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Weekend Economists' Da Doo Ron Ron January 17-18, 2010

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:07 AM
Original message
Weekend Economists' Da Doo Ron Ron January 17-18, 2010
As promised, WEE continues with our theme of send up the girls, and in honor of MLK whose birthday is celebrated Monday, a tribute to the Rev. Martin Luther King.

In effect, we are pointing to two driving forces of our previous century: women's rights and civil rights for the descendants of the slaves who built a large part of this nation. Can you imagine a bunch of white guys without women or slave labor trying to make a nation? That would be like the French trappers, killing off the beavers and making free with the native women. We know how far that went...not very. Which brings up a good point: our next effort should recognize the people who were here first, and who are still struggling to survive. Make a note of that!

So, onward with the weekend! Post them if you've got them!

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:21 AM
Response to Original message
1. This is the Second Half of the Weekend. For the First Half:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:33 AM
Response to Original message
2. Moving Your Money Can Have a Real Effect on Big Banks

People have asked whether moving your money from your giant bank to a small community bank or credit union will have any real affect on the too big to fails, given that most of their profits come from speculative investments instead of normal banking deposits.

According to the Nation, the answer is yes:

The cynics either do not understand banking or misunderstand the widespread public anger. Dennis Santiago, CEO and managing director, explained that banks compete fiercely for the core deposits provided by individual and small business accountsthis stable money is their preferred base for profitable lending. Take away core deposits, and bankers feel immediate balance-sheet stress. Expand the account base for community banks, and they gain greater stability and greater lending power. Will moving your money have an effect? Santiago asked. And by effect, I dont mean making a momentary political statement. I mean making a structural difference to the countrys financial system. The answer is yes.

The Nation points out that a wide variety of campaigns to take back power are being launched from diverse sources:

A campaign launched by faith-based community organizations associated with the Industrial Areas Foundation identifies sky-high interest rates on credit cards and other lending as the ancient sin of usury. IAF groups are asking churches, foundations and local governments to withdraw funds from the usurious banks that profit by destroying borrowers. Organized labor, likewise, has launched an aggressive movement to insist on responsible investing values for the pension-fund wealth of working people, urging state treasurers and fund managers to invest for societys interests as well as good returns.

The Nation is right. There are numerous efforts to stand up to the giant banks.

Congresswoman Kaptur advises her constituents facing foreclosure to demand that the original mortgage papers be produced. She says that if the bank cant produce the mortgage papers then the homeowner can stay in the house.

Debtors are revolting against exorbitant interest rates and fees and other aggressive tactics by the too big to fail banks. Portfolio manager and investment advisor Marshall Auerback argues that a debtors revolt would be a good thing. Popular personal finance advisor Suze Orman is highlighting the debtors revolt phenomenon on her national tv show.

What is fueling the debtors revolt? Economic conditions are obviously a large part of it. But the fact that the big banks are not abiding by free market rules, but are gambling with taxpayers money on the taxpayers dime, is a contributing factor. In other words, many people apparently feel that since the banks arent playing fair or by the normal rules of contract , they shouldnt have to, either.
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mbperrin Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:40 AM
Response to Reply #2
62. That's why these large banks have been building these little drive-by
branches for the last decade - they're liquidity traps designed to garner your deposits.

Yes, your money matters! Pull it out of big banks, and if you must bank, choose a community bank or credit union. We walked away from all financial institutions in 1978, and it feels great!
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:35 AM
Response to Original message
3. Yes, It's Okay To Walk Away From Your Mortgage Henry Blodget

As many Americans begin to realize that it will be years (if not decades) before their houses are worth what they owe on them, the idea of walking away from your mortgage is going mainstream.

Not surprisingly, the mortgage industry is doing everything it can to prevent this, including telling homeowners that they have a "moral obligation" to pay.

But do they?

Is it okay to walk away from your mortgage for no other reason than it doesn't make financial sense to keep throwing your hard-earned money away?

There's no universal answer here, but in most cases, the answer is "Yes."

Importantly, the reason is not that "Wall Street deserves it" or "We've got to teach the banks a lesson" or any of the other bogus "retribution" logic being thrown around. The reason is that you and your lender engaged in an arms-length transaction in which you balanced your competing interests and spelled out your agreement and obligations in a clear contract. And unless that contract states that you have a "moral obligation to pay," you don't.

Specifically, when you borrowed money to buy your house, the bank or mortgage-lender evaluated the risk of the transaction and concluded that the risk of your not paying was a risk worth taking. To protect its money, the lender also required that you pledge the house as collateral, and it required you to have some equity in the house as an additional cushion. In the event that you didn't pay, the lender retained the right to seize the house, sell it, and pay itself off before you got your equity. The lender loaned you the money because it concluded that this was a smart business decision.

You, meanwhile, also made a business decision. You decided to borrow money to buy your house even though it meant risking your equity, home, and credit rating.

And now it turns out that both of you made a bad decision.

Fortunately, you don't have to fight about what happens next. The contract spells everything out: If you stop paying, the lender gets the house. That's it. Unless the contract specifically differentiates between a failure to pay based on hardship (involuntary) and a failure to pay based on a collapse in the value of the house (voluntary), there's no difference. If you had a "moral obligation to pay," that would be spelled out in the contract.

Now, compare this to a situation in which you DO have a moral obligation to pay: When you borrow money from a friend at no interest, for example. THAT is a moral obligation to pay. In this case, your friend did not lend you money to make a profit. Your friend loaned you money as a favor--with no collateral or contract.

And here's another way of looking at it: If you have a "moral obligation" to pay your mortgage, doesn't the bank have a "moral obligation" to keep you in your house? After all, they loaned you the money to buy it, got your hopes up, moved your family, etc. (And, no, of course the bank doesn't have this moral obligation).

Just because you don't have a moral obligation to pay your mortgage, of course, doesn't mean it's smart or even the right thing to walk away. In fact, the best solution would likely be for you and your lender to compromise (mortgage modification). That's what companies often do. Also, abandoning your house can screw your neighbors. And you may live in in a state with "recourse" laws, in which your mortgage lender can go after other assets. Etc. You can learn more about that here >.

But don't let the mortgage industry guilt you into paying from some "moral obligation." You both made a business decision. It turned out to be a bad one. That's why you have a contract.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:17 AM
Response to Reply #3
36. We are all Melmottes now /

...Roger Lowenstein in the NY Times urges underwater/negative equity homeowners to Walk Away From Your Mortgage!. . Lowensteins key point is that businesses (including those owned or controlled by the banks themselves) treat default as a straightforward business decision, to be adopted whenever it is profitable to do so. Lowenstein gives a number of examples where leading banks like (inevitably) Goldman Sachs have engaged in strategic default and urges his readers to do likewise. The piece is in a section headed The Way We Live Now and its striking that its taken more than 100 years for the business ethics of Augustus Melmotte to percolate through to the American middle class

To be fair, its only in the last thirty years or so that such ethics have become dominant in the corporate sector, to the point where a board that rejected profitable opportunities to stiff their creditors would now be regarded as having violated its fiduciary obligations to shareholders (particularly if the creditors are workers). And despite all the talk about shareholder value, a CEO who passed up opportunities for personal enrichment at the expense of shareholders would be regarded by his or her fellows as a mug.

Millions have defaulted already (one in eight mortgages is currently in arrears). Bankruptcy is once again as common as divorce. When defaulting on debt is this common, it is hard to sustain any sort of social stigma or internalised notion that this is anything other than a financial option, like refinancing an existing loan. And, as with divorce, we must soon be reaching the point where most people who take out loans will do so in the knowledge that default is an option.

The question is can the consumer credit system survive this? Probably it can, but the system will need some radical changes. Its worked for several decades on the basis of creditworthiness criteria that work on the assumption that (nearly) everyone will repay their debts if they can. Until recently, the checks could also rely on the assumption that people would be more-or-less honest in the information they provided in their applications. The financial system, by promoting liar loans colluded in the destruction of the second assumption, and by leading the way in strategic default, helped to destroy the first.

The problem for lenders now is that they will increasingly have to act on the assumption that their borrowers (including those who appear creditworthy on the old standards) are planning, at a minimum, to use default as an insurance option. The only good way to protect against this is to demand lots of secure collateral. That means less liberal credit (and, given higher default rates, higher interest rates) for everyone and no credit at all for lots of us.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:38 AM
Response to Original message

Yves here. Several readers wrote, appalled by a Time Magazine article defending Timothy Geithner. Marshall Auerback took it upon himself to examine the quality of its reasoning:

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0.

It was only a matter of time before someone emerged to defend Tim Geithner and his actions in light of the odious decision to bail out AIG. Michael Grunwald of Time Magazine (the publication which anointed Ben Bernanke Person of the Year in 2009), has likened the attacks on Geithner to someone who booed Lassie for tracking mud on the carpet after saving that kid in the well.

In Geithners defense, Grunwald trots out the usual sanctity of contract arguments, although it is interesting that such a sacrosanct principle was deemed to be irrelevant when thousands of UAW workers were forced to rework their supposedly inviolable contracts to save GM and Chrysler: Nobody has explained how or with what authority anyone could have invalidated AIGs contracts with all those far-flung institutions on the fly, or why that wouldnt have worsened the panic.

Lets be clear: contracts are modified all the time, provided the stakes are high enough. It seems absurd for institutions to invoke sanctity of contract when the large financial firms who insist on invoking this principle conveniently omit the fact that they would be toast other than by virtue of the munificence of the bailouts Grunwald is seeking to defend.

The putrid nature of these contracts aside, the justification for defending Geithners actions seems questionable. The bailouts worked, we are told. The banking system is supposedly functioning and the cost of inaction allegedly would have been far greater panic, untold bank runs, and vastly greater economic misery. Well, if one defines the practice of banking as proprietary trading, the creation and sale of toxic instruments such as credit default swaps, and generating profits via credit card loan sharking activities, then yes, the banking system is working again. But how is that helping the rest of us? And how does it contribute to future financial stability?

Additionally, the cost of TARP (to which Grunwald alludes) allegedly represents a mere 1% of GDP (versus the normal 5%-10% cost normally associated with crises of this magnitude, according to the Cleveland Fed). However, such superficial accounting conveniently ignores the additional trillions of dollars of financial guarantees and hidden subsidies which have boosted banks profits, the regulatory forbearance embraced in regard to mark to market, the reduction of interest rates to near zero, guaranteeing billions of dollars of financial institutions debts via the FDIC. All of these off balance sheet items helped banks produce profits, subsequently paid out in the form of large bonusesplus ca change And that is before we have begun to quantify the social and economic costs associated with the privations that come with double digit unemployment.

It is far too premature to argue that the bailouts have worked, so the question of costs and profits is nonsensical. The $45 billion in profits recorded by the Federal Reserve simply constitutes a reshuffling of assets on the governments consolidated balance sheet. It was money that could have been well spent propping up real demand in the economy, not returned to the Treasury (which can always create new net financial assets).

And there were alternatives to the bailouts: the government, via the FDIC, could have just taken over the operating concerns, repaired the capital bases and carried on offering services, which would have obviated the need to pay out sums to other banks via credit default swaps, given that the issue of solvency is no longer an issue when the liabilities are fully backstopped by the government.

