphorically at least, in the streets? Evidence of how the rich prosper while everyone else struggles with inflation, public spending cuts and static wages arrives almost daily. The Institute for Fiscal Studies reports that last year incomes among the top 1% grew at the fastest rate in a decade. According to the Sunday Times Rich List, the top 1,000 are £60.2bn better off this year than in 2010, bringing their collective wealth close to the record pre-recession levels...Now comes a report this week from the High Pay Commission, set up by the Labour pressure group Compass. It reveals that FTSE 100 chief executives are on average paid £4.2m annually, or 145 times the median wage – and on current trends will be paid £8m, or 214 times the median, by 2020. In the financial sector, even the CEO can seem modestly rewarded: this year, the top-paid banker at Barclays will get £14m, nearly four times the chief executive's earnings and 1,128 times more than the lowest-paid employee receives.

Meanwhile, once inflation is taken into account, most people's incomes are set to fall, after 15 years of virtual stagnation. Between 1996-7 and 2007-8, the earnings of someone in the middle of the income distribution rose (1997 prices) from £16,000 to £17,100 – barely £100, or less than 0.7% a year. Even the increase for those quite near the top of the income scale, better off than 90% of their fellow citizens, was unspectacular. Their inflation-discounted pay crept up from £36,700 to £41,500, or less than £450 (1.2%) a year. The top 0.1% scooped the jackpot. They got a £19,000 pay rise every year, taking their incomes to £538,600, a gain of 67% over 11 years. The commission gives no figures for the top 0.01%, but we can be confident they did even better and dramatically so.

That is the most important point about what has happened to incomes in Britain and America during the neoliberal era: the very rich are soaring ahead, leaving behind not only manual workers – now a diminishing minority – but also the middle-class masses, including doctors, teachers, academics, solicitors, architects, Whitehall civil servants and, indeed, many CEOs who don't run FTSE 100 companies, to say nothing of the marketing, purchasing, personnel, sales and production executives below them. That is why, over the past decade, some of the most anguished cries about high incomes and inequality have appeared in the Telegraph and Mail.

The commission describes levels of top pay as an instance of "market failure" because most arguments used to defend it just don't stack up. For example, despite claims that pay levels are dictated by global competition, the majority of FTSE 100 CEOs are British, promoted from within their companies. Only one CEO has been poached in the past five years – by a British rival. But top pay also suggests political failure, particularly on the left. To put it crudely, why can't leftwing parties harness middle-class anger against the super-rich? Surveys show a substantial majority of the electorate agree that differences in income are too large and that ordinary people don't get a fair share. Only one in eight disagree. Why is this so difficult to translate into a political programme that could command mass support?...But the gap between the richest 1% or 2% and everybody else in the top 20% or 30% is now so great and growing so rapidly that, one might reasonably think, it should change the terms of political trade. The income distance may be huge but the social distance is not. Those in the top 2% and the next 28% have often been to the same schools and universities. More important, they compete for scarce resources: places in fee-charging schools, houses in the best areas, high-end personal services. The super-rich have provoked raging inflation in the prices of these goods. Many of the not-so-rich were born into the professional classes and high expectations. Now, to their surprise, they find themselves struggling. In income distribution, their interests are closer to those of the mass of the population than to people they once saw as their peers...

[Demeter]

22. The Rich Get Very, Very Rich: Study Finds Global Millionaire Wealth To More Than Double By 2020

YES, WELL, AS A STUDENT OF "BOUNDARY PROBLEMS" IN ENGINEERING, WHERE THINGS DON'T GO EXACTLY AS PLANNED OR DESIRED, I WOULDN'T BET MONEY ON IT...

http://www.zerohedge.com/article/rich-are-about-get-very-very-rich-study-finds-global-millionaire-wealth-set-more-double-2020?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+surv

A new study by Deloitte confirms everyone's worst fear (and every millionaire's wettest dream): the wealth amassed by millionaire households is set to increase by more than 100% over the next 9 years. From a total of $92 trillion held by the world's richest in 2011, by 2020 the world's millionaire households will possess $202 trillion, or roughly 4 times current global GDP. Even though much of move up is attributed to the wealth surge in the developing world, the biggest beneficiary is, you guessed it, the United States where the millionaires (those with net wealth of at least $1 million), who currently account for $38.6 trillion of total wealth, will see their assets increased by 225% to $87.1 trillion! And while a comparable study of how much wealth the lower and middle classes are set to lose over the next decade, we are confident that it will be roughly comparable...inversely. So if anyone harbored any illusions that the current status quo was about anything but the rich getting richer, all those can be promptly swiped aside.

The key findings of the Deliotte anti-Robin Hood study:

* According to our analysis, the total wealth of millionaire households in the 25 economies included in this study is forecast to grow from $92 trillion in 2011 to $202 trillion in 2020.
* Our study suggests that the rebalancing of global wealth is expected to accelerate over the next decade. Emerging market (EM) economies are likely to prove to be more dynamic in terms of growth rates, creating significant opportunities for wealth managers seeking to gain a share of these potentially lucrative markets. Among emerging markets, China may continue to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia. Of the 25 economies examined in this study, China and South Korea are likely to join the top10 in terms of the total number of millionaires by 2020.
* However, there is a paradox at the heart of this story. According to our study, in spite of the rapid growth of wealth in the EM economies, U.S. and Europe will remain the global centers of wealth over the next decade, in terms of both the amount of wealth held and the number of millionaire households. Our analysis indicates that aggregate wealth of millionaire households in the U.S. in 2020 will likely reach $87 trillion, from $39 trillion in 2011.
* Our forecasts suggest that, in 2020, 43% of the world’s wealth among millionaire households will be in the U.S. Opportunities for growth potentially exist via greater U.S. state penetration. In the U.S., California will likely have the most number of wealthy households, while New Jersey may continue to have the greatest density. The East Coast is likely to see the highest growth rates —New York and Florida together may add 1.5 million new millionaire households by 2020.
* Our forecasts suggest that total wealth among millionaire households will increase from $92 trillion in 2011 to $202 trillion by 2020, a growth of 119%. In emerging markets, the growth over the next decade is potentially quite impressive (260%), significantly outpacing the growth (107%) in developed markets.
















FULL REPORT AT LINK

[Demeter]

18. Treasury Prepares To Plunder Another $45 Billion From Retirement Funds As Issues $110 Billion Debt

http://www.zerohedge.com/article/treausry-prepares-plunder-another-45-billion-retirement-funds-it-issues-110-billion-more-deb?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+surv

Now that it has finally been made clear that in order to accommodate the debt ceiling by adding marketable debt, the Treasury has no choice but to literally plunder retirement accounts, we now know that in order to fit in the just announced $110 billion in new bond issuance over the next week, Tim Geithner will have to reduce US retirement funding (the bulk of which, the Social Security Trust Fund already lost $1.1 trillion in the past year) by at least $45 billion. That is the net result of $60 billion in net new cash and $15 billion in bill paydowns which will settle between May 19 and May 31. What remains to be seen is just how much cash the Treasury will bleed as it seeks a parallel track of under-rolling maturing Bills, in order to keep its previously disclosed intentions of issuing just $142 billion between April and June. Keep in mind almost two thirds of this period has passed, which means that somehow the Treasury has to not only stop but in fact reverse its net issuance. We are not sure how this will actually happen...

DON'T ASK ME, FOLKS--BUT I'M POSITIVE IT'S ILLEGAL, IMMORAL AND FATTENING...

MORE AT LINK

[Demeter]

19. Can Stocks Rally Without the Fed Juicing the Market?

...anyone who believes the market has healthy demand without the Fed juicing the system needs to rethink the last 3+ years of market action...In plain terms, we have not had a period in which the Fed wasn’t pumping tens of billions into the markets since 2007. Indeed, the only time the Fed wasn’t officially pumping its brains out was between the end of QE 1 (April 2010) and the announcement of QE lite (August 2010).

However, despite the formal declaration that QE 1 was over, the Fed DID continue to pump north of $10-20 billion into the markets every month, ALWAYS during options expiration week (this is pure coincidence of course).

So the notion that QE 2 will end and the stock market will stay afloat just fine is questionable to say the least. And it’s clear that investors still haven’t digested the fact that QE 3 isn’t coming anytime soon....

http://www.zerohedge.com/article/can-stocks-rally-without-fed-juicing-market

[Demeter]

21. Why the “Is QE 3 Coming?” Debate is a Moot Point Pt 2

http://www.zerohedge.com/article/why-%E2%80%9C-qe-3-coming%E2%80%9D-debate-moot-point-pt-2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zer

This is a continuation of an essay I wrote yesterday concerning the Fed’s moves during the financial crisis. As a recap, here are those moves again:

* The Federal Reserve cutting interest rates from 5.25-0.25% (Sept ’07-today)
* The Bear Stearns deal/ Fed taking on $30 billion in junk mortgages (March ’08)
* The Fed opens up various lending windows to investment banks (March ’08)
* The SEC proposes banning short-selling on financial stocks (July ’08)
* Hank Paulson gets a blank check for Fannie/Freddie but promises not to use it (July ’08)
* Hank Paulson uses the blank check with Fannie/ Freddie spending $400 billion in the process (Sept ’08).
* The Fed takes over insurance company AIG (Sept ’08) for $85 billion.
* The Fed doles out $25 billion for the auto makers (Sept ’08)
* The Feds kick off the $700 billion Troubled Assets Relief Program (TARP) with the Government taking stakes in private banks (Oct ’08)
* The Fed offers to buy commercial paper (non-bank debt) from non-financial firms (Oct ’08)
* The Fed offers $540 billion to backstop money market funds (Oct ’08)
* The Feds agree to back up to $280 billion of Citigroup’s liabilities (Oct ’08).
* $40 billion more to AIG (Nov ’08)
* Feds agree to back up $140 billion of Bank of America’s liabilities (Jan ’09)
* Obama’s $787 Billion Stimulus (Jan ’09)
* QE lite (August ’10)
* QE 2 (November ’10)

I’m sure I left something out. But the above make it clear just how Ben Bernanke likes to tackle financial problems: printing money. On that note, we need to keep in mind just WHY the Fed did all of this: propping up the Big Banks and their gaping balance sheets.

The global derivatives market is completely unregulated and frankly no one knows how big it is. However, we DO know that US commercial banks alone have over $230 TRILLION in notional value derivatives on their balance sheets. Of this $230 trillion, 94%+ sits on just four banks’ balance sheets. They are:



The ENTIRE 2008 episode was the result of the Credit Default Swap (CDS) market imploding (CDS, a type of derivatives, comprised about $50-60 trillion in value). And to claim that the Fed didn’t know why the Financial Crisis happened is a lie. Indeed, as early as 1998, Ben Bernanke’s predecessor, Alan Greenspan, tol , soon to be chairperson of the Commodity Futures Trading Commission (CFTC), Brooksley Born, that if she pushed for regulation of the derivatives market it would implode the financial system...Again, the Fed knew for over 10 years (possibly longer) that the derivatives market was a disaster waiting to happen. So believe me when I tell you than Ben Bernanke knew exactly what caused 2008. Indeed, his actions make it clear just what he was fighting (a derivatives collapse) as 90% of his major moves were meant to prop up the four banks with the largest derivatives exposure.

Now, as stated before, 2008 was caused by the CDS market, which was $50-60 trillion in size. In contrast, the derivative market based on interest rates is $196 TRILLION in size. In fact, derivatives based on interest rates represent 84% of ALL derivatives in the US.So with that in mind, it is clear the Fed will be engaging in QE 3 and QE 4 and on and on for as long as it can. The reason? Because if the Fed loses control of the interest rate curve, it could trigger a systemic collapse that is FOUR TIMES as large as that of 2008.

So more money printing is coming. There’s no question of that.

[Demeter]

20. The Real IMF Assault By Nomi Prins

http://www.truthdig.com/report/print/the_real_imf_assault_20110520

the global economic assault caused by the misguided IMF and EU notion that public spending cuts and national infrastructure fire sales should be enacted to make up for bank rampages marches on. Rather than clamping down on banks and working on debt reduction strategies, bailout loans remain designed to keep banks solvent, investors shielded from loss, and outside buyers interested...It doesn’t matter whether DSK or anyone else from the euro power contingent heads the IMF; its practices will remain the same. Weaker countries get economically bullied in order to benefit stronger ones through bailouts rife with measures to pound people and aid banks and international firms. For, to the IMF and European Union elite, the “confidence” of free-flowing, unencumbered capital trumps the financial security of local citizens.

