Weekend Economists Chart the Bradbury Chronicles, June 8-10,2012

[Demeter]

The word came out on Wednesday...Ray Bradbury had joined the immortals:

?t=1339006254&s=3

Ray Bradbury dies at 91; author lifted fantasy to literary heights

http://www.latimes.com/news/obituaries/la-me-ray-bradbury-20120607,0,5622415.story

Ray Bradbury's more than 27 novels and 600 short stories helped give stylistic heft to fantasy and science fiction. In 'The Martian Chronicles' and other works, the L.A.-based Bradbury mixed small-town familiarity with otherworldly settings...

http://www.trbimg.com/img-4fcf688e/turbine/la-ray-bradbury1970_kqm4x5nc/600

Bradbury died Tuesday night (June 5, 2012) in Los Angeles, his agent Michael Congdon confirmed. His family said in a statement that he had suffered from a long illness.

Author of more than 27 novels and story collections—most famously "The Martian Chronicles," "Fahrenheit 451," "Dandelion Wine" and "Something Wicked This Way Comes"—and more than 600 short stories, Bradbury has frequently been credited with elevating the often-maligned reputation of science fiction. Some say he singlehandedly helped to move the genre into the realm of literature...

I can attest to that. As an avid SF reader, I grew up on the Greats in the 60's and 70's, and Bradbury was the only true writer, more than just a whiz-bang story-teller. His characters had depth and his stories had a humanity familiar to a Midwestern girl, the kind of Plains-rooted reality that doesn't exist on any of the other coasts of this continent (I've lived them all: East, West and South). It wasn't until women broke into the genre (starting with Andre Norton, and progressing through Ursula Leguin, Kage Baker, Mercedes Lackey) that Bradbury (largely retired) met any competition in the quality of writing.

http://www.trbimg.com/img-4fcf6888/turbine/la-ray-bradbury1923_kqm4zhnc/600

Ray Bradbury in 1923 in Waukegan, Ill. "“When I was born in 1920,”" he said in 2000, "“the auto was only 20 years old. Radio didn’'t exist. TV didn’t exist. I was born at just the right time to write about all of these things."”

The Bradbury family in 1958: From left, Bettina, 3; Ray; Ramona, 7; Susan, 8; and Marguerite.

Bradbury, in his office in 1985, had said he didn't throw anything away.

His Illinois hometown named a park in his honor. Bradbury (in 1990) included the setting in "Dandelion Wine."

A friend of mine, also from Waukeegan, played in this park (20 years after Bradbury did). The park itself is a character in his novel "Dandelion Wine", which I recommend everyone read. Like Mark Twain before him, Bradbury captured the experience of childhood in the United States of his time (1920-1960 it couldn't stretch much farther, since the US changed rapidly thereafter). It is the least SF, most beautiful of his works.

The LA Times did a bang-up obituary, from which all these pictures (save the first) are drawn.

[Demeter]

1. CHECK HERE LATER FOR BANK CLOSINGS

I have a nasty stomach flu, thanks to the Kid, and I'm taking the afternoon off to complain about it. Hence the early start...

[Fuddnik]

25. As of 8:30, four banks down.

On Friday, June 8, 2012, Waccamaw Bank, Whiteville, NC was closed by the North Carolina Office of the Commissioner of Banks, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

On Friday, June 8, 2012, Farmers’ and Traders’ State Bank, Shabbona, IL was closed by the Illinois Department of Financial and Professional Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

On Friday, June 8, 2012, Carolina Federal Savings Bank, Charleston, SC was closed by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

On Friday, June 8, 2012, First Capital Bank, Kingfisher, OK was closed by the Oklahoma State Banking Commissioner, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

http://www.fdic.gov/

[Fuddnik]

26. Take a break, and get well.

[Demeter]

31. It was my computer that was sick

I am hoping its fit of insanity is over and done with...

[Demeter]

32. More Details to Fuddnik's report

First Capital Bank, Kingfisher, Oklahoma, was closed today by the Oklahoma State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with F & M Bank, Edmond, Oklahoma, to assume all of the deposits of First Capital Bank.

The sole branch of First Capital Bank will reopen on Saturday as a branch of F & M Bank...As of March 31, 2012, First Capital Bank had approximately $46.1 million in total assets and $44.8 million in total deposits. F & M Bank will pay the FDIC a premium of 7.65 percent to assume all of the deposits of First Capital Bank. In addition to assuming all of the deposits of the failed bank, F & M Bank agreed to purchase approximately $40.7 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $5.6 million. Compared to other alternatives, F & M Bank's acquisition was the least costly resolution for the FDIC's DIF. First Capital Bank is the 25th FDIC-insured institution to fail in the nation this year, and the first in Oklahoma. The last FDIC-insured institution closed in the state was First National Bank of Davis, Davis, on March 11, 2011.

Carolina Federal Savings Bank, Charleston, South Carolina, was closed today by the Office of the Comptroller of the Currency (OCC), which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of North Carolina, Thomasville, North Carolina, to assume all of the deposits of Carolina Federal Savings Bank.

The two branches of Carolina Federal Savings Bank will reopen during normal business hours as branches of Bank of North Carolina...As of March 31, 2012, Carolina Federal Savings Bank had approximately $54.4 million in total assets and $53.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, Bank of North Carolina agreed to purchase approximately $41.0 million of the assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $15.2 million. Compared to other alternatives, Bank of North Carolina's acquisition was the least costly resolution for the FDIC's DIF. Carolina Federal Savings Bank is the 26th FDIC-insured institution to fail in the nation this year, and the second in South Carolina. The last FDIC-insured institution closed in the state was Plantation Federal Bank, Pawleys Island, on April 27, 2012.

Farmers and Traders State Bank, Shabbona, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First State Bank, Mendota, Illinois, to assume all of the deposits of Farmers and Traders State Bank.

The two branches of Farmers and Traders State Bank will reopen on Saturday as branches of First State Bank...As of March 31, 2012, Farmers and Traders State Bank had approximately $43.1 million in total assets and $42.3 million in total deposits. In addition to assuming all of the deposits, First State Bank agreed to purchase essentially all of the failed bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.9 million. Compared to other alternatives, First State Bank's acquisition was the least costly resolution for the FDIC's DIF. Farmers and Traders State Bank is the 27th FDIC-insured institution to fail in the nation this year, and the second in Illinois. The last FDIC-insured institution closed in the state was Premier Bank, Wilmette, on March 23, 2012.

Waccamaw Bank, Whiteville, North Carolina, was closed today by the North Carolina Office of the Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Community Bank, Bluefield, Virginia, to assume all of the deposits of Waccamaw Bank.

The 16 branches of Waccamaw Bank will reopen on Monday as branches of First Community Bank...As of March 31, 2012, Waccamaw Bank had approximately $533.1 million in total assets and $472.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, First Community Bank agreed to purchase approximately $515.3 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and First Community Bank entered into a loss-share transaction on $330.6 million of Waccamaw Bank's assets. First Community Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $51.1 million. Compared to other alternatives, First Community Bank's acquisition was the least costly resolution for the FDIC's DIF. Waccamaw Bank is the 28th FDIC-insured institution to fail in the nation this year, and the first in North Carolina. The last FDIC-insured institution closed in the state was Blue Ridge Savings Bank, Inc., Asheville, on October 14, 2011.

TOTAL BILL TO THE FDIC: $80.8M

[Demeter]

2. A novelist for all seasons

http://www.latimes.com/news/obituaries/la-me-ray-bradbury-20120607,0,5622415.story

...Bradbury frequently attempted to shrug out of the narrow "sci-fi" designation, not because he was put off by it, but rather because he believed it was imprecise.

"I'm not a science fiction writer," he was frequently quoted as saying. "I've written only one book of science fiction "Fahrenheit 451". All the others are fantasy. Fantasies are things that can't happen, and science fiction is about things that can happen."

It wasn't merely semantics.

His stories were multi-layered and ambitious. Bradbury was far less concerned with mechanics—how many tanks of fuel it took to get to Mars and with what rocket—than what happened once the crew landed there, or what they would impose on their environment. "He had this flair for getting to really major issues," said Paul Alkon, emeritus professor of English and American literature at USC.

"He wasn't interested in current doctrines of political correctness or particular forms of society. Not what was wrong in '58 or 2001 but the kinds of issues that are with us every year."

Benford said Bradbury "emphasized rhetoric over reason and struck resonant notes with the bulk of the American readership—better than any other science fiction writer. Even [H.G.] Wells ... [Bradbury] anchored everything in relationships. Most science fiction doesn't."

Whether describing a fledgling Earthling colony bullying its way on Mars (" -- And the Moon Be Still as Bright" in 1948) or a virtual-reality baby-sitting tool turned macabre monster ("The Veldt" in 1950), Bradbury wanted his readers to consider the consequences of their actions: "I'm not a futurist. People ask me to predict the future, when all I want to do is prevent it."

Benford: "Nostalgia is eternal. And Americans are often displaced from their origins and carry an anxious memory of it, of losing their origins. Bradbury reminds us of what we were and of what we could be," Benford said.

"Like most creative people, he was still a child, His stories tell us: Hold on to your childhood. You don't get another one. I don't think he ever put that away."

Bradbury is survived by his daughters Susan Nixon, Ramona Ostergren, Bettina Karapetian and Alexandra Bradbury; and eight grandchildren. His wife, Marguerite, died in 2003.

[Demeter]

3. US banks face $60bn capital shortfall

Fed officials said that most banks should be able to reach new capital requirements by retaining earnings during the next few years rather than by raising capital in the market

Read more >>
http://link.ft.com/r/FG6LAA/OR40AQ/1O51V/08XVGM/HYAFXV/1G/t?a1=2012&a2=6&a3=8


BUT, BUT, BUT...THAT MEANS NO DIVIDENDS! NO BONUSES! IT'S THE END OF AMERICA!

[Demeter]

4. Fragility and Collapse: Slowly at first, then all at once Josh Keyes YOU MUST READ THIS ALL!

http://cluborlov.blogspot.co.uk/2012/06/fragility-and-collapse-slowly-at-first.html#more

This article is based on the notes from one of the talks I gave at the Age of Limits conference.

I have been predicting collapse for over five years now. My prediction is that the USA will collapse financially, economically and politically within the foreseeable future... and this hasn’t happened yet. And so, inevitably, I am asked the same question over and over again: “When?” And, inevitably, I answer that I don’t make predictions as to timing. This leaves my questioners dissatisfied, and so I thought that I should try to explain why it is that I don’t make predictions as to timing. I will also try to explain how one might go about creating such predictions, understanding full well that the result is highly subjective.


You see, predicting that something is going to happen is a lot easier than predicting when something will happen. Suppose you have an old bridge: the concrete is cracked, chunks of it are missing with rusty rebar showing through. An inspector declares it “structurally deficient.” This bridge is definitely going to collapse at some point, but on what date? That is something that nobody can tell you. If you push for an answer, you might hear something like this: If it doesn’t collapse within a year, then it might stay up for another two. And if it stays up that long, then it might stay up for another decade. But if it stays up for an entire decade, then it will probably collapse within a year or two of that, because, given its rate of deterioration, at that point it will be entirely unclear what is holding it up...

AS FAITHFUL READERS SUSPECT, THE ONLY THINGS HOLDING THE US UP ARE THE TAX-TRANSFERS FROM THE TAXPAYERS TO THE RECIPIENTS. AND THE CORPORATIONS ARE IN THE RECIPIENT COLUMN, DEPLETING THE WELL FASTER THAN THE POPULATION EVER COULD...

AND THEN THERE'S THE ENDLESS WARS, DOUBLING THAT DEPLETION...

...people assume that they are playing a game of chance, and that it’s a fair one: something Nassim Nicholas Taleb calls the “ludic fallacy.” If you drive over a structurally deficient bridge every day, it could be said that you are gambling with your life; but are you gambling, exactly? Gambling normally involves games of chance: roll of the dice, flip of the coin, unless someone is cheating. Fair games form a tiny, insignificant subset of all possible games, and they can only be played in contrived, controlled, simplified circumstances, using a specially designed apparatus that is functioning perfectly. Suppose someone tells you that he just flipped a coin 10 times and all 10 were heads? What is the probability that the next flip will be heads too? If you think 50%, then you are discounting the very high probability that the game is rigged. And this makes you a sucker.

Games played directly against nature are never fair. You could say that nature always cheats: just as you are about to win the jackpot, the casino gets hit by an asteroid. You might think that such unlikely events are not significant, but it turns out that they are: Taleb’s black swans rule the world. Really, nature doesn’t so much cheat as not give a damn about your rules...

WITH ANY LUCK (AND WE NEED LUCK, AT THIS POINT) EUROPE WILL GO FIRST. THEN WE WILL HAVE OUR LAST CHANCE TO PULL OUT OF THE DEATH SPIRAL

...The US Federal government is currently spending about $300 billion per month. To do so, it “borrows” around $100 billion per month. The word “borrows” is in quotes, because most of that new debt is created by the Treasury and bought up by the Federal Reserve, so in essence the government just writes itself a check for $100 billion dollars every month. If this continues forever, then the US Dollar will become worthless, so a push is on to get foreign central banks to take on some of this debt as well. They can do that, of course, but, seeing as the US Dollar is on track to become worthless, they have been decreasing their holdings of US Treasuries rather than increasing them. Nobody can tell how long such a scenario can continue to unfold, so what one looks for in a situation like this is signs of desperation...

THIS IS A COLUMN QUITE SUITABLE FOR ASSOCIATION WITH RAY BRADBURY

[Demeter]

8. Shocking: U.S. Troops Average One Suicide a Day

http://www.alternet.org/newsandviews/article/944894/shocking%3A_u.s._troops_average_one_suicide_a_day/

In 2011, suicide rates in the U.S. military reached a staggering level of one per day: 154 active-duty troops committed suicide in the first 155 days of the year, representing the fastest increase in troop suicides over the past decade.

According to the Associated Press and Pentagon statistics:

The 154 suicides for active-duty troops in the first 155 days of the year far outdistance the U.S. forces killed in action in Afghanistan — about 50 percent more.

…

The 2012 active-duty suicide total of 154 through June 3 compares to 130 in the same period last year, an 18 percent increase. And it’s more than the 136.2 suicides that the Pentagon had projected for this period based on the trend from 2001-11. This year’s January-May total is up 25 percent from two years ago, and it is 16 percent ahead of the pace for 2009, which ended with the highest yearly total thus far.

Suicide rates leveled off in 2010 and 2011. The reasons for the increase in suicides are unclear:

Among explanations, studies have pointed to combat exposure, post-traumatic stress, misuse of prescription medications and personal financial problems. Army data suggest soldiers with multiple combat tours are at greater risk of committing suicide, although a substantial proportion of Army suicides are committed by soldiers who never deployed.

Rates of sexual assault, alcohol abuse, and domestic violence are also rising among U.S. troops.

[Demeter]

9. There's an App for That: Reporting NYPD Stop and Frisks

http://colorlines.com/archives/2012/06/theres_an_app_for_that_reporting_nypd_stop_and_frisk_stops.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+racewireblog+%28ColorLines%29



stop-and-frisk-app.pngThe New York Civil Liberties Union today unveiled the “Stop and Frisk Watch” app that allows New Yorkers to monitor police activity and report NYPD officers who conduct unlawful stop-and-frisk encounters and other police misconduct.

“Stop and Frisk Watch is about empowering individuals and community groups to confront abusive, discriminatory policing,” NYCLU Executive Director Donna Lieberman said in a statement. “The NYPD’s own data shows that the overwhelming majority of people subjected to stop-and-frisk are black or Latino, and innocent of any wrongdoing. At a time when the Bloomberg administration vigorously defends the status quo, our app will allow people to go beyond the data to document how each unjustified stop further corrodes trust between communities and law enforcement.”

In February the NYPD released stop-and-frisk statistics to the City Council that revealed the highest number of stops ever recorded in one year. Out of 684,330 stop-and-frisk stops, 87% percent of those stopped in 2011 were black or Latino, and nine out of ten persons stopped were not arrested, nor did they receive summonses.