It is worthwhile contrasting the behavior of the government today with the actions undertaken by FDR. During the period in which the banking system was being restructured under Jesse Jones, Chair of the Reconstruction Finance Corporation, the RFC required letters of resignation from the top three bankers of any institution receiving aid. These were not always accepted, but their mere existence was a potent deterrent to repeat behavior.

How many managers have been replaced during the current crisis? How many are being charged for fraudulent behavior? In the words of former S&L investigator Bill Black: Zero indictments and zero convictions of senior insiders at specialty lending companies. It is also noteworthy to contrast the minimal resources provided to the Department of Justice and FBI today with the vast institutional and regulatory support for criminal convictions during the Savings & Loan crisis.

Which leads to a broader point: how is it possible to proclaim the actions undertaken to save the system a success, when we still have little understanding of how the crisis occurred? Why do the Treasury and the Federal Reserve persistently frustrate every attempt to gain better understanding via endless court challenges, obfuscation, lies and delaying tactics? Why is Congress being so dilatory in subpoenaing JP Morgan Chase, Goldman Sachs, Bank of America, Lehman Brothers, Bear Sterns or any other financial institution that pushed toxic mortgage-related securities? Do they too have something to hide?

This is one of the reasons why there is so much outrage being directed at the decision makers who, allegedly made the best of a horrible situation. Grunwald fails to understand this. Yes, there should be (and is) legitimate anger directed at the compulsive gamblers who created that situation (especially given the extent to which they are using taxpayers dollars which rescued their institutions to lobby against reforms designed to prevent a recurrence). But it is totally wrong to assert that the House of Representatives with strong support from Geithner and the Obama Administration has passed a financial-reform bill designed to address all those problems

The legislative and regulatory responses have been pathetic on the part of Congress, Treasury, the SEC, and the President himself, none of whom have the guts to introduce genuinely tough measures to target the break-up of todays destructive financial behemoths and restrict the range of activities that created the crisis in the first place. Potemkin-like reforms and pinprick tax increases do not solve the problem. Why not regulate the banks like utilities? If we are to continue the practice of securitization (not my first choice, as I would prefer to maintain a hold to maturity standard for the banks), why not rescind SEC rule 3a-7 which exempted securitized structures the main elements of the so-called shadow banking system from registration and regulation under the Investment Companies Act, as Professor Jan Kregel has suggested?

Yes, Mr. Grunwald, lets demand some real fireproofing from our government. If they actually provided that, then we could probably even stomach the notion of Tim Geithner staying on in Treasury, although its hard to imagine the architects of our current misfortune suddenly metamorphosing from a wrecking crew into the financial/regulatory architectural equivalent of Frank Lloyd Wright, building safe, sound structures, which last for generations and are admired, rather than reviled.
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:18 PM
Response to Reply #4
31. At least Lassie only tracked mud into the living room. n/t
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 08:53 AM
Response to Original message
5. Is tomorrow a market holiday?

I know the banks are closed, and we get no mail.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 10:58 AM
Response to Reply #5
7. Yes
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 11:25 AM
Response to Reply #7
8. Cool, we can dance in the streets!

Martha & The Vandellas "Dancing in the Streets"

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 11:31 AM
Response to Reply #7
9. Shout!

The Shangri-Las singing 'Shout' on the Lloyd Thaxton Show.
Sorry it's a poor quality kinescope.

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 02:30 PM
Response to Reply #9
18. Radical.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 09:56 AM
Response to Original message
6. The girls
Yes, I'm a radical feminist. And yes, I know this is MLK week-end. But we would not have had a Dr. King without the support of the women, some who did quiet things like riding on buses, some who did noisy things like disrupting conventions, and some who just sang and sing their hearts out.

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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 12:53 PM
Response to Reply #6
13. Bread and Roses belongs in there somewhere don't you think
Even though it was before MLK's time, without the 1912 female led Bread and Roses strike blacks were not even allowed in the unions.

Song Lyrics

As we go marching, marching, in the beauty of the day,
A million darkened kitchens, a thousand mill lofts gray,
Are touched with all the radiance that a sudden sun discloses,
For the people hear us singing: Bread and Roses! Bread and Roses!

As we go marching, marching, we battle too for men,
For they are women's children, and we mother them again.
Our lives shall not be sweated from birth until life closes;
Hearts starve as well as bodies; give us bread, but give us roses.

As we go marching, marching, unnumbered women dead
Go crying through our singing their ancient call for bread.
Small art and love and beauty their drudging spirits knew.
Yes, it is bread we fight for, but we fight for roses too.

As we go marching, marching, we bring the greater days,
The rising of the women means the rising of the race.
No more the drudge and idler, ten that toil where one reposes,
But a sharing of life's glories: Bread and roses, bread and roses.
Our lives shall not be sweated from birth until life closes;
Hearts starve as well as bodies; bread and roses, bread and roses.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 01:48 PM
Response to Reply #13
15. Absolutely. There were so many, so so so many.
I made the mistake this morning of doing some more googling and landed here

March 19, 2008. TWO THOUSAND EIGHT. The fifth anniversary of The War. It's always capitalized. The War. As if there is only one.

Or maybe there is and it's endless, on-going, perpetual.

And I listened to that unmistakable voice, the same one I listened to 40-plus years ago when it was another The War, and I started bawling.

Forty years after King's death, and the songs still needed to be sung. Now it's almost another two years gone, and how many more deaths will it take 'til we know that too many flowers have gone?

Tansy Gold, sayin' I'm sick and tired of bein' sick and tired, too, Fannie Lou
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 03:21 PM
Response to Reply #15
22. Yeah. Here's more: (Buffy Sainte-Marie - My Country 'Tis of Thy People You're Dying)
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:03 PM
Response to Reply #22
25. that one I can't watch
And old BF gave me the record for Christmas, 1968 and he couldn't understand why I burst into tears.

(I "found" him a few weeks ago; he's working for the Swedish govt.)


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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 03:12 PM
Response to Reply #13
20. Bread and Roses: The 1912 Lawrence textile Strike

some history...

Bread and Roses: The 1912 Lawrence textile Strike
By Joyce Kornbluh

It's so sad that the freedoms and rights the people of our country protested and died for their working conditions decades ago, that people today don't realize they are slowly being eroded away.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:10 PM
Response to Reply #20
26. This Forgotten Bit of History (And You Can Be Sure It Isn't Covered in MA Textbooks)
is exactly why I have to laugh when people get all hot and bothered about the possibility of losing Kennedy's Senate seat to a Teabagger.

Those anti-everything people never left Massachusetts--they stay like mold. It's the fresh blood and the ambitious and the newcomers and the hungry who move. Massachusetts today is just as it was in 1912, only the mills are gone to the South or to Asia, and the Harvard boys no longer joint the militia.

I graduated from the school that used to be the Lowell Textile Institute. While I attended, the textile dept. was dying but still there, the machinery in drafty, pigeon-infested, unheated rooms, which were also used by various undergrad classes.

The anti-everything people are especially good at forgetting past crimes (unless they were the "victims" in which case there's no forgetting ever). but the immigrants, including at least one of my great-grandmothers, who fled the poverty of a farm in Poland to work the silk mills in North Hampton, MA, did not forget. They did forgive, however, and then died, leaving their descendants to improve the American population.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 02:10 PM
Response to Reply #6
17. Nina Simone - Ain't Got No...I've Got Life
Edited on Sun Jan-17-10 02:15 PM by Ghost Dog
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 12:49 PM
Response to Original message
10. Franklin Roosevelt's First Inaugural Address: A Fitting Reminder For Our Crisis Today

I remember my grandmother telling me how she and her family listened to this speech on the radio, in the dark days in the depths of the Great Depression. It is still hard for us now to appreciate how desperate and fearful the people were then. We think that we know, but most of us do not genuinely understand. How can we?

"Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone."

I never read it in full, but like most people just remember the famous quote about fear.

It's worth reading this. It shows a mindset in terrible, overwhelming times that was determined to set things right, not to take care of business, but to address the business of the people directly, and not only the immediate concerns of the crisis but the long term problems that caused the financial collapse in meaningful ways.

Ways, I should add, that stood the test of time until they were overturned in the 1990's by the efficient markets ideology and a multi-million dollar lobbying effort by Wall Street.

"There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly. Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency."

Compare these words with those of the current president, and his slowness to respond with effective reform, and the ordering of his priorities. Does Obama do anything that is not first vetted by the corporate status quo? The most elite elements of the American establishment engaged in a plot to overthrow the Roosevelt administration, and found an investment climate to their liking in fascist Germany, even into the 1940's. How soon we forget.

Like him or not, FDR was a giant, a great leader, and his priorities were clear in his words and actions. He was a voice of hope and concern for the individual when the better part of the developed world was entwining itself in fascism, corporatism, militarism, and the spiral of self-destruction.

In comparison, for all his hypnotic rhetoric, Obama seems very insubstantial, and you'll forgive me for speaking so plainly, he appears to be a cheap bullshit artist in the service of special interests. And the majority of the Congress with him.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 12:49 PM
Response to Reply #10
11.  Franklin D. Roosevelt First Inaugural Address Saturday, March 4, 1933

"I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels.

This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper.

So, first of all, let me assert my firm belief that the only thing we have to fear is fear itselfnameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.

Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.

Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities.

It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character.

There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.

Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency.

There are the lines of attack. I shall presently urge upon a new Congress in special session detailed measures for their fulfillment, and I shall seek the immediate assistance of the several States.

Through this program of action we address ourselves to putting our own national house in order and making income balance outgo. Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.

The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first consideration, upon the interdependence of the various elements in all parts of the United Statesa recognition of the old and permanently important manifestation of the American spirit of the pioneer. It is the way to recovery. It is the immediate way. It is the strongest assurance that the recovery will endure.

In the field of world policy I would dedicate this Nation to the policy of the good neighborthe neighbor who resolutely respects himself and, because he does so, respects the rights of othersthe neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.

If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we can not merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.

Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.

It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.

I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.

But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisisbroad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less.

We face the arduous days that lie before us in the warm courage of the national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.

We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.

In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come."
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 12:52 PM
Response to Original message
12. is going rogue

Within 12-hours of Google's dramatic announcement about possibly pulling the plug on, some serious changes were visible in the Chinese version of the search engine - the 'self-censorship' has gone, and was clearly going rogue.

Firstly, the auto-suggest function on reappeared. This got disabled after last summer's major crackdown on web pornography and indecency in China, which saw getting publicly humiliated and reprimanded on state-TV's news programmes. Essentially, the auto-suggest was suggesting some highly, ummm, suggestive phrases, and Google quickly pulled that feature.

Also visible on the newly 'liberated' is that text and image searches are now showing some highly sensitive photos and page results, which were definitely not appearing before this week's ultimatum from Google to the Chinese authorities.

This is contrary to Google own official line: David Drummond - Google's Chief Legal Officer, and the author of the original blog post - was on NPR's All Things Considered show the other day (full audio is embedded at the bottom of this post), and was asked if has removed its 'filters', to which he replied:

"No, we haven't done that yet. What we've said is, going forward, we're going to end that practice. We have asked the government to start some discussions about how we can operate an unfiltered search engine in China, and failing that we'll have to shut it down, or do something else. But as of right now it's operating as we were, until we talk to the government."

But Mr. Drummond's words are contradicted by the evidence of our own eyes right now.