That same idea is central to the big bank bailout and subsidization strategy of the U.S. Federal Reserve, Treasury Department, current and prior administrations and most of Congress. The threat in 2008? A worse crisis will occur if the financial system isn’t saved. The related threat surrounding the debt cap debate today? A worse crisis will occur if we default on the debt we created to save the financial system. As for jobs … yeah, we’ll get back to you on that...Here in the U.S., the lie is that boosting banks will lead to a trickling-down economic prosperity for the greater population, despite all evidence to the contrary. In Europe, the lie is slightly different, because economic security of the population runs a distant second place to preservation of the euro as an overriding currency, meaning the repayment of debts by outer European to core European countries...Yet, neither the IMF nor the Fed and Treasury Department strategies even attempt to target problems like raging unemployment, or renegotiating personal or small business debt from the ground up. Instead, they deign to extract more from the citizens that had nothing to do with causing the financial collapse. Austerity measures, in any form, are a cruel weapon against a public forced to be economic collateral damage to unaccountable banking systems given cheap solvency.

As here, unemployment rates in Europe have risen substantially since the global banking debacle, and ongoing protests have followed. Today, the Greek unemployment rate stands at 14.2 percent. One out of three people under 24 years old can’t find a job. In Ireland (the recipient of a harsh $133 billion bailout package that required $23 billion in pension payment cuts), the jobless rate is 14.7 percent, and, similarly, the youth unemployment rate has tripled since 2008 to more than 33 percent. Spain has the euro zone’s highest jobless rate, 20.7 percent, with youth unemployment over 40 percent. These figures are only worsening under the burden of austerity... Portugal’s jobless rate jumped to 12.4 percent. Blame for Portugal’s weak economy has been cast on a Socialist government that didn’t embrace spending cuts quickly enough. But what’s more telling than this unsubstantiated claim is that private Portuguese banks tapped their bailout government guarantees to raise cash before the ink on the bailout agreement dried...In echoes of our own bailout, the EU and IMF were concerned that not providing banks a way to raise more money would hurt the Portuguese economy further, since banks would lend less. Yet the bailout agreement contained no requirement for banks to lend locally, instead requiring severe public spending cuts, tax hikes (on people, not international companies) and more aggressive privatization programs...Meanwhile, thousands of people are again striking in Greece, as the IMF and EU discuss more austerity measures, and thousands more are protesting in Spain fearing the same. People don’t need cuts in social programs and wages, they need jobs. They don’t need their countries racking up more debt to sustain flailing banks or the favor of global capital markets through fire-selling their infrastructure...


Avoidance, it turns out, is a useful strategy. Last week, Bernanke urged Congress to approve another debt cap increase. The Fed has amassed $2.5 trillion of debt on its books (including $1.5 trillion in treasurys shell-gamed from the Treasury Department and nearly $1 trillion of mortgage-related securities it won’t sell for fear of hurting the values of similar securities on the banks’ books). It’s being used for nothing helpful to the general economy. A simple transfer of any of it would solve the debt cap problem in a nanosecond. Going a step further, an exchange of any of the $1.4 trillion of excess bank reserves receiving interest from the Fed would do the same...Our public debt ballooned under Timothy Geithner by more than $4 trillion. But rather than even considering taking some back from the Fed’s balance sheet, Treasury Secretary Geithner threatened to halt civil service retirement and disability payments to free up borrowing capacity, repeating almost verbatim similar threats made by John Snow, George W. Bush’s treasury secretary at the end of 2004. This is exactly the kind of thing going on in Europe, with a mild twist. If we can’t raise enough debt for banks, we’ll take it from citizens. Even though creating debt (massive debt) for this reason has not helped the general economy, nor will it.

Meanwhile, the global “remedy” for depressed economies and debt-bloated banking sectors remains to do more of the same and pretend it will lead to a different outcome. Sadly, there is no way this strategy will result in more stable economies. What we can expect instead is a further slide into global economic depression.

[Demeter]

28. IMF urges US Congress to raise debt limit

http://news.yahoo.com/s/afp/20110617/bs_afp/imfuseconomypublicdebtcongress

The International Monetary Fund on Friday joined calls for the US Congress to raise the country's debt limit, warning that failure to act would risk a major global market upheaval.

"For the United States, it is critical to immediately address the debt ceiling and launch a deficit reduction plan that includes entitlement reform and revenue-raising tax reform," the IMF said in an update of its April forecasts issued in Sao Paulo.

OR WHAT? THE IMF RUNS OUT OF POKER CHIPS? HAS TO SELL OFF OFFICE FURNITURE AND ITS GALLEY SLAVES TO STAY IN THE EMPIRE GAME?

IT CERTAINLY COULDN'T BE THAT THE IMF GIVES ONE THOUGHT TO ORDINARY PEOPLE...

[Demeter]

23. Libya mission to cost $1.1 bln by Sept 30 -White House

http://www.reuters.com/article/2011/06/15/libya-usa-cost-idUSWNA113320110615

...The report stated that these funds would be found in the existing Defense Department budget, and would therefore not require a supplemental appropriations request to Congress.

RIGHT!

[Demeter]

24. 12 More Signs That Society Is Collapsing By Economic Collapse Blog

http://www.informationclearinghouse.info/article28349.htm

What we are now witnessing is the slow motion unraveling of America. Our economy is dying, the American people have lost faith in the government and in almost all of our other major institutions, and our society is collapsing. Most Americans don't understand why all of this is happening, but most of them do realize that something has fundamentally changed. Earlier this year, McDonald's held a "National Hiring Day" and a million Americans showed up to apply for jobs. Only 62,000 of them were hired. That means only 6.2% of the applicants got jobs. So what are we supposed to tell the 93.8% that didn't get hired? Are they supposed to have any hope for the future when they can't even get a minimum wage job at McDonald's? When I was a teenager, I went over to McDonald's one day, filled out an application and was instantly hired. My, how things have changed. Now we have millions upon millions of young people that are staring directly into a very bleak future. The level of frustration in this country is rising to frightening levels and large numbers of people are already showing that they will stoop to anything in order to survive.

In a recent article entitled "18 Signs The Collapse Of Society Is Accelerating" I focused primarily on the chaos that has been erupting in many of our urban areas. But the truth is that, as you will see below, there are signs that society is collapsing coming out of very rural areas as well. This phenomenon cannot just be pinned down to one area of the country or to one group of people. From coast to coast people are already starting to lose it and the economic collapse has only just begun. The cold, hard reality of the matter is that what we are experiencing right now is rip-roaring prosperity compared to what is coming down the road. So if people will behave this wildly now, what is our society going to look like someday when there are millions of Americans that have not had anything to eat for several days? That is something to think about. History has shown us that when people are really, really hungry they will do just about anything. But right now we are not even close to that point and yet people all across America are going crazy.

The following are 12 more signs that society is collapsing....

................
VARIOUS SUPPORTING VIDEOS, DATA, ANECDOTES
......................

Sadly, this is just the beginning. This is just the tip of the iceberg. As the economy collapses, the chaos is going to get a lot worse. I wish that wasn't true, but this is the world we live in now.

The recent article I did about the "economic hell" that American families are going through right now got a huge response, but honestly what we are experiencing right now is not even worth comparing to how nightmarish things are going to be when our economic system fully collapses. We have been on the biggest debt binge that the world has ever seen. Our debt-fueled prosperity has enabled us to enjoy an unprecedented standard of living. But the largest debt bubble in the history of the world is going to pop, and when it does the party is going to be over.

You better get ready.

[xchrom]

25. Fed set to cut growth forecast during meeting

http://www.marketwatch.com/story/fed-set-to-cut-growth-forecast-during-meeting-2011-06-17

WASHINGTON (MarketWatch) — When it comes to economic growth forecasts, the Federal Reserve, on paper, is as bullish as they come.

That’s less because the economists at the central bank are pollyannaish — they may be — but more a function of the infrequency of their updates.

The Fed’s view from April that the U.S. economy will grow between 3.1% and 3.3% is higher than all 51 economists polled in the early June edition of Blue Chip Economic Indicators, where the average growth rate was projected at 2.6%.

So when the Fed unveils its quarterly growth, inflation, and unemployment forecast on Wednesday, along with an interest rate decision, it’s more than likely to be projecting a slower pace of activity.

In practice, Fed members, from the top down, already have ratcheted down their assumptions. Chairman Ben Bernanke made that clear in early June when he said, “U.S. economic growth so far this year looks to have been slower than expected.” He also called the recovery “uneven” and “frustratingly slow.’

[Demeter]

27. When you are choking the life out of the economy with Predatory Macro Policies

it's probably a good thing not to get people's hopes up.

[xchrom]

30. aint that the truth. nt

[Demeter]

26. Spoils Of Victory: Obama Financial Supporters Get Top Jobs

http://www.informationclearinghouse.info/article28348.htm

Telecom executive Donald H. Gips raised a big bundle of cash to help finance his friend Barack Obama’s run for the presidency.Gips, a vice president of Colorado-based Level 3 Communications LLC, delivered more than $500,000 in contributions for the Obama war chest, while two fellow senior company executives collected at least $150,000 more...After the election, Gips was put in charge of hiring in the Obama White House, helping to place loyalists and fundraisers in many key positions. Then in mid-2009, the new president named him ambassador to South Africa. Level 3 Communications, in which Gips retained stock, meanwhile received millions of dollars of government stimulus contracts for broadband projects in six states—though Gips said he was "completely unaware" of the stimulus money.

More than two years after President Obama took office vowing to banish “special interests” from his administration, nearly 200 of his biggest donors have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events, an investigation by iWatch News has found. These “bundlers” raised at least $50,000 and sometimes more than $500,000 in campaign donations for Obama’s campaign. Many of those in the “Class of 2008” are now being asked to bundle contributions for Obama’s re-election, an effort that could cost $1 billion.

As a candidate, Obama spoke passionately about diminishing the clout of moneyed interests and making the White House more accessible to everyday Americans. In kicking off his presidential run on Feb. 10, 2007, he blasted “the cynics, the lobbyists, the special interests,” who he said had “turned our government into a game only they can afford to play.”

“They write the checks and you get stuck with the bill, they get the access while you get to write a letter, they think they own this government, but we’re here today to take it back,” he said.

AMERICA, YOUR ECONOMIC ELITE HAVE ARRIVED!

[Demeter]

29. Struggling Single Mom Sells Obama Letter By Liz Goodwin

http://www.informationclearinghouse.info/article28355.htm

Destiny Mathis, a young woman in Indiana, reached out to President Obama for a sign of hope in tough economic times, and was initially thrilled to receive a handwritten reply from the president. Now, however, the same economic hardships that prompted her to write to Obama last November have prompted her to put up the letter for sale on an auction website--marking the ninth such sale of an Obama letter that the online auction service has handled...Mathis, a single mother of three from Indiana, wrote to the president that even though she graduated at the top of her college class and worked for years as a surgical technologist, she had lost her job in January after complications with her pregnancy. "I am so afraid this dreaded economy is going to have my family homeless," she wrote, according to NBC5, the Chicago network affiliate. Mathis is now weeks away from being evicted from her home.

The president wrote back a handwritten note on White House stationery. "Please know that things will get better for you and your family," he said. You can watch the NBC5 report on the letter's sale above.

The 26-year-old is now selling the note to Gary Zimet, who has sold eight other letters from the president so far for up to $20,000 on his site, Moments in Time. He's asking for $11,000.

A Michigan woman sold a letter from Obama in October for $7,000 to help pay for her cancer treatment and for a down payment on a house. "Thanks for the very kind and inspiring letter," Obama wrote to Jennifer Cline, after she told him in a letter that she was struggling to make ends meet and had lost her health insurance. "I know times are tough, but knowing there are folks out there like you and your husband gives me confidence that things will keep getting better!"