An NYCLU analysis showed that black and Latino males between the ages of 14 and 24 accounted for 41.6 percent of stops in 2011, though they make up only 4.7 percent of the city’s population. The number of stops of young black men exceeded the city’s entire population of young black men.

The app includes a “Know Your Rights” section that instructs people about their rights when confronted by police and their right to film police activity in public. Stop and Frisk Watch is intended for use by people witnessing a police encounter, not by individuals who are the subject of a police stop.

The app allows bystanders to fully document stop-and-frisk encounters and alert community members when a street stop is in progress...

CAN AN AMERICAN SPRING BE FAR BEHIND?

[Demeter]

72. NYPD's stop-and-frisk policy to be reviewed by US department of justice

http://www.guardian.co.uk/world/2012/jun/07/nypd-stop-frisk-justice-department1

The department of justice is reviewing the NYPD's controversial stop-and-frisk policy, following demands by campaigners who say the tactic is unconstitutional and racially discriminatory.

The DoJ's intervention, confirmed to the Guardian, follows a meeting with New York City lawmakers in Washington on Thursday.

If justice department officials decided to launch a federal investigation or to intervene in lawsuits that are already under way, it would deal a significant blow to a policy that has been championed by New York City mayor Michael Bloomberg and his police chief Ray Kelly.

Last year the police department stopped close to 700,000 people on the city's streets, more than ever before. As with every year over the past decade, the vast majority of those stopped were African American or Latino and nearly nine out of 10 had committed no crime. The department is on track to make 2012 another record-setting year...Under President Obama, the department of justice has aggressively investigated a number of big city police departments for allegations ranging from systematic civil rights abuses such as harassment of racial minorities, false arrests to excessive use of force . Under so-called "pattern and practice" investigations – which grant the department authority to sue police departments if there is a pattern of violations of citizens' constitutional rights – the department has looked into allegations of misconduct in Newark, New Jersey and Seattle, Washington...

MORE

[wilsonbooks]

46. A very good read/

Thanks for posting

[Demeter]

52. Welcome to WEE!

Always glad of a new face...do visit the Stock Market Watch during the week, a new thread every day (unlike WEE).

[Tansy_Gold]

65. Welcome to the Economy Group!

By the way, I love your sig line.

[wilsonbooks]

88. Thankjs Kids, I have been folowing for a long time

I just never post. Don't know of a better place on the net to find economic articles than here.

[DemReadingDU]

94. Ths is a great article, long but excellent read.

Here are the last 2 paragraphs...


This is usually the point in my talks when somebody in the audience pipes up to say: “This is all doom and gloom, isn’t it?” To which I say, “For you, maybe, if you don’t have any other plan except to wait for everything to somehow magically fix itself.” You see, building something that works takes a lot of time and effort. Things stop working in a hurry, but making a replacement takes time, resources, and, most importantly, stability. This can only be done ahead of time, and doing so takes practice (by which I mean learning from one’s own plentiful mistakes). If you wait until that last moment when, in a spasm of horror, you suddenly think to yourself “Oh shit, Dmitry was right!” then indeed Doom and Gloom will be your charming new bunkmates. But if you start your collapse early and get it over with quickly, then your chances of surviving this are quite likely to substantially exceed zero.

And so, please don’t ask me “When?”—do your own thinking! I’ve given you the tools you need to come to your own conclusions, based on which you may be able to start your collapse early and get it over with quickly.
http://cluborlov.blogspot.com/2012/06/fragility-and-collapse-slowly-at-first.html

[Demeter]

5. Ben Bernanke to Congress: Get America's fiscal house in order. Please. (+video)

SO, NOW HE'S ASKING....WHERE WAS HE 10 YEARS AGO?

http://www.csmonitor.com/USA/Politics/2012/0607/Ben-Bernanke-to-Congress-Get-America-s-fiscal-house-in-order.-Please.-video

Fed Chairman Ben Bernanke told lawmakers Thursday that the Fed alone can't put Americans back to work. 'I'd be much more comfortable if Congress would take some of this burden,' he said, bluntly...

Members of Congress had plenty of things to ask Ben Bernanke on Thursday, but he also had a plea to them: H-E-L-P!
Related stories

Could 'fiscal cliff' push US into recession? Five questions answered.
The Fed speaks: Five times Federal Reserve chairmen made waves with words
Bernanke says Fed will do 'whatever necessary' if euro crisis spreads (+video)

He didn't say it quite that way. The Federal Reserve chairman is known for his calm and unruffled demeanor, and his latest appearance on Capitol Hill was no exception...

SEE VIDEO AT LINK

[Po_d Mainiac]

27. The chairsatan's stupidity shines through

In the last paragraph of his prepared statement

Quote: A third objective for fiscal policy is to promote a stronger economy in the medium and long term through the careful design of tax policies and spending programs. To the fullest extent possible, federal tax and spending policies should increase incentives to work and save, encourage investments in workforce skills, stimulate private capital formation, promote research and development, and provide necessary public infrastructure. Although we cannot expect our economy to grow its way out of federal budget imbalances without significant adjustment in fiscal policies, a more productive economy will ease the tradeoffs faced by fiscal policymakers.

Thank you. I would be glad to take your questions.

Hey douche bag, how about raising interest rates so savers get a return of more than negative on their net? But you set the rates, and can't do that because all the banksters wood fail.

There ain't gonna be a more productive economy until the system gets flushed of insolvent institutions that are sucking the lifeblood in a desperate measure to earn their way back into the 'black.'

[Demeter]

6. Spain Holds a Trump Card in Bank Bailout Negotiations

http://www.nytimes.com/2012/06/07/world/europe/spain-holds-a-trump-card-in-bank-bailout-talks.html?_r=1

The bargaining has begun over a deal to rescue Spain’s ailing banks, confronting Europe with urgent choices about whether to try to enforce onerous bailout terms on Madrid as the crisis spreads to the region’s largest economies.

The question has seemingly become one of when, and not if, Spain’s banks will receive assistance from European countries, with investors on Wednesday predicting an imminent rescue and pushing up stocks and bonds on both sides of the Atlantic.

Spain, the euro zone’s fourth-largest economy, is too big to fail and possibly too big to steamroll, changing the balance of power in negotiations over a bailout. Political leaders in Madrid are insisting that emergency aid to their banks avoid the stigma in capital markets that has hobbled countries like Greece, Portugal and Ireland after accepting tough rescue terms. They are also fighting to slow the pace of austerity and economic change that have pushed those smaller countries into deeper recessions.

Spain has the added advantage of seeking help in a changed political environment in which calls for growth have begun to outweigh German insistence on austerity. Unlike Greece, Spain’s government did not run large budget deficits before the crisis, giving it leverage to argue that European aid to its banks should not come weighed down with a politically delicate loss of decision-making power over its own economic and fiscal policies. ...

[Demeter]

7. House Democrats Propose Minimum Wage Increase to $10

http://www.alternet.org/newsandviews/article/944490/house_democrats_propose_minimum_wage_increase_to_%2410/#paragraph5



A group of House Democrats have proposed increasing the minimum wage to $10, which, as Rep. Jesse Jackson Jr. (D-IL) pointed out would allow the wage to “catch up”with where it would be had it been allowed to grow with inflation:

Rep. Jesse Jackson Jr. (D-Ill.) and 17 House Democrats, including several Congressional Black Caucus members, proposed legislation Wednesday that would increase the minimum wage to $10 an hour.

Jackson said his bill, the Catching Up to 1968 Act, is needed to give low-income workers a way to “catch up” to inflation, which continues to eat away at the current federal minimum wage of $7.25 an hour. He also said it would give these workers more income and boost overall demand for the struggling economy.

The minimum wage hit its peak buying power in 1968; to have the same buying power today, the minimum wage would have to be $9.92. If the minimum wage had been indexed to the Consumer Price Index since 1968, it would be approximately $10.40 today.

The current minimum wage is also covering a much smaller percentage of health care and tuition costs than it did just a few decades ago. Already this year, San Francisco has increased its minimum wage to $10, while 1.4 million workers are benefiting from scheduled increases in the minimum wage in eight states. According to the Economic Policy Institute, boosting the minimum wage particularly helps women and minorities, who make up a disproportionate share of minimum wage-earners.

I GOT NEWS FOR THEM...THE MINIMUM WAGE NEEDED TO BE $10 BACK IN 1979...

[Demeter]

10. ANOTHER CULTURAL LOSS: 'Car Talk' Guys Are Retiring

http://www.npr.org/blogs/thetwo-way/2012/06/08/154576808/car-talk-guys-are-retiring-but-their-best-stuff-will-be-rebroadcast?ft=1&f=1001



Click and Clack are going into retirement.

This just in from NPR's communications department:

June 8, 2012; Our Fair City – Tom and Ray Magliozzi, aka Click and Clack the Tappet Brothers, the comedian mechanics who host NPR's Car Talk, will tell their listeners this afternoon that as of this fall, they'll no longer record new programs. But their weekly call-in series will continue to be distributed by NPR drawing on material from their 25 years of show archives.

"My brother has always been 'work-averse,' " says Ray, 63. "Now, apparently, even the one hour a week is killing him!"

"It's brutal!" adds Tom, 74.

The brothers have been taping Car Talk at WBUR in Boston for 35 years, and the show has been a staple on NPR Member stations for the last 25 years. With older brother Tom turning 75 this year, the guys decided it was time to "stop and smell the cappuccino."

NPR will continue to distribute the weekly show ... to stations across the country. Beginning in October, the Car Talk production team will actively produce new shows built from the best of its 25 years of material – more than 1,200 shows – with some updates from the brothers. The guys will also still write their twice weekly Dear Tom and Ray column, and put their feet in their mouths in surprising new ways on the web and Facebook. ...

The brothers will mark their 25th anniversary on NPR this fall, and then put the series in the hands of their producers, who will continue to produce the show.

I HAVE TO THANK THE TAPPIT BROTHERS FOR KEEPING ME SANE DURING MY EXILE IN CALIFORNIA...THEY REMINDED ME OF MY LIFE IN NH AND MASSACHUSETTS...

NOW THAT I AM BACK HOME WHERE I BELONG, THEY STILL REMIND ME OF THE GOOD STUFF ABOUT NEW ENGLAND, AND THE GOOD THINGS THAT HAPPENED THERE.

I HAVE ONLY GOOD MUSICAL MEMORIES TO REMEMBER ABOUT CALIFORNIA...THE REST WAS THE STUFF OF NIGHTMARES...

[InkAddict]

23. These things happen in threes, you know...

Ex-Fleetwood Mac guitarist Bob Welch’s suicide note: Guitarist vowed not to be medical burden to wife, says friend

http://www.nydailynews.com/entertainment/music-arts/ex-fleetwood-mac-guitarist-bob-welch-suicide-note-guitarist-vowed-medical-burden-wife-friend-article-1.1092396

R.I.P. Bob -

[Po_d Mainiac]

28. Welch never really fit with Fleetwood Mac

He wasn't even mentioned when the group was inducted into the R&R Hall of Fame.

Ironic that Christine McVie and Lindsey Buckingham sing background vocals in this version of 'Sentimental Lady'

RIP..Sucks you had to check out the way you did.

[Demeter]

11. Chesapeake to sell pipeline assets for more than $4 billion

http://news.yahoo.com/chesapeake-sell-pipeline-assets-more-4-billion-120949703--finance.html

Chesapeake Energy Corp plans to sell its pipeline and related assets to Global Infrastructure Partners for more than $4 billion, as the company scrambles to plug an estimated $10 billion funding shortfall and prepares to face what promises to be a fiery annual shareholder meeting later on Friday. The second-largest U.S. natural gas producer, whose shares have lost about half their value over the last year, is trying to convince its shareholders that it is still a good investment despite steep drops in profits and corporate governance scandals centered around Chief Executive Officer Aubrey McClendon.

McClendon has said he will step down as chairman, and Chesapeake has said it will replace four of its current board members with directors chosen by its top shareholders -- activist Carl Icahn and Mason Hawkins' Southeastern Asset Management. This would give shareholder-backed directors a majority of the board. Chesapeake is under pressure to sell assets and cut spending to reduce debt after tumbling natural gas prices have pinched profits.

It said it would sell its limited partner units and general partner interests in Chesapeake Midstream Partners LP to infrastructure fund GIP for $2 billion. GIP will own all of the general partner and 69 percent of the limited partner units after the deal. The company also entered into an agreement with Chesapeake Midstream Partners to sell certain Mid-Continent gathering and processing assets...

[Demeter]

12. Chesapeake shareholders strike back after losses

http://www.marketwatch.com/story/chesapeake-shareholders-strike-back-after-losses-2012-06-08?siteid=YAHOOB

Shareholders vote down CEO pay package, re-election of two board members...Chesapeake CHK +2.86% said two of its nine board members, V. Burns Hargis and Richard Davidson, tendered their resignation after the board re-elected them. The two directors resigned because they received the support of only 26% and 27% respectively of the votes cast by shareholders at its annual meeting.

Under a new measure OK’d by shareholders on Friday, directors at the company must receive a majority vote. The board said it adopted the new majority voting bylaw even though its 64% voting result rate fell short of the required two-thirds of votes outstanding.

A shareholder advisory vote to approve compensation for Chief Executive McClendon did not pass because it received only 20% of the vote. However, the resolution was non-binding and won’t have any direct effect on McClendon’s pay package, which totaled $17.9 million in 2011.

“Chesapeake appreciates shareholder feedback and will act appropriately with regard to the matters voted on today,” the company said...

PERHAPS THE AMERICAN SPRING HAS ALREADY BEGUN...IN THE BOARD ROOMS AND ANNUAL MEETINGS

[Demeter]

22. BP pushes for $15bn spill deal

BP is hoping to reach a settlement with the US authorities in which it would pay less than $15bn to resolve all criminal and civil penalties and damages arising from the 2010 Deepwater Horizon disaster, according to a person familiar with the discussions

Read more >>
http://link.ft.com/r/UXDMSS/HYVHEU/B49CK/KQBF31/TUECIY/LE/t?a1=2012&a2=6&a3=8

[Demeter]

13. US Trade deficit narrows as global demand slows

http://news.yahoo.com/april-trade-deficit-narrows-trade-contracts-123341158--business.html

The trade deficit narrowed in April as slower growth in Europe and China bit into exports and the soft economy clipped import demand, a government report showed on Friday. The trade gap shrank 4.9 percent to $50.1 billion, with exports falling 0.8 percent from last month's record level to $182.9 billion, the Commerce Department said. Imports dropped 1.7 percent to $233.0 billion. Both imports and exports were still the second-highest on record. But with Europe teetering on the edge of recession, some analysts saw trouble ahead for overseas sales, which have been a driver of economic growth.

"With the euro zone crisis set to rumble on for some time yet, exports to the euro zone are only likely to fall further," said Paul Dales, senior economist at Capital Economics in Toronto.

"The upshot is that net trade is unlikely to add much to GDP growth this year and may even subtract from it," he said.

However, revisions to earlier trade data suggested economic growth in the first quarter was stronger than previously estimated. UBS Securities said GDP growth would likely be revised up to a 2.3 percent annual rate from 1.9 percent.

Exports to the 27-nation European Union fell 11.1 percent in April to $22.3 billion, but for the first four months of 2012 were 3.5 percent above the same period last year. The EU was the United States' second-largest export market last year....MORE

[Demeter]

14. Reagan Was a Keynesian By PAUL KRUGMAN

http://www.nytimes.com/2012/06/08/opinion/krugman-reagan-was-a-keynesian.html

There’s no question that America’s recovery from the financial crisis has been disappointing. In fact, I’ve been arguing that the era since 2007 is best viewed as a “depression,” an extended period of economic weakness and high unemployment that, like the Great Depression of the 1930s, persists despite episodes during which the economy grows. And Republicans are, of course, trying — with considerable success — to turn this dismal state of affairs to their political advantage.