Furthermore, it is highly likely that, as it appears right now, is in contravention of the law. As any website must in China, has an ICP (Internet Content Provider) license - clearly displayed on the front page - which covers the suitability of its content (a highly subjective area) as well as legal technicalities. I suspect that its current content, and the auto-suggest feature, are deemed most 'unsuitable'. unfiltered search results

Stayin' alive...

And yet, 72 whole hours after apparently 'going rogue', has not been blocked. This is curious, since websites that display sensitive material can be blocked within hours - as happened with a few months ago, and which has not yet been unblocked.

This is a testament to how tricky a situation this is for the authorities, who usually block sites with impunity. Clearly, the size of, a palpable amount of public opinion and good-wishes behind Google, and the hugely complex nature of the problem (encompassing hacking, cyber-warfare, freedom of speech, and operating within local laws) mean that the usual ban-hammer is not a suitable solution. We know that Google people are in direct talks with authorities this week, and so we've yet to see a counter-measure to Google's ballsy opening-gambit.

Many of it 700 employees, however, have been given a rest period of an unspecified length, with the official line still being that 'talks are ongoing'.

Twists and turns

Here are two of my favourite twists in the ongoing saga:

McAfee, the maker of security and anti-virus software, is blaming Microsoft's Internet Explorer web-broswer for unwittingly enabled the 'hacking' via IE's lax, aged security measures. Here's the story in the New York Times Bits blog. A good reason for dissidents to buy a Mac; or, at least, use Firefox or Chrome web-browser.

However, Adobe has been blamed too, with vulnerabilities in its Adobe Reader/Acrobat software meaning that the spyware and phishing tools that caused the Gmail breaches may well have been delivered by a malicious PDF file: Ars Technica has the lowdown on VeriSign's security report on this matter. It also raises the question of why the "other 30 companies" similarly attacked did not speak out at all, prior to Google's revelations.

David Drummond radio interview...

Here's the NPR All Things Considered show interviewing Google's CLO, and lasts about five minutes (opens NPR's web-based Media Player in your web-browser).
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 12:54 PM
Response to Reply #12
14. Will China squeeze the West on rare earth metals in the coming decade?

Here's a really cool use of FirstRain that we've been running - although a scary one at a macro economic level.

Back in August the NY Times ran an article on rare earth metals which prompted us to set up an ongoing FirstRain saved search on the issue. Here's the essence of what it said:

In each of the last three years, China has reduced the amount of rare earths that can be exported. This years export quotas are on track to be the smallest yet. But what is really starting to alarm Western governments and multinationals alike is the possibility that exports will be further restricted.

The angst is intensifying as many believe China could eventually halt their exports of these elements. This has prompted investors to speculate on the winners and losers which also then gets delivered to us in the daily email report.

To stay on top of this we set up folder with the topic Rare Earth Elements AND China (you can see this in the search bar):

And also set up a daily email report from the saved search to keep us up to date on the issue:

This is where it gets scary. The results of this ongoing report show the growing concern that China will need everything it is producing and it may be only a matter of time until the West is cut off from critical rare earth metals.

For example from IEEE Spectrum this month:

A single country, China, mines more than 95% percent of the worlds supply of rare earth metals, found in permanent magnets, phosphors, lasers, capacitors, and superconductors. As recently as 2004, China used less than half of the rare earth metals it produced, but according to an estimate by the Industrial Minerals Co. of Australia, in Mount Claremont, Chinas domestic demand will overtake its production in less than 10 years. Now Beijing is considering banning exports of some rare earth elements and limiting shipments of others to 35 000 metric tons a year, which would immediately threaten not just electronics manufacturing across the globe but also hybrid vehicles. A Toyota Prius, for example, requires about a kilogram of neodymium for its electric motor and as much as 15 kg of lanthanum for its battery pack.

or from Resource Investor:

China has a lock on the raw materials required for green energy technology like Indium and Gallium used in thin-film solar modules and Tantalum, which is used in the microchips for cell phones. In addition, China has an abundance of industrial metals like lithium and cobalt, which are used in batteries. If China decides to halt their exporting of these materials, they could essentially monopolize the manufacturing of many sought after components, which will have a large and lasting impact on many industries.

We're headed for a few countries having the "World by its balls" (the quote is courtesy of Business Insider) and here you can read a fascinating presentation. The U.S. has the reserves but it's a small matter of politics (i.e. a very large issue) to get mining going so we don't have our collective balls in a vise.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:41 PM
Response to Reply #14
and wont be anytime soon, according to Minxin Pei, who says its political and economic situation is more precarious than it looks.

With the United States apparently in terminal decline as the worlds sole superpower, the fashionable question to ask is which country will be the new superpower? The near-unanimous answer, it seems, is China. Poised to overtake Japan as the worlds 2nd largest economy in 2010, the Middle Kingdom has all the requisite elements of poweran extensive industrial base, a strong state, a nuclear-armed military, a continental-sized territory, a permanent seat on the United Nations Security Council and a large population baseto be considered as Uncle Sams most eligible and logical equal. Indeed, the perception that China has already become the worlds second superpower has grown so strong that some in the West have proposed a G2the United States and Chinaas a new partnership to address the worlds most pressing problems.

To be sure, the perception of China as the next superpower is grounded, at least in part, in the countrys amazing rise over the last three decades. Powered by near-double digit economic growth since 1979, China has transformed itself from an isolated, impoverished and demoralized society into a confident, prospering global trading power. With a GDP of $4.4 trillion and total foreign trade of $2.6 trillion in 2008, China has firmly established itself as a premier world economic powerhouse.

Yet, despite such undeniable achievements, it may be too soon to regard China as the worlds next superpower. Without doubt, China has already become a great power, a status given to countries that not only effectively defend their sovereignty, but also wield significant influence worldwide on economic and security issues. But a great power is not necessarily a superpower. In world history, only one countrythe United Stateshas truly acquired all the capabilities of a superpower: a technologically advanced economy, a hi-tech military, a fully integrated nation, insuperable military and economic advantages vis--vis potential competitors, capacity to provide global public goods and an appealing ideology. Even in its heydays, the former Soviet Union was, at best, a one-dimensional superpowercapable of competing against the United States militarily, but lacking all the other crucial instruments of national power.

Meanwhile, the challenges China faces in becoming the next superpower are truly daunting. Even as its economic output is expected to exceed $5 trillion in 2010, per capita income in China will remain under $4000, roughly one-tenth of the level of the United States and Japan. More than half of the Chinese population still live in villages, most without access to safe drinking water, basic healthcare, or decent education. With urbanization growing at about 1 percent a year, it will take another three decades for China to reduce the size of its peasantry to a quarter of the population. As long as China has an oversized peasantry, with hundreds of millions of low-income rural residents surviving on the margins of modernity, it is unlikely to become a real superpower.

To believe that China is the next superpower, its also necessary to assume that Chinas super-charged economic growth will continue. Unfortunately, relying on any countrys past performance to predict its future prospects is a risky proposition. Chinas stunning economic growth performance since 1979 notwithstanding, its ability to sustain the same level of growth is by no means assured. In fact, the likelihood that Chinas growth will slow down significantly in the next two decades is real and even substantial. Several favourable structural factors, such as the demographic dividend (derived from a relatively younger population), virtually unlimited access to the global markets, high savings rates and discounted environmental costs, will gradually disappear. Like Japan, China is becoming an ageing society, due in no small part to the effectiveness of the governments stringent one-child policy (which limits urban families to a single child). The share of the population 60 years and above will be 17 percent by 2020, and this ageing will increase healthcare and pension costs while reducing savings and investments. Although the exact magnitude of the reduction in the savings and the increase in healthcare and pension spending is uncertain, their combined negative effects on economic growth could be substantial...

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 02:01 PM
Response to Original message
16. Does this qualify? (+ LEAP 2020)
Edited on Sun Jan-17-10 02:03 PM by Ghost Dog (Julie Driscoll, Brian Auger & Trinity - Wheels On Fire (1968)) - thanks for the reminder, Hugin (my 'sixties were 'late' 'sixties). Hmmm, that reminds me... :smoke:

Also, the LEAP 2020 team continues to predict currency collapse:

We already took a look at the paradox of the gold market in the GEAB N34, showing that if the market for the yellow metal seemed to be well controlled by the Fed and the large central banks to prevent any significant appreciation in the gold price, nevertheless, because of the global systemic crisis, the structural collapse of United States influence (and thus the Fed) and the related breaking up of the international monetary system inherited from 1971, gold was a safe investment in times of great uncertainty. As a reminder, since the publication date of the GEAB N34 gold has gained more than 30% in US Dollars and more than 23% in Euros. In addition it has gained more than 100% in US Dollars and more than 85% in Euros since our first recommendation to diversify out of other investments in favour of physical gold (up to a third of assets) given in 2006.


But if gold has seen its price rise considerably since then, it is not the result of any market move towards greater transparency and less manipulation by the US Federal Reserve and its major supporters. The three main tools used in an attempt to prevent any return of gold to the centre of the international monetary system are still in place, that is:

. the development of a paper gold market swamping the physical gold market in a sea of fictitious contracts which are essentially pledges on gold which in reality doesnt exist (or, which amounts to the same, is repeatedly used for different contracts)

. the falsifying of the levels of actual physical gold reserves, especially those of the United States, which have not been subject to independent audit for decades

. the communication tactic, via major economic and financial media, of systematically suggesting that investment in gold is out of date, reserved for old people who only swear by gold in the same way as they would tell stories of forgotten wars, or by gold bugs whom the precious metal turns mad.

As the whole world has been able to see over the course of these last forty years, and until recently, this strategy worked extremely well, even leading a number of other countries, United Kingdom in the first place (1), to divest themselves of their gold reserves at rock bottom prices. This story thus shows very clearly the necessity for decision-makers, either to have a strong personal ability to anticipate events, or to have access to such quality anticipation. In this case, the bill for not anticipating events will reach at least ten billion USD.

But if the market, organised in such a way to permit gold to be held at a distance from the international monetary system for forty years, has continued to function, what is it that has changed and made this strong rise in the gold price possible? It is the overturning of a factor essential to world order, due to the growing impact of the systemic crisis and the entry into the phase of worldwide geopolitical dislocation: the US Federal Reserve no longer has the means to battle against the old enemy of US Dollar hegemony which gold represents. This loss of ability is, of course, a complex phenomenon, consisting of many facets which we analyse in this GEAB edition.

/...!-The-Decade-2... (Julie Driscoll - Season Of The Witch (1968))
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hamerfan Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 02:54 PM
Response to Original message
19. Get your fix here!

It's a link to 60's Chicks Radio.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 03:18 PM
Response to Reply #19
21. Thanks, playing now!


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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 03:47 PM
Response to Reply #21
23. Melanie Safka - Leftover Wine
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 05:52 PM
Response to Reply #23
24. Melanie -- yes -- I was humming this in the shower this morning
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:44 PM
Response to Reply #24
30. That's it.
And see Mr. Palast below.

I'm speechless again now.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:18 PM
Response to Original message
27. The Right Testicle of Hell: History of a Haitian Holocaust by Greg Palast /

1.Bless the President for having rescue teams in the air almost immediately. That was President Olafur Grimsson of Iceland. On Wednesday, the AP reported that the President of the United States promised, "The initial contingent of 2,000 Marines could be deployed to the quake-ravaged country within the next few days." "In a few days," Mr. Obama?