VIDEO AT LINK

[Demeter]

31. Only the “Crazies” Get the Bank Giveaway Right By Michael Hudson TODAY'S MUST READ

http://www.informationclearinghouse.info/article28354.htm

Financial crashes were well understood for a hundred years after they became a normal financial phenomenon in the mid-19th century. Much like the buildup of plaque deposits in human veins and arteries, an accumulation of debt gained momentum exponentially until the economy crashed, wiping out bad debts – along with savings on the other side of the balance sheet. Physical property remained intact, although much was transferred from debtors to creditors. But clearing away the debt overhead from the economy’s circulatory system freed it to resume its upswing. That was the positive role of crashes: They minimized the cost of debt service, bringing prices and income back in line with actual “real” costs of production. Debt claims were replaced by equity ownership. Housing prices were lower – and more affordable, being brought back in line with their actual rental value. Goods and services no longer had to incorporate the debt charges that the financial upswing had built into the system.

Financial crashes came suddenly. They often were triggered by a crop failure causing farmers to default, or “the autumnal drain” drew down bank liquidity when funds were needed to move the crops. Crashes often also revealed large financial fraud and “excesses.”...This was not really a “cycle.” It was a scallop-shaped a ratchet pattern: an ascending curve, ending in a vertical plunge. But popular terminology called it a cycle because the pattern was similar again and again, every eleven years or so. When loans by banks and debt claims by other creditors could not be paid, they were wiped out in a convulsion of bankruptcy.

Gradually, as the financial system became more “elastic,” each business recovery started from a larger debt overhead relative to output. The United States emerged from World War II relatively debt free. Downturns occurred, crashes wiped out debts and savings, but each recovery since 1945 has taken place with a higher debt overhead. Bank loans and bonds have replaced stocks, as more stocks have been retired in leveraged buyouts (LBOs) and buyback plans (to keep stock prices high and thus give more munificent rewards to managers via the stock options they give themselves) than are being issued to raise new equity capital...But after the stock market’s dot.com crash of 2000 and the Federal Reserve flooding the U.S. economy with credit after 9/11, 2001, there was so much “free spending money” that many economists believed that the era of scientific money management had arrived and the financial cycle had ended. Growth could occur smoothly – with no over-optimism as to debt, no inability to pay, no proliferation of over-valuation or fraud. This was the era in which Alan Greenspan was applauded as Maestro for ostensibly creating a risk-free environment by removing government regulators from the financial oversight agencies...What has made the post-2008 crash most remarkable is not merely the delusion that the way to get rich is by debt leverage (unless you are a banker, that is). Most unique is the crash’s aftermath. This time around the bad debts have not been wiped off the books. There have indeed been the usual bankruptcies – but the bad lenders and speculators are being saved from loss by the government intervening to issue Treasury bonds to pay them off out of future tax revenues or new money creation. The Obama Administration’s Wall Street managers have kept the debt overhead in place – toxic mortgage debt, junk bonds, and most seriously, the novel web of collateralized debt obligations (CDO), credit default swaps (almost monopolized by A.I.G.) and kindred financial derivatives of a basically mathematical character that have developed in the 1990s and early 2000s.

MORE MORE OF NOTE

The moral

... a basic axiom of today’s junk economics: When an economic error becomes so widespread that it is adopted as official government policy, there is always a special interest at work to promote it. In the case of bailing out Wall Street – and thereby the wealthiest 1% of Americans – while saying there is no money for Social Security, Medicare or long-term public social spending and infrastructure investment, the beneficiaries are obvious. So are the losers. High finance means low wages, low employment, low industry and a shrinking economy under conditions where policy planning is centralized in hands of Wall Street and its political nominees rather than in more objective administrators.

.............
Michael Hudson, a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College

[Demeter]

32. Stop The Greek Hostage Crisis!

http://www.informationclearinghouse.info/article28361.htm

This isn’t about “bailing out Greece.” Yes, the Greeks owe about $500 billion, but they already have spent the money. This is about bailing out the banks that lent to them. The biggest creditors are French banks. The second biggest are the Germans. The third biggest are the British. I’ll bet a lot of Greek bonds are now held by hedge funds. These are the people asking for public funds.

What’s happening in Europe right now isn’t a financial crisis. It’s a hostage crisis.Once again, we are all being held hostage by a bunch of bankers. “Give us a bailout,” they’re saying, “or else the economy gets it!”

Maybe it’s time to call their bluff.

Perhaps Europe should let Greece default. Let it go bust. Force the bond holders to take their losses. If you invest in a stock that falls, you don’t get made whole. If you buy bonds in a company or institution that collapses, you don’t get your money back. So why here? This is Bear Stearns all over again. It’s AIG all over again. People are going to scare you. They’ll say it will be just like Lehman Brothers Holdings Inc. “If Greece goes bust, the whole financial system will go down.”

Maybe they’re right. But the burden of proof is on them. After the high-finance fiascoes and thievery of the past few years, I will take some convincing. We were told we had to step in to rescue AIG to protect Grandma’s annuity, and then it turned out we were really protecting Goldman Sachs Group Inc. Greece, as I say, owes about $500 billion. But even if it defaults, all that money won’t be lost anyway. Greece won’t vanish from the world. What will happen instead is that the bond holders will be forced to take a haircut.

[Demeter]

34. Should Wealth Be Held by the Few or Everyone? -- Central Focus of Protests from Spain to Greece

http://www.alternet.org/story/151323/should_wealth_be_held_by_the_few_or_everyone_--_that%27s_the_central_focus_of_protests_from_spain_to_greece?page=entire

What started in Spain is now clearly spreading across Europe, where we have witnessed social movements making similar demands for economic democracy. While “Europe’s slow-motion financial collapse” – as Mother Jones magazine described it in a June 6 article – continues apace, Spain, like other European states continues to implement anti-social/neo-liberal policies in the face of strong opposition from the citizenry.

It has been one month since Spain’s “Indignados” (Indignant Ones) movement non-violently claimed 60 city-squares across the country, calling for economic democracy, political justice and peace. Since then, much has happened within Spanish borders, and what is happening there is clearly spreading across Europe, where we have witnessed social movements making similar demands.

We have observed the rise of a parallel movement in Portugal where most city squares have also been camped on by “Indignados” and where only hours before the country’s general elections protesters in Lisbon were attacked and beaten by police...We have witnessed how on that same night, in Athens, Greece, 80,000 protesters congregated in the city’s main square in opposition to the country’s “austerity measures,” waving banners in solidarity with the “Indignados” of Spain and of other European countries..In Paris, we have seen the Bastille taken non-violently by French “Indignados” only to be quickly reclaimed by the country’s police force.

Wherever you look in Europe, you hear the same cries of indignation. In some countries with more intensity than others, but the cry is becoming louder everywhere, and what may seem like a slow-motion financial collapse is rapidly becoming an accelerated social catastrophe. Specifically in Spain, despite the political elite depicting a country recovering from the financial collapse, everyday things are getting worse economically, politically and socially. Protests, although nonviolent for the most part, could be on the verge of becoming violent unless the political and economic elites begin to make some concessions...MORE AT LINK...Whether the “Indignados” will turn violent if the police continue to beat them – or whether the country’s elites will begin addressing the popular demands rising from the streets – we will learn only as events unfold.

[Demeter]

35. ON THE OTHER HAND: 9 Countries That Do It Better: Why Does Europe Take Better Care of Its People?

THE TWO GROUPS OF EUROPEAN NATIONS DO NOT OVERLAP, OF COURSE...

http://www.alternet.org/story/151312/9_countries_that_do_it_better%3A_why_does_europe_take_better_care_of_its_people_than_america?page=entire

[bread_and_roses]

33. "Small groups of rich people, determined to maximize profits"

on every front - they're willing to let people die - I simply don't know how we fight all these battles at once?

http://www.commondreams.org/view/2011/06/17-5

Cheap Meat, MRSA and Deadly Greed
If they aren't stopped soon, the WHO warns we are facing a 'doomsday scenario of a world without antibiotics'

... It might seem strange that governments all over the world are taking such a gamble with public health, in the face of the best scientific advice. But Big Agriculture has armies of lobbyists and open checkbooks, while the people trying to protect the public have only the facts and reason and truth on their side. The squandering of life-saving antibiotics is one example of a bigger trend hijacking global politics. Small groups of rich people, determined to maximize profits, are buying or bamboozling politicians into serving their interests and into ignoring the interests of the vast majority of the population. This is the trend that is making it so hard to (say) re-regulate the banks to prevent another global crash, or prevent the unraveling of the climate.

It doesn't have to be this way. The majority of the population can organize and shout louder than these self-interested juntas of profit... Fighting back on issues like this works – and we need to step it up.

The trouble, Jonathan, is that I don't even have the time to click all the internet petitions that land in my box - which I've stopped paying attention to anyway, as I don't think they accomplish much. Though I probably should, even if it's pro-forma ... I suppose it's something? How can we fight all these battles at once?

We have known about this problem with anti-biotics for years and years - I can't even remember when I first read about it, but a long time ago now. We know that giant agribusiness is cruel, harmful to the environment and all living creatures in it, destructive of a meaningful way of life - ie, family/small farming - we've known this for years and years and years....

Watching a science show last night I saw an image of a map of the universe looking like a sponge - every thing connected to everything. We knew this a long time ago - just as Jefferson Starship sang "we are stardust" long before the "Science Channel" appeared to let us know that yes, indeed, that is so.

And killing a butterfly in the Amazon matters in the Arctic. We are one. But embracing that means giving up way too much for most people.

[Demeter]

36. Full Meltdown: Fukushima Called the 'Biggest Industrial Catastrophe in the History of Mankind'

http://www.alternet.org/story/151328/full_meltdown%3A_fukushima_called_the_%27biggest_industrial_catastrophe_in_the_history_of_mankind%27_?page=entire

AL-JAZEERA COMES THROUGH WITH SOME FACTS, AGAIN.

...a nuclear waste advisor to the Japanese government reported that about 966 square kilometres near the power station - an area roughly 17 times the size of Manhattan - is now likely uninhabitable..."With Three Mile Island and Chernobyl, and now with Fukushima, you can pinpoint the exact day and time they started," he said, "But they never end."

[Demeter]

37. Fraud, Anyone? Another Type of Mortgage Document Fabrication Finally Getting Attention

http://www.nakedcapitalism.com/2011/06/fraud-anyone-another-type-of-mortgage-document-fabrication-finally-getting-attention.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

One of the strongest testaments to the severity of the mortgage mess is the use of document fabrication as a remedy to otherwise insoluble problems. Although the business has now been shut down, the firm DocX, which was a subsidiary of Lender Processing Services, had a notorious price sheet that showed the comparatively modest fees it charged for creating, as in fabricating, documents out of whole cloth. Foreclosure defense attorneys reacted strongly to the publication of this information. The price sheets contained codes, and they had repeatedly seen these very same codes on foreclosure related documents and had wondered what they meant...

PAGES MORE CUT HERE


We’ve already seen pretty shocking evidence of documentation fraud in foreclosures. Remember that the robosigning scandal was the by-product of depositions that aimed to show backdating of assignments to trusts….The depositions showed pretty clearly that there was backdating–the notarizations were by notaries who didn’t have their commissions until a couple of years subsequent or were done on Christmas Day, etc…..

I hope that courts will recognize that real serious potential for fraud that exists when one combines endorsements in blank with allonges and start demanding (1) that the complete note be filed with the original filing and (2) that anyone using an allonge prove that the allonge goes with the note in question. I think we’ve passed the point were there can be any assumptions of good faith and fair dealing.

Note that attacking the validity of the allonges directly (bringing in experts to say they are phony) isn’t the usual line of attack and for good reason. Judges don’t like having to rule that a bank was engaged in making up documents (yes, I know, they should be indifferent, but there a lot of resistance to issuing a ruling that is tantamount to calling big established institutions crooks). For readers who like technical details, there is also a good comment at Credit Slips by Tom Cox, the Maine attorney who broke open the robosigning scandal. He discusses arguments based on UCC §3-308(1) that can be used to attack bogus allonges.

[Demeter]

38. Durbin Bill Designed to Throw Wrench in Wall Street Infrastructure Heist

http://www.nakedcapitalism.com/2011/06/durbin-bill-designed-to-throw-wrench-in-wall-street-infrastructure-heist.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Senator Richard Durbin has introduced legislation that would considerably complicate the effort of Wall Street players to pillage privatize state and government assets for fun and profit.

