Economy
Related: About this forumSTOCK MARKET WATCH -- Monday, 23 January 2012
[font size=3]STOCK MARKET WATCH, Monday, 23 January 2012[/font]
SMW for 20 January 2012
AT THE CLOSING BELL ON 20 January 2012
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Dow Jones 12,720.48 +96.50 (0.76%)
S&P 500 1,315.38 +0.88 (0.07%)
[font color=red]Nasdaq 2,786.70 -1.63 (-0.06%)
[font color=green]10 Year 2.02% +0.01 (0.50%)
30 Year 3.10% +0.02 (0.65%)
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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]
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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red]
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Tansy_Gold
(17,847 posts)I'm gonna be a bit scarce this week, so if you don't see me other than the daily SMW OP, don't fret.
One of the biggest art/craft shows of the season is this coming Saturday, and I'll be getting ready for that in every spare second I can find.
The latest addition to the inventory --
Demeter
(85,373 posts)In January, in Michigan. Fricking weather!
Good luck on the art fair! That looks like elephants near the snow-topped mountain of Kilamajaro
Demeter
(85,373 posts)I think I'll go to bed early, and when I wake up, the nightmare will be over....
DemReadingDU
(16,000 posts)supposed to get back down to 35 this afternoon
Crazy!
rfranklin
(13,200 posts)but apparently the snow is coming back on Kilimanjaro.
http://wattsupwiththat.com/2011/03/21/kilimanjaro-regaining-its-snow-cap/
Fuddnik
(8,846 posts)I think the motorcycle needs a bath and a ride today.
Especially after this mornings murder and mayhem and screaming in the back yard.
DemReadingDU
(16,000 posts)good luck at the art show!
Loge23
(3,922 posts)Your work is beautiful - I'm sure you will do well!
FarCenter
(19,429 posts)Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking.
The latest report on "Debt and Deleveraging" by the McKinsey Global Institute shows that total public and private debt in the UK is still hovering at an all-time high. It has risen from 487pc to 507pc of GDP since the crisis began.
As the chart above shows, as recently as 1990 Britain’s debts were still just 220pc of GDP. Has a rich country ever been debauched so fast in peace time?
The ordeal of belt-tightening will be grim, dragging out for a generation if Japan is any guide. The Japanese at least began their post-bubble debacle as the world’s top creditor nation with a trade super-surplus and a savings rate of 17pc. Britain has no such buffers.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9031478/America-overcomes-the-debt-crisis-as-Britain-sinks-deeper-into-the-swamp.html
Demeter
(85,373 posts)America has overcome nothing. It has managed to export some of the side-effects of its wildly imbalanced and zombified economy to the greater world, just as Germany has exported some of their problems to the rest of the Eurozone.
In Germany, they are now facing declines thanks to polluting their own market (Europe). The same has happened here, it just takes longer to come crashing down, because the world is a much bigger place, and there are pockets of resistance in locally functional economies.
Po_d Mainiac
(4,183 posts)to home-owner defaults, and or personal bankrupcy?
Both of which lower the level of personal debt.
FarCenter
(19,429 posts)Both default and bankruptcy result in a transfer of money equal to the deficiency from the creditor to the borrower.
But other things, like tightening of credit standards so that fewer people can refinance mortgages or get HELOCS, lower credit card limits, and fewer auto loans and leases have had more of an effect.
And many people have been paying down their mortgages and HELOCs as well.
Fuddnik
(8,846 posts)An article in yesterday's Tampa Bay Times (formerly St. Pete Times) said that with new tax rules going into effect Jan. 01, 2013, anybody who is underwater and executes a short sale or a foreclosure, will have to declare the deficiency as income on their tax returns.
They're going to get you coming or going.
I searched, but couldn't find a link to the story on their website.
Demeter
(85,373 posts)Revenue disclosure likely to bring unwelcome scrutiny to candidate’s business background just days before Florida primary
Read more >>
http://link.ft.com/r/FG6LAA/XH5B5S/87I64/OR142Y/AMJNLA/UP/t?a1=2012&a2=1&a3=23
WHAT? HOW? I'LL LOOK FOR MORE DETAIL....
Demeter
(85,373 posts)Demands will delight some bankers but likely to infuriate policymakers in London, who have been fighting French-led attempts to dilute Basel III
Read more >>
http://link.ft.com/r/FG6LAA/XH5B5S/87I64/OR142Y/WT74I1/UP/t?a1=2012&a2=1&a3=23
AGAIN, A SEARCH FOR DETAIL ENSUES...
Demeter
(85,373 posts)State of the Union address will aim to draw sharp contrast with Republicans and pledge to ‘work for everyone – not just a wealthy few’
Read more >>
http://link.ft.com/r/FG6LAA/XH5B5S/87I64/OR142Y/JETGV9/UP/t?a1=2012&a2=1&a3=23
THIS ONE WRITES ITSELF....I'LL LEAVE THE EXERCISE FOR THE IMAGINATION....NEVER HAND DEMETER A STRAIGHT LINE!
Tansy_Gold
(17,847 posts)"What is this deja vu all over again?"
Demeter
(85,373 posts)
Tansy_Gold
(17,847 posts)But I love Yogi.
Fuddnik
(8,846 posts)Just in case anyone has to go potty.
Demeter
(85,373 posts)Croatia is set to become the EU’s 28th member state in July 2013, pending the results of the referendum as well as ratification by all 27 current member states
Read more >>
http://link.ft.com/r/FG6LAA/XH5B5S/87I64/OR142Y/KQH82R/UP/t?a1=2012&a2=1&a3=23
A CLEAR-CUT EXAMPLE OF THE TRIUMPH OF HOPE OVER (OTHER PEOPLE'S) EXPERIENCE....
Demeter
(85,373 posts)Socialist challenger for the French presidency says he would seek a Franco-German treaty to overturn the ‘dominance of finance’
Read more >>
http://link.ft.com/r/FG6LAA/XH5B5S/87I64/OR142Y/JETGVI/UP/t?a1=2012&a2=1&a3=23
GOOD LUCK, MONSIEUR! YOU ARE GOING TO NEED IT. WHY CAN'T WE GET A CANDIDATE TO TALK ABOUT THIS ISSUE IN US?
Demeter
(85,373 posts)Global banks raise $43bn in first three weeks of year amid race to secure funding after eurozone sovereign debt crisis
Read more >>
http://link.ft.com/r/CTBPCC/MS8JOC/6ADGM/TUGY5J/8Z9RL6/QR/t?a1=2012&a2=1&a3=23
AND YET, IT'S NOT ENOUGH. IT WILL NEVER BE ENOUGH.
Demeter
(85,373 posts)The Texan billionaire is accused of orchestrating a $7bn Ponzi scheme, leaving thousands of investors still waiting to recover their money
Read more >>
http://link.ft.com/r/CTBPCC/MS8JOC/6ADGM/TUGY5J/8Z9RLR/QR/t?a1=2012&a2=1&a3=23
WHY IN HELL ISN'T THAT "FORMER BILLIONAIRE"?
Demeter
(85,373 posts)David Cameron and the City of London must learn to “play the European game” and give up seeking UK exemptions that would hurt the economy and endanger open trade, the European Union’s top financial regulator Michel Barnier will warn on Monday
Read more >>
http://link.ft.com/r/QM42II/QNCNZE/6ADGM/DWE82C/ZG4KVT/28/t?a1=2012&a2=1&a3=22
I'D SAY THE TIME FOR "PLAYING GAMES" IS OVER!
Demeter
(85,373 posts)A new, privately arranged process used by the Federal Reserve Bank of New York this week to accept highly confidential bids from only four broker-dealers for US$7bn of its Maiden Lane II portfolio raised the ire of other market players shut out of what they call a glaringly non-transparent strategy...Credit Suisse ultimately won the auction today, buying US$7.014bn in face value from the approximately US$20bn remaining in the MLII portfolio of distressed RMBS assets formerly owned by AIG. The portfolio originally had a face value of more than US$30bn, but about US$9.5bn was sold in a public auction process last spring that eventually fizzled and was halted indefinitely...
The latest auction was prompted by an initial reverse inquiry from Goldman Sachs, but the Fed opted to honor an original commitment it laid out in March 2011 to adhere to a competitive process to dispose of the former AIG-owned distressed securities. It therefore opened up the bid to a limited pool of market players...As IFR first reported last Friday, America’s largest regional Federal Reserve Bank took bids on the MLII parcel from only four banks: Goldman Sachs, Barclays Capital, Bank of America Merrill Lynch, and Credit Suisse. The auction was tightly under wraps when it started today, as the Fed required the dealers, as well their investor accounts, to sign strict non-disclosure agreements (NDAs) regarding the specific bonds and prices on the bid list. "I just don't see how running a limited participation secret auction ensures that the taxpayer receives maximum proceeds for their bonds,"; said Adam Murphy, the president of Empirasign Strategies LLC, a capital markets data provider. "This auction seems inconsistent with the more open Fed that Bernanke espouses."
At the height of the financial crisis, the Fed bought the securities in order to rescue AIG. It was Goldman Sachs' collateral calls on CDS insured by AIG that sunk the company. Even though it didn't ultimately win the auction, Goldman is viewed as the bank driving the latest burst of interest in MLII, given its initial reverse inquiry.... The Fed's abrupt change of course towards a non-disclosed process irked many who were left out in the cold, according to several traders and asset managers. The strategy is in stark contrast to the more public tack taken last spring. The Fed sold US$9.5bn, or about one-third, of the more than US$30bn portfolio via nine auctions that took place between April 6 and June 9 of last year, but interest started to wane as the increased supply drove bond prices down and global macroeconomic volatility led to a vast de-risking event as investors dumped spread product...The Fed has long indicated that it never committed to any timetable or schedule for winding down the portfolio of former AIG assets, and was only looking to achieve the best execution possible. But now, secondary non-agency RMBS paper is on average 30 cents cheaper than last spring, spurring demand for the product once again.
"This MLII thing is a mess,"; said one securitization specialist away from the four bidding banks canvassing the market in a struggle to find the bonds on the list. "
It's) A complete insider deal orchestrated by those responsible for AIG's collapse in the first place. Hedge funds have to sign an NDA just to see the bonds on the list." A spokesman for the Fed declined comment. However, a press release stated that the pricing for each bond will be disclosed three months after the last ML II asset is sold, "ensuring timely accountability without jeopardizing the ability to generate maximum sale proceeds for the public."
comments:
YoureminenceJan 22, 2012 05:55 AM
Of course, it has to be a secret auction. What would happen to the President's re-election prospects if Americans understood that the Federal Government owns 3 out of 4 REOs (See January 2, 2012 statement by Ben Bernanke, Fed Chairman) and probably owns 3 out of 4 mortgages in default. In plain English, it means the Federal Government was the real party in interest which dispossessed 3 out of 4 foreclosed American families after rescuing Wall Street by transferring more than $4 trillion from Main Street to Wall Street.
Po_d Mainiac
(4,183 posts)Demeter
(85,373 posts)After a full-on counterattack by the tech industry, the entertainment industry must conduct PR damage control and convince tech-savvy Americans that it isn't the bad guy...After a week in which their anti-piracy legislation got derailed by the full force of the Internet lobby, the mood in Hollywood was one of anger, frustration and a growing resignation that the entertainment industry will be forced to accept a much weaker law than originally envisioned.
A full-on counterattack by a tech industry opposed to the toughest elements in the congressional bills, including a well-publicized Wednesday shutdown by key Internet sites, halted the legislation....CHRISTOPHER Dodd said Friday that the industry would now seek a compromise version of the legislation. He acknowledged that Hollywood lost the public relations battle and blamed his Silicon Valley counterparts.