2.There's no such thing as a 'natural' disaster. 200,000 Haitians have been slaughtered by slum housing and IMF "austerity" plans.

3.A friend of mine called. Do I know a journalist who could get medicine to her father? And she added, trying to hold her voice together, "My sister, she's under the rubble. Is anyone going who can help, anyone?" Should I tell her, "Obama will have Marines there in 'a few days'"?

4.China deployed rescuers with sniffer dogs within 48 hours. China, Mr. President. China: 8,000 miles distant. Miami: 700 miles close. US bases in Puerto Rico: right there.

5.Obama's Defense Secretary Robert Gates said, "I don't know how this government could have responded faster or more comprehensively than it has." We know Gates doesn't know.

6.From my own work in the field, I know that FEMA has access to ready-to-go potable water, generators, mobile medical equipment and more for hurricane relief on the Gulf Coast. It's all still there. Army Lt. Gen. Russel Honor, who served as the task force commander for emergency response after Hurricane Katrina, told the Christian Science Monitor, I thought we had learned that from Katrina, take food and water and start evacuating people." Maybe we learned but, apparently, Gates and the Defense Department missed school that day.

7.Send in the Marines. That's America's response. That's what we're good at. The aircraft carrier USS Carl Vinson finally showed up after three days. With what? It was dramatically deployed without any emergency relief supplies. It has sidewinder missiles and 19 helicopters.

8.But don't worry, the International Search and Rescue Team, fully equipped and self-sufficient for up to seven days in the field, deployed immediately with ten metric tons of tools and equipment, three tons of water, tents, advanced communication equipment and water purifying capability. They're from Iceland.

9.Gates wouldn't send in food and water because, he said, there was no "structure ... to provide security." For Gates, appointed by Bush and allowed to hang around by Obama, it's security first. That was his lesson from Hurricane Katrina. Blackwater before drinking water.

10.Previous US presidents have acted far more swiftly in getting troops on the ground on that island. Haiti is the right half of the island of Hispaniola. It's treated like the right testicle of Hell. The Dominican Republic the left. In 1965, when Dominicans demanded the return of Juan Bosch, their elected President, deposed by a junta, Lyndon Johnson reacted to this crisis rapidly, landing 45,000 US Marines on the beaches to prevent the return of the elected president.

11.How did Haiti end up so economically weakened, with infrastructure, from hospitals to water systems, busted or non-existent - there are two fire stations in the entire nation - and infrastructure so frail that the nation was simply waiting for "nature" to finish it off?

Dont blame Mother Nature for all this death and destruction. That dishonor goes to Papa Doc and Baby Doc, the Duvalier dictatorship, which looted the nation for 28 years. Papa and his Baby put an estimated 80% of world aid into their own pockets - with the complicity of the US government happy to have the Duvaliers and their voodoo militia, Tonton Macoutes, as allies in the Cold War. (The war was easily won: the Duvaliers death squads murdered as many as 60,000 opponents of the regime.)

12.What Papa and Baby didn't run off with, the IMF finished off through its "austerity" plans. An austerity plan is a form of voodoo orchestrated by economists zomby-fied by an irrational belief that cutting government services will somehow help a nation prosper.

13.In 1991, five years after the murderous Baby fled, Haitians elected a priest, Jean-Bertrand Aristide, who resisted the IMF's austerity diktats. Within months, the military, to the applause of Papa George HW Bush, deposed him. History repeats itself, first as tragedy, then as farce. The farce was George W. Bush. In 2004, after the priest Aristide was re-elected President, he was kidnapped and removed again, to the applause of Baby Bush.

14.Haiti was once a wealthy nation, the wealthiest in the hemisphere, worth more, wrote Voltaire in the 18th century, than that rocky, cold colony known as New England. Haiti's wealth was in black gold: slaves. But then the slaves rebelled - and have been paying for it ever since.

From 1825 to 1947, France forced Haiti to pay an annual fee to reimburse the profits lost by French slaveholders caused by their slaves successful uprising. Rather than enslave individual Haitians, France thought it more efficient to simply enslave the entire nation.

15.Secretary Gates tells us, "There are just some certain facts of life that affect how quickly you can do some of these things." The Navy's hospital boat will be there in, oh, a week or so. Heckuva job, Brownie!

16.Note just received from my friend. Her sister was found, dead; and her other sister had to bury her. Her father needs his anti-seizure medicines. That's a fact of life too, Mr. President.

Through our journalism network, we are trying to get my friend's medicines to her father. If any reader does have someone getting into or near Port-au-Prince, please contact immediately.

Urgently recommended reading - The Black Jacobins: Toussaint L'Ouverture and the San Domingo Revolution, the history of the successful slave uprising in Hispaniola by the brilliant CLR James.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 06:38 PM
Response to Original message
28. Consent-Only Overdraft Protection: Maybe Not So Great

Starting on July 1st, the Federal Reserve has required banks to get consent from customers before enrolling them in overdraft protection programs so they can experience the excitement of cascading overdrafts. The problem is that consumers may be trading overdraft fees for insufficient funds fees and good old-fashioned bounced checks...and end up worse off in the long run.

Bob Sullivan at the Red Tape Chronicles (who will be at our next Consumerist meetup on January 21) looked at financial life under the new rules, and offers advice based on your financial situation.

If you have overdrawn your account in the past year, think before you opt out. A bounced check can have more far-reaching consequences than an overdraft fee. You might end up in the ChexSystems database and lose check-writing privileges, for example. So don't opt-out until you are ready to stay out of the red.

Consumers who live near a zero balance will find that so-called account holds placed on debit purchases by gas stations and some other businesses can cause headaches in a post-overdraft-fee world. Holds, which exceed the transaction price, can freeze funds for days and cause confusing time lags. Be cautious using your debit card for purchases at firms that place holds. One tip: If you must use debit, use a PIN instead of a signature. PIN-debit transactions generally are processed faster than signature-debits, so that will help you keep your account balance up to date.

Of course, the best way to prevent issues with overdrafts is to not let your bank account hover near zero. However, life happens, and sometimes that's not possible.



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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-17-10 09:38 PM
Response to Original message
32. Well, Sunday Has Run Its Course, But We'll Be Back Monday
filling in a few more pieces of the jigsaw puzzle of life and times in these United States. See you soon!
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:06 AM
Response to Original message
33. Outlook better for some regional banks

Some banking analysts are bullish on U.S. regional banks as they expect fourth-quarter results to bring improved earnings per share and capital-ratio visibility, Barron's reported on Sunday.

Credit Suisse analyst Craig Siegenthalter says that while some regional banks will probably miss earnings estimates when results are announced in coming weeks, he believes the rate of change in non-performing assets and earnings charge-offs will move close to zero, Barron's reported.

Loan-loss provisions should peak in the fourth quarter, Siegenthalter said.

"If problem loans don't grow as much as expected and the deceleration is bigger than expected, that will cause a lot of buying of these stocks," Barron's quoted Siegenthalter as saying.

Stocks he rates as "outperform" include Bank of Hawaii Corp (BOH.N), Fifth Third Bancorp (FITB.O), First Horizon National Corp (FHN.N) and SunTrust Banks Inc (STI.N), the newspaper said.

David Kovacs, a chief investment officer at Turner Investment Partners, told Barron's his favorites include Regions Financial (RF.N), Huntington Bancshares Inc (HBAN.O), Marshall & Ilsley Corp (MI.N) and Susquehanna Bancshares (SUSQ.O).

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 09:11 AM
Response to Reply #33
42. more green shoots

When commercial real estate goes bankrupt, the regional banks will find themselves awash in bloody losses.

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:09 AM
Response to Reply #33
46. US Commercial Real Estate a Multi-Trillion Dollar Bloodbath in Progress

1/16/10 US Commercial Real Estate a Multi-Trillion Dollar Bloodbath in Progress

Residential Real Estate in the US is in serious trouble, and a drag on the real economy. And yet it is holding up a bit because the Fed is buying over $1 Trillion in mortgage debt, presumably at artficially high prices to support it, and of course the too big to fail Wall Street Banks who were wallowing in the residential real estate bubble.

Commercial Real Estate is much worse, a bloodbath in progress. Down 42% and dropping with store, office and apartment vacancies soaring. And much of that paper is held by regional banks and REITs like Boston Properties (BXP), Vornado Realty Trust (VNO), Brookfield Properties (BPO), and a host of private firms and trusts.

Like the residential market, the pain in commercial real estate is not distributed evenly across geographic regions. So far the public equities have recovered reasonably after a breathtaking plunge, as compared to the SP 500's decline from the top. I am watching them for an indication or at least a confirmation of a double dip, a potential next leg down in the real economy and the financial markets.

I hope Ben is wearing a truss if he tries to put a floor under this one.


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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:14 AM
Response to Original message

In my piece Whats in Store for 2010 my number one prediction was:

-Tim Geithner will resign as Treasury Secretary. Sheila Bair will replace him.

The odds of getting any of these types of predictions correct are probably 20 to 1. Given what has happened in the past few days I would now say that the swap of Sheila for Tim is an even money bet.

Mr. Geithner has outlived his usefulness. He is too connected to the bailouts of 08. Bear, Lehman, AIG, TARP and even QE are all part of his legacy. That makes Tim a lightening rod. Too many Americans hate that part of our history.

I dont think the current flap relating to the deliberate non-disclosure of information relating to AIG is that big a deal. When the full history of this period is finally told (it will take awhile yet) this particular transgression of Mr. Geitner will look small by comparison. The things that we do not yet know about that we agreed to during the crisis period are going to cause us to roll our eyes and bow our heads when all is said and done.

Those that had their hands on the tiller were firmly of the belief that the western world financial system was shutting down. They left no stone unturned in trying to save the patient. They committed future generations for Trillions in additional debt. Every step available to calm market fears was taken. Even withholding information. When you are at war, and you think you are losing, you do what you have to do. If you later win the war and someone criticizes you for using WMD so be it.

I will take a stab at writing the Presidents statement on this:

I have today accepted the resignation of my Treasury Secretary Tim Geithner. One year ago the global economy was facing the biggest challenge in history. Tim and a small handful of dedicated individuals took the steps that were considered necessary at the time to first stabilize a collapsing system and second put the economy of the US and the globe on a path that would lead to recovery.

For this, the American people owe Tim our thanks. He worked tirelessly during one of the darkest periods of our history. And he succeeded. Today the economic crisis of one year ago has receded. Our economy has stabilized and growth has resumed. Our financial institutions have also returned to health. The financial support provided them through the TARP program has worked. We see the evidence of this as those banks who took assistance a year ago are now paying it back with interest.

Our country continues to face serious economic challenges. Unemployment remains stubbornly high; we face a protracted period of large fiscal imbalances. A critical weakness continues to be with homeowners who are unable to meet their financial obligations.

I have appointed Sheila Bear to replace Tim Geithner. Sheila will bring to the Treasury Department her proven leadership and administrative skills. She has both the knowledge of the core issues and the compassion that is required to address the problems that are at hand.

Sheila has set the standards and seen to the implementation of the Nations efforts in restructuring home mortgages. The guidelines for refinancing troubled homeowners that she established have been accepted by virtually every public and private sector lender. Much more work needs to be done in this area. Many homeowners are still facing default. This reality causes human suffering and is adding to our economic problems. I am looking forward to working with Ms. Bair in this critical area as well as all of the other challenges we face.