It is key to understand what a bad deal these transactions are for ordinary citizens. In addition to having sizeable up front fees, the return requirements are well in excess of the government entities’ borrowing rates, typically just under 20%. That means after you allow for the up front charges, the effective cost of funding is likely to be 20% or even higher. How does it make the remotest iota of sense for governments to fund at rates comparable to that of credit card borrowers?

On top of that, the deals also impose serious restrictions on government sovereignity and often have extremely unfavorable clauses that serve to guarantee the investors’ returns. Again, one fundamental concept in finance is a risk/return tradeoff. A deal with a target return that high presupposes a high level of risk, so the degree of guarantees sought should lead to a large reduction in target returns. But as this Dylan Ratigan segment describes, that’s not how these transactions work: VIDEO AT LINK

The Durbin legislation seeks to curb these abuses. Huffington Post summarizes its main provisions:

The bill would require states and cities to repay any federal funds they used to build or maintain the assets, such as toll roads or airports, as a condition of leasing them, likely thwarting many deals before they happen. It would also call for more transparency in the negotiation of such deals….

“I’m really trying to stake some ground here on a principle and position that we ought to reflect on,” Durbin told HuffPost. “The federal government is in debt. We are borrowing money to sustain our operations, and we’re sending some of that money to states and localities for investment in infrastructure. We’re making quite a sacrifice. If a decision is made by a local unit of government to privatize that public infrastructure, federal taxpayers should have a seat at the table.”….

Durbin’s bill would pertain only to transportation assets, and it would attach a federal lien on any transportation project that has received more than $25 million in federal money or is valued at more than $500 million.

If passed, the law would likely bring to an end the proposed privatization of Amtrak. This week House Transportation Committee Chairman John Mica (R-Fla.) rolled out a plan to privatize the rail service in the Northeast, claiming trains would run smoother between Washington and Boston if they were in the hands of private entities.

http://www.huffingtonpost.com/2011/06/17/durbin-introduces-bill-to_n_879110.html

[Demeter]

39. 2 Big Banks Exit Reverse Mortgage Business

http://www.nytimes.com/2011/06/18/your-money/mortgages/18reverse.html?ref=business

The nation’s two biggest providers of reverse mortgages are no longer offering the loans, as the economics of the business have come under pressure. Wells Fargo, the largest provider, said on Thursday that it was leaving the business, following the departure in February of Bank of America, the second-largest lender. With the two biggest players gone — together, they accounted for 43 percent of the business, according to Reverse Market Insight — prospective borrowers may find it more difficult to access the mortgages.

Reverse mortgages allow people age 62 and older to tap what may be their biggest asset, their home equity, without having to make any payments. Instead, the bank pays the borrowers, though they continue to be responsible for paying property taxes and homeowner’s insurance...But the loans have increasingly become a riskier proposition. Banks are not allowed to assess borrowers’ ability to keep up with all their payments, and more borrowers do not have the wherewithal to stay current on their homeowners’ insurance and property taxes, both of which have risen in many parts of the country. At the same time, borrowers have been taking the maximum amount of money available, often using it to pay off any remaining money owed on the home. Yet home prices continue to slide. “We are on new ground here,” said Franklin Codel, head of national consumer lending at Wells Fargo. “With house prices falling, you reach a crossover point where they owe more than the house is worth and it creates risk for us as mortgage servicers and for HUD.” He was referring to the Department of Housing and Urban Development, whose Federal Housing Administration arm insures the vast majority of these loans through its Home Equity Conversion Mortgage program.

As a result, banks are seeing a rise in what are known as technical defaults, when homeowners fall behind on their taxes or homeowner’s insurance, both of which are required to avoid foreclosure. According to Reverse Market Insight, about 4 to 5 percent of active reverse mortgages, or 25,000 to 30,000 borrowers, are in default on at least one of those items...Bank of America, meanwhile, said that declining home values made fewer people eligible for reverse mortgages. So it decided to redeploy at least half of those working on the mortgages to its loan modification division, which has been criticized for failing to help enough homeowners on the brink of foreclosure...In days past, the borrower would get the reverse mortgage, and equity would continue to build, experts said, which would provide borrowers with more options — like refinancing — should they fall on hard times. Declining home values have changed that calculus for both bankers and consumers. Borrowers have not been able to pull out as much money. At the same time, the government has also tightened its withdrawal limits.

There were a total of more than 50,000 reverse mortgages, totaling $12.66 billion, made industrywide since last October, according to HUD...Both Wells Fargo and Bank of America will continue to service their existing reverse mortgages. And the reverse mortgage association has said it will work with its members to ensure that senior citizens who need the loans can get them, though some experts said that less competition could increase certain fees...

THE BANKSTERS BELIEVED THEIR OWN BULLSHIT, AND THE FALLACY OF CONTINUOUSLY RISING EQUITY...

[Demeter]

40. The Real Scandal at Goldman Sachs: The Stock Price

OH REALLY?

http://finance.yahoo.com/news/The-Real-Scandal-Goldman-dg-2903663016.html

What's the biggest scandal surrounding Goldman Sachs (GS), the bank everybody loves to hate? Take your pick. There's last year's $550 million settlement with the Securities and Exchange Commission over its role in constructing securities related to subprime bonds. Or the fact that a big chunk of the taxpayer cash used to bail out insurer AIG went into Goldman's sacks. Or the $10 million fine it received from Massachusetts this week over its practice of holding "trading huddles" with selected clients. Or the continuing debate over whether Goldman executives testified accurately to Congress when they discussed the firm's subprime trading position. Ooh, ooh, I know. How about its dealings with Libya's sovereign wealth fund, which are now being investigated by federal authorities? Others, like Matt Taibbi of Rolling Stone, say it is the firm's general vampire-squid nature...

Now look at this five-year chart of Goldman's stock. It closed on June 28, 2006, at $146.49, and today it trades at about $135. The stock is down 7.8 percent under his (BLANKFEIN'S) reign. Goldman's stock has paid a dividend of about $1.40 per share for the past several years. So, adjusted for dividends, according to Yahoo! Finance, the total return under Blankfein has been -3.5 percent. Investors would have done much better leaving their money in a bank and collecting minuscule interest payments....So imagine a bunch of senior Goldman executives hired an expensive portfolio manager and tasked him with creating positive returns. Next, imagine that the manager came back year after year and informed the executives that the best he could do was flat returns — but that he nonetheless deserved a multimillion-dollar payday. They'd laugh... And yet, while Goldman's returns have been subpar, CEO Lloyd Blankfein is getting paid like he's crushing the market. As the Financial Times reported this week, Blankfein "was paid $14m in 2010, more than 15 times his 2009 earnings, as senior bankers collectively shed their hair shirts." That' s just one year's compensation.

This highlights the real problem with Goldman Sachs. Like other investment banks, it isn't run for the benefit of its clients, or for the benefit of public shareholders, despite what its business principles say (#3: "Our goal is to provide superior returns to our shareholders.") No, Goldman and other publicly traded Wall Street firms are really ingenious machines for spinning revenues into compensation for insiders. If that means other stakeholders do poorly while executives make out great, that's just the way it goes.

This is really nothing new. In 1940 Fred Schwed, Jr., published the classic book on how brokers prosper while investors suffer. It was entitled Where Are the Customers' Yachts? Goldman Sachs stockholders might rightly ask Where Are the Shareholders' Yachts? The returns provided to them under Lloyd Blankfein in the past five years aren't enough to buy a ride on the Staten Island ferry.

[Demeter]

42. Georgia Senate banking chair has property in foreclosure

http://www.ajc.com/business/senate-banking-chair-has-978854.html

The chairman of the state Senate Banking Committee, already the subject of lawsuits over a failed bank and bank debt, could lose a Forsyth County property to foreclosure. State Sen. Jack Murphy, R-Cumming, owns a one-acre tract along Tribble Gap Road in downtown Cumming that has been listed for foreclosure on July 5, according to a legal notice published earlier this month in the Forsyth County News.

The loan was originally issued for about $228,000 by Integrity Bank of Alpharetta, which failed in 2008 and where the senator was once a director. Investors later bought the loan. Murphy, in an email, said he acquired the property in 2005 with plans to build an office building. He said its value has since dropped to 35 percent of the purchase price...In January, Murphy was appointed chairman of the Senate panel that considers changes in banking law.

Later that month, the FDIC sued Murphy and seven other insiders of the failed Integrity Bank, accusing them of various breaches of fiduciary duties, including violations of state lending limits. The suit seeks more than $70 million in damages. The Integrity co-defendants are fighting the suit. Murphy and three other Integrity insiders have cast blame at the FDIC for the bank’s failure.

The Atlanta Journal-Constitution reported in February that Murphy also had been sued in recent years for defaulting on other bank loans. Murphy has said he settled debts with one, an Alabama bank that said he owed about $50,000. Atlanta’s Silverton Bank also sued Murphy, claiming he owed $193,000 on a loan. Silverton failed in 2009 and the case was taken over by the FDIC. Murphy has sought to dismiss the Silverton case.

HE'S A ONE-MAN WRECKING CREW! NO WONDER THE BANKS IN GEORGIA ARE ALL GOING UNDER!

[Demeter]

43. Former Tea Party of Nevada candidate sues over efforts to foreclose on home

http://www.lasvegassun.com/news/2011/jun/16/former-tea-party-nevada-candidate-sues-over-effort/


Defeated Nevada U.S. Senate candidate Jon Scott Ashjian is suing two lenders and a law firm, charging they’ve been wrongfully trying to foreclose on his Las Vegas home.

Ashjian, a Tea Party of Nevada candidate, picked up 1 percent of the vote in November’s election in which Sen. Harry Reid was re-elected.

An attorney for Ashjian and his wife Bonnie Ashjian filed suit this month against Bank of Nevada and Dovenmuehle Mortgage in Clark County District Court in hopes of blocking a foreclosure planned for their home on June 13.

That home, with an assessed value of about $204,000, is in northwest Las Vegas near Craig Road and Durango Drive.

[Demeter]

44. Debbie Wasserman Schultz: Social Security Benefit Cuts “Off the Table”

http://news.firedoglake.com/2011/06/17/debbie-wasserman-schultz-social-security-benefit-cuts-off-the-table/

[Demeter]

45. The Banking Miracle By JOE NOCERA

http://www.nytimes.com/2011/06/18/opinion/18nocera.html?_r=2&hp

...From my vantage point here in 2011, Glass-Steagall seems miraculous. It was amazingly radical, not just for its time, but for any time; it didn’t so much reform banking as upend it. Most notably, it ordered banks to get out of the securities business. As Sisson complained: “The effect of the proposed banking reform is to renounce investment banking rather than regulate it.” Because investment banking was then the chief activity of the big banks, this was a very big deal...Glass-Steagall also created the Federal Deposit Insurance Corporation, which insured customer deposits for the first time, and outlawed branch banking by national banks, among other things. It is impossible to imagine anything like it passing today; although the modern reform bill, Dodd-Frank, surely does some good, it’s not even comparable.

I’d long wondered how Senator Carter Glass, the powerful Virginia Democrat, and his House counterpart, the Alabama congressman Henry Steagall, managed to get it passed. What were the politics like? What did they fight over? Why didn’t people like (BANKER) Sisson have better luck pushing back against it, the way bank lobbyists do today? So I asked the editors at American Banker if they would send me some articles from the era that would shed some light on the question. Happily, they obliged...The first thing I realized is that all the horse-trading over the bill’s provision was done by Democrats. The Republicans, having been badly defeated in the 1932 election, had no ability to block it or even amend it. For instance, Republicans tended to view the creation of deposit insurance as “socialism.” (Sound familiar?) But it didn’t matter: Steagall cared deeply about deposit insurance. Many community bankers — as strong a force back then as today — also supported the idea because they believed it would renew customers’ faith in the banks, and bring back deposits. (This turned out to be true.) Glass, though skeptical, went along so he could get things he cared about, mainly a stronger Federal Reserve with more power over the banks.