They love, in particular, to contrast President Obama’s record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding over a strong economic recovery. You might think that the more relevant comparison is with George W. Bush, who, at this stage of his administration, was — unlike Mr. Obama — still presiding over a large loss in private-sector jobs. And, as I’ll explain shortly, the economic slump Reagan faced was very different from our current depression, and much easier to deal with. Still, the Reagan-Obama comparison is revealing in some ways. So let’s look at that comparison, shall we?

For the truth is that on at least one dimension, government spending, there was a large difference between the two presidencies, with total government spending adjusted for inflation and population growth rising much faster under one than under the other. I find it especially instructive to look at spending levels three years into each man’s administration — that is, in the first quarter of 1984 in Reagan’s case, and in the first quarter of 2012 in Mr. Obama’s — compared with four years earlier, which in each case more or less corresponds to the start of an economic crisis. Under one president, real per capita government spending at that point was 14.4 percent higher than four years previously; under the other, less than half as much, just 6.4 percent.

O.K., by now many readers have probably figured out the trick here: Reagan, not Obama, was the big spender. While there was a brief burst of government spending early in the Obama administration — mainly for emergency aid programs like unemployment insurance and food stamps — that burst is long past. Indeed, at this point, government spending is falling fast, with real per capita spending falling over the past year at a rate not seen since the demobilization that followed the Korean War. Why was government spending much stronger under Reagan than in the current slump? “Weaponized Keynesianism” — Reagan’s big military buildup — played some role. But the big difference was real per capita spending at the state and local level, which continued to rise under Reagan but has fallen significantly this time around. And this, in turn, reflects a changed political environment. For one thing, states and local governments used to benefit from revenue-sharing — automatic aid from the federal government, a program that Reagan eventually killed but only after the slump was past. More important, in the 1980s, anti-tax dogma hadn’t taken effect to the same extent it has today, so state and local governments were much more willing than they are now to cover temporary deficits with temporary tax increases, thereby avoiding sharp spending cuts...MORE

[Demeter]

20. GOP Slams Obama For Saying Private Sector's 'Doing Fine'

http://www.npr.org/blogs/itsallpolitics/2012/06/08/154579423/gop-slams-obama-for-saying-private-sectors-doing-fine?ft=1&f=1001

President Obama opened himself up to withering Republican attacks Friday via an off-hand statement he made in a brief White House news conference.

Obama seemed to suggest that matters were going swimmingly for the private-sector part of the economy and that it was the reduction of government jobs that was the real problem.

Asked to respond to Republican charges that he was blaming Europe's economic policies for the alleged failure of his own domestic economic policies, Obama said:

"As I've said, we created 4.3 million jobs over the last two (years), 27 months, over 800,000 just this year alone. The private sector is doing fine."

Screech!!! As soon as the president uttered those words, it was obvious he and his campaign would be hearing this line repeated back at them for a while, and not in a good way...

YOU GOT TO SEE THE REST OF THIS--IT REMINDS ME OF LAUGH-IN OR THE SMOTHER'S BROTHERS SHOW.

[Po_d Mainiac]

29. Every penny that Raygun spent showed up as an increase in the national debt

Those now mothballed battleships still haven't been paid off.

[Demeter]

15. Ex-Bear Stearns executives to pay $275m NOT QUITE A CLAWBACK...

Former executives have agreed to pay $275m to investors in a rare example of senior Wall Street figures offering big sums to settle allegations

Read more >>
http://link.ft.com/r/FG6LAA/OR40AQ/1O51V/08XVGM/C4OQ7H/1G/t?a1=2012&a2=6&a3=8

[Demeter]

16. Hackers target social networks

Breaches at LinkedIn and eHarmony highlight an escalation in cybercriminals seeking to exploit personal data

Read more >>
http://link.ft.com/r/FG6LAA/OR40AQ/1O51V/08XVGM/WTSCP2/1G/t?a1=2012&a2=6&a3=8

[Demeter]

17. Best Buy founder resigns from board

Richard Schulze says he is weighing the future of his 20 per cent stake in the struggling US electronics retailer as he quits as its chairman

Read more >>
http://link.ft.com/r/FG6LAA/OR40AQ/1O51V/08XVGM/PFKHSC/1G/t?a1=2012&a2=6&a3=8

[Demeter]

18. Barclays forced to rethink Diamond plan

The UK bank chief executive reckoned without the eurozone crisis, which has made sorting out its business a much bigger challenge

Read more >>
http://link.ft.com/r/FG6LAA/OR40AQ/1O51V/08XVGM/JE73DO/1G/t?a1=2012&a2=6&a3=8

AND FOR THAT HE GETS PAID?

[Demeter]

21. London’s hold on RBS set to tighten

The government’s ownership of Royal Bank of Scotland is likely to be reinforced before it is reduced, the UK bank’s chairman Sir Philip Hampton has indicated, with an autumn-time capital restructuring being discussed with regulators

Read more >>
http://link.ft.com/r/FG6LAA/VLE526/RP6QL/IITJFU/DW0R01/LE/t?a1=2012&a2=6&a3=8

[Demeter]

19. Spain poised to seek bailout

Spain could request bailout aid for its struggling domestic banks as early as Saturday during conference calls between officials from all 17 eurozone finance ministries, making Madrid the fourth member of the single currency bloc to need a rescue from EU authorities since the outbreak of the sovereign debt crisis.

People briefed on planning for the calls, one with senior officials and a second with finance ministers themselves, said leaders want to move pre-emptively in order to assuage growing market uncertainty. The decision was first reported by Reuters.

There were signs on Friday that the Spanish government may back away from a formal request for aid after news of the call was made public. Spanish media quoted deputy budget minister Fernández Currás on Friday as saying the reports were “false”.

Read more >>
http://link.ft.com/r/NA70KK/U1I70M/PNGIU/OROUJ1/R3Y6XP/W1/t?a1=2012&a2=6&a3=8

[Demeter]

41. IMF: 40 Billion Euros Needed To Fix Spain's Banks

http://www.npr.org/2012/06/08/154626011/imf-40-billion-euros-needed-to-fix-spains-banks?ft=1&f=1001

The International Monetary Fund is estimating that Spanish banks need at least a euro40 billion ($49.87 billion) capital injection following a stress test it performed on the country's financial sector.

The lending institution said Friday that Spain's financial sector is well managed but vulnerable. It recommended that banks raise capital by an additional unspecified amount beyond the euro40 billion to properly restructure troubled banks, noting that the country should be prepared for further bank losses....

WHATEVER

[Eugene]

81. Spanish bailout could reach 100 billion euros: sources

Source: Reuters

Spanish bailout could reach 100 billion euros: sources

By Jan Strupczewski and Luke Baker

BRUSSELS | Sat Jun 9, 2012 12:56pm EDT

(Reuters) - A bailout for Spain's teetering banks, once requested by Madrid, could amount to as much as 100 billion euros, two senior EU sources told Reuters on Saturday.

Spain has not yet made a formal request for European aid but it could come during a conference call of euro zone finance ministers, the sources, who were both on an earlier call to discuss the technicalities of a rescue, said.

"A decision on Spain will only be taken ... by the ministers (in a second call). Madrid has not officially asked for help yet," one of the officials said. "The statement will mention 100 billion euros as an upper limit."

[font size=1]-snip-[/font]

Read more: http://www.reuters.com/article/2012/06/09/us-eurozone-idUSBRE8530RL20120609

[DemReadingDU]

87. Ireland wants rescue deal negotiated to match Spain's

6/9/12 Ireland wants rescue deal negotiated to match Spain's

Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return, European sources said on Saturday.

"Ireland raised two issues: one is the need to ensure parity of the deal with Spain retroactively on its bailout from EFSF," one European government source told AFP, referring to the temporary rescue fund, the European Financial Stability Facility. Another European government source confirmed the information.

Ireland secured an 85-billion-euro ($112 billion) rescue deal from the European Union and the International Monetary Fund in November 2010, but only after agreeing to draconian austerity measures.

Unlike Ireland, Spain's economy minister said a deal on financing for the country's troubled banks would not impose any conditions on the wider economy. Dublin plans to raise the issue during the next meeting of eurozone finance ministers to be held June 21, the sources said.

Eurozone finance ministers said Saturday they were willing to give Spain up to 100 billion euros to help its troubled banks, which are suffering due to their massive exposure to the ailing property sector.

http://news.yahoo.com/ireland-wants-rescue-deal-negotiated-match-spains-204107771.html

[Demeter]

89. Well, they have now

I listen to the BBC while throwing Sunday's paper....

[Eugene]

24. Spanish, Greek Turmoil May Trigger Downgrades: Moody’s

Source: Bloomberg News

Spanish, Greek Turmoil May Trigger Downgrades: Moody's

By Dave Liedtka on June 08, 2012

An exit of Greece from Europe’s monetary union and Spain’s need for financial support to capitalize its banks may trigger additional credit-rating downgrades in the region, Moody’s Investors Service said.

All sovereign ratings in the region, including the Aaa of nations such as Germany, would need to be reviewed if Greece left the 17-nation currency union, New York-based Moody’s said in a statement today. The credit standing of Cyprus, Portugal, Ireland, Italy and Spain would deteriorate as the risk of a Greece exit rose, the company said.

[font size=1]-snip-[/font]

Read more: http://www.businessweek.com/news/2012-06-08/spanish-greek-turmoil-may-trigger-downgrades-moody-s

[Po_d Mainiac]

30. The bond markets did this months ago n/t

[Demeter]

33. DILBERT'S DISCOVERY

[Demeter]

34. Bradbury's "Dandelion Wine" by Marissa Alioto

http://www.npr.org/blogs/thetwo-way/2012/06/06/154459361/from-our-readers-bradbury-s-wine



Dandelion Wine — first a short story in 1953 and then a novel in 1957 — may not wield as much name recognition as Fahrenheit 451, but it is the late Ray Bradbury's most personal work. This sensory tribute to his boyhood summers in Illinois begins:

"It was a quiet morning, the town covered over with darkness and at ease in bed. Summer gathered in the weather, the wind had the proper touch, the breathing of the world was long and warm and slow. You had only to rise, lean from your window, and know that this indeed was the first real time of freedom and living, this was the first morning of summer."

One of our commenters, "Tes Stone," remembers an interaction she had with the author, when the wind's "proper touch" seemed to have temporarily gone out of his experience. Stone wrote:

"I had the great pleasure of meeting him when I was still in college. As a part-time waitress at a fancy Los Angeles restaurant, I recognized him sitting at what appeared to be a business lunch with two 'suits.' He didn't seem very happy, so I rushed up to the bartender, grabbed a bottle and slapped a label on it, which said 'Dandelion Wine.' I walked to his table quite pompously and said, 'Your wine, sir.' His great wide smile and kiss on the cheek will always be etched in my memory. I am heartbroken, but very glad of this experience and all the wonderful work he has left us."

(Marissa Alioto is an intern on NPR's Social Media Desk.)

[Demeter]

35. Ray Bradbury: Finding Our Reflections Where We Didn't Expect Them by Peter Sagal

Heinlein, Asimov and Bradbury; they were the tripod (invasive, moving, with lasers) on which my science fiction education was built in the 1970s. This was somewhat self-selected, because once you — or I — grew out of Danny Dunn and Journey to the Mushroom Planet and Tom Swift, Jr., they were the inevitable destinations, the planets with the heaviest gravity wells in the sci-fi solar system.

Heinlein was story, adventure, politics, action. My favorite of his was Glory Road, an unabashed tribute to swords and swashbuckling on foreign planets in the vein of John Carter, but I was also freaked out by the parasitical brain worms of the Puppet Masters, confused but intrigued by the patriotic, slightly fascist future state of Starship Troopers, bemused and confused and excited by the weird sexual politics of Stranger In A Strange Land and Time Enough for Love.

Asimov was ideas, millions of them, based on physics, psychology, speculation: what if a civilization had never seen the stars? ("Nightfall.&quot What if social science became so powerful it could predict the future? (Foundation.) What if Asimov could actually write as well as he could think?

And Bradbury was people. Kids in a long-gone Midwestern town (based on a town not far from where I write), firemen who reluctantly burned books, and of course astronauts, travelers, people who went to other planets only to find themselves. That is, in fact, the ending of my favorite Ray Bradbury story, "The Million Year Picnic," the last story in The Martian Chronicles. A family from Earth arrives on Mars, after a nuclear war has wiped out life here. The Dad offers the kids a chance to see Martians; the story ends as the family looks into a canal, seeing their own reflection in the water, and the Dad says [something like]: "There they are. Now we are the Martians."

MORE AT LINK: http://www.npr.org/blogs/monkeysee/2012/06/06/154443387/ray-bradbury-finding-our-reflections-where-we-didnt-expect-them

[Demeter]

36. Beyond Corporate Capitalism: Not So Wild a Dream

http://www.alternet.org/story/155665/beyond_corporate_capitalism%3A_not_so_wild_a_dream_?page=entire

Public ownership offers a powerful alternative to traditional progressive approaches to fighting corporate domination. It’s time to put the taboo subject of public ownership back on the progressive agenda. It is the only way to solve some of the most serious problems facing the nation. We contend that it is possible not only to talk about this once forbidden subject but to begin to build a serious politics that can do what needs to be done in key sectors. Proposals for public ownership will of course be attacked as “socialism,” but conservatives call any progressive program—to say nothing of the modest economic policies of the Obama administration—“socialist.” However, many Americans are increasingly skeptical about the claims made for the corporate-dominated “free” enterprise system by its propagandists. A recent Pew Research Center poll found that a majority of Americans have an unfavorable view of corporations—a significant shift from only twelve years ago, when nearly three-quarters held a favorable view. At the same time, two recent Rasmussen surveys found Americans under 30—the people who will build the next politics—almost equally divided as to whether capitalism or socialism is preferable. Another Pew survey found that 18- to 29-year-olds have a favorable reaction to the term “socialism” by a margin of 49 to 43 percent.

Public ownership in certain sectors of the economy is the only way to solve some of America’s most pressing problems. Take the financial arena, where the current recession was hatched. Today, five giant banks control more than one-third of all deposits. Wall Street claims this makes it more efficient; but even if the Big Five banks were efficient (which is open to question—how “efficient” are institutions that didn’t know they were carrying a huge backlog of underwater loans?), they were all deeply involved in creating the meltdown that cost taxpayers billions in bailouts, and the overall economy trillions. Numerous economists, left and right, believe that these unbridled operations will inevitably lead to another crisis. JPMorgan Chase’s recent speculative loss of at least $2 billion should be fair warning.

The traditional liberal approach calls for more regulation. But, important as it is, this tool for controlling corporate behavior has been increasingly undermined by fierce lobbying. As Senator Dick Durbin observed, “The banks…are still the most powerful lobby on Capitol Hill. And they, frankly, own the place.” Most of those who created the mortgage crisis went scot-free, and the financial reforms that have since been enacted are flimsy in many areas and easily evaded. Nearly two years after the Dodd-Frank legislation was approved, only 108 of 398 necessary regulations have been written, 148 deadlines have been missed (67 percent) and nearly two dozen Congressional bills scrapping parts of the law proposed. The draft measures implementing the Volcker Rule (which limits proprietary trading by banks) are so full of holes as to be almost meaningless.

The underlying problem is that the economic and political power of corporations in general, and banks in particular, has grown dramatically. On the eve of the Great Depression in 1929, 250 banks controlled roughly half the nation’s banking resources. Now, a mere six banks control almost 74 percent of the nation’s banking resources. The steadily increasing concentration of power occurred, not surprisingly, as progressives’ power declined. Organized labor, the institution that has given progressive politics its muscle, has shrunk from a 1954 peak of 34.7 percent of the workforce to a mere 11.8 percent—only 6.9 percent in the private sector. As unions have grown weaker, conservative politicians at the state level, backed by right-wing-funded lobbying groups like the American Legislative Exchange Council, have launched drives to pass a raft of “right to work” and other anti-labor laws, further undermining the liberal-left’s key institutional power base...