"You've got an opponent who has the capacity to reach millions of people with a click of a mouse and there's no fact-checker. They can say whatever they want," he said. "We need to engage in a far better education process. People need to know … that 98% of people who work in the entertainment industry make $55,000 a year. They're not moguls and they're not walking red carpets." OH, REALLY, CHRIS? FACT-CHECK YOURSELF! That message, however, has so far failed to resonate with the American public, which has shown more sympathy for the tech companies promoting the idea that the bills — the Protect Intellectual Property Act and the Stop Online Piracy Act — would hurt legitimate websites and stifle freedom of speech on the Web.
Hollywood now must conduct PR damage control and convince tech-savvy Americans that it isn't the bad guy. "What they need to do is lick their wounds, see what happened and do a lot of test messaging right now because clearly the one they were using wasn't effective," said veteran Hollywood publicist Howard Bragman, vice chairman of Reputation.com, a reputation management company. Rob Beschizza, managing editor of the digital culture website BoingBoing.net, which joined the Internet "blackout," said many people were suspicious of the entertainment industry's inside-the-Beltway lobbying effort. "While folks feel a lot of sympathy for artists and musicians who are struggling to make sales, there's none for the companies," Beschizza said.
Demeter
(85,373 posts)Megaupload Type Shutdowns and Patriot Act Are Killing Cloud Storage
The government’s takedown of the 800 pound gorilla online storage site Megaupload may have killed the cloud storage model.
Many innocent users have had their data taken away from them.
As PC World notes:
***
Before its closure MegaUpload had 180 million registered users and an average of 50 million daily visits, claimed a total visitor history of more than one billion, and accounted for about four percent of all global Internet traffic….
***
Take, for example, Videobb.com, a site that appears to be similar to Megavideo. Videobb bills itself as an ideal place to share videos without ever having to worry about “disk space or bandwidth again.” Videobb is “safe, secure and easy” the company says, and that’s probably true; at least unless the FBI and the Department of Justice decide that videobb is ripe for a takedown. Behind the scenes, videobb is rife with pirated content just as Megavideo was.
A quick check of sites that index pirated content shows you can find recent episodes of The Big Bang Theory, Modern Family, and the recent movie Contagion available for free streaming on Videobb.
Videobb isn’t alone, either; services such as Novamov, ZShare, and VidXDen all offer file-sharing services similar to Megavideo and all of them are being used (or at least have been used) to distribute pirated content. The trick is that you won’t see the pirated content on these sites’ front pages; you have to know how to access it through third-party sites that contain links to the secret files.
If you use any of these sites to store or distribute your own non-infringing files, you are wise to have backups elsewhere, because they may be next on the DOJ’s copyright hit list.
***
Keep in mind that when you use these services you also make it easier for the government, and possibly hackers, to peer into your files without your knowledge — but that’s a discussion for another day.
Bottom line: if your cloud service offers file storage on the front end and shows pirated video out the back, don’t be surprised if your files vanish one day.
In other words, the government is exercising the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs.
And if that’s not enough to kill your enthusiasm for cloud storage, CIO points out:
***
Anxiety was heightened last year when a Microsoft UK managing director admitted that he could not guarantee that data stored on the company’s servers, even those outside the U.S., would not be seized by the U.S. government.
***
Escaping the grasp of the Patriot Act, however, may be more difficult than the marketing suggests. “You have to fence yourself off and make sure that neither you or your cloud service provider has any operations in the United States,” explains [Alex Lakatos, a partner and cross-border litigation expert in the Washington, D.C. office of Mayer Brown], “otherwise you’re vulnerable to U.S. jurisdiction.” Few large IT customers or cloud providers fit that description in today’s global business environment. And the cloud computing model is built on the argument data can and should reside anywhere around the world, freely passing between borders.
***
So, what’s a European cloud customer to do—or, for that matter, a U.S. customer anxious about how their cloud provider might respond to a government request for data under the Patriot Act? Cloud and other technology service providers have a mixed record when it comes to keeping customer data out of government hands. “For the cloud service providers, their life may be easier if they give the government whatever it’s asking for,” Lakatos says.
AWESOME COMMENTS AT LINK...SHOWING HOW MANY REALLY INTELLECTUAL TYPES READ YVES COLUMN...
Demeter
(85,373 posts)INTERNETS, 18th of January 2012.
PRESS RELEASE, FOR IMMEDIATE RELEASE.
Over a century ago Thomas Edison got the patent for a device which would “do for the eye what the phonograph does for the ear”. He called it the Kinetoscope. He was not only amongst the first to record video, he was also the first person to own the copyright to a motion picture.
Because of Edison’s patents for the motion pictures, it was close to financially impossible to create motion pictures in the North American east coast. The movie studios therefor relocated to California, and founded what we today call Hollywood. The reason was mostly because there was no patent.
There was also no copyright to speak of, so the studios could copy old stories and make movies out of them — like Fantasia, one of Disney’s biggest hits ever.
So, the whole basis of this industry, that today is screaming about losing control over immaterial rights, is that they circumvented immaterial rights. They copied (or put in their terminology: “stole”) other people’s creative works, without paying for it. They did it in order to make a huge profit. Today, they’re all successful and most of the studios are on the Fortune 500 list of the richest companies in the world. Congratulations — it’s all based on being able to re-use other people’s creative works. And today they hold the rights to what other people create.
If you want to get something released, you have to abide by their rules. The ones they created after circumventing other people’s rules.
The reason they are always complaining about “pirates” today is simple. We’ve done what they did. We circumvented the rules they created and created our own. We crushed their monopoly by giving people something more efficient. We allow people to have direct communication between each other, circumventing the profitable middlemen, who in some cases take over 107% of the profits (yes, you pay to work for them).
It’s all based on the fact that we’re competition. We’ve proven that their existence in their current form is no longer needed. We’re just better than they are.
And the funny part is that our rules are very similar to the founding ideas of the USA. We fight for freedom of speech. We see all people as equal. We believe that the public, not the elite, should rule the nation. We believe that laws should be created to serve the public, not the rich corporations.
The Pirate Bay is truly an international community. The team is spread all over the globe — but we’ve stayed out of the USA. We have Swedish roots and a Swedish friend said this:
The word SOPA means “trash” in Swedish. The word PIPA means “a pipe” in Swedish. This is of course not a coincidence. They want to make the Internet into a one way pipe, with them at the top, shoving trash through the pipe down to the rest of us obedient consumers.
The public opinion on this matter is clear. Ask anyone on the street and you’ll learn that no one wants to be fed with trash. Why the US government wants the American people to be fed with trash is beyond our imagination, but we hope that you will stop them, before we all drown.
SOPA can’t do anything to stop TPB. Worst case we’ll change top level domain from our current .org to one of the hundreds of other names that we already also use. In countries where TPB is blocked, China and Saudi Arabia spring to mind, they block hundreds of our domain names. And did it work? Not really.
To fix the “problem of piracy” one should go to the source of the problem. The entertainment industry says they’re creating “culture” but what they really do is stuff like selling overpriced plushy dolls and making 11 year old girls become anorexic. Either from working in the factories that create the dolls for basically no salary or by watching movies and TV shows that make them think that they’re fat.
In the great Sid Meiers computer game Civilization you can build Wonders of the world. One of the most powerful ones is Hollywood. With that you control all culture and media in the world. Rupert Murdoch was happy with MySpace and had no problems with their own piracy until it failed. Now he’s complaining that Google is the biggest source of piracy in the world — because he’s jealous. He wants to retain his mind control over people and clearly you’d get a more honest view of things on Wikipedia and Google than on Fox News.
Some facts (years, dates) are probably wrong in this press release. The reason is that we can’t access this information when Wikipedia is blacked out. Because of pressure from our failing competitors. We’re sorry for that.
THE PIRATE BAY, (K) 2012
Ghost Dog
(16,881 posts)I predict a boom in Swiss, for example, and other European servers and services in this area.
Demeter
(85,373 posts)Get your head and your sensitive data out of the clouds.
Demeter
(85,373 posts)AND IT'S NOT DEAD YET, EITHER!
http://www.nakedcapitalism.com/2012/01/advisors-pick-the-lehman-carcass-bankruptcy-on-its-way-to-2-billion-in-fees.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29
YVES SMITH WRITES:
One of my buddies who must go unnamed because he is involved in the Lehman bankruptcy told me many months ago that the unwinding was going to cost over $2 billion. A new story at Bloomberg suggests that his prediction is on track. The costs of various advisors to the Lehman estate in now in excess of $1.6 billion, and it ain’t over.
But perhaps more important, my mole, who has oodles of experience on big messy international bankruptcies, was incensed at the way various advisors, in particularly Alvarez & Marsal, which is running what is left of Lehman and is the major domo, and the lead law firm, Weil Gotschal, were feeding at the trough. Bloomberg also tells us that the fees paid to A&M are now over $500 million. This of course is the sort of thing that is inherently difficult to discern from the outside, since there aren’t that many people with the experience base and the vantage to discern that. And the people who do see it are either direct beneficiaries (as in they are working for Lehman) or are representing clients who are trying to improve their recovery. The advisors to creditors are in many respects part of a criminogenic environment, since the fees and costs incurred by the Lehman advisors legitimate their charges. And if someone was high-minded enough to object, waging a quixotic war over self-serving practices is not likely to help their client or their career.
Now some of the expense of the BK is due to people who have something to hide trying to reduce liability. We’ve pointed several times to one factoid supplied by A&M, that Lehman’s “disorderly bankruptcy” cost as much as $75 billion (we’ve had fun since 2008 trying to explain the size of the Lehman black hole, and the figures offered don’t even begin to add up). But why did A&M even bother making this report and going on a PR push? As we noted in 2009:
….
So if the logic above is correct, the A&M report looks like a costly ass-covering exercise to protect the board from lawsuits. And the Journal did the board a favor by giving it reasonably prominent placement.
Oh, by the way, our last sizing of the Lehman black hole put it at $140 to $245 billion (total losses of $216 to $319 billion less giving full credit for A&M’s as much as $75 billion attributable to the disorderly unwind. If you take out $50 billion for Repo 105, you still have $90 billion to $195 billion of losses that have not been adequately explained. But Bryan Marsal has maintained that Lehman had a liquidity, not a solvency problem! That’s certainly the line the board that hired him would want him to take.
MUCH MUCH MORE AT LINK...I THINK WE'VE FOUND THE BLACK HOLE OF FINANCE, RIGHT THERE....
Demeter
(85,373 posts)After watching the banksters swagger around, looting and pillaging, for over a generation, I have pretty much decided that the most we can hope to achieve in controlling these criminals is serious regulation. I still applaud the wag who suggested that "the regulation of the financial services business should be so comprehensive and strict, the head of Goldman Sachs would have to get a hall pass from Marcy Kaptur to take a dump." But in reality, I would settle for financial services being treated like a regulated utility.
But look what happened to Hungary when she attempted to put some restrictions on the "sacred" independence of the central bank. The EU has stepped in to explain how her government will be allowed to run. Actually, the restrictions Hungary wanted impose are very reasonable—which pretty much means my reform wish list will never happen. (sigh) I especially liked the part where central bankers were required to swear a loyalty oath to the country. Imagine asking a central banker to place the well-being of his country above the institutional needs of the central bank. (the horror) Gotta bring the big guns down on that!
EU Takes Legal Action Against Hungary
01/17/2012
The European Commission has launched legal proceedings against Hungary, accusing it of breaching EU treaties with laws that undermine the independence of the justice system and central bank. The case could delay the payment of international aid needed to shore up Hungary's economy.