Okay, so that was BS. But if it does go this way, the Boss will say words to this effect. He will just do it better.

My sense is that this would be a very significant development. I believe that Ms. Bair will introduce a very large program of PRICIPAL debt relief for borrowers. This program will start with the D.C. mortgage lenders Fannie, Freddie and FHA. It will be forcibly extended to the private sector lenders. (They already have significant reserves on a lot of this.)

I hate this development. But I think it is the right thing to do. The inequity of it will cause great divides. The cost will be astronomical. The total could go as high as $800 billion. A significant portion of that would be born by the Government lenders. My guess for the taxpayer tab is $500 billion. I do not see any realistic alternative however. If we let the problem fester it will cause us to lose a decade of growth. Better we deal with it now.

A muse of all of this is that the money to accomplish a half trillion dollars of debt relief has already been made available to the D.C. mortgage lenders. Mr. Geithner saw to that on Christmas Eve when he did the Sneaky Pete announcement of a virtual blank check for the Agencies. For me, that was a much more serious offense than the disclosure issues with AIG. That was then, this is now. I thought that this, by itself, would have proved to be a significant enough gaff to take him down. As it turns out, that straw on the camels back may well prove to be the critical step that insures that the next Treasury Secretary will have the Bazooka that is necessary to address the problem. Funny how things work. It almost looks like it was planned.


-I do think that Sheila Bair would make an excellent T. Secretary. She has the skills and experience. She also has a vision that we desperately need. She is no lightweight. She will fight very hard and she has a lot of chips in her pocket. The fact that she is a woman is helpful. In my opinion it is high time that a woman took this job. Lets face it. The Guys have screwed this up for decades.

-If all this happens and Tim G. ends up at PIMCO or with Wilbur Ross structuring investments in Distressed Debt as Neel Kashkari and James Lockhart have, I am just going to puke.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:18 AM
Response to Reply #34

By L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute, who writes for New Deal 2.0.

There is a growing consensus that it is time for President Obama to fire Treasury Secretary Timothy Geithner. While he is at it, he needs to clean house by firing Larry Summers, by banning Robert Rubin from Washington, and by appointing a replacement for Chairman Bernanke. It is time for a fresh start.

Geithner is facing renewed scrutiny due to his questionable actions while at the NYFed. As reported on Bloomberg and in the NYT, secret emails show that the NYFed under Geithners command prohibited AIG from reporting that it was passing government bail-out funds directly to counterparties, including Goldman Sachs. AIG had been negotiating with the banks, asking them to take as little as 40 cents on the dollar against bad CDOs they held. AIG was the biggest insurer in the country and had provided $62 billion of credit default insurance to these banks. The CDOs went bad and AIG could not cover claims. It was forced into insolvency and the government came to the rescue, with $182 billion of bailout funds through last June. By all rights, its counterparties should have lost big on their bad bets. Apparently, Geithner arranged the bailout of AIG with full knowledge that it would pass the bailout funds directly to the banks. Whether or not some protection should have been provided to the banks, it clearly was not good public policy to provide dollar-for-dollar protection to them. If you are a favored Wall Street bank, no bet can go bad!

Geithners relations with Wall Street bankers have always been incestuous, raising serious questions about his intentions. Note that Geithner worked with then Treasury Secretary Paulson to broker the AIG deal. Paulson, of course, had been the CEO of Goldman. Geithner is the protg of Clintons Treasury Secretary Rubin, also from Goldman, and he got his job at the NYFed through the efforts of Pete Peterson. In addition to the AIG deal, Geithner had the NYFed provide $29 billion of funding for J.P Morgan Chases hostile takeover of Bear Stearns. In the deal, the NYFed got $30 billion of questionable collateral. Geithner hired Blackrock in a no-bid contract to manage these assets. Blackrock is a spin-off of Pete Petersons Blackstone Group, and was 49% owned by Merrill Lynch, headed by John Thain (another Goldman alum). As head of the NYFed, Geithners closest advisors were Thain, William McDonough (Vice Chairman at Merrill), Gerald Corrigan (Managing Director at Goldman), Jamie Dimon (JP Morgan), and Richard Fuld of Lehmans. The head of the NYFeds Board of Directors was Stephen Friedman, former Goldman Sachs Chairman. As Gary Weiss put it back in 2008, Thus Geithner reports to a board that is composed of people who are not only under his purview but would also benefit from any potential bailouts. The structure of the New York Feds board bears more than a passing resemblance to that of the New York Stock Exchange in the bad old days, when member firms, regulated by the N.Y.S.E., were heavily represented on its board. The AIG deal seems to have been business as usual for Geithner.

According to Representative Darrell Issa, Republican of California, It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information to the S.E.C.. Not only did Geithner want to keep this information from the public, but also from fellow regulators. (Whoops, Geithner admitted he was never a regulator while at the NYFed.) Indeed, at the time, Geithner refused to even tell Congress who the counterparties were-until overwhelming pressure required that he release the names. This smells fishy because it is.

The Feds justification for such secrecy was that it was trying to preserve the value of the taxpayers investment in AIG. (Vice President Donald Kohn explicitly made this argument before the Senate.) But that is nonsense-there was no value to preserve. This was just a give-away to protect Goldman and other counterparties. Later when AIGs executives demanded that compensation limits be lifted so that they could get their bonuses, Geithner came to their rescue, arguing that contracts are contracts no matter how putrid they might appear. We now know that the executives were demanding cash rather than stocks in their own firm because they expect the stocks will prove to be worthless-they are managing a firm that will never have any value and they know it. This is something Geithner refuses to tell the public.

Remember, this is the same guy who forgot to pay his taxes. Worse, he improperly claimed a tax deduction for a summer camp for his kids. He is ethically challenged. Should he be running the Treasury?

More important than such blunders, however, is that Geithners policies are not working. As Republican Congressman Brady of Texas put it, Conservatives agree that, as point person, youve failed. Liberals are growing in that consensus as well. Poll after poll shows the public has lost confidence in this presidents ability to handle the economy. For the sake of our jobs, will you step down from your post? here Todays employment figures show that rather than a recovery, our economy is still hemorrhaging jobs at a scary pace. While the payroll number was down only 85,000 jobs, the household survey was down 589,000 for December. Over the past three months we have lost an average of 325,000 jobs. And that is in spite of the fiscal stimulus as well as the trillions of bail-out funds provided to the financial sector. We are at least 26 million jobs short. Even if the job losses stopped, real recovery will require job creation on a massive scale. The problem is that Congress, and the public, no longer has sufficient faith in the Administration to provide new funding-and the stimulus will soon run out. Rep. Peter DeFazio of Oregon put it this way: We may have to sacrifice just two more jobs to get millions back for Americans.

Of course it is not quite that simple, but it is a first step.

We need an economic team that recognizes the following:

1. Banks do not face a liquidity crisis, rather they are massively insolvent. Reported profits are due entirely to trading activities-which amount to nothing more than a game of Old Maid, with institutions selling bad assets to each other at inflated prices on a quid-pro-quo basis. As such, they need to be shut down and resolved. Geithner is not the right person to head such an effort because his past resolutions have always been designed to protect Wall Street, not Mainstreet.

2. Saving financial institutions does not save the economy. The financialization of the economy promoted by Greenspan and Rubin has led to a financial sector that is at least three orders of magnitude too big. If anything, all the efforts directed toward saving Wall Street have only made the economy more fragile. Another financial crash is inevitable because the financial system is still too large to be supported by the economy-even if the economy could recover. We need a Treasury Secretary who recognizes that the best course of action is to downsize the financial system. Geithner is not that guy.

3. As such, all of the bail-outs and guarantees provided to financial institutions (over $20 trillion) need to be unwound. Not because we cannot afford them but because they are dangerous. Unfortunately, Congress has come to see all of these trillions of dollars committed to Wall Street as a barrier to spending more on Mainstreet. Thus, even if the Wall Street bail-outs were not dangerous, they need to be reversed to generate fiscal policy space for another economic stimulus package. It will not be easy to convince Congress that the solution to our economic crisis is more government spending. And Geithner is not the Treasury Secretary to lead such an effort because he has lost the confidence of Congress and the public.

4. Finally, we need an economic team that understands government finance. The current team is hopelessly confused, led and misguided by Robert Rubin. He thinks government is nothing but a big household, which must balance its budget. He continues to believe that the Clinton boom was due to federal budget surpluses, not recognizing that it was actually due to an unsustainable boom of household borrowing. Indeed, as Clintons Treasury Secretary, he oversaw the creation of the conditions that led to this current crisis. The new team must have no connection to Rubin (or Pete Peterson) and his anti-deficit hysteria. The Great Depression of the 1930s only ended with the massive spending of WWII, when the budget deficit reached 25% of GDP. Our current situation is not yet that severe, and it is likely that a sustained recovery can be obtained long before the budget deficit reaches such a level. However, the longer that Geithner, Summers, Bernanke, and Rubin remain in charge, the greater the probability that this could still turn into another Great Depression.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:21 AM
Response to Reply #37
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:42 AM
Response to Reply #38
52. The version without the ultimate "tree hugger" :shame on me:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:28 AM
Response to Reply #52
58. Oh, How COULD You!
You get no lunch today, for that. Now go to your room!
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 03:49 PM
Response to Reply #58
72. He was a republiCON (now the best kind), thus fair game n/t
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-19-10 08:41 AM
Response to Reply #72
78. I can't believe
it took me almost 24 hours to get it.


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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-19-10 10:15 AM
Response to Reply #78
79. Same here

catching up on this thread this morning. duh!

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:58 AM
Response to Reply #34

Let me add a few words to Yves last post because I dont think she was explicit enough about whats going on here. This was looting and a cover-up plain and simple.

A quick review: Damaging e-mails have revealed that Treasury Secretary Timothy Geithner urged AIG to withhold crucial information about the deterioration of its financial condition in the lead up to its demise. This will put further political pressure on Geithner, who has already been exposed for his dubious role in the Lehman Brothers bankruptcy.

Bloomberg leads into the story saying:

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurers payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

These were not e-mails revealed willingly, but rather as a result of oversight and investigation. At issue is whether the 100 cents on the dollar payments by AIG to its credit default swap counterparties were a backdoor bailout. Most market watchers believe that AIG counterparties would have received significantly less on the free market, exposing them to tens of billions in losses instead of taxpayers (see CW story from March 2009 on this issue). So, in a very real sense, many believe taxpayers were defrauded by the governments handling of the AIG affair. This latest revelation only adds to that belief.

Moreover, in regards to Tim Geithner personally, this revelation is extremely damaging. Not only did he, Paulson and Bernanke mishandle the Lehman bankruptcy which triggered the panic central to the financial crisis, but he has now been personally implicated in withholding covering up, if you will vital evidence on the looting of taxpayers to the benefit of financial companies, some of whom are not even domestic institutions. (See my definition of terms.) You have to see this in a negative light.

I would be remiss if I didnt remind you that he had direct oversight responsibilities for money center banks as president of the Federal Reserve Bank of New York. In the past, in testimony before Congress he has denied that he was, in fact, responsible for these institutions, saying Im not a regulator.

Ive never been a regulator, for better or worse. And I think youre right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.

Overwhelmed by regulation! It wasnt the absence of regulation that was the problem, it was despite the presence of regulation youve got huge risks that build up.