The second thing I realized was that, the Sisson speech notwithstanding, there was surprisingly little controversy over what we now think of as the law’s primary achievement: splitting commercial and investment banking. The fights were all over issues that seem inconsequential by today’s lights. It’s as if the notion of breaking the banking business into two was always a foregone conclusion....And, for the most part, it was. Partly, this was because, unlike today, bank failures in the 1930s were often ruinous to customers. So reform was more pressing. But it was also because, for the entire time the legislation was under consideration, the Pecora hearings were going on — in which Ferdinand Pecora, the flamboyant chief counsel of the Senate Banking Committee, dragged one well-known banker after another before the committee and grilled them mercilessly, exposing how they had abused their investment banking roles, sometimes to the point of criminality. The Pecora hearings serve as a steady drumbeat in the American Banker articles...Those hearings infuriated the country, and made it unthinkable that banks would continue to be allowed to sell securities. In fact, some banks, seeing which way the wind was blowing, applauded: “The spirit of speculation should be eradicated from the management of commercial banks,” declared Winthrop Aldrich, the chairman of Chase National Bank, according to Michael Perino, Pecora’s biographer. Ironically, Glass loathed the Pecora hearings, deriding them as “a circus, and the only thing lacking now are peanuts and colored lemonade.” But the hearings made his bill — which had been filibustered by Huey Long just 18 months earlier — not just possible but inevitable.

How inevitable? Charles Geisst, a finance professor at Manhattan College and an expert on the law, says that the House and Senate didn’t even bother with a roll-call vote for final passage. This seminal piece of legislation, which helped keep the banks out of trouble for the next 70-plus years, flew through on a voice vote. On Friday, June 16, 1933, when Roosevelt signed it into law, The American Banker gave the news all of three paragraphs. There was nothing left to say.

[Demeter]

47. Can Obama cut the deficit and have job growth too?

http://www.creditwritedowns.com/2011/06/obama-deficit-job-growth.html#ixzz1Pdodt8rn

FIRST PROVE TO ME THAT HE CAN WALK AND CHEW GUM...

NO, HE CAN'T DO EITHER, BECAUSE HE REALLY DOESN'T WANT TO. JOB GROWTH WOULD AUTOMATICALLY CUT THE DEFICIT BY INCREASING TAX REVENUES AND REDUCING GENERAL WELFARE COSTS, BUT OBAMA'S MONEYMEN DON'T WANT ANY JOB GROWTH, BECAUSE THAT WOULD MEAN LABOR COSTS CUTTING INTO THE BOTTOM LINE. AND WITHOUT JOB GROWTH, THERE WILL BE NO MECHANISM TO REDUCE THE DEFICIT. REDUCING THE DEFICIT BY VICIOUS CUTTING WILL NOT ONLY NOT STIMULATE THE ECONOMY, IT WILL ALSO END THE GOVERNMENT.

[Demeter]

48. Earth may be headed into a mini Ice Age within a decade

http://www.theregister.co.uk/2011/06/14/ice_age/

AND WE WILL ALL BE GLAD OF GLOBAL WARMING...

[Hotler]

49. k&r

I have no hope. I see no future.

[Demeter]

50. Erich Korngold Made Errol Flynn What He Was

Korngold was the composer who generated the scores for Flynn's best films:

THE SEA HAWK

http://www.youtube.com/watch?v=C-RPzAbW7No

http://www.youtube.com/watch?v=R4KCPnj06PE&feature=related

THE NEARLY COMPLETE FILM

http://www.youtube.com/watch?v=knW3g9dVC6E&playnext=1&list=PL47CB0B933BF1203C

[Demeter]

51. And as for me

http://www.youtube.com/watch?v=i6yLRmo7CjU

see you later, alligator!

Carry on, Marketeers (as if I had any way to prevent you..)

[DemReadingDU]

52. N.H. man burns self at courthouse in protest

Original link
Editor’s note: On Thursday morning, June 16, The Sentinel received a “last statement” via mail from a man who insinuated that he planned to set himself on fire in front of the Cheshire County Court House, and an explanation of why he intended to do so. Through further reporting, The Sentinel is confident this is from the victim of Wednesday afternoon’s fire, although police have not yet received confirmation of his identity. The 15-page statement is printed in full, except for two redacted items: The names of the man’s mother and his three children. Details will be posted as they become available.
http://www.sentinelsource.com/news/local/last-statement-sent-to-sentinel-from-self-immolation-victim/article_cd181c8e-983b-11e0-a559-001cc4c03286.html

Posted at The Burning Platform
http://www.theburningplatform.com/?p=17240
and at ZeroHedge
http://www.zerohedge.com/article/guest-post-new-hampshire-man-burns-self-courthouse-protest

[Demeter]

54. omg

"Live Free or Die", NH state motto.

So: killing himself, and enabling his children to remain with their mother, and receive survivors benefits from Social Security, may not have been the outcome he intended, but in a way, it is the best result...an inadvertent act of love and caring from a man who did neither, by his own account.

His fixation on "his" rights, his manhood, his everything....the misogyny, the inability to accept any blame whatsoever for what went down. One less psychopath in the world. Never able to say: "I'm sorry."

This isn't going to set the world on fire, like the young man in Egypt. This is going to gnaw at whatever social adhesive still holds things together.

[DemReadingDU]

55. It was a long read

Of course we don't know the whole story. But from his view, it appears he got labeled for domestic violence for that one incident and had his family taken from him, then got caught in the layers of bureaucracy. He spent a lot of time researching statistics about families torn apart by the injustice of the legal system. Quite a sad situation. I wonder about the ex-wife, what would she say?

[Pale Blue Dot]

56. I read it. I don't buy his story.

First of all, he gets angry with a 4-year-old for "licking his hand". Second, he slaps her hard enough to draw blood (she "cut her lip" - yeah, right). Third, he compares himself to Jews in Germany and sympathizes with the Tea Party. Finally, he handled this by becoming obsessed and then setting himself on fire in front of a courthouse.

All of this says to me that this man's judgement can't be trusted. On anything, including his opinion about whether or not he abused his daughter.

[Demeter]

73. The Social Psychological Narrative — or — What Is Social Psychology, Anyway?

http://edge.org/conversation/social_psychological_narrative

One of the basic assumptions of the field is that it's not the objective environment that influences people, but their constructs of the world. You have to get inside people's heads and see the world the way they do. You have to look at the kinds of narratives and stories people tell themselves as to why they're doing what they're doing. What can get people into trouble sometimes in their personal lives, or for more societal problems, is that these stories go wrong. People end up with narratives that are dysfunctional in some way....

But in the mid 1970’s, Tim Wilson and Dick Nisbett opened the basement door with their landmark paper entitled "Telling More Than We Can Know," in which they reported a series of experiments showing that people are often unaware of the true causes of their own actions, and that when they are asked to explain those actions, they simply make stuff up. People don’t realize they are making stuff up, of course; they truly believe the stories they are telling about why they did what they did. But as the experiments showed, people are telling more than they can know. The basement door was opened by experimental evidence, and the unconscious took up permanent residence in the living room. Today, psychological science is rife with research showing the extraordinary power of unconscious mental processes.

[DemReadingDU]

76. Very interesting, and timely. thanks

[bread_and_roses]

77. How about we do something about the "objective environment" ...

... and then worry about the individual "constructs of the world?" Since all the objective evidence we have is that people for the most part most people act/think/judge in response to their environment? Do we really need some "subconscious" explanation for why a starving person steals food?

I admit that the article linked lost me pretty quickly. That the human mind is still a mystery to us is less important than those realities that are not mysteries, at least in my book. We know people need food, shelter, health care, freedom from being blown to bits by bombs, a community in which to feel at home, a way to be productive and valued - and without those things, most of us disintegrate. That seems to me to be enough to go on for the time being - we can worry later about whatever "individual constructs" make the Oligarchs want to eat the world.

[Demeter]

79. The "Constructs of the Mind/World" Have to Do With the Psychopaths Among Us

And since this defective type of personality and world view dominates the Self-Appointed Elites with all the money and power to plunge us into Depression or War, it is important to understand, correct, and punish (yes, punish) those who abuse the population, whether it's a man beating his child to death with a baseball bat, or a President assassinating his countrymen without a trial.

It's not an Either/Or situation. We have both problems ravaging our society, and both must be dealt with. It is the faulty "constructs of the world" that prevent us as a society from dealing with the "real" problems. There are too many really Evil (or if correctable, Misguided) people out there in positions of power, with more money than any one person will ever need, which they stole, by the way, and used to undo millenia of social progress and the rule of law.

I appreciate your dedication, which I share. Solidarity forever.

[Demeter]

87. JUST FOR YOU: Life Expectancy Fell in Many Counties in the US BEFORE the Crisis

http://www.nakedcapitalism.com/2011/06/life-expectancy-fell-in-many-counties-in-the-us-before-the-crisis.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A rising tide did not lift all boats even when the economy looked a lot better than it does now. As Francois T, an MD and medical researcher, wrote:

If you need ONE Indicator of how a nation is doing, it ought to be female life expectancy at birth. It is a tell tale sign that a lot of good things, (or bad things) are happening in the nation under study. Hence, forget about CDOs, CDS, RMBS, Pure BS, Official BS and what have you. Female LEAB will tell you something much more fundamental. It will also be a proof that everything you wrote about the deleterious societal impacts of financial high crimes is correct. As a matter of fact, people severely underestimate the real repercussions and total costs of a decrease in female life expectancy at birth.

He pointed to a just-released study, Falling behind: life expectancy in US counties from 2000 to 2007 in an international context. Some of its major findings:

Large swaths of the United States are showing decreasing or stagnating life expectancy even as the nation’s overall longevity trend has continued upwards, according to a county-by-county study of life expectancy over two decades.

In one-quarter of the country, girls born today may live shorter lives than their mothers, and the country as a whole is falling behind other industrialized nations in the march toward longer life…

Some US counties have a life expectancy today that nations with the best health outcomes had in 1957 … Five counties in Mississippi have the lowest life expectancies for women, all below 74.5 years, putting them behind nations such as Honduras, El Salvador, and Peru. Four of those counties, along with Humphreys County, MS, have the lowest life expectancies for men, all below 67 years, meaning they are behind Brazil, Latvia, and the Philippines.

And get a load of this:

Despite the fact that the US spends more per capita than any other nation on health, eight out of every 10 counties are not keeping pace in terms of health outcomes. That’s a staggering statistic.

[bread_and_roses]

92. Well, I must give credence to a "faulty construct" to explain how our fellow citizens...

... in the face of so much indisputable evidence, continue to allow themselves to be confused into failing to insist on something as simple as "health care for all." Note - they do not out and out reject it - even under the assault of the RW spinmasters, polling for at least some form of feeble "public option" was there right till the end - but they doallow themselves to be confused into timidity and inaction ....

[xchrom]

53. Moody's warns to cut Italy's credit ratings

http://news.xinhuanet.com/english2010/business/2011-06/18/c_13936374.htm

NEW YORK, June 17 (Xinhua) -- Moody's investors service warned on Friday that it may cut Italy's sovereign credit ratings from the current Aa2, citing economic growth challenges and the potential of higher borrowing costs.

Moody's said in a statement that it has placed Italy's credit ratings under review for a possible downgrade and affirmed the European nation's short-term Prime-1 ratings.

"Moody's review of Italy's sovereign rating will focus on the growth prospects for the Italian economy in coming years, and particularly the prospects for a removal of important structural bottlenecks that could hinder a stronger economic recovery in the medium term," the ratings agency said.

It said that Italy's economy has structural weaknesses like low productivity and "labor and product market rigidities," and the debt-burdened country also faces risks for the implementation of fiscal austerity plans.

[Demeter]

57. How Miserable? Index Says the Worst in 28 Years

http://www.cnbc.com/id/43441924

...In fact, misery, as measured in the unofficial Misery Index that simply totals the unemployment and inflation rates, is at a 28-year high, reflective of how weak the economic recovery has been and how far there is to go.

The index, first compiled during the soaring inflation days of the 1970s by economist Arthur Okun, is registering a nausea-inducing 12.7—9.1 percent for unemployment and 3.6 percent for annualized inflation—a number not seen since 1983. The index has been above 10 since November 2009 and had been under double-digits from June 1993 through May 2008....

[Demeter]

58. Stop the banksters: Michigan county weighs foreclosure moratorium

http://peoplesworld.org/stop-the-banksters-michigan-county-weighs-foreclosure-moratorium/

If common sense, instead of banks, ruled the nation, a solution to the foreclosure crisis would have been found long ago...That point was driven home over and over during a June 13 public hearing on a measure to stop the foreclosure "madness." Members of the Wayne County Board of Commissioners listened as speakers pressed for adoption of the Homeowner Protection and Neighborhood Preservation Act, introduced by Commissioner Martha Scott.