The European Commission said on Tuesday it was launching legal action against Hungary for violating EU laws with new legislation that curbs the independence of the national central bank, the data protection agency and the judiciary.
Legal proceedings against a member state's laws are rare in the EU, and the Commission's move reflects mounting international concern at the authoritarian policies of the right-wing government of Prime Minister Viktor Orbán, and could delay negotiations on an international aid package for Hungary.
"We had hoped that Hungary would have made the necessary changes. This has not been the case so far," said Commission President Jose Manuel Barroso.
Hungary has introduced legislation permitting a cabinet minister to participate in meetings of the central bank's monetary council, requiring the council to send the government the agenda of its meetings in advance, and forcing the central bank governor and council members to take an oath of loyalty to the country.
The government has also lowered the retirement age of judges to 62 from 70, in addition to making other changes to the organization of courts. The move has raised suspicions that the government wants to get rid of troublesome judges and state prosecutors. MORE AT LINK
Demeter
(85,373 posts)...the legitimacy of the system has already crumbled. It is harming too many for the benefit of too few...
Some examples:
- Powerful corporations socialize their risks and costs, but privatize profits. That means we, the 99 percent, pick up the tab for environmental clean ups, for helping workers who aren’t paid enough to afford food or health care, for bailouts when risky speculation goes wrong. Meanwhile, profits go straight into the pockets of top executives and others in the 1 percent.
- The financial collapse threw millions of Americans into poverty. 25 million are unemployed, under-employed, or have given up looking for work; four million have been unemployed for more than 12 months. Poverty increased 27 percent between 2006 and 2010. And students who graduated with student loans in 2010 had borrowed 5 percent more than the previous year’s graduating class—owing more than $25,000. Meanwhile, those who caused the collapse continue the same practices. And the unwillingness of the 1 percent to pay their fair share of taxes means the the public services we rely on are fraying.
- Scientists say that we are on the brink of runaway climate change; we only have a few years to make the needed investments in clean power and energy efficiency. This transition could be a huge job creator—on the order of the investments made during World War II, which got us out of the Depression. But fossil fuel industries don’t want to see their investment in dirty energy undermined by the switch to clean energy and conservation. So far, by paying millions to climate deniers, lobbyists, and political campaigns, they’ve succeeded in stymieing change.
- Agribusiness get taxpayer subsidies for foods that make us sick; for farming practices that destroy rivers, soils, the climate, and the oceans; and for trade practices that cause hunger at home and abroad.
- Through ALEC, the private prison industry crafts state laws that boost the numbers behind bars, lengthen sentences, and privatize prisons.
- Big Pharma jacks up prices; insurance companies raise premiums and delivers fewer benefits; the burden of inflated care drags down the economy and bankrupts families. But only a very few politicians stand up to the health care industry's war chests and advocate for Canadian-style single-payer health care, which would go a long way toward solving the cost problem.
- Corporations and wealthy executives fund an army of lobbyists and election campaigns, spreading untruths and self-serving policy prescriptions.
It’s not that we, the people, haven’t noticed all this...Some say corporations have such a strong grip on politicians and big media that it is impossible to challenge them, no matter how many of us there are.
But I believe we can do it. In the past few months, YES! Magazine has been researching ways that ordinary people can challenge corporate power (look for strategies in our spring issue, out in February). And we found that there are actually a lot of tools at our disposal:
- Corporations were created by public law to provide a public benefit. If we the people no longer feel that a corporation is providing a benefit—or if we feel that it is operating in a lawless and destructive manner—we can revoke their charter. That’s what Free Speech for People has asked the attorney general of Delaware to do to Massey Energy, which has been one of the worst culprits in mountaintop removal and which has operated its mines in a lawless and negligent manner, resulting in 29 deaths at the Upper Big Branch Mine.
- We can insist that, in exchange for use of our public airwaves, broadcasters provide free airtime to candidates for public office. If they don’t need to raise millions for media buys, they don’t need to be as beholden to the 1 percent.
- We can get our governments to quit banking with Bank of America and Chase, and start our own state banks—14 states, including California and Washington, are considering such a move. And while we're at it, we can localize food, energy, and other aspects of our economy so local, independent businesses and cooperatives can thrive.
We can stand up to specific parts of the corporate agenda by engaging in the sort of direct action that halted the KXL Pipeline. - We can call for a constitutional amendment overturning Citizens United, corporate personhood, and the ridiculous notion that money is the same thing as speech. So far, Los Angeles, New York City, and about 50 other towns and cities have done so far.
- We can use mechanisms like clean elections, electoral transparency, citizen review of legislation, and recalls to keep corporate control of our democracy in check.
- Finally, the reason I am most hopeful today: We can take a cue from Occupy Wall Street and continue to name the source of political corruption—something the political establishment and mainstream media have refused to do. We can occupy homes that are slated for foreclosure, as people have been doing all over the country. We can mic check places like Walmarts that intimidate and fire workers who want to unionize. We can set up tents in public places and in other ways join with the Occupy movement to take a stand for a world that works for the 100 percent—a world where we all benefit.
None of these actions will be easy. It will take time—potentially years of work—to make big change. But just as the legitimacy of apartheid crumbled well before the institutions of apartheid went down, the legitimacy of corporate rule is crumbling. So I’m convinced that, with you and me and all the others out there creating alternatives and taking a stand, we will see change.
*******************************************************************************************
Sarah van Gelder will deliver these comments at Seattle's rally on the second anniversary of the Citizens United ruling. Sarah is YES! Magazine's co-founder and executive editor, and editor of the new book: "This Changes Everything: Occupy Wall Street and the 99% Movement."
AnneD
(15,774 posts)
and lurkers.
Just a reminder, this is the week of the big confab in Davos, when the masters of the universe decide how to slice the pie.
My sister-in-law says the offer still stands. She will be happy to host the confab and her place. She can whip up a feast in no time if you don't mind a few left-overs thrown in. There is plenty of room on the property and the house. The drought has hit their pond hard, so it is not as scenic as in years past, but the antics of the cows and chickens are amusing and my niece has gotten better at playing the piano, so there will be entertainment in the evenings. Brother plays a mean game of chess and automatic Uno is a nice ice breaker-but it gets cut throat, so you ahave been warned. Scrabble can be dangerous. We have a wide selection of DVD's so there is plenty of activities.
I know security is a big concern, what with all the talk of OWS and FRSP and all, but my brother is a very good sharpshooter and there is plenty of guns and ammo lying about. He has a scrap yard in the front and word had gotten around the community that it is protected so folks don't even bother anymore. The acreage assures privacy (as long as SIL is not in earshot).
In this tough economy and all this austerity, you can be treated like royality for under $50 per night. Think of all the money you save (or pocket). I mean it is not as much as you get for plundering a country's treasury, stealing their resources, taking away their soverenty, looting their cultural treasures, and make slaves of them, but you can have a decent time for a few bucks. Just keep that in mind.
Happy hunting and watch out for the bears.
Demeter
(85,373 posts)I don't want to be wasting my time around Eurotrash and Vampire Squid tentacles....
AnneD
(15,774 posts)I know you folks don't have any money
Demeter
(85,373 posts)to a blind man.
Demeter
(85,373 posts)CONGRESS IS KEPT IN THE DARK AND FED BS, JUST LIKE ANY OTHER MUSHROOM FACTORY WHERE THE "WORKERS" ARE EXPLOITED BY THEIR MASTERS--IN THIS CASE, THE CORPORATIONS WITH THEIR HIRED SUPERVISORS, THE K STREET LOBBYISTS--AND PAID HANDSOMELY FOR IT, TO BOOT. IT'S CALLED CORRUPTION. AFTER ALL:
“It is difficult to get a man to understand something when his salary depends on his not understanding it.”
― Upton Sinclair, I, Candidate for Governor: And How I Got Licked
http://www.nakedcapitalism.com/2012/01/matt-stoller-fed-transcripts-%E2%80%93-why-was-congress-in-the-dark-during-the-crafting-of-dodd-frank.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29
By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Cross posted from New Deal 2.0
Records of the Fed’s meetings at the height of the housing bubble provide more evidence that our central bankers need to be held accountable. The latest release of the Federal Reserve’s Open Market Committee transcripts is a doozy. Binyamin Appelbaum read through the transcripts and wrote a great article on what he found. The people on the FOMC straight up did not understand the economy, and that becomes very obvious when you parse their nonchalance through the pivotal year of 2006. That’s true as far as it goes, but there’s a political angle here as well.
My question is, why don’t we have the transcript for 2007? Or 2008? Or beyond that? Why didn’t Congress have the evidence that Bernanke was an incompetent central banker when he was up for reconfirmation in late 2009? Why didn’t Congress know any of what was revealed yesterday while it was tasked with rewriting the rules governing our entire financial architecture?!? It might have been useful to know that the Fed was staffed by an inept, embarrassing group of fools fiddling over inflation while Rome was being set ablaze.
I wrote a piece on this back in May of 2011:
There’s an easy way, however, for the Federal Reserve to lose its aura of undemocratic secrecy. It could release transcripts of its Federal Open Market Committee meetings within one year — or be compelled to do so with a congressional subpoena.
These committee meetings are the real guts of U.S. economic policymaking. You can already get a summary of each meeting within three weeks. But the actual transcripts — the debates among Fed policymakers at those meetings — are released with a minimum lag time of five years.
Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, had pledged last year to look into this issue. But he has not acted.
So, we still do not know what top Fed officials were debating from 2006 through 2010 as the housing bubble ballooned and the banking system collapsed. Were Fed officials privately worrying about the housing market? Were they aware of leverage in the system? Did they understand the dangers of credit default swaps?
The democratically elected Congress should have known these things before attempting to fix the financial system. Several congressional postmortems on the crisis should have had access to these records. And as Congress debates Rep. Mike Pence’s bill to change the Fed’s mandate, it should have access to this information.
Why doesn’t Congress issue a subpoena to get the information about FOMC meetings from 2007-2010, so that we know what the Fed is thinking? They do not deserve the presumption of competence anymore. Darryl Issa promised this during the transition to GOP congressional rule in 2010 but he has not followed through. Perhaps he should.
Many people did get what was happening — 2006 was the year that the big banks began cutting warehouse lines of credit to mortgage originators, which would eventually topple the whole housing ponzi scheme. Dean Baker had been trying to sound the alarm about a housing bubble as early as 2003. Yves Smith started her site Naked Capitalism in 2006 and Josh Rosner began noticing what was going on that year; moreover, the dangers of leverage had been recognized as far back as the early 1990s by such economic luminaries as Jane D’Arista.
It’s not just that the people on the Federal Reserve’s Open Market Committee — the real rulers of America — are insultingly out of touch with reality. It’s also that the public does not even get to see what they are doing and that Congress doesn’t really want to know. This, more than anything else, is animating figures like Ron Paul, who accuses the Federal Reserve of foisting an unwanted monetary system on the American public.
The reality of our times is that the people in charge of powerful institutions are driven by nothing so much as a desire to be the maintainers of consensus. That is what the FOMC participants were. And if we don’t fix this state of affairs and hold powerful people accountable for being incompetent and wrong at least some of the time, America is done for.
Tansy_Gold
(17,847 posts)I think this is the reality they want. Or rather, they've put us on the road to the reality they want to create.
I'm tired of people claiming the puppetmasters are stupid/inept/incompetent. They are nothing of the kind.
Demeter
(85,373 posts)Demeter
(85,373 posts)SO, IT COMES DOWN TO THIS: IS IT EASIER TO REWRITE THE CONSTITUTION, OR TO ELECT A CORRUPTION-FREE CONGRESS THAT WILL DO ITS CONSTITUTIONALLY MANDATED JOB?