This is just nonsense. Jo Becker and Gretchen Morgenson put it this way in April:

An examination of Mr. Geithners five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Streets giant financial institutions.

His actions, as a regulator and later a bailout king, often aligned with the industrys interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.

In a pair of recent interviews and an exchange of e-mail messages, Mr. Geithner defended his record, saying that from very early on, he was a consistently dark voice about the potential risks ahead, and a principal source of initiatives designed to make the system stronger before the markets started to collapse.

Mr. Geithner said his actions in the bailout were motivated solely by a desire to help businesses and consumers. But in a financial crisis, he added, the government has to take risk, and we are going to be doing things which ultimately in order to get the credit flowing again are going to benefit the institutions that are at the core of the problem.

He was on the job when these firms levered up and took reckless risks that endangered our financial system. For him to absolve himself of responsibility is a disgrace. And to add insult to injury, we now learn that he urged a systemically important company to withhold evidence of his looting of taxpayers.

Tim Geithner must go.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:15 AM
Response to Original message
35. Obama Administration Wants to Annuitize 401k's and IRA's - Mandatory "R Bonds"

As a rule of thumb, the worst possible time to convert lump sum savings into a fixed income annuity would be when interest rates are historically low.

Although products may vary, this is roughly equivalent to buying long term bonds at a time when interest rates are likely to increase, substantially reducing your principal in real terms, and eroding your fixed returns through inflation.

For some reason the Obama Administration is promoting the idea now that there should be some encouragement for Americans to start converting their 401K's and IRA's into annuities, to provide themselves with lifetime income.

The effort is being spear-headed by Mark Iwry of the Treasury and Phyllis Borzi of the Department of Labor. Here is a paper written on the subject by Mark Iwry when he was at the Brookings Institution.

The essence of this paper is that distributions from IRA's and 401K's would automatically be rolled into an annuity providing a monthly income by default.

This concept is known on the Street as the handling fees for meager returns pork barrel pigfest. The Fed likes it because they will undoubtedly get a two year rolling chunk of the people's retirement cash to play with.

Perhaps just rolling those 401K's and IRA's into Social Security or the Long Bond would be what they have in mind. Somehow the panacea of TIPS with inflation defined by the government sounds probable. The drawback perhaps is that this would not generate the highest recurring fees for Wall Street and the FIRE sector, which have to be eyeing that 'cash on the sidelines' hungrily.

How about Patriot Bonds that are fully invested in Mortgage Debt formerly owned by the Fed, with some tranches of Commercial Real Estate to add some zest to the recipe? The Treasury can give this option a small tax break, which can be largely consumed by Wall Street fees and mispricing of risk returns.

And I thought that Greenspan's advice for homeowners to step into ARMs into the knee of the housing bubble was foul.

Here's a modest proposal. Raise the amount of losses from investments that can be deducted from income in one year from $3,000 to $20,000 for individuals and $40,000 filing jointly so mom and pop can clean up their balance sheets. And if they really want to jump start the economy, declare a tax and penalty exemption on the first $150,000 that an individual can withdraw from their IRA or 401K in 2010.

And for God's sake fix the Alternative Minimum Tax levels.

Does it seems as though I have barely given this annuitization effort a chance, a fair hearing, the benefit of the doubt, improperly assumed it might not have the best intentions of the American public at heart?

Are you serious? After Healthcare Reform and TARP? These people in Washington and Wall Street have no shame, much less good intentions, common sense, or a conscience. They are strangling the real economy, slowly but surely.

My model for thinking about this annuitization is that the government wishes to appropriate your savings for a 2.0% return, ex fees and mispriced risk and inflation, as a source of funding for the bailouts of an oversized and insolvent FIRE sector (like AIG) and the imploding pretensions of a global financial elite.

"Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the presidents proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds

J. Mark Iwry, deputy assistant secretary for retirement and health policy at the Department of the Treasury, said that administration officials are exploring some conservative options for investing the assets of 78 million Americans that he estimates could be automatically enrolled in this universal workplace retirement system.

He said that officials have discussed the possibility of making a low-risk life-cycle or target date fund the default investment option for these auto-IRAs, which would be mandatory for employers if they dont offer a retirement plan to their workers.

But there is also a chance that they could rely on a new form of bond an R bond as the basic building block for the auto-IRA, Mr. Iwry said in addressing reporters at the Treasury Department in Washington last week.

Administration officials are discussing the exact details of these R bonds, such as their interest rates, maturities and minimums, he noted. These bonds ideally would provide individuals with a source of secure, steady returns that would protect their initial investments."

Administration Explores R Bond For Retirement Accounts - Investment News 7 June 2009

Why have a separate "R Bond" instead of those government bonds they have now called 'Treasuries?' And why have a mandatory universal retirement system when you have this thing called 'Social Security?' Think about it. Sounds like the kind of preparations governments make for things like 'new dollars' after a selective default.

Instead of "Yes We Can" the slogan for the Obama Administration should be "Over One Million Fat Cats Served." And the only difference in the Republicans is the breed of the fat cats whose desires they seek to fulfill. The public has lost its advocacy in Washington, and therefore the integrity of the democratic republic is in peril.

The banks must be restrained, and the financial system reformed, and the economy brought back into balance, before there can be a sustained recovery.

"None are so hopelessly enslaved as those who falsely believe they are free." Johann Wolfgang von Goethe

Retiree Annuities May Be Promoted by Obama Aides
By Theo Francis

The government is looking at ways to promote the conversion of 401(k)s and IRAs into steady payment streams after a significant decline in plan balances

(Bloomberg) The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

Annuities generally guarantee income until the retiree's death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner, legislative counsel for AARP, said in an interview.

"There's a real desire on a lot of people's parts to try to encourage something other than just rolling over a lump sum, to make sure this money will actually last a lifetime," said Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.

Promoting annuities may benefit companies that provide them through employers, including ING Groep NV (INGA:NA) and Prudential Financial Inc. (PRU), or sell them directly to individuals, such as American International Group Inc. (AIG), the insurer that has received $182.3 billion in government aid...
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:10 AM
Response to Reply #35
47. Questions
Is this an acknowledgment that the equity markets are in "bubble" mode? And if so, the administration knows that the repercussions from the "double dip" will be more than enough to bring the wrath of the middle class down on Wall and K Streets? :frsp:

Does Turbo Timmy think that he is a better wealth manager than investment bankers or does he know that Chopper cannot buy (for lack of a better term) any more of his paper? If Ben can't hide any more treasury purchases, and China ain't interested, the game has to be extended somehow?

Would IRA's with local institutions (CD's) be exempted? If not, is the US gov't going to be willing to open fire on it's citizens?

Would there be an option to put 401(k)/403(b) contributions into local banks and credit unions? If so is this just a back-door plan to shore up the cash strapped FDIC or an honest attempt to get "side-line" money working on Main Street?

I can see this as either real reform or a double edged sward. More details needed!!


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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:29 AM
Response to Reply #47
59. It's Called Throwing Good Money After Bad
and I wouldn't touch it with a 20 foot pole.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 12:06 PM
Response to Reply #47
67. Here are a couple postings from elsewhere

1/8/10 Denninger: 401k/IRA Screw Job Coming?

1/10/10 gjohnsit: Here comes the screw job

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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 03:43 PM
Response to Reply #67
70. Ayuh.....Read those articles over the last couple weeks
No disagreement that if the motive is to force the money into Treasuries, we will be in need of barrels of KY and trowels. Most people are clueless that the SS trust fund has already been used as a suppository

But (spelled with just one T)..IF there was an option to take 401(k)/403(b) accounts and move them into a local bank/credit union IRA's (sans the penalty), I'd take it in a heartbeat. Yeah 2-3% interest sucks, MM rates suck more (save for the added boost from employer matching where it exists) but I have more faith in my local CU than Fidelity, Vanguard, etc. and the mutual funds they manage.

As for throwing good money after bad? If your retirement savings are invested in the equity markets right now, I'd seriously question how good that money will be after the next dip. At least in T's the only thing needed to back them up is a printing press :sarcasm:

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 04:28 PM
Response to Reply #70
73. By forcing money into government Treasuries...

Isn't the main purpose of converting our tax-deferred plans to annuities with Treasuries so that the government can do whatever it wants with that money? But the perception is that it would be good for us in retirement to have steady income from the annuity.

I think as long as the market rallies, people are not inclined to convert. However, when the markets decline again, people will lose money in their accounts and be devastated by the losses. When that happens, the people would be receptive to the government converting the tax-deferred plans to annuities so that they would be 'guaranteed' a certain amount of money in the future without worrying about any market losses. Just that by the time people retire, there won't be any money cause the government used it all.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:44 AM
Response to Reply #35
64. Cher - The Shoop Shoop Song
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:23 AM
Response to Original message

Wow, has someone declared Forced Out CEO Tries to Salvage His Reputation Month when I wasnt paying attention? Or was I just not on the distribution list? Last week, we had Sandy Weill telling us how the Frankenstein of the Citigroup he created was really a fine business; the only mistake he made was pushing Chuck Prince as his successor, who was obviously incapable of filing Weills shoes. If you believe that is why Citi went so spectacularly off the rails, I have a bridge Id like to sell you.

So this week we have Hank Greenberg trying to rewrite the record in the weekend Wall Street Journal Who comes next? Dick Fuld? The ex-CEO of Northern Rock? Jeff Skilling? The former heads of the three biggest banks in Iceland?

Big big caveat: I am most assuredly not a fan of Goldmans conduct in the runup to and during the credit crisis. However, if you are going to attack Goldman (and its various enablers in the officialdom) you need to make credible charges. Broadsides that are off base in important aspects can and often do backfire. They allow the target to dismiss the erroneous arguments, and muddy the waters on the ones that are closer to the mark. The net result that it looks at best like a case of he said, she said and at worst that the critics are all wet.

And in this case, the attacker, Hank Greenberg comes off as whiny and afflicted with a major case of CEO grandiosity. The subtext of his account is that he was persecuted, he was an impeccable leader, other people screwed up his business. Yet it was Greenberg who picked Joe Cassano, a man who knew nothing about risk management, to lead AIG Financial Products, the unit that wrote the credit default swaps that were the proximate cause of AIGs demise. This was a catastrophically poor choice, yet to hear Greenberg cavil, all the woes visited on AIG were due to the machinations of Goldman and Hank Paulson, not AIG greed and incompetence.

The worst feature of AIG FP was one Greenberg approved at its inception: it was a firm within a firm, always a bad idea, with its leaders receiving a pre-specified cut of revenues that they could disburse as they saw fit. That sort of arrangement had been the demise of Drexel. The deal also allowed bonuses to be paid immediately on certain types of transactions, with at most 50% reserved for a few years to see how the deal performed, even if the deal took decades to pay out. When the AIG FP team threatened to leave over a turf issue, Greenberg caved. He was too addicted to their profits even then to risk losing them.

So lets turn to what the Wall Street Journal article, which Dorothy Parker would have deemed nausea-making:

Mr. Greenberg, a genuine captain of industry but little known to the public, had built AIG over 30 years to become the biggest and most admired company in the global insurance industry. Then Mr. Spitzer, riding a wave of righteous distrust of business after Enron, accused him and AIG of accounting fraud. Mr. Spitzer, on national television, pronounced Mr. Greenberg guilty even before any evidence had been presented to a jury.