MORE AT LINK

[Demeter]

37. Wage Theft Epidemic: Bosses Pocket 15 Percent of Workers' Pay

http://www.alternet.org/story/155710/wage_theft_epidemic%3A_bosses_pocket_15_percent_of_workers%27_pay?page=entire

READ IT AND WEEP

[Demeter]

74. Petition to raise the minimum wage

http://www.timeforaraise.org/

[Demeter]

38. Markets Post Best Week Of The Year

AND THEY SHOULD GET AN OSCAR FOR THE PERFORMANCE, A STUNNING PIECE OF MAKE-BELIEVE...

http://www.npr.org/blogs/thetwo-way/2012/06/08/154611116/markets-post-best-week-of-the-year?ft=1&f=1001

[Demeter]

39. The Euro’s 11th Hour By Steven Rattner

WAKE ME WHEN WE GET TO MIDNIGHT....

http://www.nytimes.com/2012/06/09/opinion/the-euros-11th-hour.html

WITH each passing day, the noose around the neck of the euro zone grows tighter, with no indication that European leaders share any coherent vision for avoiding the hangman. Instead of tackling structural problems, much of the endless chatter about the common currency centers on financial engineering: rescue funds, backstopping banks, printing money and the like.

At the heart of the European quandary is the conundrum that ideas that are economically sensible are not politically feasible, while ideas that are politically possible make little economic sense. Topping the “must do” list is the need to fix the disastrous design flaw in which the 17 members agreed to a common monetary policy without coordinating their budgets and regulations. A consequence was broadly divergent competitiveness. Since 2000, wages of German workers have increased barely more than efficiency has grown, an enormous advantage in global markets. Meanwhile, Greece’s unit labor cost (the average cost of labor per unit of output) has increased by roughly 40 percent. Greece is merely the most disobedient of a passel of problem children; by this all-important measure, the other 15 members are mostly sprinkled closer to Greece than to Germany. Without the ability to adjust exchange rates, euro zone countries with rising labor costs can’t compete against export powerhouses like Germany. But fully integrating 17 economies and undertaking the necessary restructuring remains, not surprisingly, politically absurd, with Europe’s clock clicking down.

Frustrated, European leaders have descended into the five stages of grief: denial, anger, bargaining, depression and — by some — acceptance that the euro could fall apart. They have embraced ideas that simply won’t do the job. Consider the simplistic headline-grabbing debate between growth (greater deficits) and austerity (smaller deficits)...



Meanwhile, all roads lead to Berlin. Ironically, a currency created in part to curb Germany’s influence following reunification is now effectively under German control. Chancellor Angela Merkel has been caricatured as the leader of the austerity campaign, although the measures that she is demanding of others — like wage restraint and greater labor-market flexibility — mirror those Germany adopted over a decade ago...In essence, she (like the voters of Greece) is playing a huge game of chicken. She wants the weaker countries (including even France) to clean house before loosening German purse strings. If that happens, Germany would be well advised to back short-term financial rescue actions similar to those the United States undertook in 2008. And the stronger countries must also accept the need for fiscal transfers — subsidies to poorer euro zone members — just as states like New York pay far more in federal taxes than they get back in services and transfer payments.

The euro zone may find another piecemeal solution and escape the hangman for now, but unless it attacks its more fundamental problems, it is doomed to a cascading series of crises that will ultimately destroy the common currency.

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

Steven Rattner, a contributing opinion writer, is a longtime Wall Street executive and a former counselor to the Treasury secretary.

[Demeter]

40. Key Dates In The Life And Work Of Ray Bradbury by The Associated Press

http://www.npr.org/templates/story/story.php?storyId=154449351

1920: Ray Douglas Bradbury is born Aug. 22 in Waukegan, Ill.

1934: Bradbury's family moves to Los Angeles.

1939: Bradbury publishes one of his first short stories, "Hollerbochen's Dilemma" in the fan magazine Imagination! He also launches a fan magazine of his own, Futuria Fantasia.

1947: Bradbury marries Marguerite McClure, with whom he later has four daughters. His first collection of short stories, "Dark Carnival," is published. One of the book's stories, "Homecoming," earns him an O. Henry Award for one of the best American short stories of the year.

1950: "The Martian Chronicles" is published, a breakout success that established Bradbury in literature and continues to be one of his most highly regarded works. In intertwined stories about Earth colonizers destroying an idyllic Martian civilization, Bradbury explored issues of post-World War II America.

1951: Bradbury releases "The Illustrated Man," a collection of 18 loosely connected short stories.

1953: "Fahrenheit 451," Bradbury's most famous work, is published. Inspired by the Cold War, the rise of television and the author's passion for libraries, the dystopian novel was an apocalyptic narrative of nuclear war abroad and empty pleasure at home, with firefighters assigned to burn books instead of putting blazes out.

1954: The National Institute of Arts and Letters honors Bradbury for his contributions to American literature.

1956: With John Huston, Bradbury co-writes the screenplay to the film "Moby Dick," an adaption of Herman Melville's novel.

1957: Bradbury releases the autobiographical novel "Dandelion Wine," a loosely connected series of short stories about childhood in the Midwest. He fashioned the fictional Green Town after his Illinois hometown.

1962: Bradbury's novel "Something Wicked This Way Comes" is published, a darker companion piece to "Dandelion Wine." Also set in Green Town, it's a story of two 13-year-old boys who become enmeshed with a sinister traveling carnival.

1963: An animated short film based on a Bradbury story, "Icarus Montgolfier Wright," is nominated for an Academy Award.

1964: Bradbury serves as creative consultant on the United States Pavilion at the 1964 World's Fair in New York.

1969: Bradbury's "The Illustrated Man" is adapted into a movie by Jack Smight, starring Rod Steiger.

1971: The Dandelion Crater is named on the moon by the astronauts of the Apollo 15 in honor of Bradbury's "Dandelion Wine."

1980: Bradbury's "The Martian Chronicles" is adapted into an NBC miniseries starring Rock Hudson.

1983: Bradbury's "Something Wicked This Way Comes" is adapted into a film starring Jason Robards and Jonathan Pryce.

1985: The sci-fi series "The Ray Bradbury Theater," which Bradbury hosted, begins its six seasons on broadcast on HBO, later to be aired on the USA Network.

1992: The Ray Bradbury Award is launched by the Science Fiction and Fantasy Writers of America to honor screenwriting, with the first recipient being James Cameron for "Terminator 2."

1994: Bradbury wins an Emmy Award for the screenplay to "The Halloween Tree," an animated TV movie produced by Hanna-Barbera based on Bradbury's 1972 novel of the same name.

2004: President George W. Bush presents Bradbury with the National Medal of Arts.

2007: The Pulitzer Prize board gives a special citation to Bradbury for "his distinguished, prolific and deeply influential career as an unmatched author of science fiction and fantasy."

2005: Michael Moore releases the documentary "Fahrenheit 9/11," the title of which alluded to Bradbury's "Fahrenheit 451."

2011: Bradbury grants permission for "Fahrenheit 451" to be released in digital form with the promise from Simon & Schuster that the e-book be made available to libraries, a first at the time for an e-book from the publisher.

[Demeter]

42. Obama Was Pushed by Drug Industry, E-Mails Suggest By PETER BAKER (HE HAS PROOF!)

http://www.nytimes.com/2012/06/09/us/politics/e-mails-reveal-extent-of-obamas-deal-with-industry-on-health-care.html

After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs.

The e-mail exchange three years ago was among a cache of messages obtained from the industry and released in recent weeks by House Republicans — including a new batch put out Friday detailing the industry’s advertising campaign supporting Mr. Obama’s health care overhaul. The broad contours of his dealings with the industry were known in 2009, but the newly public e-mails open a window into the compromises underlying a health care law now awaiting the judgment of the Supreme Court...

(THROWS UP HANDS IN DESPAIR)

[girl gone mad]

82. They used him then discarded him like a kleenex.

[Demeter]

84. Your point?

[Demeter]

43. Housing Agency to Sell More Troubled Loans

http://online.wsj.com/article/SB10001424052702303296604577452710734690848.html

The Federal Housing Administration, struggling to manage a growing glut of delinquent home mortgages, plans to ramp up sales of the loans to investors, a move that could stave off foreclosure for thousands of homeowners. The government agency, which is expected to announce the bulk sale program Friday, has more than 700,000 loans in default, amounting to more than 9% of the $1 trillion in loans it insures. Bulk loan sales are one way the FHA could reduce the backlog of potential foreclosed properties it will have to take back and resell.

Mortgage-finance giants Fannie Mae and Freddie Mac as well as banks have shied away from bulk mortgage sales despite heavy interest from investors because they would have to sell the loans at such deep discounts. Instead, they modify the mortgages, and if that doesn't work they sell the homes individually, often through foreclosure. (The FHA has faced big losses on sales of foreclosed properties, which could make loan sales attractive. The agency now loses about 64 cents on every $1 on mortgages that go through foreclosure. If defaulted loans sell at that discount, the sales won't add to the FHA's losses.)



But FHA rules provide less flexibility on how troubled mortgages can be modified, leaving very little room to cut loan balances. Officials figure that if they sell defaulted loans to an investor for at least the same price as it would cost to foreclose, investors can take more aggressive steps to modify the mortgages, such as reducing principal, to keep the borrower in the house—all without raising costs for the government. If the borrower resumes making payments, the investor could later resell the loan for a profit...Investors can't foreclose for six months after buying the FHA-backed loans. Under the agency's revamped "distressed asset stabilization program," they must also agree not to resell for three years at least half the homes backing the loans they buy. The changes are designed to deter "vulture" investors that buy defaulted loans with the aim of quickly evicting the homeowner and reselling the home....(YEAH, RIGHT)

"There will be an incentive for a modification that isn't able to be done under the current system," said Carol Galante, the FHA's acting commissioner. "It will be cost-effective for the FHA....It will be better for the communities."

For now, the FHA says it plans to sell up to 5,000 defaulted mortgages every quarter. In a small pilot sale in April, the agency sold 279 loans to buyers that paid around $19 million, representing around a third of the outstanding loan balances. It sold about 2,200 loans last year through the program. Ms. Galante said the FHA didn't yet have firm data on what share of the loans sold to investors involve the resumption of mortgage payments by delinquent borrowers, or what proportion of borrowers are still living in the houses under a new arrangement with the investor...

I DON'T BELIEVE THEM...WE SHALL SEE. NEVER UNDERESTIMATE THE ABILITY TO MAKE A BUCK BY PASSING THE BUCK...

[Demeter]

44. 40 Million Strong: Underwater Homeowners Can Fight And Win ... If They Get Organized

http://www.nationofchange.org/40-million-strong-underwater-homeowners-can-fight-and-win-if-they-get-organized-1339168763

It sounds like hype to say it, but underwater homeowners can change the course of history. It's not me saying that - it's the numbers. People who owe more than their homes are worth have the power to become the a powerful new political and economic force. They've got the numbers, they've got the votes, and - if they can get organized - they've got the economic clout. And we can prove it....A new and more accurate study by Zillow shows that the number of underwater homes is higher than we had thought, and that that 16 million homes are underwater. If those households are the same size as the American average, then the average number of people living in them is 2.6. (I thought it might be higher, but I cross-tabulated some Census Bureau numbers and came up with 2.63.) That's more than 40 million people.

40 million people is more than the population of Connecticut. Of Iowa. Of Mississippi. Of Kansas, Arkansas, Utah, Nevada, New Mexico, West Virginia, Nebraska, Idaho, Maine, Hawaii, New Hampshire, Rhode Island, Montana, Delaware, South Dakota, Alaska, Vermont, North Dakota, the District of Columbia, and Wyoming ...The number of people living in underwater homes is larger than the number of people living in twenty-two states and the District of Columbia. The residents of those states are represented by 44 Senators. The number of people living in underwater homes is greater than the entire population of California, our largest state.

How many voting-age people live in underwater homes? Statistics are hard to come by, but if we assume it's 1.5 voters per household here's the figure we get: 24,000,000 voters. 132,618,580 people voted in the last Presidential election. That means these homeowners could account for as much as 18 percent of all voters - if they all turned out to vote. It also makes them one of the largest potential voting blocs in the country....They could become an equally powerful financial force, too. We don't normally think of underwater homeowners as having economic clout, but they do - if they get organized. How much clout? Zillow now estimates the underwater portion of their mortgages at $1.2 trillion. That's "trillion," with a "t." And that's just the lost value in their mortgages. But their clout doesn't just extend to the mortgage amount that's underwater. It involves the whole amount owed to the banks. Another data group, Core Logic, reported at the end of 2011 that the average "underwater" amount on these homes - the difference between what was owed and what the home is worth - was $64,000. But the average total owed was $252,000. If these ratios are still accurate, then we can multiply that $1.2 trillion by four to get the total amount these underwater homeowners owe banks: $4.8 trillion.

To paraphrase an old saying, if one person doesn't pay their mortgage it's a tragedy. If 16 million don't pay, it's a freakin' revolution.

When you do it, it's immoral. When they do it, it's "strategic."

HOW-TO AT LINK

[westerebus]

56. Wait a second.

The FHA is selling homes at $68,000 and that's good for them because it comes off their books.

So, if someone bought a home for say $205,000 at the market peak and are now underwater by say $50,000 making the current home value $155,000, the investor who bought the loan nets out $70,000 after closing costs. Said investor can't sell for six months and may if they so choose modify the loan for the delinquent borrower, but are not required to, makes it all good.

Now, the FHA can't modify a loan because they make the rules on loan modification and they don't see the need to change their own rules?

Who the f**k is running this government agency and who do they report to?

Re-Max? BoA? Mortgage Underwriters Association of America? Who?

Is it any wonder why PIMCO bought MBS's by the boat load?

Gives a new meaning to "home-land" battle field.

[Demeter]

60. That's Good Old Ed DeMarco: Edward DeMarco - FHFA Chief & Public Enemy #1

http://www.loansafe.org/forum/stop-foreclosure-tell-us-your-story/46289-edward-demarco-fhfa-chief-public-enemy-1-a.html

This guy is the reason why Fannie and Freddie won't do principal reductions but yet still hand bonuses out to the executives. Fannie and Freddie loans are not included in the AG foreclosure settlement and slated for principal reductions. Folks have asked him to allow principal reductions or step down from his post...

Ed DeMarco: Public Enemy FROM OCTOBER

http://online.wsj.com/article/SB10001424052970203687504577001962437746618.html

President Obama and Democrats are unleashing the big guns on the man they now see as a top threat to their retaining the White House.

Mitt Romney?

Nah. Try Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, an independent regulator created in 2008. That job makes Mr. DeMarco the conservator of Fannie Mae and Freddie Mac—those mortgage beasts of nationalized and bailed-out fame. Put another way, he's the man standing guard over the two entities Democrats would most like to milk in aid of their election prospects.

What else have they got? The housing market stinks, in part thanks to Obama housing programs that have served to slow recovery. Democrats have blown the bank, and several future banks, on non-stimulating stimulus, giving those stingy Republicans an excuse to refuse to pay for any more housing bailouts. With Mr. Obama's poll numbers slipping, he needs something big to offer in aid of housing and the economy overall. And there sit Fannie and Freddie, just waiting to be plundered. Since last year the White House and Democrats have been pushing for Mr. DeMarco's agency to embrace the biggie of housing bailouts: "principal write-downs," in which lenders would be required to outright forgive a portion of homeowners' outstanding mortgage debt. Democrats are furious that the housing-finance regulator won't hand out more taxpayer dollars through mortgage principal reductions.

The White House sees this as—woohoo!—"free stimulus," a way to quickly dump money into borrowers' pockets, no congressional approval or official spending estimates needed. Fannie and Freddie would swallow the losses, quietly adding to the $141 billion taxpayers have already blown on the pair. Democrats would meanwhile get big-time backslaps for aiding the housing market, and just in time for November 2012.