ON THE WHOLE, I PREFER TO HAVE THE RULES ON PAPER, INVIOLATE, RATHER THAN DEPEND ON VENAL, MORTAL MEN. THEN, AT LEAST, UNDER A RULE OF JUST LAWS, NOT CORRUPTIBLE MEN, WE HAVE A CHANCE OF JUSTICE.
http://www.truth-out.org/constitutional-amendment-not-needed-congress-already-has-remedy/1326484813
...Under our existing Constitution, Congress already has the power to stop the court from making any more of the decisions that have allowed the 1 percent to buy elections. Then Congress can pass legislation reversing the unconstitutional decisions the court has made to corrupt elections.
Here is the provision the founding fathers included:
The Supreme Court shall have appellate Jurisdiction, both as to Law and Fact with such Exceptions and under such Regulations as the Congress shall make (US Constitution, Article III, Section 2).
Hence, under the Constitution, Congress has the power to remove Court jurisdiction over financing election campaigns. Removing Court jurisdiction means that the court would not even be able to take up cases involving financing of elections. Congress and state legislatures will then be free to pass laws removing private money from election campaigns. Thus, Congress already has power to curtail the court and the tyranny of private money in elections facilitated by the 5-4 majority of Supreme Court judges whose goal is to empower the 1 percent at the expense of the rest of us.
Separately, Congress also establishes and controls all "inferior courts" (Article III, Section 1).
It is not just the Constitution. As early as 1803, in a case called Marbury v. Madison, the case in which the Supreme Court established judicial review, the court also recognized that it must not decide questions that are "in their nature political." Regulating elections and their funding to prevent corruption is a quintessential political question. For 173 years, the courts followed this mandate and declined jurisdiction over such political questions.
Under Article I of the Constitution, it is Congress - not the court - that has the exclusive power to make or alter regulations regarding the "Manner" of holding elections. Under this Article I power, "in 1907 Congress passed the Tillman Act, prohibiting national banks and corporations from making contributions in federal elections. The Corrupt Practices Act, first enacted in 1910 and replaced by another law in 1925, extended federal regulation of campaign contributions and expenditures in federal elections and other acts have similarly provided other regulations." (Congressional Research Service Annotated Constitution.)
Under Article I, Congress also has the exclusive power to judge the elections of its members.
All this changed in 1976 when the court injected itself into election financing and overturned long-established law, deciding that corrupting money in politics is constitutionally protected speech. The court, not Congress, established as law that putting money in the pocket of a politician has the same protected status as speech by a citizen. Thus, the court allowed the 1 percent with money to drown out the speech of ordinary voters. In that decision and in 5-4 decisions since then, the Supreme Court also violated its own long-established precedent of keeping out of political questions so it could unleash special interest money in politics. By doing so, the court overstepped its judicial powers and intruded on Congress' legislative powers to regulate and judge elections. the court thus violated the separation of powers which is the most fundamental bulwark the Constitution provides raised against tyranny. The disenfranchisement of the 99 percent and auction of public policy to the 1 percent is the consequence of Congress' failure to maintain the separation of powers with respect to election integrity.
The decisions since 1976, including the 2010 Citizens United decision, addressed an increasing problem for the 1 percent. Faced with an aroused public, Congress had earlier passed vast amounts of progressive legislation, including the Clean Air Act, product safety and food safety laws, the EPA, the Clean Water act, the Occupational Safety and Health Act, consumer protection laws and laws regulating campaign contributions and spending. One of the ways the 1 percent fought back to empower themselves and disempower the 99 percent was for pro-corporate presidents to nominate pro-corporate justices, who would make elections a commodity that corporations and wealthy individuals could finance and control.
By enabling the upper 1 percent to buy elections, the court put an end to rule of, by and for the people at the federal level and within most states. The court not only put a stop to progressive legislation, but they turned the government into an instrument to increase the wealth and power of the 1 percent. To its credit, Vermont has successfully resisted the power of money in several recent elections. But recent Supreme Court decisions allow an overwhelming flood of private interest money, even putting democracy in Vermont at risk.
Now is the time for we, the people; our towns; and our states to demand that Congress use its existing power to re-establish the bar on court jurisdiction over financing election campaigns, establishing public funding and removing private interest money from elections...
YES, BUT...IT ISN'T WORKING!
***********************************************************************
This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.
DemReadingDU
(16,000 posts)1/16/12 Jon Stewart - Fear Factory
China's Foxconn houses employees who work 35-hour shifts at 31 cents an hour, thereby saving American technology companies money.
http://www.thedailyshow.com/watch/mon-january-16-2012/fear-factory appx 7 minutes
The Jon Stewart segment goes well with the Apple segment I posted last week
http://www.democraticunderground.com/?com=view_post&forum=1116&pid=3884
Tansy_Gold
(17,847 posts)If electronics manufacturing were reshored to the US, prices for consumer electronics would go up 23%. BAD
BUT
1. More Americans would be put to work. GOOD
2. With more Americans working, more of them could afford the higher prices. GOOD
3. Higher prices would result in more sales taxes to help fund state and local services. GOOD
4. Environmental laws regarding production would be enforced. GOOD
5. Higher prices might make people think twice about replacing electronic junk quite so often. conditional GOOD.
6. A few cost accountants might get into politics -- or comedy news shows -- and explain just why slave labor in China doesn't result in the 30% cost differential. GOOD.
7. Understanding that the labor cost savings all goes in the corporations' (stockholders', CEOs') pockets and not into actual retail price savings for consumers might spur enough competition among electronics manaufacturers to bring the prices back down! DOUBLE PLUS GOOD!
TG, your friendly socialist cost accountant. . . .
DemReadingDU
(16,000 posts)For all the reasons you listed.
And, if/when global trade collapses, how will we be able to buy the necessary things that we need every day - clothing, shoes, towels, appliances, etc. etc., when the goods are no longer shipped?
So that's another reason manufacturers need to re-locate back to America.
Fuddnik
(8,846 posts)It's not just labor. The whole thing is rigged against us. Time to re-instate tariffs. Screw "Free Trade".
http://www.nakedcapitalism.com/2012/01/new-york-times-tells-us-only-chinese-near-slave-labor-could-handle-steve-jobs-demands.html
I guess slave labor is OK, a long as it's offshore.
Tansy_Gold
(17,847 posts)
Ghost Dog
(16,881 posts)
Fuddnik
(8,846 posts)Demeter
(85,373 posts)and his name is Mel Brooks.
FarCenter
(19,429 posts)The real reasons Apple makes iPhones in China, therefore, are as follows:
- Most of the components of iPhones and iPads — the supply chain — are now manufactured in China, so assembling the phones half-a-world away would create huge logistical challenges. It would also reduce flexibility — the ability to switch easily from one component supplier or manufacturer to another.
- China's factories are now far bigger and more nimble than those in the United States. They can hire (and fire) tens of thousands of workers practically overnight. Because so many of the workers live on-site, they can also press them into service at a moment's notice. And they can change production practices and speeds extremely rapidly.
- China now has a far bigger supply of appropriately-qualified engineers than the U.S. does — folks with the technical skills necessary to build complex gadgets but not so credentialed that they cost too much.
- And, lastly, China's workforce is much hungrier and more frugal than many of their counterparts in the United States.
Read more: http://www.businessinsider.com/you-simply-must-read-this-article-that-explains-why-apple-makes-iphones-in-china-and-why-the-us-is-screwed-2012-1
Tansy_Gold
(17,847 posts)Just askin'.
Fuddnik
(8,846 posts)bread_and_roses
(6,335 posts)fucking apologists for the 1%
Here's the key
and
Then they have the nerve to write:
Just how living in the Company Barracks while working for "super-low-cost" wages translates into "middle class prosperity" is left to the reader's imagination, I guess.
Corporate shills. Oligarch tools.
edit for quoteboxes
FarCenter
(19,429 posts)Back in the '70s and '80s, the consumer electronics business was lost to the Japanese (actually, it may have been deliberately handed to them in order to strengthen their geopolitical role as our "unsinkable aircraft carrier" during the Cold War). It started with transistor radios, then record players, tape recorders, televisions, and high fidelity component systems. US manufacturers were gradually forced to either exit the field or to set up shop in Korea and Taiwan. Finally, as Korea and Taiwan started to compete with the transplants, the US manufacturers went to Malaysia, Thailand, Indonesia, and at last to China in an effort to stay competitive. Meanwhile, Japan, Korea, and Taiwan companies also put factories into southeast Asia and China.
During this whole process of moving final assembly of products to Asia, a whole ecosystem of suppliers of parts like plastic molded bits, small metal pieces, discrete components like capacitors, resistors, diodes, etc, and discrete analog and logic circuits emerged in Asia. While the semiconductor fabs still produced wafers in the US, they sent the wafers to Asia where they were cut into chips, the chips were tested, and the chips were wirebonded to the chip carriers for installation into circuit boards. Later, the Japanese and Taiwanese companies set up their own semiconductor fabs and their own semiconductor design operations.
The industry in the US was reduced to industrial and military electronics (expensive, bulky, low volume), semiconductor and product design, and some of the tooling needed for semiconductor manufacturing and for electronics assembly.
At this point the US has no ability to get back into manufacturing high-volume, small, precision consumer electronics, along with all of the production systems needed for a complete supply chain of all the parts and pieces.
It was always obvious that the $3000 to $10,000 personal computers and workstations of the 1980s would evolve from bulky, power hungry, multi-modular systems into small, integrated, inexpensive consumer electronics like systems. Previously, the bulky, power hungry, multi-modular high fidelity audio systems made in the US had evolved into small, integrated, inexpensive book-shelf audio systems made in Asia. There were sophisticated HP and TI calculators, early PDAs and early attempts like the Apple Newton that clearly pointed the way. The only reason it took so long to go from a $10,000 Sun Workstation to an iPad was that people found more and more applications that absorbed computing power and keep systems larger and more power hungry longer than anticipated.
So it was always obvious that because the US had exited the consumer electronics business, it also would be forced to exit the personal computing and workstation manufacturing business.
PS-- In communications, telephone equipment for the home was produced in the US until the Bell System was broken up in the mid-80s. As soon as that happened, manufacturing of telephone sets went to Asia, and the Western Electric plants in Indianapolis and Shreveport were shut down.
Tansy_Gold
(17,847 posts)Relying mostly on slave-wage labor and imported (either stolen or given) technology, why the fucking hell couldn't the US do it? Are you trying to tell me it's IMPOSSIBLE? Because I'm not going to believe that. People are people.
And I'm not talking about turning Americans into Chinese-style wage slaves, but rather I'm talking about doing away with the myth that low-wage jobs in China equate to lower consumer prices here. Low-wage jobs in China equate to higher profits for the corporacrats.
If it happened in the 50s and 60s, it can happen again in the 10s and 20s. All it takes is. . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
LEADERSHIP.
FarCenter
(19,429 posts)It is another one of their comparative advantages.
Demeter
(85,373 posts)Slavery is not a sign of leadership. It's a sign of oppression.
Demeter
(85,373 posts)TANSY GOLD FOR PRESIDENT!
FarCenter
(19,429 posts)Apple earned $400,000 in profit per employee last year, reports MSNBC.
...
When asked about bringing these jobs to the US, an Apple spokesman told MSNBC that “we sell iPhones in over a hundred countries. We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”
Apple's huge $400,000 in profit per employee is more than Goldman Sachs, Exxon Mobil, or Google.
Read more: http://www.businessinsider.com/apple-profit-2012-1
Demeter
(85,373 posts)
FarCenter
(19,429 posts)
saedi1995
(3 posts)As soon as they companies start going multi-national they start forgeting about the fact that it was America that made them possible. Look At G.E, they were born out of American productivity in the 70's and 60's, and at one point supplied hundreds of thousands of American manufacturing jobs as the largest company in the world, now they pay $0 in corporate taxes claiming they're now a company of the world. It's ridiculous.