Yves here. A key bit of backstory: the Wall Street Journal has had a long-standing vendetta with Eliot Spitzer. And the genuine captain of industry with Spitzer as infidel characterization is simplistic and inaccurate. The idea that AIG was as sound as it was believed to be in Greenbergs final days does not survive close scrutiny. Efforts to segregate subsidiaries in order to sell them have revealed some questionable inter-company transacations. In addition, David Merkel, who worked at AIG in the early 1990s, did a detailed analysis of the statutory books of AIGs subsidiaries, and concluded that taxpayers bailed out not just AIG FP, but its life insurance and mortgage subsidiaries as well. In other words, Greenbergs efforts to pin the blame on AIGs woes on AIG FP, and Goldman in particular, is a convenient distraction from significant but well camouflaged problems elsewhere at AIG.

Merkel also recounts dubious practices which were part of the AIG culture nearly 20 years ago:

 Dealing with auditors is bloodsport.
 I drop my deficiency reserves in the Atlantic Ocean. (via reinsurance)
 I like the pension and annuity businesses because they give some bulk to our balance sheet. (Reputedly M.R. Greenberg said this to a colleague of mine. We scratched our heads over that one, because it was so anti-AIG philosophy.)
 Heavy reliance on surplus relief reinsurance in order to front statutory earnings into the present, and reduce capital needs.
 My boss found two centimillion-dollar reserve errors also.
 Dealing with reinsurers is bloodsport. Never give them an even break.
 Clever use of transfer pricing to get money out of blocked currencies.
 Arrogant guys at AIG Financial Products that would hardly acknowledge you as part of the same team at conferences.
 And, a $1 billion GAAP reserve understatement at Alico Japan in 1992.

Merkel left because he was uncomfortable with his conscience working there (!) and contends the firm has long run with hidden leverage and losses. And lest you think this is an isolated account, a friend who joined AIG at an executive level shortly before Greenbergs departure (he is now the CEO of a large foreign insurer) was horrified at what he saw: a lack of normal systems and procedures, far too much decision-making in Greenbergs hand for a company as big and sprawling as AIG. Thus the perception that it was successful appears to have much to do with its aggression in the marketplace and creative accounting, a rather leaky ship for a so-called captain of industry.

But lets return to Greenbergs efforts to rewrite history:

In the months after he left, AIG amped up its bets on the housing market by writing what where, in effect, insurance policies on derivative securities backed by subprime mortgages. These securities were created by Wall Street firms, notably Goldman Sachs, and held on their own books or sold to investors. AIG, in turn, had committed not only to insure them again eventual loss, but to make cash payments in the meantime to compensate for any drop in price or downgrade of their Triple-A ratings by credit agenciesboth of which promptly happened as housing collapsed and panic spread about the possible failure of large financial institutions.

Yves here. This account cheerily assumes that AIG would have written fewer CDS guarantees had Greenberg been in place. Do we have a single shred of evidence to support that flattering notion? In fact, a three-part Washington Post story on the rise and collapse of AIG FP makes clear that AIG was writing CDS on mortgage exposures at a furious pace prior to Greenbergs departure. Indeed, the piece also points out that Fitch downgraded AIG to AA upon Greenbergs exodus in March 2005; S&P and Moodys followed suit shortly thereafter. Those downgrades not only led AIG to post over a billion dollars of collateral, but reduced its competitiveness in the business (insurance from an AAA counterparty was given particularly favorable treatment in certain circumstances). With its AAA intact, it is entirely plausible AIG would have written as much, if not more CDS before it pulled back at the end of 2005.

But let us continue with Greenbergs version of events:

Here are the pieces Mr. Greenberg says he sees falling into place. In 2005, a trade group called the International Swaps and Derivatives Association got together and drafted new standards for the kinds of credit default swaps AIG had been writing.

Previously, Mr. Greenberg explains, losses to the underlying securities were paid off at maturity. Now, cash payments would have to be forthcoming to cover any drop in value or credit downgrades even before any losses were realized.

I dont know whether Goldman Sachs was the force behind the ISDA change or Deutsche Bank, Mr. Greenberg concedes. Thats something investigative reporters are going to have to spend time digging out.

Yves here. This is utter rubbish. Oh, ISDA created this new protocol and we had to go along. Goldman and maybe Deutsche did it to us. Guess what? AIG was the only insurance company that complied. CDS that were written on subprime (say on the ABX, or on individual MBS that might become sold singly or be part of a CDO) did conform to the new protocol. But monolines who were far less powerful firms than AIG, continued to write only CDS that did NOT provide for collateral posting but payment on maturity (this was one of the reasons the monolines howled when short seller Bill Ackman had them in his crosshairs: even if their contracts were total turkeys, it would be an eternity before the insurers would have to pay out a dime on them. But the monolines forgot one thing: those agreements were still marked to market, and the accounting losses on such thinly capitalized balance sheets gave investors and rating agencies pause).

Moreover, AIG marketed the difference between its contracts (which required collateral posting in the event of a downgrade) versus those of a monoline (which did not) aggressively, as an important reason to prefer AIGs offering.

Now you do have the rather interesting fact which has not gotten enough play, that Goldman apparently obtained its insurance on its CDOs largely if not entirely through AIG (it is difficult to be certain but former monoline employees report they never saw Goldman seeking insurance coverage from them, and were surprised when AIG went down to learn how active they had been with AIG). One can argue from a risk management standpoint that it is a pretty poor choice to concentrate ones counterparty risks so heavily. On the other hand (and I am not saying I buy this view, but it is arguable), Goldman can contend that it understood that this sort of insurance was likely to prove to be a non-performing airbag (the term of art is wrong way risk) and the only protection against that was CDS that had collateral posting requirements.

Now in fairness, among all this blather, Greenberg levels a charge against Goldman which is substantive, serious, and tallies with other reports that we have received: that Goldman, once it was net short, was more aggressive than other firms in marking down collateral. In other words, once the housing market started to burn down, Goldman poured gas on the fire:

When the housing boom imploded, Goldman demanded giant cash collateral payments from AIG on a mark to market basis for housing-backed securities whose price was plummeting even if the underlying payment streams were intact. True, Goldman was hardly the only one demanding cash, but Mr. Greenberg is suspicious about the size of the payments Goldman demanded based on Goldmans own marks (i.e. estimate of the securities now-depressed value). Goldman had the lowest marks on the Street by everything I hear, he says. There was no exchange. Where was the price discovery? It was all in the eye of the beholder.

But then we go back to conspiracy theories:

When the government took over AIG, why did it insist that Goldman and other firms receive 100 cents on the dollar on their AIG exposure, while the terms of AIGs own bailout were so onerous as to force the firm into slow-motion liquidation? When the governments bailouts of Citigroup, Bank of America, GM and Chrysler were clearly designed to restore the firms to health, why was AIGs apparently designed to create a wasting asset that would wither and die in taxpayer hands

Yves here. Most readers of this blog are probably in the camp that is mighty unhappy about the 100% payout to the AIG counterparties. So Greenberg is, in effect, trying to argue that a second wrong, throwing even more money into the AIG black hole in the hopes of bringing it back from the dead, would be a good idea. Well, it might be good for Greenberg, who prior to the government rescue, controlled the biggest block of AIG shares, between his personal stake and that of C.V. Starr.

The deal from the very outset was envisaged as a dismemberment. Lest we forget, AIG, was about to go bankrupt. It was so badly managed that it wasnt even sure of its cash needs (the Sorkin book has its estimates of its shortfall growing by billions on a daily basis because it keeps finding new obligations. It was evident that the insurers controls were grossly deficient).

When you are on deaths door, you are in no position to dictate terms, so Greenbergs indignation is wildly misplaced:

Mr. Greenberg has no doubt the destruction of AIG was the politically-dictated goal at the time. He points to Treasury Secretary Hank Paulsons statement on Sunday morning television shortly after the rescue, saying the purpose was to allow the government to liquidate the company.

Mr. Greenberg invokes the loaded constitutional word takings for the governments seizure of a 79.9% stake in AIG as part of the package dictated to the companys board. They just took the goddamn thing. Whats the basis for taking it? You gotta explain, How did you get to 79.9%? Id be curious to know.

Yves here. It was 79.9% because the more logical number, 100%, would produce more headaches than it was perceived to be worth to Uncle Sam, as we discuss shortly.

AIG got a very costly loan and promised to sell assets to repay the loan, which was in effect an orderly liquidation The fact that AIG survives as AIG is due strictly to the fact that the government has blinked and retraded the deal four time. Greenberg thinks AIG deserves better? AIG has gotten vastly more than it deserves. And let us recall that the only rescue of a firm about to collapse prior to AIG was a shotgun marriage of Bear with a big dowry paid to the groom. JP Morgan, to take on a presumed garbage barge. And lest we forget, Bear did not survive. But we get another dubious idea from Greenberg:

Washington could simply have ordained that AIGs debts were the governments debts and so no collateral was due give Uncle Sams bulletproof credit rating.

Yves here. Right. First, the reason Freddie and Fannie were done as conservatorships were to avoid consolidating their debt on the Federal balance sheet, so the idea of having the Treasury make AIG a full faith and credit obligation was a non-starter. Having the government own 79.9% is a dysfunctional arrangement, as we have seen with Freddie, Fannie, and now AIG. But if the government assumed the debt, there is no reason not to wipe out the equity holders. And then Greenberg would be enlisting the Wall Street Journal to complain about nationalization.

This interview is a lead in to a truly offensive proposal: that the AIG deal be retraded yet another time, yet again to the advantage of the shareholders (Greenberg, of course) and the taxpayer be damned. Predictably, he tries to present this self-enriching plan as best for the dumb chump public. I wont dignify it by going through the details.

This whole interview amounts to what I call the shitpile school of argumentation, which sadly has become prevalent in America: produce a whole heap of crap, and declare, See, there is lot of shit, surely there is a pony! The assumption is that no one has the fortitude to do forensic work on the, um, evidence. But these dung hills, upon inspection, seldom prove the existence of a pony. Indeed, they usually consist of non-equine output, like old zoo doo and garden variety dirt. But guys like Greenberg are happy to produce volumes of rubbish on the cheery assumption that no one dares question a con artist captain of industry like him.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 08:40 AM
Response to Reply #39
40. Bang Bang

(Personally, I found this 2003 video grotesque, but didn't have time to find a more authentic one.)

Tansy Gold, who is behind schedule and literally staring an approaching storm dead ahead
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 09:08 AM
Response to Reply #40
41. It's like night and day watching videos from the 60s compared to today

The 60s were basically the singers dressed simply, maybe a few dancers in the background, but nothing to detract from the singers.

Today, the background dancers, the lights, pyrotechnics, the stage sets, the costumes, the enormity of everything, is way more than the singer. It seems like people nowadays expect these outlandish concerts. And they are expensive. How much longer can these extravaganzas be produced in a devolving economy?

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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 09:43 AM
Response to Reply #41
43. Yeah, the old "garage bands" of the 60s couldn't make it
today, girls or boys!

Tansy Gold, sigh, feelin' old today
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:02 AM
Response to Reply #43
45. but the production concerts of today
Edited on Mon Jan-18-10 10:03 AM by DemReadingDU
won't be able to make it in the future when people don't have the money, or credit cards, to pay for those expensive tickets
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:33 AM
Response to Reply #45
49. Cinema's grew during the depression...Not sure how that would
relate to today's world, But it didn't look like many empty seats at NFL play-off games. Daytona will probably be packed for the 500, and "Survivor" will get higher ratings than C Span.....