But Mr. DeMarco won't play ball. The 51-year-old regulator, who has spent a career in serious Washington jobs, takes seriously his legal obligation to preserve Fannie's and Freddie's assets, thus protecting taxpayers. He's pushed back on a number of Obama housing schemes, but his real affront is refusing mortgage forgiveness. When I called Mr. DeMarco, he told me he does view it as his mandate, as conservator, to "be actively and aggressively engaging in loss mitigation activities" for homeowners, at least when they end up costing Fannie and Freddie less than foreclosure. The agency has engaged in 1.9 million such transactions. But when it comes to principal forgiveness, says Mr. DeMarco, there is no "upside" to taxpayers—the lenders lose whether the borrower fails or succeeds. "If Congress wants to appropriate money" to pay for the program, "that changes the calculus." Until then, he doesn't view principal forgiveness as within his "statutory mandate."

Mr. DeMarco these days is being treated with all the courtesy Democrats normally reserve for Paul Ryan. The White House's initial instinct was to disappear the troublemaker, who inherited his job in 2009 after his predecessor left. The Obama team a year ago nominated North Carolina Banking Commissioner Joseph A. Smith, who looked to be far more on the Obama political page. Republicans balked, and in January Mr. Smith withdrew his troubled nomination...

[westerebus]

78. Carol Galante acting commissioner at the FHA is THE whitehouse pick for the FHA currently.

She was at HUD selected by WH in 2009.

Ran the private-public multi family multi use development projects in California prior to HUD appointment.

Public money. Private money. Non-profit money. State money. Retirement System money.

Can you say Bi-Partisan. OK semi partisan with talking points all around. What's not to like?

It was back in 2008-9 the WH started the P-P let's make a deal deal. They announced it back then as a foot note.

DeMarco, not so much the trickster, more likely the distraction. I'm probably wrong.

The fact the fellow she replaced, replaced the fellow who quit to become the president of the Mortgage Brokers Association.

Wonder what the MBA bundles when they get together for policy and cocktails?

[xchrom]

45. morning! -- isn't this a picture from Fuddnik's last Party?

[Demeter]

53. Who took the photos?

That's our Memorial Day BBQ!

[westerebus]

57. At least he remembered to wear his hat. n/t

[xchrom]

47. Reports: UBS may have $350M Facebook trade losses

http://hosted.ap.org/dynamic/stories/U/US_UBS_FACEBOOK_LOSSES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-08-20-45-43

NEW YORK (AP) -- Swiss bank UBS AG may have lost as much as $350 million due to technical glitches on the Nasdaq stock exchange the day Facebook went public, according to reports published Friday.

CNBC and The Wall Street Journal, citing people familiar with the matter, reported that UBS is considering legal action against Nasdaq as a result.

UBS spokeswoman Karina Byrne confirmed that the bank lost money due to Nasdaq's technical issues when the social networking company's stock began trading on May 18.

Byrne declined to disclose the amount but said it was "not material" to the bank. She said UBS has not taken legal action but is weighing its options for recovering its losses.

[Demeter]

54. Those guys can't do anything right...They are always on the losing side of any deal

That takes a special gift. I know, I've got it.

[xchrom]

48. Eurozone ministers 'to discuss Spain bank bailout'

http://www.bbc.co.uk/news/business-18377482


Spain's banks have lent billions of euros that they might never get back


Eurozone finance ministers are to hold a conference call to discuss a bailout for Spanish banks, the BBC understands.

EU sources say Madrid could formally request financial assistance for its troubled banks this weekend.

So far Spain has denied reports that an announcement on a European rescue plan for its banks is close.

The International Monetary Fund (IMF) is estimating that Spain's banks need a cash injection of at least 40bn euros ($50bn; £32bn).

[Tansy_Gold]

63. "Spain's banks have lent billions of euros that they might never get back."

Ooooh, oooooh, scary headline! scary headline! scary headline!




This is the heart of the statement(s) I made the other day.

WHY did Spain's banks lend billions of euros that they might never get back?

Have the borrowers simply not repaid it? Then the banks need to go after the borrowers, not the ECB or the IMF or the taxpayers of ANY country. (Also, who are these borrowers and why are they not repaying their loans?) ***

Did the borrowers not put up any collateral? Well, that's the banks' fault for not demanding collateral. If the banks erred, why should they be bailed out by someone else? (What will stop them from making more loans without collateral?)

If the borrowers did put up collateral, why are the banks not foreclosing (legitimately) on that collateral? If they're not foreclosing, then they're not availing themselves of normal business remedies to their problems. Unless and until they foreclose on all the collateral put up for bad loans, they are not deserving of any bailout.

If the borrowers did put up collateral but it is no longer worth what they borrowed against it, that's too bad. The banks still need to foreclose on it, get what they can, and move on.


If in fact the banks' losses are not related to normal banking operations, then they've acted irresponsibly and it's their own tough luck. Maybe if they fail this time, they won't make the same "mistakes" next time.



***It should be remembered, too, that if the borrowers do not repay and are not forced to surrender any collateral, then they, too, are being bailed out. That's why it's important to know who they are and why they haven't repaid their loans.

[xchrom]

49. Greeks march against far-right party Golden Dawn

http://www.bbc.co.uk/news/world-asia-18374107

Thousands have protested in Greece against the far-right Golden Dawn party after one of its members assaulted a woman on live TV.

Demonstrators shouted "Neo-Nazis out" in rallies called by left-wing and anti-racism groups in Athens.

On Thursday, Ilias Kasidiaris, a Golden Dawn MP, was filmed hitting a left-wing politician during a chatshow.

The rally comes nine days before elections which could result in a Greek exit from the Eurozone.

[Demeter]

86. Good for the Greeks

Once bitten, twice shy.

[xchrom]

50. 21 Signs That This Could Be A Long, Hot, Turbulent Summer

http://www.businessinsider.com/21-signs-that-this-could-be-a-long-hot-crazy-summer-for-the-global-financial-system-2012-6



***SNIP

#1 There are rumors that major financial institutions are canceling employee vacations in anticipation of a major financial crisis this summer. The following are a couple of tweets quoted in a recent article by Kenneth Schortgen Jr....
Todd Harrison tweet: Hearing (not confirmed) @PIMCO asked employees to cancel vacations to have "all hands on deck" for a Lehman-type tail event. Confirm?
Todd M. Schoenberger tweet: @todd_harrison @pimco I heard the same thing, but I also heard the same for "some" at JPM. Heard it today at a hedge fund luncheon.
As Schortgen points out, these are not just your average Twitter users....
Todd Harrison is the CEO of the award winning internet media company Minyanville, while Todd Shoenberger is a managing principal at the Blackbay Group, and an adjunct professor of Finance at Cecil College.
#2 The Bank for International Settlements is warning that global lending is contracting at the fastest pace since the financial crisis of 2008.
#3 Unemployment in the eurozone has hit a brand new all-time record high.
#4 The government of Portugal has just announced that it will be bailing out three major banks.
#5 Many U.S. banking stocks are being hit extremely hard. For example, Morgan Stanley stock has declined by 40 percent over the past four months.


Read more: http://theeconomiccollapseblog.com/archives/21-signs-that-this-could-be-a-long-hot-crazy-summer-for-the-global-financial-system#ixzz1xIi4r1WD

[Demeter]

55. Going to be?

the author is a bit behind the times....

[xchrom]

51. Banks fail to deliver on growth for markets

http://www.irishtimes.com/newspaper/finance/2012/0609/1224317566195.html


However, the failure of the European Central Bank and the Bank of England to deliver on the market’s hopes – and Federal Reserve chairman Ben Bernanke’s lack of explicit commitment to further policy easing – ultimately left the markets disappointed.

“Co-ordinated policy intervention remains as elusive at this stage of the crisis as at any previous juncture in the last three years,” said Ralf Preusser at BofA-Merrill Lynch.

Instead, the week’s most significant policy move came from an unexpected quarter as the People’s Bank of China cut interest rates for the first time since 2008.

The decision came in response to recent signs of deteriorating growth in the world’s second-largest economy.

[Demeter]

58. Obama says private sector is fine — see the charts

SEE THE CHARTS? SEE THE LIVES PEOPLE ARE LIVING, PRESIDENT DRONEBOY. WHY IS THE ATTORNEY GENERAL WORRYING ABOUT "SECURITY LEAKS" WHEN PEOPLE ARE DYING FROM CONTROL FRAUD IN THE HOUSING MARKET?

http://www.marketwatch.com/story/obama-says-private-sector-is-fine-see-the-charts-2012-06-09?siteid=YAHOOB

During a press conference Friday, President Barack Obama said the private sector “is doing fine,” a comment that drew immediate scorn from conservatives. House Speaker John Boehner, an Ohio Republican, replied the private sector is “not doing well,” and Republican presidential rival Mitt Romney said the remarks show Obama is out of touch. Obama himself later offered a clarification to reporters, saying the economy is “not fine.” In any case, the data on the private sector — what MarketWatch interprets to mean “business” — offers multiple interpretations. Here are the charts of the relevant statistics.




CORPORATE NET WORTH TO GDP








LIQUID ASSETS ON CORPORATE BALANCE SHEETS


CORPORATE DEBT TO EQUITY RATIO

[Demeter]

59. Obama takes more strident tone with Europe

President Barack Obama on Friday took a more strident tone with Europe in contrast to two years of quiet prodding, urging the region’s leaders to aid the troubled banking sector and warning of the fallout if Greece were to leave the euro zone.

And on the domestic front, the president ignited a fire-storm of reaction when he said in a brief news conference that “the private sector is doing fine,” noting that the American labor market had created 800,000 jobs in the last year.

Obama later backed away from his remarks on the economy, saying that it was “absolutely clear that the economy is not doing fine.”

MORE PABLUM AT LINK

http://www.marketwatch.com/story/obama-takes-more-strident-tone-with-europe-2012-06-08

[Demeter]

70. Household Net Worth in U.S. Increases by Most Since 2004

NOT ACCORDING TO THE ABOVE CHARTS...

http://www.bloomberg.com/news/2012-06-07/household-worth-in-u-s-rose-by-2-83-trillion-in-first-quarter.html

Household wealth in the U.S. climbed in the first quarter by the most in seven years, bolstered by a jump in stock prices and more stable home values.

Net worth for households and non-profit groups increased by $2.83 trillion from January through March, the biggest gain since the last three months of 2004, to $62.9 trillion, the Federal Reserve said today in its flow of funds report from Washington...

ANOTHER CASE OF CORPORATIONS ARE PEOPLE, TOO.

[Demeter]

98. Number of the Week: Corporations NOT Hoarding Cash !

http://blogs.wsj.com/economics/2012/06/09/number-of-the-week-corporations-not-hoarding-cash/?mod=WSJBlog&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+wsj/economics/feed+%28WSJ.com:+Real+Time+Economics+Blog%29&utm_content=Google+Reader

$496.5 Billion: How much less cash U.S. corporations had at year-end 2011 than previously believed.

The Federal Reserve on Thursday came out with its quarterly “flow of funds” report, which for two years now has reflected the steady increase in the amount of cash on corporate balance sheets. Sure enough, the report showed that corporate cash ticked up yet again in the first quarter of the year by around $12.6 billion, to $1.74 trillion. But here’s the funny thing about that figure: Back in March, the Fed said nonfinancial companies ended the year with a record $2.23 trillion. The new release revised that figure down to $1.72 trillion. Even for the Fed, a half-trillion-dollar revision is a big deal. $1.7 trillion is still a lot of money, close to an all-time high. But more significant than the actual number is the implication for what had been one of the most enduring narratives of the recovery: the massive pile of cash that was sitting on the sidelines.



The old story went something like this: The 2008 financial crisis wiped out the cash reserves even of seemingly healthy companies. The ones that survived scrambled to rebuild their reserves as a buffer against renewed turmoil, then kept saving even after markets stabilized and profits rebounded. This has been paradoxically both a cause and an effect of the slow recovery, as companies’ reluctance to spend has reduced economic activity, giving spooked executives yet more reason to remain cautious. Depending on your political leanings, the problem is evidence either of the dangers of corporate greed or of the pernicious effects of over-regulation. The revised data — at least if it is to be believed — changes all of that. Under the new narrative, companies still rebuilt their reserves in the wake of the financial crisis, boosting their cash holdings from $1.4 trillion at the end of 2008 to $1.7 trillion in mid-2010. Since then, however, the cash hoard has barely budged, as companies neither draw down their reserves nor continue adding to them. The long-term trend makes the cash hoard look even less remarkable. As a share of assets, cash has been trending upward since the 1980s, rising from about 3% in 1982 to just shy of 6% at the end of 2005. Cash reserves tanked during the financial crisis, then soared in 2009, quickly returning to the earlier trend line. Since then, they’ve more or less held to their prior trend.

In other words, the big pile of cash sitting idly on the sidelines? “Boom, it’s all gone now,” says James Bianco of Bianco Research.

Mr. Bianco has long been skeptical of the cash-hoard narrative. Even before the revision, he argued that the rise and fall of the real estate bubble distorted the corporate cash picture, making cash look artificially small as a share of assets when property values were rising, and then artificially large when prices collapsed. Better, Mr. Bianco argues, to strip out real estate and look at cash as a share of financial assets, which showed a much milder run-up in cash holdings using the old data, and now shows no run-up at all.

“It was slightly above average and now it’s not even that anymore,” Mr. Bianco says.

Others are more skeptical. Howard Silverblatt, senior index analyst for S&P, has looked at securities filings for the non-financial members of the S&P 500 and found that cash holdings are still rising, although he said they likely ticked down in the first quarter for the first time in three and a half years. Like the Fed data, however, the S&P data shows cash holdings accelerating out of the financial crisis, then returning to their prior trend line.

COME ON, GUYS! ADD UP THE COMPENSATION AND BONUSES AND DIVIDENDS AND STOCK BUY-BACKS, AND YOU CAN SEE WHERE THAT MONEY WENT.

IT DIDN'T GO TO THE 99%, FOR SURE! NOR DID IT GO TO THE GOVERNMENT AS TAX PAYMENTS, PENALTIES, SETTLEMENTS, ETC.

OH, AND IT'S ELECTION SEASON. LOTS OF DOUGH DISAPPEARING INTO THAT BLACK HOLE IN ALL KINDS OF WAYS.

[westerebus]

80. Tax cuts! More tax cuts!

It's the only policy that will save us.

srac/off

[Demeter]

61. Whatever Happened to Natchez? How to End the Nightmare of Jobless America

THIS IS YVES COMMENTARY ON A ARTICLE I POSTED EARLIER...SEE LINK FOR THE ARTICLE

http://www.nakedcapitalism.com/2012/06/whatever-happened-to-natchez-how-to-end-the-nightmare-of-jobless-america.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. It is frustrating to watch the refusal of the officialdom to deal with a persistent, high level of unemployment. Ronald Reagan was more concerned and more aggressive when unemployment breached 8%. By contrast, pundits provide excuses for the Administration’s passivity by blaming joblessness on structural unemployment, when various studies have debunked that (one simple proof: if unemployment were structural, you’d expect to see tight job markets in some sectors/job types and slack in others, but when you cut the data, you find high unemployment across the board).

This article helps to puncture some of the misperceptions about unemployment in America and provides some practical ideas....

[Demeter]

62. Alabama Appeals Court Reverses Decision on Chain of Title Case, Question of Bogus Allonges

http://www.nakedcapitalism.com/2012/06/alabama-appeals-court-reverses-decision-on-chain-of-title-case-ruling-hinges-on-question-of-bogus-allonges.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

In a unanimous decision, the Alabama Court of Civil Appeals reversed a lower court decision on a foreclosure case, U.S. Bank v. Congress and remanded the case to trial court.

We’d flagged this case as important because to our knowledge, it was the first to argue what we call the New York trust theory, namely, that the election to use New York law in the overwhelming majority of mortgage securitizations meant that the parties to the securitization could operate only as stipulated in the pooling and servicing agreement that created that particular deal. Over 100 years of precedents in New York have produced well settled case law that deems actions outside what the trustee is specifically authorized to do as “void acts” having no legal force. The rigidity of New York trust has serious implications for mortgage securitizations. The PSAs required that the notes (the borrower IOUs) be transferred to the trust in a very specific fashion (endorsed with wet ink signatures through a particular set of parties) before a cut-off date, which typically was no later than 90 days after the trust closing. The problem is, as we’ve described in numerous posts, that there appears to have been massive disregard in the securitization for complying with the contractual requirements that they established and appear to have complied with, at least in the early years of the securitization industry. It’s difficult to know when the breakdown occurred, but it appears that well before 2004-2005, many subprime originators quit bothering with the nerdy task of endorsing notes and completing assignments as the PSAs required; they seemed to take the position they could do that right before foreclosure. Indeed, that’s kosher if the note has not been securitized, but as indicated above, it is a no-go with a New York trust. There is no legal way to remedy the problem after the fact.