Demeter
(85,373 posts)Unless and Until we have some hope of CHANGE in the game plan.
happyslug
(14,779 posts)Where I live we have the remains of several old mining towns. When the mines were active, everyone in the town lived in a home provided by the mine. Anyone coming into the town was checked out at the gate to the town (It was private property). If some one was caught "Trespassing" (i.e a union organizer) he was run out of town (if he was lucky and witnesses were around, many were killed). In most states, starting in the 1890s, the states re-wrote their Trespass acts, to make it a criminal act to even walk into any area marked "No Trespassing" (previous to the 1890, Criminal Trespass was reserved to someone who entered your home or any locked building, it was perfectly legal to walk into unlocked buildings, even if they were a factory or a mine.
Side note: I was referring to CRIMINAL TRESPASS, the Common Law also recognized CIVIL TRESPASS. Under the Common Law if you entered property owned by another without that person's permission your were Trespassing, but that that meant is the land owner did NOT have to inform you of any natural danger AND the owner could recover from you for any damage your trespass did (i.e. in most cases nothing, we are talking about harm by mere walking on the land NOT harm caused by someone talking to your employees about forming a union).
As you can see, the Common Law as to Trespassing accepted the fact people often walked onto the property of others, the only liability was if the trespasser did any damage (or the landlord was stupid enough to put up a "booby trap" or NOT mark a hazard made by the owner of the property).
No overtime was permitted. One of the causes of the 1919 Steel Strike was the fact steel workers had to work eight 12 hour days a week (Yes, they had to work one day for 24 hours). Housing was provided by the employer, and if you went on strike (or otherwise quit your job) they would evict you within a day (even when such evictions was illegal, it was common for the local Justice of the Peace to be also an employee of the Steel company, mine or other factory).
More on the 1919 Steel Strike:
http://en.wikipedia.org/wiki/Steel_strike_of_1919
http://historymatters.gmu.edu/d/106/
http://books.google.com/books?id=eScwAAAAYAAJ&pg=PA125&lpg=PA125&dq=Donora+Streetcar&source=bl&ots=Jhr9Fhrx9E&sig=rkIXxd4xCb5Nvo3tfIu3uUgYKy4&hl=en&sa=X&ei=ikHqTqPyM8rc0QHp8Oi6CQ&ved=0CCoQ6AEwADgK#v=onepage&q=Donora%20Streetcar&f=false
The mines were even worse, during the Mine Strike of 1928, children of strikers were forbidden to go to school, and the one school the Union was able to hold (so they children could go to School) was shot up by anti-union strike breakers:
http://news.google.com/newspapers?nid=djft3U1LymYC&dat=19280203&printsec=frontpage&hl=en
It was estimated over 12,000 miners and their family lost their homes during the strike:
http://news.google.com/newspapers?nid=djft3U1LymYC&dat=19280118&printsec=frontpage&hl=en
Pittsburgh was known as the "Smoky City" for pollution controls were unheard of till the Donora disaster of 1948 (When the State and Federal Government started to do something, and then it took them decades to actually crack down on the Steel Companies).
THE DONORA EPISODE
SINCE the days of water-borne epidemics of typhoid and cholera, few experiences in the field of environmental sanitation have been so dramatic as that which occurred in Donora, Pa., in the last week of October, 1948. An exhaustive and well printed report on this episode has recentlv been published by the U.S.P.H.S.1; and some of the field problems involved in the study were presented by Dr. J. G. Townsend at the New York meeting and will be published in a later issue of this JOURNAL.
Donora is a small steel mill town on a curve of the Monongahela River. Smogs
have been common in this bowl between the hills; but, on the occasion in question, the atmospheric conditions were such as to make the accumulation of smoke and fog unusually severe and persistent. It began on Wednesday, and by Saturday the first death occurred. Before the atmosphere became clear again, 43 per cent of the 13,839 persons in the area were affected by an irritation of the respiratory tract, the predominant single symptom being cough. Fifteen per cent were mildly EDITORIALS affected, 17 per cent moderately and 10 per cent severely. Over 60 per cent of persons 65 years of age and older reported some affection, almost half being in the severely affected group. Although onset in some cases was as early as the first day of severe smog, 40 per cent occurred on day Number 2. By the end of day Number 3, 17 persons had died; 3 more died shortly thereafter bringing total deaths to 20......
The death rate was higher among non-whites than among whites, and higher in the village of Webster than in Donora itself. The average age of the victims was 65, the youngest being 52 and the oldest 84. Preexisting disease of the cardiorespiratory system was a significant fact. Preexisting disease of the
It is conceivable that there is a threshold of throat irritation below which no harmful effects are produced. Preliminary studies did not indicate exceptionally high death rates from respiratory and cardiac disease in Donora in the past, as compared with nearby communities.
It is, of course, well known that death rates from respiratory disease are high
in low-income groups. Studies have shown that, in a given city, such rates are excessive in areas of intensive industrial atmospheric pollution. These are, of course, also the areas of low economic status. There is a definite challenge to the epidemiologist to attack this problem with the best available tools of research. Studies of seasonal variations of age-adjusted respiratory rates in communities with and without smog, in low-income areas without smog and high-income areas exposed to smog and the use of partial correlations where both factors are present in varying degree, should tell us whether Donora was an exceptional incident or a signpost.
(Please note this is a US Government Publication and as such is NOT COPY-WRITABLE by Federal law and thus we can use the whole report if we want to). The whole report it is only 1 1/2 pages long:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1528488/pdf/amjphnation01016-0084.pdf
Just some comments that China today reminds me of the US 1870-1930
Tansy_Gold
(17,847 posts)Everything from steelmaking to auto assembly to washers and dryers and TVs and textiles. There is no cosmic law that says the only way to have a thriving economy is on the backs of slave labor. And the workers who prospered did not live in cages.
What changed it all, in my humble and admittedly poorly educated opinion, was simple greed. When the Japanese economy recovered after the war and there were workers available, US corporations started to move to the cheap labor. AND NO ONE STOPPED THEM. The consumers were bombarded with advertising that you had to have this gadget and that doodad, and it was all going to be cheaper if it was made in Japan. Then Mexico. Then Honduras or Egypt or Turkey or Bangladesh or Vietnam or China.
But with all the stuff being made "there," has the cost of living gone down? No. There was no precipitous drop in the cost of clothing just because Levi and Wrangler and Hanes moved to low-wage countries. A pair of Wrangler jeans on sale at Kohl's for $54?? What kind of effing bargain is that?
Toyotas are no cheaper than Chevys, even when assembled with non-union labor.
It's all greed. The savings go to the stockholders (a little) and the CEOs (a lot).
Look at the Apple deal to eliminate textbooks. Apple will get 30% royalty???? Excuse me? And of course the software and devices will all be Apple, for more profits, and the executives will become filthy fucking rich while kids still struggle.
Bill Gates defends his Microsoft copyrights, but he could still do that and sell MSOffice for $10.
I'm tired of the excuses that Americans aren't educated enough or Americans won't work hard enough or this or that or the other thing. It's just a bunch of fucking excuses.
The summer of 1968, I worked for a small specialty electronics firm in a Chicago suburb. Not consumer electronics, but the company made components for the equipment used by the consumer electronics manufacturers. The job I did required very little training -- half a day? -- but demanded absolute 100% precision. Are people saying it's impossible to find people to do that kind of work here any more? Or is that companies don't want to pay a living wage like my 1968 employer did? They want to keep it ALL for themselves?
Fuck that.
TG
happyslug
(14,779 posts)The problem is such practices occur when the are "Legal" i.e, in the sense the Government permit them to occur. After the 1930s the US Government did NOT permit them to occur so their disappeared. Right now the Chinese Government is not willing to make such practices illegal, thus you have such sweat shops.
The point I was making was simple, business will do these terrible things if permitted to do so, be it China or the USA.
The problem is sooner or later you will have a class revolt. China is heading in that direction at the present time. Unionization is one aspect of that revolt, when it fails, the situation deteriorates further and you have a true Communist Revolt (Yes, a Marxist revolt against the rule of the Chinese Communist Party, which many Communists do NOT consider Communist let alone Marxist).
The Rural Interior of China is already long on that road, all that China needs is a rapid deterioration of people living standards then a spark. Thus the Chinese Government buys US Bonds, how else can the Chinese offset all the dollars we are sending them to buy what they are producing. If the US ever cuts off China imports (for whatever reason, including a further decline in the US economy) that would lead to the rapid deterioration and all that would be needed is some spark to send China off like Egypt and Tunisia went off in 2010-2011.
People tend to forget (or ignore) that the chief reason the Western Allies did NOT move into Germany at the end of WWII, was do to serious strikes and revolts in every one of their own countries (including the US) then any fear of the German Army in the fall of 1918 (And the revolution in Germany scared the Allies enough that they gave in on several points the German Army demand so that the Army could return to Germany). It was after four years of War, which lead to revolution in Russia and Germany (Through in Germany the Communist failed to gain control). You had massive strikes in Britain, France and Italy (Italy was to turn Fascists within four years of the end of WWI in response to the problems of 1918-1920). The West Virginia Coal War of 1921 was just the Bloodiest single event in the US during the same time period (Through the Steel Strike of 1919 came close).
In many ways, the world was ripe for revolution in 1918, not only do to the pressure of WWI, but the pressures that had been building up since the 1870s throughout the West. During the 1920s the situation remain tense, the British fleet even had a mutiny (Through the Admirals of the Fleet said a more accurate term was the sailors went on Strike). This Tendency for radical change resumed in the early 1930s, Germany went Nazi, the Soviet Union went Fascist as Stalin took over (Mussolini called Stalin the Greatest Fascists after the Show Trials of the late 1930s). Wall Street made an attempt for a Fascist Government to replace FDR in the mid 1930s.
The reason for the revolts was simple, people were upset with how things were going and wanted change. China is heading down that same road, but the Government is NOT willing to do what FDR did in the 1930s, pass laws to stop harmful practices AND to provide alternatives to have to work under such conditions. China is on that path and sooner or later everything will fall into place and China will have its time of Revolution. One result of that revolution is exports from China could and will stop and the rest of the world will have to start making its own electronics.
Demeter
(85,373 posts)Apple has released a report on working conditions in its suppliers’ factories, highlighting a form of control fraud (fraud in which the head of a company subverts it for personal gain) that criminology has identified but rarely discussed. I write overwhelmingly about accounting control fraud because it drives our recurrent, intensifying financial crises. The primary intended victims of accounting control frauds are the shareholders and the creditors. Other private sector control frauds target customers (e.g., George Akerlof’s 1970 article on “lemons”), and the public (e.g., the unlawful disposal of toxic waste, illegal logging, and tax fraud).
Anti-employee control frauds most commonly fall into four broad, but not mutually exclusive, categories – illegal work conditions due to violation of safety rules, violation of child labor laws, failure to pay employees’ wages and benefits, and frauds based on goods and loans provided by the employer to the employee that lock the employee into quasi-slavery. Apple has just released a report on its suppliers that shows that anti-employee control fraud is the norm. Remember, fraud is hidden and is often not discovered and Apple did not have an incentive to make an exhaustive investigation. Apple calls its inquiries “audits” and it is apparent that most of its information comes from reviewing written and electronic records at its suppliers. That is exceptionally revealing. The suppliers know that they can defraud their employees with such impunity that they don’t even bother to get rid of records that prove their frauds. Apple has resisted making public its suppliers and the report refused to identify which suppliers committed which violations – often for years despite repeated, false promises to end their anti-employee control frauds. Two other facts are evident (but not reported). First, Apple rarely terminates suppliers for defrauding their employees – even when the frauds endanger the lives and health of the workers and the community – and even where Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices. Second, it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers even when they commit anti-employee control frauds as a routine practice, even when the frauds endanger the worker’s and the public’s health, and even when the supplier repeatedly lies to Apple about the frauds. Apple’s report, therefore, understates substantially the actual incidence of fraud by the 156 suppliers (accounting for 97% of its payments to suppliers). From the New York Times:
And though Apple said it mandated changes at those suppliers, and some facilities showed improvements, in aggregate, many types of lapses remained at levels that have persisted for years.