It would demand an independent audit of foreclosure sales to determine if fraudulent practices were used by banks and mortgage servicers, have the sheriff implement a moratorium on sales of occupied homes, and place the issue of implementing such a moratorium on the November 8, 2011, ballot.

Miguel Foster, director of the United Auto Workers Civil Rights and Community Services Department, told commissioners his union and its president, Bob King, support this act. Foster noted that in 2010, there were 100,000 foreclosures in Michigan and one-fourth of those were in Wayne County, where Detroit is located. He called it an "economic and human catastrophe" affecting many of his union's members.

Many at the hearing expressed outrage at the fact that banks have more of an incentive to force people out of their homes than to keep a roof over the heads of families and children...Rowe emphasized that banks were misusing "our" money as most loans are government-guaranteed and banks were given a $700 billion bailout with our tax dollars. In effect we are "foreclosing on ourselves," he said.

[Demeter]

59. Default by Greece may start the global restructuring process Christopher Whalen

I THINK THAT'S WHAT THEY ARE AFRAID OF


http://blogs.reuters.com/christopher-whalen/2011/06/16/default-by-greece-may-start-the-global-restructuring-process/

...Governor Tarullo and his counterparts at the European Central Bank have been trying for months now to guide the financial markets into some type of controlled crash landing, but with fanciful goal of avoiding default on the debt of banks and the states themselves. Many EU banks are now state-backed, explicitly or implicitly, so the distinction between public and private is now relatively moot.

But the sad fact is that the EU states do not have the money to fudge the issue any longer. Though discussion contunues about a “voluntary” debt exchange with respect to Greece, that seems like a very ambitious goal. A more likely scenario is that Greece and Ireland will eventually, poilitically, be forced into a default and formal debt negotiations a la Latin America in the 1980s. Banks in the EU and around the world will then need to write-down Greek, Irish and other exposures.

In the event, many of the banks of the supposed “core” EU states will need to be restructured, again, and once more the issue of funding raises questions about how all of the necessary restructuring will be financed. One of the reasons for the AIG bailout, let us not forget, was avoiding another capital hit for the large French and German banks which are marginally solvent looking at the data from the IMF.

US banks will also face losses in the event of a Greek default, both in terms of direct exposures visible in SEC filings and regulatory reports, and indirect idiosyncratic exposures that flow through counterparties and customers. The top several US banks have reportedly written credit default swap protection on approximately one-half the total outstanding debt of all PIIGs nations combined, a total many times their capital.

As and when the situation in Europe ripens, the issue for the Fed and other regulators will no longer be capital adequacy and stress testing, but solvency...

[xchrom]

60. Greek PM defends austerity package, calls for fall referendum

http://news.xinhuanet.com/english2010/world/2011-06/19/c_13938242.htm

ATHENS, June 19 (Xinhua) -- Ahead of lawmakers' confidence vote on his new crisis cabinet, Greek Prime Minister George Papandreou Sunday defended the austerity package and called for a referendum on whether to change the country's constitution.

Speaking at the onset of a three-day debate in the parliament, Papandreou urged Greeks to unite behind the unpopular package in order to overcome the country's worsening debt crisis.

He also said the proposed fall referendum would remove those unfit to govern from key government posts.

The confidence vote will be held on Tuesday, a crucial test for the prime minister and his new economic and political initiatives at a time of the country's deepening crisis.




i wonder where the on the richter scale the protests will go now?

[Demeter]

63. The Euro system contains a serious design flaw

http://www.creditwritedowns.com/2011/06/us-currency-sovereign-ireland-currency-user.html#ixzz1PiefQNib

The Euro is premised on a philosophy that is best characterized by the slogan, “One Market, One Money.” At the core of the Euro system is the European Central Bank, an institution that was given a limited but ostensibly critical role: keep a tight lid on inflation by strictly controlling the supply of euros. Because they could not conceive of an event that would trigger a breakdown in the payments system itself, the authors of the Maastricht Treaty did not give the ECB the statutory mandate to act as a ‘Lender of Last Resort’ in times of crisis. And, because a group largely composed of bankers (the Delors Committee) had written the blueprint for the Euro, it contained no systematic framework for regulating and supervising Europe’s financial institutions. Instead, the ECB was given a sole mandate: maintain price stability. These are significant departures from the customary modus operandi for a central bank.

Because they assumed that a sharp decline in output and employment would be rectified through emigration or a depreciation of the euro, the authors of the Maastricht Treaty saw no reason to create a fiscal analogue to the ECB, an institution that would bear responsibility for promoting growth and employment in the Eurozone. Instead, the political intention of the Treaty was to subordinate the role of fiscal policy, leaving it to the individual member nations to cope with a downturn by permitting only a modest increase in their deficits.

The problem, as everyone now observes, is that an individual member nation can find it impossible to engineer a recovery on its own...

IN OTHER WORDS, IT'S AS ARTIFICIAL AS THE CDOS,CDS, AND OTHER "ENGINEERED" "FINANCIAL INNOVATIONS".

[xchrom]

68. Private sector to be involved in new Greek bailout

http://www.irishtimes.com/newspaper/finance/2011/0618/1224299153120.html

THE PRESIDENT of the European Council, Herman Van Rompuy, has said he envisaged some form of voluntary private sector involvement in a new Greek bailout, but the two “red lines” of credit default or the triggering of a credit event must be avoided.

Speaking to the Irish Institute for European Affairs in Dublin Castle yesterday, Mr Van Rompuy, said while the Greek situation was “worrisome”, he was confident a final agreement on a package would be reached.

The four elements of the deal will include a correction of the “fiscal slippage” in Greece’s budgetary efforts this year; a new three-year reform programme, including “ambitious privitisations”; additional European Union and International Monetary Fund financial support for Greece; and some form of private sector involvement in the package.

Mr Van Rompuy said that “time is of the essence” for Ireland in solving its financial problems. Outlining how, as budget minister in Belgium, he had helped bring about a reduction in the public debt from more than 130 per cent of gross domestic product in 1995 to 114 per cent in 1999, he said “it can be done”. “We could not devalue our currency due to our strong links with the German mark, so with resolve and time, strong adjustments are possible.”

[xchrom]

91. Greek PM: Talks on new bailout package under way

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-06-19-10-44-30

ATHENS, Greece (AP) -- Greece is talking with international creditors about a second bailout package "roughly equal" to the first euro110 billion ($157 billion) rescue it accepted a year ago, the prime minister confirmed Sunday.

George Papandreou also blamed Greece's bloated and inefficient state sector for bringing the country to its knees and vowed to effect deep changes with a fall referendum on the constitution that would make it easier to get rid of inept officials or workers.

His proposals were a populist response to widespread popular anger at politicians as austerity measures cut deeply into disposable incomes. Riots erupted on the streets of Athens last week against a new round of spending cuts and tax hikes being demanded by the European Union and the IMF.

"I ask for a vote of confidence because we are at a critical juncture ... the debt and deficits are national problems that have brought Greece into a state of dependence that may have protected us from bankruptcy, but which we need to get out of," Papandreou said, opening a three-day parliamentary debate that culminates Tuesday in a confidence vote.

[xchrom]

61. Cost-cutting plans prompt mass protests in Budapest and Prague

http://www.irishtimes.com/newspaper/world/2011/0618/1224299152489.html

THOUSANDS OF Hungarians and Czechs have marched in protest at cost-cutting measures their governments say are vital to bolster their economies and avert future crises.

Some 10,000 Hungarians, most of them police officers, fire-fighters and soldiers, rallied in central Budapest and cast fake ballots in mock voting booths against the country’s conservative government, which is using its stranglehold on power to push through controversial reforms.

Many of the demonstrators wore multicoloured wigs, face paint and outlandish costumes, in reference to reports that prime minister Viktor Orban had refused to talk directly to protesters and offered to send his “under-secretary for clown affairs” instead.

Most of those at the “Clown Revolution” rallied against state plans to no longer pay pensions to people younger than the general retirement age of 65. Until now, emergency and security service workers have been able to retire at 45. Other workers joined the march to protest against moves to scrap the system of government negotiation with employers and unions.

[DemReadingDU]

62. The Next Crisis is Coming… And It WILL Be Worse Than 2008

6/18/11 Yes, the Next Crisis is Coming… And It WILL Be Worse Than 2008
by Graham Summers

So 2008 comes along. We all find out that this bunch of crap nearly destroyed the financial system. And we did… nothing. Bernanke funneled trillions to the big banks (all of whom are the primary producers of this crap) and that’s about it.

It’s almost as if the conversation went like this.

Bernanke: You did what!?!?
Wall Street: We have rendered the entire financial system insolvent with crap. We need trillions.
Bernanke: Hmmm… will you stop making this crap?
Wall Street: No.
Bernanke: Will you consider admitting it’s crap?
Wall Street: No
Bernanke: Ok, here’s a blank check.

So here we are today. And rather than fixing any of these problems, we’ve transferred a couple trillion dollars’ worth of this crap to the public’s balance sheet. Put another way, the crap that nearly took down the banks has been allowed to spread to the US and other country’s balance sheets.

What happens when a problem is not only ignored but allowed to spread even further? Well, we’re going to find out.

Indeed, the next Crisis is coming. And it will make 2008 look like a picnic. Why? Because this time around the Crisis will involve entire countries, rather than just banks (see Greece today). It’s going to be really REALLY bad. And I would argue that 99% of people are completely ignorant of it.

more...
http://www.zerohedge.com/article/yes-next-crisis-coming%E2%80%A6-and-it-will-be-worse-2008

[Demeter]

64. +1

[Demeter]

65. City Government demands all keys to properties belonging to Cedar Falls residents.

http://www.youtube.com/watch?v=zFCLiij0CBA&feature=youtube_gdata_player

UNBELIEVABLE

[Demeter]

69. Bilderberg 2011: Background, Preview and Predictions

http://www.youtube.com/watch?v=6vEiWw1FIX8&NR=1

[xchrom]

66. 'Unilateral' Irish bank guarantee triggered EU-wide stability measures, says Almunia

http://www.irishtimes.com/newspaper/finance/2011/0618/1224299153081.html

IRELAND’S “UNILATERAL” bank guarantee of September 2008 was the trigger for subsequent EU-level actions to preserve Continent-wide financial stability, according to Joaquin Almunia, EU commissioner for competition.

Speaking to an audience of bankers in Dublin yesterday, the Spaniard repeated criticisms he made earlier in the week of the guarantee. Among other things, Mr Almunia said that it had limited the “margin for manoeuvre to seek burden-sharing from senior bondholders”.

In a more veiled criticism, he said the EU countries played as a team in responding to the crisis “most of the time”.

Mr Almunia was blunt in his criticism of Ireland’s banks. Speaking at a subgroup of the Irish Banking Federation yesterday, he said: “Ireland’s financial woes originated in excessive and careless lending by the Irish banks to the commercial real estate sector.”

[Demeter]

67. Paychecks as Big as Tajikistan By GRETCHEN MORGENSON

http://www.nytimes.com/2011/06/19/business/19gret.html?_r=1&ref=business

Let’s begin with the view from 30,000 feet. Total executive pay increased by 13.9 percent in 2010 among the 483 companies where data was available for the analysis. The total pay for those companies’ 2,591 named executives, before taxes, was $14.3 billion.

That’s some pile of pay, right? But Mr. Ciesielski puts it into perspective by noting that the total is almost equal to the gross domestic product of Tajikistan, which has a population of more than 7 million.

Warming to his subject, Mr. Ciesielski also determined that 158 companies paid more in cash compensation to their top guys and gals last year than they paid in audit fees to their accounting firms. Thirty-two companies paid their top executives more in 2010 than they paid in cash income taxes.

The report also blows a hole in the argument that stock grants to executives align the interests of managers with those of shareholders. The report calculated that at 179 companies in the study, the average value of stockholders’ stakes fell between 2008 and 2010 while the top executives at those companies received raises. The report really gets meaty when it compares executive pay with items like research and development costs, and earnings per share.

[Demeter]

70. Marxism without revolution: Class

http://johnquiggin.com/2011/06/19/marxism-without-revolution-class/

As Cohen puts it, the revolutionary working class postulated by Marx had to satisfy four conditions:

1) They constitute the majority of society;
2) they produce the wealth of society;
3) they are the exploited people in society;
4) they are the needy people in society.