The solution in the Congress case appears to have been a practice that has since become troublingly become common: a fabricated allonge. An allonge is an attachment to a note that is so firmly affixed that it can’t travel separately. The fact that a note was submitted to the court in the Congress case and an allonge that fixed all the problems appeared magically, on the eve of trial, looked highly sus. The allonge also contained signatures that looked less than legitimate: they were digitized (remember, signatures as supposed to be wet ink) and some were shrunk to fit signature lines. These issues were raised at trial by Congress’s attorneys, but the fact that the magic allonge appeared the Thursday evening before Memorial Day weekend 2011 when the trial was set for Tuesday morning meant, among other things, that defense counsel was put on the back foot (for instance, how do you find and engage a signature expert on such short notice? Answer, you can’t).

The case was ruled in favor of the US Bank, in a narrow and strained opinion (which was touted as significant by reliable securitization industry booster Paul Jackson). It argued that the case was an ejectment action (the final step to get the borrower out after the foreclosure was final) so that, per securitization expert, Georgetown law professor Adam Levitin,

..the question of ownership of the note was not an issue of standing, but an affirmative defense for which the homeowner had the burden of proof…Crazy or not, however, this meant that the homeowner wasn’t actually challenging the trust’s standing. From there it was a small step for the court to say that the homeowner couldn’t invoke the terms of the PSA because she wasn’t a party to it…..

The court found that the judge put an improperly high burden of proof on Congress, applying a “clear and convincing evidence” standard. The court said that was a misapplication of precedent based on cases dealing with recorded deeds. The document under dispute was an allonge to an unrecorded note. The appeals court found the evidentiary hurdle should instead be that of a preponderance of evidence. In addition, the court also found that the lower court incorrectly focused on the issue of the validity of the signatures. The appeals court found that even though Congress seemed to be contesting the validity of the signatures (the appeals court notes the argument at points seemed to be a bit confused), her real bone of contention was that the allonge was bogus (emphasis original):

Congress appears to be arguing not that signatures on the allonge are forged or otherwise invalid to prevent enforcement of the note, but that the allonge was fabricated or, essentially, created after the first trial in order to remedy the apparent defect in the chain of indorsements.

Keep in mind that Alabama is hardly a consumer friendly jurisdiction; it’s former status as one of the preferred states for launching class action suits, thanks to favorable state statutes and easily riled juries, has led to a concerted effort to elect and place business friendly judges on the bench (Alabama has far and away the most costly Supreme Court elections in the entire nation). The fact that a higher court has finally decided to place the question of the legitimacy of suddenly-appearing allonges at the heart of a ruling is a welcome development.
The case has been remanded back to trial court, and the judges put the issue of the allonge front and center.

COMPLETE RULING AT LINK

[Demeter]

64. S.H.A.M.E. PROFILE: FREAKONOMICS AUTHOR STEVEN LEVITT...

http://shameproject.com/profile/steven-d-levitt/

Co-author of #1 Bestseller Freakonomics; Economics Professor at the University of Chicago

Named one of Time magazine's "100 People Who Shape Our World," Steven Levitt, author of Freakonomics, is generally assumed to be a harmless, quirky pop economist for trivia nerds. However, Levitt has a history of attacking teachers' unions, advocating for the privatization of prison labor, defending online gambling and occasionally crossing over the fringe-right line by promoting climate change denialism and, some have argued, racial eugenics. A dyed-in-the-wool Milton Friedman neoliberal from the same “Chicago Boys” network that brought you the "shock doctrine," Levitt’s idea of economics Utopia is a world in which "the market" solves all our problems and government is restricted to protecting property rights.
WALL OF S.H.A.M.E.

While a PhD student at MIT, Levitt published a counter-intuitive masterpiece whitewashing corruption in politics by "proving" that corporate campaign donations do not influence election outcomes. Levitt argued that “campaign money has about one-tenth the impact as was commonly accepted,” according to a 2003 New York Times Magazine profile—a stance that helped land him a tenured job at the University of Chicago.

At the University of Chicago, Levitt's mentor was Gary Becker, another of the “Chicago Boys” who supported Chilean dictator Augusto Pinochet. Gary Becker developed the theory of “human capital” which treats human labor as just another resource to extract profit from. Levitt's mentor also proposed the creation of a deregulated human-organ commodities exchange, arguing that it would actually help the poor. Levitt said of Becker, "More than any other economist, he has been my inspiration and role model."

In 1999, Levitt co-authored a paper arguing that an increase in abortion rates for black women in the 1970s was the reason for falling crime rates two decades later. "Basically, we had aborted the generation of criminals who would have been active in the 1990s," he told Esquire magazine. His research led to accusations of racial eugenics, according to the New York Times. The study has been debunked and exposed in numerous academic studies over the years—one study by Federal Reserve economists proved Levitt used badly flawed data, forcing Levitt to apologize for the "embarrassing" errors. Nevertheless, Levitt stuck to his original conclusion linking race and crime: fewer African-American children correlates to a drop in crime.

In 1999, Levitt presented a paper for privatizing prison labor at a symposium hosted by a private prison consulting firm, arguing: “I would privatize prison industry. As long as the government is in charge of prison industries, it will be difficult if not impossible to avoid decisions being made with political rather than economic justifications.” Thirteen years later, Levitt’s privatized-prison-labor dream is a reality: Some 1 million state inmates are slaving away for wages averaging between $0.93 and $4.73 a day. African-Americans make up over 40% of the U.S. prison population.

In 1995, Levitt published a paper which "proved" that packing prisoners into increasingly-overcrowded prison cells translates into a net $15,000 positive effect on society per overcrowded cell inmate.

L Levitt has played a role in busting teachers' unions by devising a method that claims to catch teachers cheating on standardized test results. Levitt took personal credit for firing at least a dozen teachers he claims to have “caught,” gloating in his book Freakonomics that, as a result of his method, “Chicago Public School system began to fire its cheating teachers. The evidence was only strong enough to get rid of a dozen of them, but the many other cheaters had been duly warned.”

Levitt is a paid corporate speaker regularly hired by investment banks, financial services companies, venture capital firms as well as various anti-labor "human resource" outfits. One corporate union-busting association, the Society for Human Resource Management (SHRM), gushed over Levitt's performance: "We received numerous compliments about your remarks from our attendees, well over 500 participants . . . We applaud the valuable work that you are doing." Recently, SHRM opposed legislation that would have made it easier for workers to join union and lobbied to defeat a law that would have protected women against gender-based wage discrimination.

Levitt's second book, Superfreakonomics, contained a section that "debunked" climate-change science, asserting that CO2 does not cause global warming. One of the scientists cited and used to back up Levitt's climate-change denialism, Jeffrey Severinghaus, accused Levitt of "flat-out misrepresentation" of his work, telling the Boston Globe, “Asserting that CO2 doesn’t cause warming at this point is tantamount to saying cigarette smoking doesn’t cause cancer. It’s just laughable.” Levitt responded with a bizarre non-retraction: "The sentence may be poorly written, but I do not think it is factually inaccurate.”

In 2011, Levitt published a paper proving that poker is a game of "skill" and not "luck," and used the Freakonomics website to advocate for legalized online gambling. The Chicago Tribune noted that Levitt's support for the industry coincided with a federal crackdown on online gambling companies for fraud and money laundering, noting that Levitt's "research could not be more timely." Levitt did not disclose his financial relationship with the online gambling industry, which included working to develop a set of tools to catch cheaters for an online poker company in 2007.

L Levitt came out in support of the hugely unpopular Stop Online Piracy Act (SOPA), RIAA-backed legislation that would have given U.S. law enforcement unprecedented power to shut down and censor websites without due process. The reason Levitt supported SOPA? Because he believes one of the few things that government should do is "protect property rights."

[Demeter]

66. Obama Increases Pakistan Drone Strikes as Relations Sour

WELL, A FEW OF THOSE PREDATORS UP THE WASZOO SHOULD SWEETEN IT ALL UP! WAR ON PAKISTAN, ANYONE?

http://www.bloomberg.com/news/2012-06-08/obama-increases-pakistan-drone-strikes-as-relations-sour.html

President Barack Obama has ordered a sharp increase in drone strikes against suspected terrorists in Pakistan in recent months, anticipating the CIA may soon need to halt such operations in Pakistan’s territory, two U.S. officials said.

His decision reflects mounting U.S. frustration with Pakistan over a growing list of disputes -- mirrored by Pakistani grievances with the U.S. -- that have soured relations and weakened security cooperation. The U.S. is withholding at least $3 billion in reimbursements for counterinsurgency operations and security-related funding, according to congressional aides and Pakistani officials.

“We are reaching the limits of our patience, and for that reason it’s extremely important that Pakistan take action” to crack down on armed groups based there that attack American and coalition forces in Afghanistan, U.S. Defense Secretary Leon Panetta said yesterday in Kabul.

...U.S. officials, who spoke yesterday on the condition of anonymity to discuss classified intelligence, said they expect Pakistan may order the CIA to stop using a remaining air base from which the officials say they have controlled Predators to target militants sheltered in Pakistan’s tribal areas bordering Afghanistan. Pakistani authorities today disputed the U.S. version of events, insisting that the CIA officers working on the drones program were expelled from all Pakistani air bases late last year. Predator strikes on targets in Pakistan’s tribal areas are being launched from bases in Afghanistan, according to two Pakistani national security officials who spoke on condition of anonymity because they weren’t authorized to speak.

[Demeter]

67. STEP ASIDE, O. HENRY: The Eurozone as a Modern Day ‘Merchant of Venice’

EXCEPT THAT SHYLOCK HAXS ALREADY GOTTEN SEVERAL POUNDS OF FLESH...I CAN SEE THAT

http://neweconomicperspectives.org/2012/06/the-eurozone-as-a-modern-day-merchant-of-venice.html

PORTIA

A pound of that same merchant’s flesh is thine;
The court awards it, and the law doth give it.

SHYLOCK:

Most rightful judge!

PORTIA:

And you must cut this flesh from off his breast 310)
The law allows it, and the court awards it.

SHYLOCK:

Most learned judge!—A sentence! come, prepare!

PORTIA:

Tarry a little;—there is something else.—
This bond doth give thee here no jot of blood;
The words expressly are, a pound of flesh 315)
Take then thy bond, take thou thy pound of flesh;
But, in the cutting it, if thou dost shed
One drop of Christian blood, thy lands and goods
Are, by the laws of Venice, confiscate
Unto the state of Venice.(320)

GRATIANO:

O upright judge!—Mark, Jew;—O
learned judge!

SHYLOCK:

Is that the law?

PORTIA:

Thyself shalt see the act:
For, as thou urgest justice, be assur’d(325)
Thou shalt have justice, more than thou desirest.

GRATIANO:

O learned judge!—Mark, Jew;—a learned judge!

GRATIANO:

Oh, learned judge! Mark, Jew: a learned judge!

SHYLOCK:

I take this offer then,—pay the bond thrice
And let the Christian go.

BASSANIO:

Here is the money.(330)

PORTIA:

Soft;—
The Jew shall have all justice;—soft;—no haste;—
He shall have nothing but the penalty.

GRATIANO:

O Jew! an upright judge, a learned judge!

PORTIA:

Therefore prepare thee to cut off the flesh.(335)
Shed thou no blood; nor cut thou less, nor more,
But just a pound of flesh: if thou tak’st more,
Or less, than a just pound,—be it but so much
As makes it light, or heavy, in the substance,
Or the division of the twentieth part(340)
Of one poor scruple,—nay, if the scale do turn
But in the estimation of a hair,—
Thou diest and all thy goods are confiscate.

GRATIANO:

A second Daniel, a Daniel, Jew!
Now, infidel, I have thee on the hip.(345)

PORTIA:

Why doth the Jew pause? take thy forfeiture.

SHYLOCK:

Give me my principal, and let me go.

BASSANIO:

I have it ready for thee; here it is.

PORTIA:

He hath refus’d it in the open court;
He shall have merely justice and his bond.(350)

GRATIANO:

A Daniel, still say I; a second Daniel!—
I thank thee, Jew, for teaching me that word.

SHYLOCK:

Shall I not have barely my principal?

PORTIA:

Thou shalt have nothing but the forfeiture,
To be so taken at thy peril, Jew.(355)

SHYLOCK:

Why, then the devil give him good of it!
I’ll stay no longer question.

PORTIA:

Tarry, Jew;
The law hath yet another hold on you.
It is enacted in the laws of Venice,—(360)
If it be proved against an alien
That by direct or indirect attempts
He seek the life of any citizen,
The party ‘gainst the which he doth contrive,
Shall seize one half his goods; the other half(365)
Comes to the privy coffer of the state;
And the offender’s life lies in the mercy
Of the duke only, ‘gainst all other voice.
In which predicament, I say, thou stand’st:
For it appears by manifest proceeding,(370)
That, indirectly, and directly too,
Thou hast contriv’d against the very life
Of the defendant; and thou hast incurr’d

The danger formerly by me rehears’d.
Down, therefore, and beg mercy of the duke.(375)

The Merchant of Venice is one of Shakespeare’s truly great comedies and serves as a useful morality tale for today’s Eurozone. It is a tale that Germany ignores at its own peril, as it mechanistically demands its ongoing ‘pound of flesh’ from the increasingly hapless periphery in order to gain its political acceptance for greater support of the eurozone’s weaker constituent parts.

As early as 1998, Professor Peter Garber recognized the euro’s fatal flaw: any possibility of a euro exit by one of the euro member countries would create the risk of a currency loss to parties involved in the euro area banking system. There is no parallel potential currency loss in the case of the U.S. No state is going to pick up and run and form its own new currency (Rick Perry’s mindless secessionist threats to the contrary in Texas). It is this potential for euro exit and subsequent currency loss that fuels the European bank run. And it is this potential for currency loss that prevents the private interbank system from recycling flight deposit funds from recipient nation banks back to the banks in those countries where the deposit run originates. With euro wide acceptance of a common currency, transferring deposits from a domestic commercial bank in one nation to a bank domiciled in another EU nation is costless. In a world of rational economic agents, any non-negligible perceived probability of euro exit and subsequent currency loss should result in a massive deposit run if there is any suspicion about the overall integrity of the system.

This is why the ECB has to step in and act as lender of last resort lynchpin in the system. There is no parallel need for such a role for Federal Reserve role in the U.S, given the existence of a United States of America fiscal authority which underpins the entire system. So talk of euro bonds and deposit insurance and supranational bank supervision are fine, but they don’t address this fundamental structural flaw. There need to be political actions which eliminate any possibility that any constituent member can be cut down or thrown out, because such an action will simply undermine the overall integrity of the payments system and feed speculative doomsday machine which Garber has so eloquently articulated.

Germany’s ongoing insistence of extracting pounds of flesh from the increasingly emaciated periphery has some of the inherent contradictions encapsulated in the lengthy exchange in The Merchant of Venice, which we cited above. With their insistence on yet more austerity, they are being penny wise and pound foolish.

In the great Shakespearean comedy, Shylock agrees to lend money to Bassanio on the credit of Antonio, Shylock’s Christian rival. Shylock, suspicious of Antonio, sets the security as a pound of Antonio’s flesh. When Antonio’s merchant ventures fail and he cannot come up with the money to pay off Bassanio’s loan, Shylock demands the pound of flesh, which will surely kill Antonio. Of course, in the end, Shylock is foiled. Dressed as an eminent judge, Antonio’s indirect beneficiary Portia takes Shylock’s insistence on the letter of the bond to its absurd conclusion. The bond specified only a pound of flesh, she maintains, but “no jot of blood.”