The New York Times, the Wall Street Journal, and the Washington Post articles on the Apple report are all lengthy, but none of them has any input from a criminologist and each of the articles misses most of the significance of the report. The most fundamental flaws have to do with why anti-employee control fraud is the norm at Apple’s suppliers and why the suppliers typically don’t even take the inexpensive efforts necessary to avoid holding a paper trail that makes the frauds obvious even to a not terribly vigorous audit that they know is coming.
If there is one single thing that drives us white-collar criminologists around the bend it is the implicit assumption that fraud cannot be common. There is, of course, no logical (or experiential) reason for this belief. Nevertheless, it is a common belief and among economists it is a virtually universal dogma. Economists have a tribal taboo against even using the word “fraud” to describe individual frauds. The surest way to be considered an un-serious economist is to use the “f” word to describe frauds by elite economic actors. Economists’ taboo is particularly bizarre because it is economic theory, developed by a Nobel Laureate that explains why fraud can become endemic. George Akerlof, in his famous article on markets for “lemons” (largely describing anti-customer control fraud), explained the perverse “Gresham’s” dynamic in 1970: "[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”
Anti-employee control fraud creates real economic profits for the firm and can massively increase the controlling officers’ wealth. Honest firm normally cannot compete with anti-employee control frauds, so bad ethics drives good ethics out of the markets. Companies like Apple and its counterparts create this criminogenic environment by selecting least-cost – criminal – suppliers who offer components at prices that honest firms cannot match. Effectively, they hang out a sign – only the fraudulent need apply to be suppliers. But the sign is, of course, invisible and cannot be introduced in court so Apple and its peers also get deniability. They are shocked, shocked that its suppliers are frauds that cheat their employees and put them and the public’s health at risk in order to make a few extra yuan or dong for the senior officers.
Fraudulent suppliers, therefore, have compelling incentives to locate in nations and regions in which they can commit fraud with impunity. The best way to evaluate the fraudulent CEOs’ view as to the risk of prosecution for their frauds is to observe whether they take cheap means of hiding their frauds. When the CEOs do not even bother to avoid creating a paper trail documenting their frauds one knows that they view the risk of prosecution as trivial. Nations that are corrupt, have weak rule of law, weak or non-existent unions, poor protections for workers, a reserve army of the impoverished, and have few resources devoted to prosecuting elite white-collar crime provide an ideal criminogenic environment for firms engaged in anti-employee control fraud. The ubiquitous nature of anti-employee control fraud (and tax fraud) in many nations explains why U.S. industries have been so eager to “outsource” U.S. jobs to fraud-friendly nations. Companies like Apple also discovered long ago that Americans often made poor senior managers in these nations because they objected to defrauding workers. Not a problem – there are plenty of managers from other nations that have no such ethical restraints. Foreign suppliers run by Asian managers are increasingly dominant.
The endemic nature of anti-employee control fraud also demonstrates an important technical point. The wages reported in the most fraud-friendly nations are substantially overstated because workers work far longer hours without receiving the compensation to which they are entitled. Their hourly rate is much lower than reported, which means that the wage gap between U.S. and the most fraud-friendly nations is significantly greater than reported. U.S. firms that have foreign suppliers in these nations are well aware of this data bias and make their outsourcing decisions based on the real (much larger) wage gap.
The Harm to Employee and Consumer Health is Grave
The NYT article notes that it was bad publicity in the U.S. that finally forced Apple to make greater disclosures about its suppliers’ frauds:
The calls for Apple to disclose suppliers became particularly acute after a series of deaths and accidents in recent years. In the last two years at firms supplying services to Apple, 137 employees were seriously injured after cleaning iPad screens with n-hexane, a toxic chemical that can cause nerve damage and paralysis; over a dozen workers have committed suicide or fell or jumped from buildings in a manner that suggests a suicide attempt; and in two separate blasts caused by dust from polishing iPad cases, four were killed and 77 injured.
The Washington Post article noted:
One supplier was caught dumping wastewater at a nearby farm. Another had a total lack of safety measures, creating “unsafe working conditions,” the report found. Five facilities employed underage workers.
The company in the past had refused to divulge its full supplier list even as it became standard practice for multinational corporations to do so after the public outcry in the 1990s over labor problems at Nike factories in developing countries.
Apple’s change of heart follows a highly publicized string of factory worker suicides in 2010 and deadly explosions in two Chinese factories in 2011.
The WSJ emphasized this chilling finding:
The article does not make this point explicitly, but these firms conduct these tests in order to unlawfully coerce their pregnant employees to have undesired abortions in order to obtain and keep their jobs.
Foreign Anti-employee Control Fraud harms U.S. Workers
These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.
A final caution is in order because each of the major articles on the Apple report failed to mention it. CEOs who are willing to routinely defraud their workers and expose them to grave threats to their health are exceptionally likely to commit other forms of control fraud.
Demeter
(85,373 posts)in evidence of his criminality.
A criminality that spans the globe, poisons the world mentally physically and spiritually.
A criminality that the world hasn't ever faced--
- worse than viking slavery, Amerindian slavery, and other forms of chattel slavery
- worse than Rome's slavery, which was more a form of indentured servitude
- worse than the 17th and 18th and 19th century slavery because it pervaded more than agriculture, which technology could make obsolete.
Manufacturing slavery is a handmaiden to technology, and not replaced by it except in the most basic ways.
Unfortunately, I think I have a theme for the Weekend...
FarCenter
(19,429 posts)Most electronics manufacturing is done by the big Electronic Manufacturing Services companies:
1.Foxconn (Hon Hai)
2.Flextronics
3.Sanmina-SCI
4.Solectron
5.Celestica
6.Jabil Circuit
7.Elcoteq
8.Benchmark Electronics
9.Venture
10.USI
See http://www.johnclements.com/presentations/02%20IMI%20-%20EMS%20Winning%20Strategies.pdf
Companies like Apple have to use one of these. The company who's name is on the box rarely manufactures the product. These major EMS companies also do a lot of the product design, manufacturing process design, supply chain management, etc.
Companies like Apple do product concepts, specifications, packaging and brochure design, software, merchandising, and support.
Fuddnik
(8,846 posts)Rather than the market regulate bad players out of the market, Bad money tends to drive good money out.
"A final caution is in order because each of the major articles on the Apple report failed to mention it. CEOs who are willing to routinely defraud their workers and expose them to grave threats to their health are exceptionally likely to commit other forms of control fraud."
They also didn't mention that in reality, it's homicide and genocide.
Loge23
(3,922 posts)Good to see that I am not quite the Luddite I thought I was, not that there's anything wrong with that.
My wife and I have no Apple products - we're so........ not hip!
When this guy - Jobs - passed away, there was an avalanche of press about what a genuis he was. One wag even compared him to Edison. I looked at my wife and said: "let's see now, electric lights or an iPad? I think I'll go with electric lights."
As far as I know, and I am so not hip, there's the iPhone, Ipad, Imusic thing, am I missed anything? IFultower?
Now the proverbial chickens are coming home to roost - to the ICoop no doubt.
Fuddnik
(8,846 posts)I rarely use it. It sits on the lanai, waiting to be turned on.
Loge23
(3,922 posts)I don't mean to denigrate those who have, or enjoy, these products; it's just that I don't see these products as "must have" items.
Fuddnik
(8,846 posts)DemReadingDU
(16,000 posts)The iPod was a Christmas gift last year from our son, I would never have bought one for myself. Anyway, spouse decided he really liked it, and has hundreds of songs via iTunes.
I ended up buying an MP3 player so I could download podcasts.
xchrom
(108,903 posts)
xchrom
(108,903 posts)12.17pm Here's an interesting nugget of information -- the cost of insuring Greek debt against default has actually dropped in recent weeks.
As this graph shows, the price of a credit-default swap on a five-year Greek bond peaked in early December and has been falling since. CDS contracts pay out if a bond defaults, and are meant to provide insurance for bondholders.
Data: BGC Partners/Bloomberg
Greek CDSs have been driven to record highs in the last couple of years, as the country struggled to meet the targets set by the IMF in refurn for financial help.
So why are they now falling? Louise Cooper of BGC Partners (who kindly provided the graph) explains:
The CDS market is suggesting that a "voluntary" deal will be done, no "credit event" will occur, and CDS insurance will not be triggered.
The key question, of course, is 'what counts as a default?'. Any deal that satisfies Greece and its creditors will see tens of billions of debt wiped out. Fitch and S&P have said they will class Greece as being in "selective default" if an agreement is reached - crucially, that is different than being in "restrictive default" (which is reserved for situations where a bond issuer refaults on its payments without the permission of its creditors).
There's a good explainer about this in the Daily Telegraph, from last weekend.
Louise Cooper also points out that a Greek debt restructuring deal will have implications for other weaker European countries. If Athens can agree a haircut on its debt, what about Ireland and Portugal?
The restructuring of Greek debt means that all Eurozone bonds are no longer considered risk free, (other countries bonds could be restructured in a similar way) so borrowing costs, especially for periphery countries will remain high.
Demeter
(85,373 posts)so, how much are you going to bribe us?
DemReadingDU
(16,000 posts)1/23/12 Lagarde: A Desperate Scream For Help
.
.
.
You cannot solve a debt problem with more debt. You cannot resolve the issues that face the world economy with more borrowing and you cannot "grow out of it", as mathematically you must either grow faster than the debt increases or shrink the debt faster than GDP decreases.
This is mathematical fact, not politics or policy.
Lagarde doesn't want to talk about mathematics and she's not alone. The rest of the developed world is likewise unwilling to face facts when it comes to the mathematical certainties that underpin what is going on in the economy on a global basis. The IMF states that "a collapse in demand" will lead to a global Depression (true) but refuses to admit that "demand" fueled by deficit spending is in fact false; it is "demand" that does not actually exist in the economy as a consequence of actions by people and is instead a reflection of "free stuff" being handed out by those governments.
But "free stuff" is never actually free. It is only a pull forward of demand into today from tomorrow. Then, when tomorrow comes, we do it again. And again. And again.
For how long can this continue? Can it contiunue forever, as people like Lagarde claim? Of course not.
Can we expect productivity and improvement in the economy to lessen and fix sovereign balance sheets? No, because the deficit spending has not stopped and nobody intends to stop it.
But until it does stop, and until the facts are faced there is no resolution, there is no adjustment in the general price level, there is no recognition that the people of these nations have lived at a standard of living that exceeds their ability to earn.
Until that changes -- whether by choice or force -- there is no resolution to the underlying problem, and thus all so-called "recoveries" will be both short-lived and false.
http://market-ticker.org/akcs-www?post=200922
xchrom
(108,903 posts)if we now live in a world of smaller growth -- and it at least looks that way -- how much longer have we chained these countries to debt?
i mean there must be a proportional time line, right?
Demeter
(85,373 posts)Take your pick and your chances.
None of this rebuilds for the future, by the way.