To quote this summary from the Directionless Bones blog, 1. and 2. give the proletariat the capacity to revolutionise society, and 3. and 4. give them the reason to do so. It seems clear, as Cohen says, that no sensible definition of the working class is going to satisfy all four conditions.

On the other hand, there clearly is a self-conscious and generally dominant class, centred on control of capital, but including plenty of people whose source of power and wealth is derived from their job rather than from capital income. On a narrow definition, it includes the top 1 per cent of US households which now receive 25 per cent of all income and hold around 35 per cent of all wealth. More broadly, the top 20 per cent of the population has, in broad terms, increased or maintained its share of national income as the top 1 per cent have become richer. This broader group controls more than half of all income and wealth.

Most of the political elite in developed countries, but particularly in the US, consists of members of the top 1 per cent, or aspirants to rise to this group from the top 20 per cent. Moreover as well as controlling much of the political process through direct participation or political donations, this class exercises power directly through ownership of capital and particularly through control of the financial system. Anyone who attempts to understand policy and politics without taking account of the central role of this class is doomed to failure.

Coming back to Cohen’s conditions, the case to be made against the top 1 per cent is that:

1) They constitute a tiny minority of society
2) they consume far more of the wealth of society than they actually contribute
3) they exploit their control over capital for their own benefit
4) they are the primary obstacle to meeting a wide range of social needs

[bread_and_roses]

93. "Greek Protesters Are Better Economists ..."

I admit to just scanning this article briefly, but I liked the title and thought it fit under any post with "Marxism" in it....while the post to which I am responding interested me, articles about the IMF and World Bank and their always-bloodily evil doings essentially profoundly bore me. There is no "reasoning" with such entities, and no "bargaining" with our Oligarch Masters. If we had half the sense of the Greeks we'd be in the streets for a general strike -

http://www.commondreams.org/view/2011/06/18-6

Greek Protesters Are Better Economists Than the European Authorities
by Mark Weisbrot

....

[Demeter]

94. That's No Contest--2 year-olds are better economists

try and cheat one of an equal share of a treat...

[Demeter]

71. Grasping Reality with Both Hands

http://delong.typepad.com/sdj/2011/06/a-sokratic-dialogue-liquidity-preference-loanable-funds-and-european-hedge-funds-that-fear-the-collapse-of-us-treasury-b.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+BradDelongsSemi-dailyJournal+%28Brad+DeLong%27s+Semi-Daily+Journal%29&utm_content=Google+Reader

And what do European hedge funds think?...

Adeimantos: They demand that I tell them why U.S. Treasury bond prices have not already collapsed (and Treasury interest rates risen) in anticipation of this forthcoming tsunami of bond issues. Given that Treasury bonds have not yet collapsed they are very very bearish about U.S. Treasury bond prices and interest rates. Supply and demand. The supply of U.S. Treasury bonds is about to become huge, and when supply goes up price should go down.

Sokrates: But if that argument is correct, then rational profit-seeking traders should already have sold U.S. Treasury bonds and already have pushed their prices down in anticipation of the sudden increase in supply...

Meno: Are you Sokrates or Milton Friedman?

Kephalos: There are two supply-and-demand arguments that can be made here. The first is that the supply of U.S. Treasury bonds is about to jump enormously--and so by supply-and-demand the price will be low once the extra bond issues hit the market, and should be low now in anticipation of this low-price Treasury bond market equilibrium. The second is that the inverse of the price of U.S. Treasury bonds--the Treasury nominal interest rate--is the price of liquidity: the amount of interest income you forego by keeping your wealth in cash rather than in securities. According to this second argument, the supply-and-demand is the supply and demand for cash: when the supply of cash is high, the price of liquidity is low, and since the price of liquidity is the short-term Treasury interest rate the short-term Treasury interest rate should be very low...And the long-term Treasury interest rate is the average of expected short-term future Treasury interest rates. Since the Federal Reserve has flooded the economy with cash and will keep flooding it with cash for the foreseeable, Treasury interest rates should be low which means Treasury bond prices should be very high--which they are--and stay high...

IF THIS INTERVIEW DOESN'T CONVINCE YOU THAT THE INMATES ARE RUNNING THE ASYLUM...

[Demeter]

72. Totally. Fucking. Clueless.

http://shakespearessister.blogspot.com/2011/06/totally-fucking-clueless.html

I'M NOT SURE THAT THIS HELPS...

[Demeter]

74. More Dubious Research: “It Would Take 62 Years in New York to Repossess the Homes in Severe Default

http://www.nakedcapitalism.com/2011/06/more-dubious-research-it-would-take-62-years-in-new-york-to-repossess-the-homes-in-severe-default-or-foreclosure-2.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

An article at the New York Times, “Backlog of Cases Gives a Reprieve on Foreclosures,” is more than a little frustrating in that it takes some high level factoids about the mortgage mess and fails to draw the right inferences from them.

The premise of the piece is that in some states, the average time to foreclosure has become so attenuated that it would take decades at current rates to clear the backlog....The convention in writing is to list the most important cause first. Thus by giving “the foreclosure system is bogged down by the volume of cases” pride of place implies that the “foreclosure system” being overloaded is the biggest cause.

But this level of abstraction is misleading. There is no “foreclosure system”; that turn of phase implies a single overarching set of procedures. As the mere mention of judicial versus non-judicial states indicates, each state has its own laws and case history as to what is proper practice. Referring to a “system” when there is none is also likely to lead many readers to think in term of the system that is involved in the foreclosure process, the judicial system, and to incorrectly infer that courts being overloaded is a major culprit. The vagueness of the expression, in other words, has the effect of directing attention away from the fact that it is the banks’ own machinery that is the most gunked up.

Indeed, the failure of the banks’ own processes and procedures is very much underplayed in the story. There is virtually no mention of the fact that the banks cut corners so badly both in how they handled the process of transferring notes to trusts and in their use of the mortgage registry MERS, and then in the foreclosure process itself, that much of the delay is the result of their efforts to remedy major operational shortcomings. Passing references to “documentation crisis” and robosigning are inadequate to describe the scope of the problem and support the mortgage industrial complex’s narrative that this is a mere paperwork problem (the reliably sanctimonious Wells has the temerity to blame its problem on “changes in state laws governing foreclosure”)...Thus what the article depicts as “backlog” (remember, LPS is including “severe defaults”, meaning deliquencies that have not yet resulted in foreclosure) is far more likely to be the result of foreclosures that either will not be initiated or have been abandoned. In other words, the samples all include a mix of foreclosures that are moving forward to resolution which should be parsed out and analyzed separately to see what the real time to foreclosure is, versus ones that the banks have dropped and/or are not initiating (and I don’t mean dropped by virtue of being contested, I mean left in limbo by the bank).

[Demeter]

75. Lawyers and Accountants Once Put Integrity First

http://www.nytimes.com/2011/06/19/opinion/19everson.html


...It will take decades to fully untangle the causes of the 2008 financial crisis, but as our economy fitfully heals, it would be prudent to ask whether lawyers and accountants offer the same protection against corporate misconduct that they once did...Three or four decades ago, investors and regulators could rely on these professionals to provide a check on corporate risk-taking. But over time, attorneys and auditors came to see their practices not as independent firms that strengthen the integrity of capitalism, but as businesses measured chiefly by the earnings of their partners. Necessarily, the actions of outside professionals were guided by a cautious orientation. I remember one partner advising a bunch of young auditors examining the financial statements of several of the biggest companies in the world, “If you try hard enough, you can always make the numbers add up.” His point was clear: technical compliance alone was not sufficient. Substance mattered.

Recent decades have seen a new model take root: a business plan tied to partner earnings. Obviously, to pay employees more and to increase partner pay to its present, staggering levels, billings needed to grow. Perhaps today’s approach to fee generation by leading law firms was best stated in a recent Wall Street Journal article about partners billing over $1,000 per hour. Said one such lawyer, “The underlying principle is if you can get it, get it.” Imagine a doctor saying that, for attribution, about an organ transplant.

Understandably, corporate clients are reluctant to pay through the nose for advice on how to color safely within the lines. Whereas concern for a company’s reputation on the part of its executives historically served to reinforce the conservative influence of the outside professionals, it is well documented that attitudes have shifted within corporations themselves. One need look no further than General Electric’s no-longer-obscure tax department to see how traditional law and accounting functions have morphed into profit centers.

Lawyers and accountants who were once the proud pillars of our financial system have become the happy architects of its circumvention. Nowhere is this more the case than in the world of tax law. Companies (and wealthy individuals) pay handsomely for tax professionals not just to find the lines, but to push them ever outward. During my tenure at the Internal Revenue Service, the low point came when we discovered that a senior tax partner at KPMG (one of the Big Four, which by virtue of their prominence set standards for the others) had advocated — in writing — to leaders of the company’s tax practice that KPMG make a “business/strategic decision” to ignore a particular set of I.R.S. disclosure rules. The reasoning was that the I.R.S. was unlikely to discover the underlying transactions, and that even if we did, any penalties assessed could be absorbed as a cost of doing business...

[Demeter]

78. Hoenig: Restrict bank activities to core services

http://www.creditwritedowns.com/2011/06/hoenig-on-banking-regulation.html#ixzz1PjBvqySi

Below are extracts of a paper formulated by Thomas Hoenig, the President of the Federal Reserve Bank of Kansas City, to better regulate the US Financial sector. His overarching aim is to isolate core banking activities that are protected by a government guarantee from riskier investment banking and trading activities.

“This paper offers a proposal to reduce the costs and risks to the public safety net and financial system and reintroduce accountability by restricting bank activities. The designation of allowable activities is based on the principle that banks should not engage in activities beyond their core services of loans and deposits if those activities disproportionately increase the complexity of banks such that it impedes the ability of the market, bank management, and regulators to assess, monitor, and/or control bank risk taking. Such activities are not essential for conducting the socially valuable core banking activities and lead to unnecessary risk to the safety net and financial system.”

The main regulatory suggestions

* Impose Volcker Rule. Banking organizations would not be allowed to do any proprietary trading.
* Allow money market funds to break the buck. “Money market mutual and other investment funds that are allowed to maintain a fixed net asset value of $1 should be required to have floating net asset values.”
* Rescind mortgage assets bankruptcy exemption. “Bankruptcy law for repurchase agreement collateral should be rolled back to the pre-2005 rules, which would eliminate mortgage-related assets from being exempt from the automatic stay in bankruptcy when the borrower defaults on its repurchase obligation.”
* Regulate off-balance sheet transactions as on-balance sheet. “Off-balance-sheet holdings and exposures should be supervised and regulated as if they were on-balance-sheet.”

“Restricting banks to the activities mentioned above will allow capital regulation to be simplified and improved.“

PLEASE TELL ME WHY THIS MAN ISN'T CHAIRMAN OF THE FED RESERVE?

[Demeter]

80. Foreign banks OK'd to underwrite corporate debt CITI IN CHINA

OH, BOY! TALK ABOUT HOPE OVER EXPERIENCE...WHY WOULD CHINA LET THE CIA'S PET BANK IN?

http://www.chinadaily.com.cn/bizchina/2011-06/17/content_12722311.htm

The China units of HSBC Holdings and Citigroup Inc have won initial approval to underwrite corporate debt in China, paving the way for them to be the first foreign banks to win the coveted licenses, sources told Reuters on Thursday.

China's National Association of Financial Market Institutional Investors (NAFMII), an industry association under the central bank that supervises the country's debt market, has given the two banks the green light to underwrite corporate debt, two sources with direct knowledge of the approvals said.

The two banks will still have to register with the People's Bank of China, the central bank, before they can start operations, the sources said, adding that the banks may obtain final approval within the next two weeks.

[Demeter]

81. How politicians could carelessly turn a temporary softening of global recovery into something worse

http://www.economist.com/node/18836014


Politicians playing poker

The current battle over raising the federal government’s debt ceiling is driven not by careful consideration of the economics but by ideology and brinkmanship. Democrats refuse to consider serious spending reform. Republicans reject higher taxes. Many tea-party types would rather see America’s government default than compromise on spending. The result is a perilous stand-off—and a growing danger that America will have to make drastic short-term spending cuts, or even find itself forced into a technical default.