In much the same way, Germany’s ongoing insistence on its pound of Spanish, Italian, Greek, or Irish flesh via further fiscal austerity is impossible to secure without spilling further massive quantities of blood from the periphery body politics. Like Shylock, Germany apparently fails to appreciate extracting too much flesh from the borrower ultimately does draw away its lifeblood, making repayment impossible. Much like Shylock, Berlin is trapped. Only the ECB as “judge” can offer a way out. Will Germany see that, or will it risk a fate as ignominious as Shylock?

[Demeter]

68. JOBS Act Fallout: More Fraud, Fewer IPOs

http://www.rollingstone.com/politics/blogs/taibblog/jobs-act-fallout-more-fraud-fewer-ipos-20120607

One story I did want to pass on while I was gone is a very interesting Wall Street Journal piece entitled, "Meet the JOBS Act's Jobs-Free Companies." A few months ago, I wrote a few articles about the JOBS Act, which a number of friends of mine from congress and from the regulatory community insisted would pave the way for a return to the IPO fraud boom of the late nineties, if not for a return to the penny-stock fraud age. Well, eight weeks after the passage of the law, we're finding some unexpected results. Among the more controversial provisions of the JOBS Act, remember, was a sort of blanket regulatory exemption for so-called "Emerging Growth Companies," which were loosely defined as public companies with less than $1 billion in annual revenues. Among other things, the new law allows such companies to avoid independent accounting requirements for the first five years of their existence.

According to the WSJ, what's happening now is that the JOBS Act is being used to facilitate what are known as "reverse mergers." Because it's traditionally been difficult for new companies to meet the regulatory requirements for going public, what's often happened is that young companies look for dormant or dead corporations that are already registered. They then merge with those "empty shell" companies, use their corporate structures, and thusly avoid the IPO process altogether. This process is called a "reverse merger." Oftentimes those empty shell companies – also called "blank check" firms or "special purpose acquisition companies" – are dead for a reason. Otherwise honest new companies that merge with those firms often find themselves in bed with unexpected, and unexpectedly shady, partners. In other cases, the problem goes the other way: the government has had issues in recent years, for instance, with Chinese startups that use American empty shell firms to establish businesses here.

So why does this matter? Well, the JOBS Act was ostensibly designed to make it easier to launch actual IPOs, and theoretically should have made the darker, more problem-ridden reverse merger process less appealing. But what we're finding now is that companies are using the JOBS Act to designate those "blank check" firms as "emerging growth companies." From the WSJ piece:

The Act... also allows [emerging-growth companies] to make fewer financial disclosures, use a new, confidential SEC review process for IPOs and lets their bankers communicate more freely with potential investors. The confidential reviews are designed to let companies sort out any differences with the SEC behind closed doors.

Many of the hundreds of companies that have claimed to be emerging-growth companies under the new law are small biotech, technology, retail and energy companies. But 17 explicitly described themselves as blank-check companies or trusts.

About 30 companies have submitted IPO filings to the SEC confidentially under the law, according to the agency's staff. And at least two of those submissions are for blank check companies, an advisor to those companies said.

These little reverse-merger enterprises are exactly the sorts of companies where small investors should want to have as much transparency as possible, so they know whom they're jumping in bed with. Instead, we're going to use this new tool to allow already-troubled companies to hide their warts in behind-closed-doors sessions with the SEC. So that's awesome.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/jobs-act-fallout-more-fraud-fewer-ipos-20120607#ixzz1xJ80Gocs

[Demeter]

69. Accounting Backfired at MF Global By FLOYD NORRIS A MUST READ!

AMONG OTHER THINGS...I DON'T THINK IT'S FAIR TO PUSH CONTROL FRAUD OFF ONTO THE ACCOUNTANTS, THOUGH

http://www.nytimes.com/2012/06/08/business/mf-global-case-exposes-weakness-in-accounting-rules.html?_r=1&ref=business

Back when I was studying accounting at Columbia University’s business school, the professor had a handy way to determine whether it made sense for a company to recognize revenue: Had it completed the hard task in its business? GAAP — generally accepted accounting rules — were not so simple, he said, and sometimes let companies record revenue — and post profits — far too early. Companies that took advantage of such rules could well be reporting earnings they would never see.

The hard task varied from business to business, he said. For a farmer, the hard part was done when the crop was harvested. Even if it had not yet been sold, there was a ready market for corn or soybeans or whatever, and money had been earned. For a manufacturer of tourist tchotchkes, making them was the easy part. Persuading someone to buy them was the difficult part, and revenue recognition should be delayed. Over the years, I’ve seen any number of accounting disasters, ranging from Enron to subprime mortgages, where that simple principle was ignored. Sometimes that accounting was within the limits of GAAP and sometimes it was not. In all cases, it produced profits that vanished before they were actually realized.

Now there is another example at MF Global, the brokerage firm that Jon Corzine ran into the ground.

The accounting maneuver allowed MF Global to buy bonds issued by European countries and book profits the same day. That is the rough equivalent of a farmer’s booking profits as soon as he plants the crop.

To be fair to MF Global, it did disclose what it was doing in a footnote to its financial statements. The accounting appears to have been proper under accounting rules that are now being reconsidered....

[Demeter]

71. MBS and Foreclosures Expose Our Degraded Legal Profession

http://abigailcfield.com/?p=1309

A LAWYER'S LAMENT

[Demeter]

73. Iceland economy grows at fastest pace in four years

http://www.reuters.com/article/2012/06/08/us-iceland-gdp-idUSBRE8570UA20120608?feedType=RSS&feedName=businessNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=56943

Iceland's economy expanded in the first quarter at its fastest pace since its near-meltdown, powered by a surge in exports, tourism and domestic consumption. Gross domestic product (GDP) grew 2.4 percent quarter-on-quarter in the first three months of the year to put annual economic growth at 4.5 percent in the period, the highest since the first quarter of 2008, data from the statistics office showed on Friday....Growth for the fourth quarter of 2011 was 1.9 percent on the quarter and 2.7 percent on the year. The recovery has gathered momentum more quickly than expected...Iceland successfully completed a bailout program led by the International Monetary Fund last year and has returned to bond markets. Forecasts for 2012 indicate GDP growth will be the strongest among developed countries, the central bank has said.

While investments have begun to recover from lows reached after the bank collapse, the relative weakness of the Icelandic currency has lured tourists. Guest nights in Icelandic hotels by foreign tourists rose by 17 percent year-on-year in April. Islandsbanki said the number of tourists departing from the main airport hit a record in May, helping the economy of the country of only about 320,000 people.

The data released on Friday showed exports and consumption grew 4.2 percent year-on-year in the first three months of the year while investment grew 9.3 percent, though from low levels.

Iceland said last month it would offer overseas investors who have crowns they don't want another chance to sell their currency as the country seeks to remove the capital controls put in place during the 2008 crash. Reducing the overhang of foreign-held crowns in a controlled manner should make it easier to loosen capital restrictions in the long run and encourage investment in the country.

[girl gone mad]

83. Greece coulda shoulda woulda.

Sigh.

[Demeter]

85. I don't know about that

Other nations can and will follow Iceland, but Greece is so different from Iceland, its people couldn't conceive of following Iceland's lead. And Iceland had some unique problems that nobody else has (except maybe Monaco or Luxemburg).

Nobody's done a good analysis of each nation's weaknesses, strengths and tendencies (and published it in my vicinity). I would think such real work would be a useful thing...but all we get is propaganda, bluster, and whining. Occasionally a fact or two slips in.

[Demeter]

75. The Power Principle Video Documentary

A gripping, deeply informative account of the plunder, hypocrisy, and mass violence of plutocracy and empire; insightful, historically grounded and highly relevant to the events of today.

This documentary is about the foreign policy of the United States. It demonstrates the importance of the political economy, the Mafia principle, propaganda, ideology, violence and force.

It documents and explains how the policy is based on the interest of major corporations and a tiny elite to increase profits and the United States governments own interests in maintaining and expanding it’s imperialistic influence.

Inside the United States this has been made possible with a propaganda of fear for the horrible enemies like the Soviet Union, Communists and so on and a love for “free markets”, “democracy”, “freedom” and so on.

Externally (and increasingly internally) this has caused massive poverty and suffering, genocide, war, coups, crushed unions and popular movements and environmental destruction.

3 PARTS OF VIDEO AT LINK

http://www.informationclearinghouse.info/article31417.htm

[Demeter]

76. The Pentagon Seeks to Regain the Initiative in South America (CHILE BASE FOLLOW UP)

http://www.informationclearinghouse.info/article31525.htm

The recent visit by US Secretary of Defense Leon Panetta to three South American countries, and the installation of a Southern Command base in Concón, Chile, show the deepening of the military presence of the Pentagon in the region.

"We'll really try to develop a key part of our new defense strategy, which is to…reinforce some very innovative partnerships in a very important region of the world that represents a key security interest for the United States," said Secretary of Defense Leon Panetta, aboard the military aircraft that took him on his first visit to the region as defense secretary.

Panetta made three stopovers: in Colombia he reaffirmed the mission of Plan Colombia, to export security to the countries of the region, in particular to Central America and Mexico; in Brazil he attempted to lure the country with promises, to bring the world's sixth-largest economy closer to Washington's orbit; and finally, in Chile his visit coincided with the opening of the first military base of the Southern Command in that country, specializing in urban warfare.

His words revealed the objectives of the Pentagon's policy in the region: innovate, modify and deepen security policies, in line with the new national defense strategy issued by President Obama in early January, 2012. The focus shifts from the Middle East to the Asia-Pacific region, and to attract allies, the US proposes building partnerships in the form of "a network of alliances across the globe," offering the partners "technology transfer, intelligence sharing and foreign military sales."

MORE MADNESS AT LINK

[Demeter]

77. UK banks sitting on £40bn of undeclared losses

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9312513/UK-banks-sitting-on-40bn-of-undeclared-losses.html

PIRC, the shareholder advisory group, has analysed the 2011 accounts of the UK's top five banks to calculate how much they expect to write off as bad debt in the coming years but have yet to take against profits.

Royal Bank of Scotland (RBS) was in the worst condition, PIRC found, with £18bn of undeclared losses that would wipe out more than a third of its capital buffer and potentially force the 82pc state-owned lender back to the taxpayer for another rescue.

HSBC had ($16bn) £10bn in undeclared losses, Barclays £6.7bn, Standard Chartered $3.6bn (£2.3bn) and Lloyds Banking Group £2.9bn. PIRC presented its numbers to all the banks and said none disputed them.

Profits at Britain's lenders have been flattered by controversial international accounting standards introduced in 2005 that prevent companies from provisioning against potential losses. The rules have been attacked by the House of Lords, among others, as deeply flawed.

PIRC said the rule was "masking the true position of the accounts by including fictional assets and fictional profits"....MORE

[Demeter]

79. That's all I've got for Saturday

tomorrow will be mining the past...and anything else that crops up. Meanwhile, back to reality, my style....

[xchrom]

90. sigh -- lazy, lazy sunday

[Demeter]

95. What a darling photo!

Lazy for some but not for me. Got up and finished the Sunday delivery, then took a bath to get all the sweat and oil and bug spray off. Yes, the mosquitoes are finally hatching, and they love me, as usual.

The relief of 80F at sunset rapidly turned into the misery of 80% humidity, and today it's going back up to 90F.

We are in a drought. The grass is all burnt and the corn looks terrible. It's only a foot high because we've had no rain for a month at least. All that winter sogginess is gone. There must be a hurricane forming, to pump this much heat up so fast.

[Hotler]

105. I'm so trrrrd. Someone fetch me a Milkbone. n/t

[xchrom]

91. Spain's Rajoy hails bank rescue as 'victory for euro'

http://www.bbc.co.uk/news/world-europe-18385634

Spanish Prime Minister Mariano Rajoy has hailed a decision by eurozone finance ministers to help Spain shore up its struggling banks as a victory for the European common currency.

"It was the credibility of the euro that won," he told reporters.

On Saturday, the eurozone ministers agreed to lend Madrid up to 100bn euros ($125bn; £80bn) to help banks hit by bad property loans.

The US and the International Monetary Fund (IMF) also welcomed the move.


*** apparently the government will still have access to the markets -- part of the 'big deal'.

[Eugene]

109. Skeptical Spaniards pour scorn on Rajoy over rescue

Source: Reuters

Skeptical Spaniards pour scorn on Rajoy over rescue

By Fiona Ortiz and Tracy Rucinski
MADRID | Sun Jun 10, 2012 2:47pm EDT
(Reuters) - Confused and anxious Spaniards heaped scorn on Prime Minister Mariano Rajoy on Sunday for portraying a 100 billion euro European rescue of the country's zombie lenders as a triumph, expressing skepticism about whether the plan will work.

With the economy contracting, one in four workers out of a job, and Greek elections next weekend overshadowing the entire euro zone, Spaniards accepted that Saturday's announcement of the bank rescue was necessary but many doubted it would solve the problems of Spain or the euro.

Some commentators were willing to give Rajoy the benefit of the doubt as Spain became the fourth euro zone country to seek international aid in the two-and-a-half-year debt crisis.

However, others were less forgiving, while online many Spaniards accused him of cowardice and expressed astonishment that he had gone off to watch Spain play in the European football championships on Sunday.

[font size=1]-snip-[/font]

Read more: http://www.reuters.com/article/2012/06/10/us-eurozone-spain-rajoy-idUSBRE85905520120610

[DemReadingDU]

92. Dmitry Orlov: Fragility and Collapse: Slowly at first, then all at once

edit - because Demeter already posted!

BTW - a great article, long but excellent read!

[DemReadingDU]

93. John Michael Greer: Collapse Now and Avoid the Rush

6/6/12 Collapse Now and Avoid the Rush

As I write this week’s post, for example, it’s difficult not to notice some of the other voices in this particular conversation. The bookshelf an easy reach to my left has a row of brightly colored trade paperbacks by some of my fellow peak oil authors—William Catton, Richard Heinberg, Jim Kunstler, Sharon Astyk, Dmitry Orlov, Carolyn Baker and more. Close by, the rolling brown landscape of Arnold Toynbee’s A Study of History, all ten volumes, confronts the twin black monoliths of Oswald Spengler’s The Decline of the West, while Giambattista Vico’s New Science offers an ironic Italian commentary from one side. Other shelves elsewhere in the room contribute other voices: biology and ecology textbooks from my college days; appropriate tech manuals from the Seventies brimfull of unfulfilled hopes; old texts on the magical philosophy that forms the usually unmentioned foundation from which all my thinking unfolds; and a great deal more. Poets, as often as not, these days: Robinson Jeffers, William Butler Yeats, T.S. Eliot. Without the contributions of all these other voices, the conversation and thus my contributions to it would not be what it is.

Still, there are times when the conversational nature of what I’m doing becomes more obvious and more direct than usual, and one of those happened the weekend before last, at the Age of Limits conference I discussed in last week’s post. One of my presentations to that conference was a talk entitled "How Civilizations Fall;" longtime readers of this blog will know from the title that what I was talking about that afternoon was the theory of catabolic collapse, which outlines the way that human societies on the way down cannibalize their own infrastructure, maintaining themselves for the present by denying themselves a future. I finished talking about catabolic collapse and started fielding questions, of which there were plenty, and somewhere in the conversation that followed one of the other participants made a comment. I don’t even remember the exact words, but it was something like, "So what you’re saying is that what we need to do, individually, is to go through collapse right away."

"Exactly," I said. "Collapse now, and avoid the rush."
.
.
It’s difficult to think of anything more frightening, or more necessary. "In order to arrive at what you do not know"—that’s Eliot again—"you must go by a way which is the way of ignorance. In order to possess what you do not possess, you must go by the way of dispossession." Which is to say: collapse now, and avoid the rush.

lots more (but not as long as Orlov's article)
http://thearchdruidreport.blogspot.com/2012/06/collapse-now-and-avoid-rush.html



Ok, So I do try to live more simply, eat more simply, and buy less and less. However, spouse will say that we must drive and eat out more often now, because when the collapse comes, there won't be anyplace to go. lol

[Demeter]

96. I'm a firm proponent of doing more with less

as well as deciding what really doesn't need to be done--ever. And then just not doing it, or not letting it happen.