Demeter
(85,373 posts)Michael Snyder: I wish that I had an “aha moment” to share with you today, but instead all I have is an “ack moment” to share. As I was analyzing all of the info coming out of Europe (NYSEARCA:VGK) in recent days, I came to the following realization: “Ack! They are actually going to let Greece default!” The only question is whether it is going to be an orderly default or a disorderly default. Of course the EU (led by Germany) could save Greece financially if it wanted to. But Germany (NYSEARCA:EWG) has decided against that course of action. Many in the German government are sick and tired of pouring bailouts into Greece and then watching Greek politicians fail to fully implement the austerity measures that were agreed upon. At this point a lot of German politicians are talking as if a Greek default is a foregone conclusion. For example, Michael Fuchs, the deputy leader of Angela Merkel’s political party, recently made the following statement: “I don’t think that Greece, in its current condition, can be saved.” But that is not entirely accurate. Greece could be saved, but the Germans don’t want to make the deep financial sacrifices necessary to save Greece. So instead they are going to let Greece default.
Many prominent voices in the financial world that have been watching all of this play out are now openly declaring the Greece is about to default. Moritz Kraemer, the head of S&P’s European sovereign ratings unit, made the following statement on Bloomberg Television on Monday: “Greece will default very shortly. Whether there will be a solution at the end of the current rocky negotiations I cannot say.”
...If the EU allows Greece to default, that would be a signal to investors that the EU would allow Italy, Spain and Portugal to all default someday too. Confidence in the bonds of those countries would disintegrate and bond yields would go through the roof. Right now, confidence in government debt is one of the things holding up the fragile global financial system. Governments must be able to borrow gigantic piles of very cheap money for the system to keep going, and once confidence is gone it is going to be incredibly difficult to rebuild it. That is why a Greek default (whether orderly or disorderly) is so dangerous. Investors all over the world would be wondering who is next...if Greece is able to get a 50% haircut from private investors, then why shouldn’t Italy, Spain, Portugal and Ireland all get one? Once you start playing the haircut game, it is hard to stop it and it rapidly erodes confidence in the financial system.
This point was beautifully made in a recent article by John Mauldin….
The difficult is that if our problem country A gets to cut its debt by 50%, what about problem countries B, C, and D? Do they get the same deal? Why would voters in one country expect any less, if you agree to such terms for the first country?
But if Greece is able to negotiate an “orderly default” with private bondholders, that would be a lot better than a “disorderly default”. A disorderly default would cause mass panic throughout the entire global financial system.
...Greece’s dire economic condition can hardly be overstated. After two years of tax increases and wage cuts, Greek civil servants have seen their income shrink by 40 percent since 2010, and private-sector workers have suffered as well. More than $75 billion has left the country as people move their savings abroad. Some 68,000 businesses closed in 2010, and another 53,000 — out of 300,000 still active — are said to be close to bankruptcy, according to a report issued in the fall by the Greek Co-Federation of Chambers of Commerce. “It’s an implosion — it’s an endless sequence of implosions from bad to worse, to worse, to worse,” said Yanis Varoufakis, an economics professor at the University of Athens and commentator on the Greek economy. “There’s nothing to stop the Greek economy losing 60 percent of its G.D.P., given the path it is at.” But Greece is not the only one in Europe with major economic problems. The unemployment rate for those under the age of 25 in the EU is an astounding 22.7%. And as I have written about previously, there are a whole host of signs that Europe (NYSEARCA:IEV) is on the verge of a major recession.
Greece is just the canary in the coal mine. The truth is that the entire European financial system is in danger of collapsing.
*******************************************************************************************
Written By Michael Snyder From The Economic Collapse
Michael has an undergraduate degree in Commerce from the University of Virginia and a law degree from the University of Florida law school. He also has an LLM from the University of Florida law school. Michael has worked for some of the largest law firms in Washington D.C., but now is mostly focus on trying to make a difference in the world.
Demeter
(85,373 posts)Where the Debt Supercycle Begins
All I sold in the 1980’s was fixed income. Who wanted to invest in stocks when you could get double digit returns in guaranteed deposits at a bank or by investing in government debt? I still remember one of my first trades—a 10-year treasury note paying a 15% interest rate.
What I did not realize at the time was the U.S., and the western world in general, was about to embark on what we now refer to as the “Debt Supercycle”—a theory articulated by the investment strategists at Bank Credit Analyst out of Canada. The Debt Supercycle is a description of the long-term decline in U.S. balance sheet liquidity and the rise in indebtedness during the WWII period. Economic expansions in the post WWII world were associated with the buildup in debt as western governments introduced automatic stabilizers through entitlements such as unemployment benefits, Social Security, Medicare, and deposit insurance at financial institutions. During the early stages of debt buildup, government policies were successful in preventing the frequent depressions that plagued the pre-WWII economy. Western economies would experience periodic corrections during recessions, but these recessions did not reverse the long-term trend of debt buildup that continued to grow with each successive decade.
These trends would lead to growing illiquidity making our financial markets more fragile and susceptible to the threat of a deflationary event like we experienced recently in the great credit crisis of 2008-2009. These periodic recessions were fought by governments with more deficit spending and credit creation. Thus, the bigger balance sheet excesses became, the more painful the eventual corrective process would be. The financial stakes became higher in each new economic cycle, putting ever-increasing pressure on governments to reflate demand, by whatever means were available.
According to the Bank Credit Analyst the Debt Supercycle reached an important inflection point in the recent economic meltdown of 2008-2009. Authorities reached the limit of their ability to get consumers to take on more credit. The result is that it forced governments to leverage up instead. This is where we are today as authorities spend, borrow and print money to fight off the deflationary impact of private sector deleveraging. Welcome to the final chapter of the Debt Supercycle—a period of trillion dollar deficits that are being monetized by trillion dollar expansions of central bank balance sheets, otherwise known as money printing. Once fiscal policy is pushed to the limits of sustainability, the Debt Supercycle will come to a violent end. This is exactly what is happening to Europe now.
A graphic depiction of this Debt Supercycle can be seen below. As of this writing, outstanding U.S. federal debt is close to $15.3 trillion dollars. For the first time in my lifetime US federal debt now exceeds U.S. GDP. In personal terms each U.S. citizen now owes $180,559.1
http://imagesize.financialsense.com/
MUCH MORE AT LINK...TODAY'S ECONOMICS LESSON
Demeter
(85,373 posts)The warning signs are all around us. All we have to do is open up our eyes and look at them. Almost every single day there are more prominent voices in the financial world telling us that a massive economic crisis is coming and that we need to prepare for the worst. On Wednesday, it was the World Bank itself that issued a very chilling warning. In an absolutely startling report, the World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better “prepare for the worst.” You would expect to hear this kind of thing on The Economic Collapse Blog, but this is not the kind of language that you would normally expect to hear from the stuffed suits at the World Bank. Obviously things have gotten bad enough that nobody is even really trying to deny it anymore. Andrew Burns, the lead author of the report, said that if the sovereign debt crisis gets even worse we could be looking at an economic crisis that could be even worse than the last one: “An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09.” Burns also stated that the “importance of contingency planning cannot be stressed enough.” In other words, Burns is saying that it is time to prepare for the worst. So are you ready?
.........................................
So what should we all be looking for next?
March 20th is a key date to keep your eye on. That is the day when Greece will either makes its 14.5 billion euro (NYSEARCA:FXE) bond payment or it will default.
Greece does not have a prayer of making that payment without help. If Greece can convince the EU and the IMF to release the next scheduled bailout payment and if Greece can reach a satisfactory deal with private bondholders, then the coming Greek default might be “orderly”. But if something goes wrong, the coming Greek default might be quite “disorderly”.
At this point, almost everyone in the financial world is anticipating a Greek default of one form or another….But whether there is a default or not, the reality is that Greece is already experiencing a full-blown economic depression. In Greece, 20 percent of all retail stores have already shut down. The unemployment rate for those under the age of 24 is now at 39 percent. Large numbers of Greeks are trying to get themselves and their money out of the country while they still can.
xchrom
(108,903 posts)Millions of ordinary families are unlikely to see their earnings return to pre-recession levels until at least 2020, a report from a leading thinktank has warned. But it predicts that the income of the wealthy will continue to rise over the same period.
The study, which focuses on the state of the "squeezed middle" and is produced by the independent Resolution Foundation, looks at the situation of 10 million adults, who crucially do not rely heavily on means-tested support from the state, and their 5.2 million children.
A report by the foundation last year led to Ed Miliband's championing of the squeezed middle, a part of Britain that the foundation says remains a key political battleground. It says that households without children earn between £12,000 and £29,000 a year to be part of the squeezed middle; homes with children, between £16,000 and £41,000.
On Monday Labour's welfare spokesman, Liam Byrne, will debate the report's implications with Liberal Democrat MP David Laws at the foundation's London offices.
Ghost Dog
(16,881 posts)"UK crisis live", or, better, "Crisis of Global Capitalism live" (Crisis of Globalisation) very soon now.
As for US crisis... you're telling me.
xchrom
(108,903 posts)David Cameron believes he is on a crusade to drive a new "moral capitalism" (Report, 19 January). He should read Will Hutton on stakeholder capitalism and look to Germany, where employee representatives engage in corporate decision-making including levels of executive pay, local banks provide long-term support to business, apprenticeships remain common, stakeholders include suppliers and distributors, and community engagement stems from a responsibility to protect the interests of all employees.
The ghastly alternative of shareholder capitalism engineered by Conservative governments in the 1980s, and cravenly supported by New Labour, has destroyed UK manufacturing and turned the country into a spivs' paradise, with investment banks and hedge-fund managers holding everyone, including the government, to ransom. Where is the moral compass in gambling on corporate failure? Or in ensuring that one of the few profitable UK manufacturing sectors left is an arms industry mostly in partnership with the US, a war-exporting economy?
Shareholder capitalism regards share value as the only criterion for success, encouraging foreign takeover of businesses like Cadbury's that for 176 years had applied Quaker principles. Asset-stripping has become a national sport, devastating families and communities. It is inconceivable that Cameron will reverse this ruinous crusade on behalf of the super-rich parasites who have devastated the UK economy.
The tragedy is that the stakeholder model remains under attack throughout the western world. Without a multilateral turnaround by all OECD countries, beginning with the closure of tax havens and the imposition of a financial transaction tax, and the establishment of a World Environment Organisation possessing common powers and veto alongside the World Trade Organisation, we are heading towards an economic, environmental and social meltdown.
Simon Sweeney
University of York
Ghost Dog
(16,881 posts)Wait and see.
xchrom
(108,903 posts)There was a minor riot in Beijing last week. The Apple store was attacked. Its offence? Not being willing to sell sufficient numbers of the iPhone 4S. Buyers had queued all night and things turned ugly when it became clear that many of those in line had not the faintest idea what an iPhone was. They belonged to teams hired by middlemen who knew that every handset bought was resaleable for an additional £100. The teams of tech-unsavvy people were identifiable to each other by homemade armbands, and when the store staff realised what was happening, they suspended sales. That was when the eggs started flying. In London they riot to steal things. In Beijing, they riot because they cannot buy them.
China proclaims itself a secular country. But that is not what it looks like. For a first-time visitor to China, the most astonishing aspect of the country is the worship of wealth. The mayor of London may like to be seen riding around on a bicycle. That is not the style of the mayor of Beijing.
Even China Daily, a sort of hymn-sheet to the Communist party, reads like the FT much of the time. It reported this month that there were more Rolls-Royces bought in China last year than anywhere else on earth, that Audi now sells more of its brand there than in Germany, and that the company confidently expects to exceed its target of 1m sales between 2011 and 2013, "as long as we can grow annually at 8%", as a senior executive blithely asserted. The target was set less than a year and a half ago.