Sheeple love to pay absurd amounts to be entertained, whether they can afford it or not.....We'll know we've bottomed out when the Emperor tosses out loaves of bread before the World Series and Super Bowl :popcorn:
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:00 AM
Response to Reply #49
55. I'm willing to bet that most people charge those tickets using credit cards
No need to pay cash today, the bill won't come due for another month.

What's going to happen when more banks lower the amounts that can be charged on that credit card? Or worse, cut that credit off completely?

Tell me, when there is no credit, who will pay cash to see those extravagant concerts, college or NFL games, Nascar races, vacations?

I'm not saying that there will not be entertainment. Of course there will. But people will have to pay cash for it. And if people have no job nor savings nor any kind of income, there are going to be lots fewer people buying expensive tickets.

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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 02:40 PM
Response to Reply #55
69. You used to have to stand in line to buy tickets.
And stand in a really long line for a good concert. Mow, it's all done from computer with a credit card.

I just got some decent seats for the Moody Blues, as soon as they went on sale. In the olden days, I would have had to drive to a Sears, that had a Ticketron, and stand in line. And hope they weren't sold out by the time I got to the window.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 03:43 PM
Response to Reply #69
71. yep, those were the days

mary hopkin - those were the days-68

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:36 AM
Response to Reply #45
51. Keywords in times of depression: (Elegant) Authenticity?
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:01 AM
Response to Original message
44. GLOBAL MARKETS-Asian share ease on signs of weak US consumer
Mon Jan 18, 2010 2:58am EST HONG KONG, Jan 18 (Reuters) - Most Asian stocks fell on Monday following No 2 U.S. bank JPMorgan's heavy losses on mortgage and credit card loans which cast doubt on consumer demand in the region's largest export market.


The U.S. dollar and the yen fell after strengthening initially when investors unwound riskier trades. The euro remained under pressure, hurt by concerns about fiscal problems buffeting Greece, which has seen its budget deficit balloon and its credit ratings cut.

Euro zone finance ministers had little patience left for Greece after it misled them about the size of its deficit and would be ready to impose sanctions on Athens if needed, euro zone sources said.

Sentiment in Asia remained cautious.


The MSCI index of Asia Pacific stocks traded outside Japan, which fell as much as 0.8 percent, was down 0.1 percent.

The Thomson Reuters index of regional shares was down 0.23 percent.


Japan's Nikkei average fell 1.2 percent, coming off a 15-month high struck last week, with bank shares leading declines over fears the market's recent rally was over done.

Hong Kong shares were under pressure as the property and banking sector lead the decline. Although Chinese banking shares were weak in the mainland market, the Shanghai benchmark ended up 0.4 percent on gains in airline stocks.

Fears that Beijing is moving to curb credit growth to avoid inflation and economic overheating rattled shares in China and the rest of Asia last week.


The euro slid to a four-month low against sterling as the British currency gained ground on the dollar and the yen following a rise in UK house prices and as the euro continued to be weighed down by concerns about Greece's fiscal woes.

The euro fell as far as 88.03 pence, its lowest since mid-September, down 0.5 percent on the day.

The U.S. dollar and the yen were firm while currencies leveraged to global growth like the Australian dollar ran into a bout of profit-taking after an impressive run up since the start of the new year.


Oil prices tumbled, extending losses for a sixth session to below $78 a barrel, after the International Energy Agency cut its view on 2010 global oil demand growth.

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:33 AM
Response to Reply #44
48. GLOBAL MARKETS WEEKAHEAD-A (sour) taste of things to come
Fri Jan 15, 2010 3:18pm GMT LONDON, Jan 15 (Reuters) - Investors head into next week having had a small taste of what lies ahead this year, monetary tightening in a major economy -- and, frankly, they didn't like it.

They also had to deal with a disappointing start to an earnings season that is about to heat up, with big bank results to the fore. Again, they didn't like it.

The result has been that while the risk-asset rally that began in March last year has not been reversed, it has stumbled. World stocks as measured by MSCI .MIWD00000PUS were set to end the week flat while the dollar .DXY rose on Friday.

The week ahead could thus be a watershed, testing the sustainability of what have been entrenched investment patterns with more earnings, Chinese growth data and continuing worries about sovereign debt. One of the biggest drivers will almost certainly be the U.S. earnings season, which has got off to a rocky start.

Alcoa (AA.N: Quote, Profile, Research) disappointed and there were profit warnings from Chevron (CVX.N: Quote, Profile, Research) and, in Europe, Societe Generale. JPMorgan (JPM.N: Quote, Profile, Research), the second-largest U.S. bank by assets, had a better-than-expected profit, but put investors off with rising losses on mortgages and commercial loans.

Ahead lie IBM (IBM.N: Quote, Profile, Research), General Electric (GE.N: Quote, Profile, Research), Google (GOOG.O: Quote, Profile, Research) and a host of major banks, including Citigroup (C.N: Quote, Profile, Research), Bank of America (BAC.N: Quote, Profile, Research), Morgan Stanley (MS.N: Quote, Profile, Research), Goldman Sachs (GS.N: Quote, Profile, Research) and Wells Fargo (WFC.N: Quote, Profile, Research).

In purely numerical terms, most earnings are supposed to be spectacular because of a year-on-year impact. But investors will be burrowing deep for signs of real improvement.

"Markets will want to see evidence of strength in the private sector demand, because its important the economy stand on its feet after the public fiscal stimulus starts to fade which will probably happen around mid-year," said Geoff Lewis, head of investment services at JP Morgan Asset Management in Hong Kong. Continued...

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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:35 AM
Response to Reply #44
50. Greece is the only thing propping up the USD n/t
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:46 AM
Response to Reply #50
53. Given Greece's Problems, that means We're REALLY in Trouble!
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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 10:55 AM
Response to Reply #53
54. A sad day when the Greece on the Euro's skids
is keeping the Dollar afloat :shameless metaphors:

How bout a maritime theme next week........Yellow Submarine is a hellofalot better ear worm to live with!!

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:25 AM
Response to Original message
56. In Remembrance of Martin Luther King, Jr
Edited on Mon Jan-18-10 11:31 AM by Demeter
What can one say about the Rev. King? He was born on January 15th, 1929, and shot dead at the age of 39, a martyr to the American dream of equality, liberty and pursuit of happiness for all. Somebody, or maybe a group, felt that extending these rights to minorities previously and traditionally denied the American promise was a step too far.

King organized the Montgomery bus boycott the year I was born, and was assassinated the day after my 13th birthday, so personally, I was too young and too sheltered by nervous parents to know much about it all.

Rev. King's "I Have a Dream" speech was delivered in Washington, DC, on August 28th, 1963. Three months later, President JF Kennedy was assassinated in Dallas; LBJ took over the job, and with his Congressional expertise and power, passed the Civil Rights Act (1964) (at which point MLK received the Nobel Prize, the youngest recipient to date) and the National Voting Rights Act (1965). 3 years after that, MLK himself was ripped from his people. MLK had started to concentrate on ending poverty and the Vietnam war. In one speech, he stated that "something is wrong with capitalism" and claimed, "There must be a better distribution of wealth, and maybe America must move toward a democratic socialism." Were he alive today, King would be in there with Naomi Klein and John Perkins, fighting Globalism and the economic piracy that is the hallmark of the Corporatists. Given his success in voting rights and anti-discrimination, somebody must have feared MLK would accomplish those goals, too.

The assassination led to a nationwide wave of riots in more than 100 cities. Presidential nominee Robert Kennedy was on his way to Indianapolis for a campaign rally when he was informed of King's death. He gave a short speech to the gathering of supporters informing them of the tragedy and asking them to continue King's idea of non-violence. President Lyndon B. Johnson declared April 7 a national day of mourning for the civil rights leader. Vice-President Hubert Humphrey attended King's funeral on behalf of Lyndon B. Johnson, as there were fears that Johnson's presence might incite protests and perhaps violence. At his widow's request, King's last sermon at Ebenezer Baptist Church was played at the funeral. It was a recording of his "Drum Major" sermon, given on February 4, 1968. In that sermon, King made a request that at his funeral no mention of his awards and honors be made, but that it be said that he tried to "feed the hungry", "clothe the naked", "be right on the (Vietnam) war question", and "love and serve humanity". His good friend Mahalia Jackson sang his favorite hymn, "Take My Hand, Precious Lord", at the funeral. The city of Memphis quickly settled the strike on terms favorable to the sanitation workers.

Two months after King's death, escaped convict James Earl Ray was captured at London Heathrow Airport while trying to leave the United Kingdom on a false Canadian passport in the name of Ramon George Sneyd on his way to white-ruled Rhodesia.<122> Ray was quickly extradited to Tennessee and charged with King's murder. He confessed to the assassination on March 10, 1969, though he recanted this confession three days later.<123> On the advice of his attorney Percy Foreman, Ray pleaded guilty to avoid a trial conviction and thus the possibility of receiving the death penalty. Ray was sentenced to a 99-year prison term.<123><124> Ray fired Foreman as his attorney, from then on derisively calling him "Percy Fourflusher".<125> He claimed a man he met in Montreal, Quebec with the alias "Raoul" was involved and that the assassination was the result of a conspiracy.<126><127> He spent the remainder of his life attempting (unsuccessfully) to withdraw his guilty plea and secure the trial he never had.<124> On June 10, 1977, shortly after Ray had testified to the House Select Committee on Assassinations that he did not shoot King, he and six other convicts escaped from Brushy Mountain State Penitentiary in Petros, Tennessee. They were recaptured on June 13 and returned to prison.<128>

When our city erupted in violence the year after King's assassination, my parents, like so many, fled the big city for the isolation and therefore relative security of the suburbs. It was at this point that major cities began to die: decaying from within, robbed of people, capital, vigor, jobs, stores, respect and dignity. America, traumatized by Kennedy's assassination, took a mortal wound when Martin Luther King was martyred. And when Bobby Kennedy went down, so did the American dream.

We have been living in the aftermath, when the forces for evil have been mopping up the spoils. The war was lost long ago. Only a new revolution will ever bring us back to the high point this nation attained when Jack, Bobby, and Martin led us.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:26 AM
Response to Reply #56
57. MLK's Requested Funeral Hymm
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:36 AM
Response to Reply #56
60. "I Have a Dream"
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:38 AM
Response to Reply #56
61. "I Have Been to the Mountain Top" (Last Speech)
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 11:42 AM
Response to Reply #56
63. Useful Sources on Line
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 12:00 PM
Response to Original message
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 01:57 PM
Response to Original message
68. Kick!
So I can read later. I've been laid up all week-end with a nasty cold or the flu.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 06:47 PM
Response to Reply #68
74. Physician, Heal Thyself!
Hope you're feeling better soon.

I'm off to pump up the economy again. Thanks everyone for joining in our little strange interlude. See you next weekend!
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hamerfan Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 07:48 PM
Response to Reply #74
75. Thank you, Demeter,
For keeping it all together for us!
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 08:24 PM
Response to Reply #74
76. Demeter, Thanks for the weekend thread

enjoyed the 60s girls groups

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Po_d Mainiac Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 09:20 PM
Response to Reply #74
77. A big Thank U Demeter! n/t
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