[Demeter]

97. Not Wasting the Waste: Creating Environmental Sustainability

http://truth-out.org/opinion/item/9695-not-wasting-the-waste-creating-environmental-sustainability

S. Ushakumari is a horticulturist who has been working with a public interest research organization, Thanal, for the past 22 years. Part of her life’s work is a movement which is sweeping the globe: zero waste. Instead of seeking to “manage” waste, this philosophy and campaign aim to eliminate it. Zero waste considers the entire life cycle of material objects – natural resource extraction, processing, production, transportation, consumption, and disposal – which is exhausting the planet’s resources and creating increased pollution. Zero waste re-examines consumption with an ethical, economic, and environmental eye. It starts with the humble elements of waste reduction: re-using, recycling and composting. But it goes further, requiring companies to change the way they design and manufacture goods so that they are free of toxins, and getting government to change policies and laws. Ultimately, zero waste aims to create a society that lives sustainably on a finite resource base. In the process, it strengthens local economies with jobs, reduces energy demands and thus climate change, and saves local governments money that is spent cleaning up industries’ messes.

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

Zero waste came to us as an alternative to the current waste management paradigm of burning or burying, which is actually wasting the waste itself.

Tourists like to come and visit the town of Kovalam but, in the past ten to fifteen years since globalization hit, the state of Kerala has been having a problem of excessive waste. The figures showed that the tourist flow was actually going down in Kovalam because of waste. The tourism department became very concerned. They had what they thought was a good idea: burn the waste and make it disappear. Like a miracle. When we at Thanal came to know about the incineration and problems associated with it, we held a press conference as a first step to starting a campaign, which the media took up in a very positive manner. We also communicated with leaders in the community who really felt attacked by the idea of incineration, because it’s a thickly populated area. Then the tourism director at that time, who was a medical professional, had a discussion with us. He asked, “Why you are you opposing this?” We gave him all of the written documents against incineration. Then he said, “Okay. Because of the information you gave me, I stopped the project. But, now, I need to solve the problem. Can you help me out?” He said, “Come up with some ideas and we’ll support you.” Discussions with the Global Anti-Incinerator Alliance [GAIA] gave us the idea of zero waste. We started by identifying the kind of waste that was in Kovalam. We found out that almost 70 to 80 percent of the waste could be recycled or reused.

Women in the town got inspired by the whole idea of an alternate approach to waste management, and that’s how we began. With the support of the tourism department, we started a zero waste center, which was a resource education center to do training with women, students, farmers, and policy-makers. Almost immediately, we were training up to 400 women – not very many men actually came forward – and also some local organizations who were working with street children.

Some of the women were interested in developing an enterprise. In 2004, they started the Pioneer Paper Bag Unit. They talked to hoteliers in and around Kovalam and got the hotel industry to start realizing the problems with the materials they were wasting, including newspaper. They were just dumping it in the city garbage which was, in turn, getting dumped into some corner of the city premises. Some of the hoteliers started freely giving their waste paper to the Pioneer Paper Bag Unit. The unit made paper bags to give back to the hotel, so it was like completing the cycle. They also got one-sided papers [sheets in which one side is blank] from some of the computer centers and they made notebooks. I can happily say that the unit works in an economically sustainable manner. MORE

[DemReadingDU]

104. Zero Waste?

I don't think I will see this in my neighborhood.

[DemReadingDU]

106. Waste Based Society

An occasional poster at The Automatic Earth,

6/7/12 Reverse Engineer: Waste Based Society

Perhaps my first recollection of becoming aware that we were running a wasteful and unsustainable paradigm came from the original Coke Bottles, also made of Glass and also quite distinctive in shape. I was probably only 5 years old most when I couldn't understand WHY we were throwing out these very nice Bottles which clearly could be reused many times over.

Eventually "recycling" became the word of the day, and you were supposed to separate your Trash into separate Bins, one for Glass, one for Aluminum Cans, one for Plastics of various kinds, one for Paper and one for Organic Waste, aka food leftovers mainly in the typical Suburban Household of the 1970s. Of course, having 5 different trash receptacles in the Kitchen never really gained all that much traction and eventually this worked down to 2, "recyclables" and non-recyclables. Somewhere, some Unidentified person sifted through the Recyclables trash on a conveyor belt separating out the Glass, Plastic, Paper and Aluminum.

Just looking at the Glass though, how was it "recycled"? The Bottles were not sent back to Coke Plants whole for rinsing and re-using, they were Crushed, melted down and Molded again into a new Coke bottle, or some other kind of bottle or Jar or maybe automotive windshield. How much Energy was saved by recycling a Gas bottle? Not much if any, and probably actually was net waste when you consider the transport issues.

more...
http://theautomaticearth.com/Energy/waste-based-society.html


and part 2
6/9/12 Waste Based Society II: Vendor Financing & Planned Obsolescence

Why do we run a Waste Based Economy (WBE)? It seems illogical on the surface, but there is a fundamental reason for it.

The reason is this: In a Conservation Based Economy, nobody gets OUTRAGEOUSLY rich!

more...
http://www.doomsteaddiner.org/forum/index.php?topic=160.msg3156#msg3156

[Demeter]

108. Very true. And nobody is destitute, either, I'll wager.

[Demeter]

107. When the malls shut down, we will.

or when everybody has no income to speak of.

[Demeter]

99. Goldman Sachs Hires Single Morally Decent Human Being To Work In Separate, Enclosed Cubicle

http://www.theonion.com/articles/goldman-sachs-hires-single-morally-decent-human-be%2c28460/

NEW YORK—Seeking to mollify critics over its role in the global financial crisis, Goldman Sachs announced Friday the hiring of junior analyst Greg Kohler, who executives said is the investment bank's first and only employee to possess a clear set of morals or a basic understanding of right and wrong. Officials confirmed the upstanding Kohler, 24, will be based out of the company's Lower Manhattan headquarters, working from within a small cubicle strategically located in a remote corner of the building where he is unlikely to have contact with his morally bankrupt coworkers.

"We are very pleased to welcome Mr. Kohler, who will be adhering to the letter of the law in a workspace physically detached from the rest of our firm's operations," public relations chief Richard Siewert said during a press conference. "He'll be joining a select group of 33,000 talented individuals at Goldman Sachs as our sole employee not motivated purely by the pursuit of obscene wealth at the expense of society."

"While Mr. Kohler won't be attending a single meeting or influencing any of our business decisions, we're confident his acute sense of professional integrity will prove a valuable asset," Siewert continued. "He will technically be on our staff, collecting a paycheck, and that's really all that counts."

According to Siewert, Kohler's unique values of fairness, honesty, and social responsibility will be put to the test immediately, with daily tasks that include not searching for SEC loopholes to exploit, not deliberately misleading clients into unwise investments and then betting against them, and not taking massive risks at the expense of American taxpayers. Working in the seclusion of his 16-square-foot office in a seldom-traveled hallway adjacent to the office cafeteria's dishwashing facility, Kohler will report to a vice president of private wealth management who will be barred from communicating with him in person, by phone, or over e-mail in the event Kohler accidentally hears about, and thus has to report, any instances of duplicitous behavior.

In a recent letter to shareholders, CEO Lloyd Blankfein stressed that the firm has taken every precaution to ensure Kohler has no influence on Goldman's culture of rampant amorality, writing, "Trust me, no one here is going to be listening to [Kohler]. He'll only be allowed to access our building through the freight entrance."

"Unlike the numerous members of our organization who have brazenly done so in the past, Mr. Kohler will be prohibited from ever taking a high-ranking position within the U.S. government, as that would present a serious conflict of interest," Siewert told reporters. "Nor will he be allowed, as our lone ethically minded employee, to draw upon those dubious connections to secure favorable treatment for Goldman Sachs or any of its global interests."

"Our plan is to ask for his advice on strategy and then immediately abandon anything he believes to be a good idea," he added.

Despite the official announcement welcoming Kohler, several employees voiced concerns that Kohler's hire represents a shift away from the firm's long-standing commitment to making as much money as possible, as quickly as possible, without any regard for human decency.

"On a certain level, I'm not worried about having him on board—he's just one guy, after all—but the mere fact that we'll be sharing an office with someone who plays by the rules is extremely depressing," said a managing director who spoke on condition of anonymity. "At the end of the day, you just want to cut loose with a few of your coworkers and expense a $2,000 meal without having to think that someone's back at the office doing his job with professionalism and character."

"It's just that I value the tradition we've all worked so hard to create here," he continued. "I wouldn't want one virtuous person to ruin that."

In addition to Kohler, Goldman Sachs also announced the hiring of 10 unscrupulous profit-mad sociopaths as a hedge against any of his moral convictions actually costing the company money.

[Demeter]

100. Ben Bernanke’s Office Phone Number Given Out at Netroots Nation Keynote By: David Dayen

CALL HIM QUICK BEFORE IT CHANGES!

http://news.firedoglake.com/2012/06/09/ben-bernankes-office-phone-number-given-out-at-netroots-nation-keynote/

At a keynote address this morning at Netroots Nation, Erica Payne of The Agenda Project gave out Ben Bernanke’s office telephone number, and urged the audience to “call him every day for the next couple weeks,” specifically urging him to get Jamie Dimon to step down from the board of the New York Federal Reserve. An attendee named Alice called the number, 202-452-2955, and confirmed it was the public affairs office of the Federal Reserve. She left a message, saying “I want you to fire Jamie Dimon. I will call again tomorrow.”

Payne made the point that she gave out the number because of the power relationship between central bankers and the elites. “The rich can call up Ben Bernanke any time,” Payne said, so why shouldn’t everyone else? After all, the people are the Fed’s constituents as well.

It would be possible to come up with other messages for Bernanke’s outside of the conflict of interest issue on the regional Fed boards, which even Tim Geithner has said publicly is a problem. For instance, as writer Matt Yglesias tweeted, “the Fed’s role in mass unemployment is way more important” than the Dimon issue. But having the phone number is a tool to do activism actions across the spectrum, at targets that typically are not used to such activism directed at them....

[Demeter]

101. Bundesbank: the eurozone's secret dictator

http://www.telegraph.co.uk/finance/financialcrisis/9321661/Bundesbank-the-eurozones-secret-dictator.html

German Chancellor Angela Merkel may be the dominant force in the eurozone but the Bundesbank, Germany’s powerful central bank, is the power behind the throne....

When the details of the (SPANISH BANK) bail-out are agreed, it will almost certainly be presented as generous to Spain and evidence of Germany’s unstinting support for the eurozone project. Spain is expected to be pledged the funds from the European Financial Stability Facility (EFSF) or the IMF’s precautionary credit line — set up to help the “innocent victims” of the euro crisis. Under the deal, Madrid will borrow the money to recapitalise its banks at a rate it would not be offered in the market.

The cheap, state-backed funds will mean that Spain’s national debt rises from the 72pc of gross domestic product (GDP) forecast this year by the IMF to about 80pc — still lower than both France and the UK. But, crucially, neither the EFSF or IMF funds would come with any fiscal conditions attached. Despite appearances, though, Germany will not have given an inch. The EFSF’s existing statutes say the funds can be used for a banking bail-out, and the only conditions attached will be financial sector reform. More importantly still, the EFSF funds will not rank senior to other holders of sovereign debt — which makes them potentially preferable to IMF funds. Were the private sector subordinated to the bail-out fund, traders fear investors would be even less likely to buy Spanish government bonds, yields on which have spiked to unaffordable levels of more than 6pc.

So long as the bail-out is less than €100bn, economists say, the bank rescue should stabilise Spain. Thomas Mayer, senior adviser at Deutsche Bank, is confident that the deal will help restore market confidence in Madrid, which has pushed through difficult but vital labour market reforms. But, Mayer added, there should be no mistake — at no point in the negotiations did Germany stop playing hardball. Chancellor Angela Merkel was never going to put taxpayers on the hook for the estimated €180bn of bad real estate loans made by Spanish banks....

[Demeter]

102. How (US) Banks Could Return the Favor By GRETCHEN MORGENSON

http://www.nytimes.com/2012/06/10/business/banks-could-return-a-favor-to-governments-fair-game.html?_r=1&ref=business

LIKE millions of homeowners, shrewd state and local governments are looking to refinance. Interest rates have hit rock bottom. So why not save some public money by replacing old debts with new ones at lower rates? The bad news for taxpayers is that such easy refis are out of the question for many governments and agencies short on cash. And that’s because these borrowers have been trapped by Wall Street.

Behind all of this is — you guessed it — derivatives. Bankers have embedded interest-rate swaps in many long-term municipal bonds. Back when, they persuaded states and others to issue bonds and simultaneously enter into swaps. In these arrangements, the banks agreed to make variable-rate payments to the issuers — and the issuers, in turn, agreed to make fixed-rate payments to bond holders. These swaps were supposed to save the public some money. And, for a while, they did. Then the financial crisis hit — and rates went south and stayed there. Now issuers are paying bond holders above-market rates as high as 6 percent. In return, they are collecting a pittance from banks — typically 0.5 percent to 1 percent.

Why not just refinance the old bonds? Well, if you think it’s costly to refinance a home mortgage, try refinancing a derivatives-laced muni. The price, in the form of a termination fee, can be enormous. New York State, for one, has paid $243 million in recent years to extricate itself from swaps-related debt. That money went straight from taxpayers’ pockets to Wall Street.

Corporations rarely do deals like these, because they generally avoid making long-term bets on interest rates. But bankers sold the idea to public borrowers. The total bill to terminate all of these swaps-related deals would run into many billions. Officials who have done such financing typically defend it. They say these deals were struck at lower rates than those associated with fixed-rate debt at the time. Therefore, the defenders say, the deals have saved money for issuers and taxpayers. But if states, cities and others had issued plain vanilla fixed-rate debt to begin with, they could have refinanced much of it by now at little or no cost. They would be paying significantly lower financing costs and would not be facing huge penalties to get out of the deals.

THE EVILS OF SECURITIZATION....IT WAS A DEAL LIKE THIS THAT GOT ME ON THE CONDO BOARD AND INTO THE ECONOMY SECTION OF THE DEMOCRATIC UNDERGROUND...WE HAD TO PAY A $3M PENALTY TO GET OUT OF OUR LITTLE PROBLEM...

[Demeter]

103. "Ray Bradbury imagined the future, and didn't always like what he saw."

http://www.npr.org/templates/story/story.php?storyId=154424110

Those of us addicted to this DU sector know that sinking feeling very well....but I'm out of new newsletters and time, so have a wonderful Sunday and a peaceful and productive week!

Demeter

[jtuck004]

110. I wonder what the next Bradbury, maybe born in 2000 or 2020 will see to write about.

The odds of a great one are pretty good out of the global population, though having largely tried to remove dirt and danger from growing up here, I wonder how their imaginations and spirit will be fed. I know they're safer, and needed to be...

From above -

"“When I was born in 1920,”" he said in 2000, "“the auto was only 20 years old. Radio didn’'t exist. TV didn’t exist. I was born at just the right time to write about all of these things."”

and from the last link about Bradbury on WEE -

"Bradbury, who died Tuesday at age 91, said often that all of his stories, no matter how fantastic or frightening they might be, were metaphors for everyday life and everything it entailed. And they all came from his childhood.

"The great thing about my life is that everything I've done is a result of what I was when I was 12 or 13," he said in 1982.

...

In many ways, he was always that 12-year-old boy who was inspired to become a writer after a chance meeting with a carnival magician called Mr. Electrico who, to Bradbury's delight, tapped him with his sword and said: "Live forever!"

"I decided that was the greatest idea I had ever heard," Bradbury said later. "I started writing every day. I never stopped.""Bradbury, who died Tuesday at age 91, said often that all of his stories, no matter how fantastic or frightening they might be, were metaphors for everyday life and everything it entailed. And they all came from his childhood."
...

That poor magician might get tased into submission and arrested today -

btw, thank you for your work on WEE, folks.