It is all surface froth, of course: there will still be 1,299,000,000 Chinese who do not buy an Audi. But it is the flaunting of wealth that is so shocking, because the entire economy floats on a sea of migrant workers willing to go anywhere for a day's pay. You can hear them hammering on the construction sites and see them clambering across the half-built highway towers from dawn until long after dusk. Victorian Britain was perhaps similar, and the smog of Charles Dickens's London finds its counterpart in the murk that envelopes Beijing on windless days and tears at your throat like sandpaper. Beijing – once, apparently, a charming ancient city – has been torn down and replaced with a traffic-jammed assortment of functional concrete blocks, interspersed with the occasional stunning pieces of modern architecture.
Demeter
(85,373 posts)Calling Dr. Pangloss! Sheesh!
The fact that the bleeding has slowed or stopped could be that there simply isn't any blood left in the body....
xchrom
(108,903 posts)(Reuters) - The Occupy movement, which went global after protests against Wall Street last year, is camping in igloos to bring its argument with the super-rich "1 percent" to Davos.
It is a reminder to the leaders of finance and industry at the World Economic Forum of the resentment that is leading to questions about the future direction of capitalism.
"At meetings the rest of society is excluded from, this powerful '1 percent' negotiates and decides about the fate of the other 99 percent of this world," says David Roth, "Camp Igloo" organiser and head of the Swiss centre-left's youth wing.
"The economic and financial concentration of power in a small, privileged minority leads to a dictatorship over the rest of us. The motto 'one person, one vote' is no longer valid, but 'one dollar, one vote'. We want to change that."
xchrom
(108,903 posts)LONDON, Jan 23 (Reuters) - Gold hit a six-week high on Monday as the euro recovered against the dollar and other commodities climbed, with confidence in the precious metal rising after it recorded three straight weeks of gains for the first time since November.
Gold prices were up 7.1 percent since the end of December, but analysts warned the metal could lose traction if more bad news on the euro zone knocks the euro lower versus the dollar.
Spot gold was up 1.0 percent at $1,674.30 an ounce at 1255 GMT, having earlier hit a high of $1,677.10. U.S. gold futures for February delivery were up $11.3 an ounce at $1,675.40.
"
Gold) is going up as a commodity at the moment," said Simon Weeks, head of precious metals at the Bank of Nova Scotia. "Commodities have had a good start to the year, full stop."xchrom
(108,903 posts)ST. LOUIS, Jan 20 (Thomson Reuters Accelus) – The U.S. Treasury Department is under bipartisan pressure to draft tough rules implementing an Iranian sanctions law enacted in December. While the effect on U.S. financial institutions is likely to be minimal, foreign financial institutions may take a hit.
“To me, the important question is the extent to which we’ll see non-U.S. banks cut off from the U.S. financial system because of continued processing of transactions involving Iran, particularly Iran’s energy sector, and whether petroleum trading will be pushed into other currencies by Iran,” a former Treasury official told Thomson Reuters. “Watch for changes one to six months from now when more of the law is required to be implemented.”
U.S. lawmakers crafted Section 1245 of the National Defense Authorization Act for fiscal year 2012 to reduce Iran’s oil revenue as punishment for what the United States says is a program to develop a nuclear-weapon capability. Among other things, it prohibits financial institutions from dealing with Iran’s central bank, which acts as the clearinghouse for OPEC’s second-largest oil exporter.
Section 1245 states that U.S. financial institutions should be prohibited from opening or maintaining correspondent or payable-through accounts for any foreign financial institution that has “knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran.”
xchrom
(108,903 posts)The Bank of Spain on Monday predicted the domestic economy faced a deep recession as the IMF warned of the risk of a "solvency crisis" for Spain and Italy if Europe fails to beef up its rescue fund.
The central bank estimated the economy declined by 0.3 percent in the last quarter of 2011, foreshadowing a contraction of 1.5 percent of GDP this year, with the new Popular Party government bent on fulfilling its deficit-reduction targets at all cost. The severe setback this year will give way to a "moderate" recovery the following year.
The main victim of the worsening of the economic crisis will once again be the job market, with unemployment - already the highest in the developed world at 21.5 percent - set to rise to over 23 percent this year and the next.
Urging the European Union to increase the scope of its European Financial Stability Facility (EFSF) and its planned successor, the European Stability Mechanism (ESM), IMF's managing director, Christine Lagarde, warned that the risk of higher funding costs for Italy and Spain could lead to a "solvency crisis" that "would have disastrous consequences for systemic stability."
"The longer we wait, the worse it will get," Lagarde said in a draft version of a speech to be delivered on Monday and provided by the IMF. "The only solution is to move forward together."
xchrom
(108,903 posts)Deputy Prime Minister Soraya Sáenz de Santamaría reaffirmed on Friday that the government will meet its target deficit figure of 4.4 percent of GDP by the end of the year.
The PP government number two made her statements after Finance Minister Cristóbal Montoro was quoted in a newspaper saying that the forecast was based on obsolete growth forecasts.
Rebutting Montoro, Sáenz de Santamaría said that "the government has a definite determination to comply with the deficit." She said that in the "upcoming Cabinet meetings" the PP administration of Mariano Rajoy plans on introducing a series of reforms to help the country's finances. "If the situation warrants more reforms, then we will introduce them," she said.
Rajoy's economic advisors said that Spain's deficit for the end of 2011 would be greater than eight percent of GDP ? two notches above the previous Socialist government's goal of six percent.
xchrom
(108,903 posts)China and Qatar have been taking virtually opposite positions apropos events in Libya and Syria. Yet, they do not seem to be deterred by this little difference and are bonding in a big way in economic cooperation to mutual benefit.
Chinese Prime Minister Wen Jiabao, who visited Doha last week, disclosed at a press conference on Friday: a) China proposes to invest in the manufacturing of ''downstream oil products, which are most urgently needed by Qatar''; b) China and Qatar signed an agreement to jointly build a refinery in Taizhou, Zheijiang, in China; c) Chinese companies propose to participate in infrastructure projects in Qatar; and d) China and Qatar are
discussing a "long-term, stable and comprehensive cooperative partnership" in natural gas.
Then, Wen quietly dropped a bombshell. He revealed "one more important point" as if it were an afterthought. He said:
In order to address investment issues, we [China and Qatar] need financial support. Therefore, we reached another agreement, a cooperation agreement linking finance with investment. Qatar also proposed the use of local currency in trade settlement and even a specific ratio. I think this proposal can be studied.
The short point is, the renminbi, the "people's currency" also known as the yuan, is appearing in Doha. The China-United Arab Emirates (UAE) currency swap deal which was signed during Wen's visit to Abu Dhabi last week already brings the yuan to the Emirates. The deal with the UAE is worth US$5.5 billion and the Chinese central bank statement said that it aims at "strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability".
Demeter
(85,373 posts)and put all the current politicos in one global Ostrich Party.
Demeter
(85,373 posts)Wisconsin's Democratic Party says it will submit 3,000 pounds of recall petitions at 3 p.m. Tuesday, Jan. 17.
They're expected to contain 1.5 million signatures of those favoring recall elections against the governor, lieutenant governor and four Republican senators. The officials are targeted mainly for their decision to virtually eliminate public employee union bargaining.
State law requires the Government Accountability Board to decide within 31 days whether there are enough signatures to order recall elections. The agency has asked for an extension to 60 days. Officials say they'll need even more time, after Waukesha Judge Mac Davis ordered the Board to do its own checking for false and duplicate signatures, instead of making the recall targets do that. Gov. Scott Walker's campaign and the state GOP say they'll review the petitions anyway. The challengers have 10 days to complete the task. Republicans say 5,000 volunteers will examine the documents.
Before the judge's ruling, GAB Director Kevin Kennedy said he expected recall votes to take place in May. Now he's not sure how far the elections will be pushed back.
Demeter
(85,373 posts)Back in 2010 Scotland’s First Minister, Alex Salmon, proclaimed that by 2025 all of Scotland would be powered by 100% renewable energy, with an interim target of 31% by 2011. In the past four years the Scottish Government approved 42 renewable energy projects, and in 2009 27.4% of electricity demand came from renewables. Scotland was well on its way to achieving their ambitious targets, despite the doubts from sceptics. 2011 has been and gone and Scotland easily exceeded the goal of 31% causing Minister Salmon to return with a new target; 100% by 2020.
“Because the pace of development has been so rapid, with our 2011 target already exceeded, we can now commit to generating the equivalent of 100% of Scotland’s own electricity demand from renewable resources by 2020. By then we intend to be generating twice as much electricity as Scotland needs -- just over half of it from renewables, and just under half from other conventional sources. We will be exporting as much electricity as we consume. So we will continue to work with industry and Governments at local, UK and European level to build on what we have achieved. We will now move still further and faster to secure our place as the green energy powerhouse of the continent of Europe.”
Currently Scotland boasts 7GW of renewable energy projects, mostly in offshore wind farms, but also in wave and tidal power. In fact they already have an estimated quarter of Europe’s offshore wind and tidal energy resource and a tenth of its potential wave capacity. But in order to achieve 100% clean energy by 2020 a lot of investment is needed. The Department for Energy and Climate Change recently released figures showing that the renewable energy sector received more than £750 million last year, and another £46 billion is to be invested in the construction of 17GW of power in the future. It is all part of the grand plan to become Europe’s renewable energy leader.
Whilst renewable energy is the sector, the Scots are focussing their efforts on offshore wind farms. This will be hugely helped by the recently declared partnership with Masdar, the Abu Dhabi clean energy company. The pooled resources of both institutions will be used to research and advance clean technology development. Salmond acknowledged that "the costs of offshore wind will have to be reduced by 20% to be competitive,” as will the costs of efficiently transporting electricity over long distances. But the aim is clear; the commercialisation of offshore wind farms. It is the big prize, and will give Scotland a strong foothold in one of the most promising industries of the future; which could reportedly be worth $30 billion. Needless to say, Scotland’s hopes are as high as their ambitions.
IF SCOTLAND CAN DO IT, NOBODY ELSE HAS AN EXCUSE
AnneD
(15,774 posts)lift yer kilt, I dunno what will.
mbperrin
(7,672 posts)Last winter, when record cold froze inlet water pipes to coal, gas and nuke plants, wind provided 25% of the whole state's power.
On our way to doubling that by 2020.
Demeter
(85,373 posts)
Fuddnik
(8,846 posts)For at least 120 years. Probably longer.
Crash of '29. Latin America. Asia........
And we ALWAYS have the honor of bailing them out.
Demeter
(85,373 posts)...they are preparing to bid on the hundreds of foreclosed properties auctioned each week in one of the country’s more colorful public clearinghouses. During the housing boom, when mortgages were being given out with no money down and prices soared, the auctions were a sleepy sideshow. But in the years since, the auctions have grown into a scruffy economic circus where bargain hunters from around the world have scooped up houses often sold for less than half of the value of the mortgage.
The auctions look more like a low-end poker game than the floor of the New York Stock Exchange. The bidders and auctioneers, most of them men in their 20s and 30s, are on a clubby first-name basis, and their banter can border on sophomoric. But their trading serves a critical if somewhat heartless function: to find new buyers for houses so they can be fixed up and sold to more stable owners.
“This is capitalism at its rawest,” said Brad Grannis, a bidder from AZ Property Advisors. “There’s an asset, and people assign a value to it.”
In recent months, the auctions have become more competitive because of an influx of outsiders who are eager for cut-rate houses that they can resell or rent out and because of a decrease in the number of houses available. There were 2,296 trustee sales in Maricopa County last month, 44 percent fewer than in December two years ago during the depths of the market crash, according to The Cromford Report, a real estate newsletter....