A parallel dynamic is playing out in the euro zone, where the debate about how to deal with Greece’s debt crisis has descended into a high-stakes stand-off between Germany, which wants the maturities on Greek bonds to be extended, and the ECB, which resists any debt restructuring (see article). The hope is still that Europe’s leaders will come up with a face-saving compromise at their summit on June 23rd-24th. But the longer the confrontation continues, the greater the risk of an accident: a chaotic Greek default and exit from the euro.

This dangerous political brinkmanship could also have a damaging effect by creating uncertainty. Companies are currently sitting on piles of cash because they are wondering how strong economic growth will be. Politics gives them more reason to sit on their hands rather than investing and hiring immediately, providing a boost the world economy sorely needs.

There is a real risk that the politicians’ pig-headedness could lead to disaster. The odds of a catastrophe—harsh fiscal tightening in America, or a crash in the euro zone—may not be high, but neither are they negligible. Though economic logic suggests that the world economy is just going through a sticky patch, squabbling politicians could all too easily turn it into a meltdown.

[Demeter]

82. Wall Street Braces for New Layoffs as Profits Wane

THIS IS ONE BUBBLE THAT SORELY NEEDED BURSTING

http://dealbook.nytimes.com/2011/06/16/as-profits-wane-wall-street-braces-for-new-layoffs/

Wall Street plans to get smaller this summer. Faced with weak markets and uncertainty over regulations, many of the biggest firms are preparing for deep cuts in jobs and other costs. The cutback plans are emerging even as Wall Street firms have mostly recovered from the financial crisis and are reporting substantial profits again. But those profits are not as big as they were before the crisis, and it is expected that in the coming months it will be even more difficult for firms to make money. Worries about debt in Europe and the shape that the Dodd-Frank financial overhaul rules will ultimately take, combined with the usual summer doldrums, are prompting banks to act...

Even Goldman Sachs, Wall Street’s most profitable firm, is retrenching. Senior executives at Goldman have concluded they need to cut 10 percent, or $1 billion, of non-compensation expenses over the next 12 months, according to a person close to the matter who was not authorized to speak on the record. The big pullback will cause Goldman employees, who have already been ordered to cut costs, to re-examine every aspect of their business. The firm, this person said, had not set final targets for layoffs, but Goldman was “certain” to shrink headcount in the coming months. Decisions on bonuses are still months away, but they are sure to come down as well if business does not pick up.

Bank of America is also examining its expenses and is likely in the next few months to cut some staff members from its securities division, according to one senior executive at that firm who was not authorized to speak on the record. And Credit Suisse is in the process of identifying people to cut in its investment banking unit, according to a person briefed on that bank’s plans...Morgan Stanley is expected to cut at least 300 low-producing brokers in its wealth management division this year, more than the firm initially expected, and has announced plans to cut $1 billion in non-compensation expenses over the next three years. Unlike many of its rivals, however, the firm so far has no plans to cut staff members from its investment banking and trading division, which has added hundreds of employees over the last two years or so as part of a rebuilding effort after the financial crisis.

Some firms have already wielded the ax. In January, Barclays Capital cut 600 people, or more than 2 percent of its worldwide staff, citing a business slowdown, and recently cut more employees for “performance-related reasons,” according to a person briefed on the cuts but not authorized to speak on the record. A third of the January cuts were in New York... The last significant industrywide job cuts were in early 2009. In the first quarter of that year Goldman alone cut its work force by almost 9 percent. Since then, most firms have held steady on their head counts or have added to them slightly. That will change this summer...The scale of the expected cuts is bad news for the New York City economy, which depends heavily on a booming financial industry to pay taxes and fill its restaurants. And they will come as the national economy is still struggling to find its footing since the financial crisis.

MORE TO GLOAT OVER AT LINK

[Demeter]

83. Wall Street Gets Eyed in Metal Squeeze (CORNERING ALUMINIUM)

WHY IS IT ALWAYS GOLDMAN?

http://online.wsj.com/article/SB10001424052702304186404576389680225394642.html?mod=dist_smartbrief

Goldman Sachs Group Inc. and other owners of large metals warehouses are being scrutinized by the London Metal Exchange after being accused by users like Coca-Cola Co. of restricting the amount of metal they release to customers, inflating prices. The board of the LME met on Thursday to discuss complaints from aluminum users and market traders, who say operators of warehouses, which also include J.P. Morgan Chase & Co. and Glencore International PLC, should be forced to allow the metal out more quickly to meet demand.

Aluminum prices have jumped 13% since the start of 2010 even though economic growth had been tapering off. Aluminum for delivery in three months on Thursday closed at $2,557 a metric ton on the LME, down 1.3% on the day.

Goldman, through its Metro International Trade Services unit, owns the biggest warehouse complex in the LME system, a series of 19 buildings in Detroit that house about a quarter of the aluminum stored in LME facilities...Coca-Cola and other consumers say that Metro in particular is allowing the minimum amount of aluminum allowed by the LME—1,500 metric tons a day—to leave its facilities, and that Metro could remove much more, erasing supply bottlenecks and lowering premiums for physical delivery in the process. Coca-Cola, which has complained to the LME, says it can take months to get the metal the company needs, even though warehouses are allowing aluminum to come in much more quickly. Warehouses, meantime, collect rent and other fees. "The situation has been organized artificially to drive premiums up," said Dave Smith, Atlanta-based Coca-Cola's strategic procurement manager. "It takes two weeks to put aluminum in, and six months to get it out." As a result of the complaints, the LME is considering changing its rules for warehouses, which would effectively double the minimum daily amount of metal that must be released...

In recent years, major investment banks like Goldman and J.P. Morgan and commodities houses like Glencore have been snapping up warehouses around the world, turning the industry from a disperse grouping of independent operators into another arm of Wall Street. The LME has licensed about 600 warehouses around the world...

MARKETEERS, WE HAVE TO GET INTO THE WAREHOUSE BUSINESS--SOUNDS LIKE A PROPER RACKET!

[Demeter]

84. High-Frequency Trade Sparks Commodity Flash Fires

http://www.nytimes.com/reuters/2011/06/17/business/business-us-commodities-highfrequency.html

When natural gas prices dropped by 8 percent in a matter of seconds in the early hours of Asian trade last week, one New York-based hedge fund manager said he didn't have to think twice. "The moment I heard, I ran, literally ran, to my computer and started buying," he said. "It was clear it was an HFT algo gone bad and I could profit on the rebound off the lows." He wouldn't have been the only one.

Since the infamous "flash crash" in equity markets in May 2010, that was exacerbated by high-frequency trading (HFT), seasoned traders say that violent, often inexplicable price moves are becoming more common, and allow those who are fast enough to book a quick profit as prices bounce straight back up.

In commodity markets, which have been hit by a series of mini flash crashes over the last 18 months, experts say there could now be an influx of more high-speed computer-based traders that have honed their techniques in the cut-throat equities markets -- the fastest and most electronic on earth.

Though such firms have traded commodities for years, some traders and experts say they are now applying new and more aggressive strategies that have stunned traditional players...

[Demeter]

85. THEME SONG FOR THIS SUBTHREAD

http://www.tomsmithonline.com/freestuff/oddio/iT008_192.mp3

[Demeter]

86. How the Mortgage Industry Bullies Lawyers Who Sue Them (With the Help of PR Outlet Housing Wire)

http://www.nakedcapitalism.com/2011/06/how-the-mortgage-industry-bullies-lawyers-who-sue-them-with-the-help-of-pr-outlet-housing-wire.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

One of the striking things, as the mortgage crisis has ground on, is how persistent and to some degree effective the industry incumbents have been in influencing news stories. One can argue they’ve been more successful than the TBTF banks, perhaps because if you can tank the global economy, keep your job, and still continue to pay yourself egregious bonuses, you don’t need to stoop to throttling every bit of negative coverage. The fact that near-urban legends like strategic defaults are trumpeted in the media as if they are a meaningful phenomenon, or that defenses of securitization practices by firms like K&L Gates, which have liability on their legal opinions, dominated the coverage on that issue for quite some time until more and more court decisions showed their analysis to be sorely wanting, illustrates how much spin there is in what purports to be news.

For instance, the website Housing Wire, which appears to aspire to cover the mortgage/housing space comprehensively, nevertheless has had some pretty telling omissions. You saw nary a peep of the bombshell of a story by lawyer Abigail Field in Fortune, which found that all of the mortgages securitized by Countrywide and a large proportion of those that it serviced had not been transferred to the trusts as stipulated in the pooling and servicing agreements that govern then. As we have discussed in this blog at some length, this has devastating consequences. If the borrowers challenge a foreclosure, unless the judge is bank friendly, they will probably prevail. No one wants the party that would be in a position to foreclose (someone earlier in the securitization chain) to do so; that’s an admission the securities are not mortgage backed at least in part if not in full and the investors were defrauded. And there are no retroactive fixes (why do you think document fabrications have become so common?)

Similarly, we have commented on how remarkable it is that foreclosure mills all over the US participated in widespread, systematic frauds on courts (robosigining, forgeries, affidavits being filed without the requisite personal knowledge of the affiant, document fabrication) and yet there has been a failure of state bar associations to sanction the attorneys involved.

But there is a long and proud tradition of small firm attorneys being harassed in various ways when the go up against the big dogs, and attorneys taking on the mortgage-industrial complex are getting their share of it. We know lawyers who do foreclosure defense work who have gotten death threats and had break-ins with the apparent intent to either plant bugs or copy documents (police arrived before a team of six men had gotten very far). Another is to misrepresent the conduct of an attorney in the press, as the Wall Street Journal did in a widely-derided piece on anti-foreclosure attorneys in October of last year (right on the heels of the robosigning scandal becoming national news)...Another common ruse is filing spurious motions for sanction; even if the lawyer being targeted is confident he will prevail, it still takes time and money to beat back these attacks, which diverts his attention from his pending cases. From an April post, “Housing Wire Again Runs PR Masquerading as News on Behalf of Its Big Client, Lender Processing Services“:

[Demeter]

88. What Happens if the Consumer Financial Protection Bureau Has No Director By Its Start Date?

http://www.nakedcapitalism.com/2011/06/what-happens-if-consumer-financial-protection-bureau-has-no-director-by-its-start-date.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A useful article in CNN Money (hat tip SA) describes what happens if the Consumer Financial Protection Bureau does not have a director in place by its official start-up date, July 21. That outcome looks certain, given that the House Oversight Committee has scheduled its ritual flogging of its defacto head, Elizabeth Warren, for July 14, and Senate Republicans have vowed to nix any candidate lest they get to strangle the agency by controlling its budget.

Even if Obama were to have a brain transplant and do something so out of character as to get in a fight with banks and the Republicans, the logical window of opportunity for breaking the Senate’s planned pro-forma sessions (a device to forestall a recess appointment) would be the four week end of summer Congressional break. That starts August 8. So it looks like a sure bet that the CFPB will go past July 21 with no chief in place.

Contrary to popular opinion (and bank lobbyist fond hopes) the CFPB is not stymied if a director has not been installed. What would happen is:

1. The CFPB does not get moved to the Fed. It stays in the Treasury under Geithner.

2. The CFPB cannot act on new regulatory powers created by Dodd Frank, but it can act in one of its planned and still large roles, that of the overseer of existing consumer financial regulation which is now scattered among many agencies. Those powers are transferred to the CFPB as of July 21.

So Warren could continue in her current role as minister without portfolio effective leader of the agency if Geithner were to hand off that task to her. Expect a major outbreak of Banker Derangement Syndrome if that occurs..LINK BELOW

Banker Derangement Syndrome I: Lawyers Offer to Get Rid of Their Profession to Save the TARP Banks

http://www.nakedcapitalism.com/2011/06/banker-derangement-syndrome-i-lawyers-offer-to-get-rid-of-their-profession-to-save-the-tarp-banks.html

[Demeter]

89. HIATUS

Gotta find some food, some sunshine, and something more cheerful to do for a while...perhaps a little bit more before the end of the day.

Happy Father's Day to all the REAL Fathers (I KNOW you're out there) and perdition on the psychos/sociopaths we have known...

[Demeter]

90. By the Way--It's Looking Pretty DOWN in Asia

http://finance.yahoo.com/intlindices?e=asia