Weekend Economists Working for Peanuts Friday the 13th, Jan. 13-16, 2012

[Demeter]

It looks so weird, typing 2012. I thought 2011 would never end...or maybe, it never actually started for me. ahem....

WE WILL BE HERE MONDAY, SINCE THE MARKETS ARE CELEBRATING MLK DAY....WHICH EXPLAINS WHY THERE WERE NO BANK FAILURES, TOO.

Could one say that members of the GOP should be working for peanuts? Or is that a vicious stereotype?



It's apparent that there's more than nation-wide approval or public service at work, though, when the GOP goes electioneering. Trouble is, that kind of "eyes on the prize" seems to have crossed the aisle nowadays. So, whom can you trust?


I'm putting my trust in the original Peanuts:

Charles Monroe Schulz (November 26, 1922 – February 12, 2000), nicknamed Sparky, was an American cartoonist, whose comic strip Peanuts proved one of the most popular and influential in the history of the medium and is still widely reprinted on a daily basis.


Born in Minneapolis, Minnesota, Schulz grew up in Saint Paul. He was the only child of Carl Schulz, who was born in Germany, and Dena Halverson, who was Norwegian. His uncle called him "Sparky" after the horse Spark Plug in Billy DeBeck's comic strip, Barney Google.

Schulz loved drawing and sometimes drew his family dog, Spike, who ate unusual things, such as pins and tacks. Schulz drew a picture of Spike and sent it to Ripley's Believe It or Not!; his drawing appeared in Robert Ripley's syndicated panel, captioned, "A hunting dog that eats pins, tacks and razor blades is owned by C. F. Schulz, St. Paul, Minn." and "Drawn by 'Sparky'" (C.F. was his father, Carl Fred Schulz.)

Schulz attended St. Paul's Richard Gordon Elementary School, where he skipped two half-grades. When he was in first grade, his mother helped him get valentines for everybody in his class, so that nobody would be offended by not getting one; but he felt too shy to put them in the box at the front of the classroom, so he took them all home again to his mother.

He became a shy, timid teenager, perhaps as a result of being the youngest in his class at Central High School. One episode in his high school life was the rejection of his drawings by his high school yearbook. Much to its irony, a statue of Snoopy was placed in Central's main office sixty years later.

Military service

In 1943, he was drafted into the United States Army and served as a sergeant with the 20th Armored Division in Europe as a squad leader on a .50 caliber machine gun team. The unit saw combat only at the very end of the war. Schulz stated that he only ever had one opportunity to fire his machine gun, but forgot to load it. Fortunately, he said, the German soldier he ran into willingly surrendered. Years later, he proudly spoke of his wartime service.

After discharge in late 1945, he returned to Minneapolis where he took a job as an art teacher at Art Instruction, Inc. — he had taken correspondence courses before he was drafted. Before having his comics published, Schulz did lettering for a Roman Catholic comic magazine, Timeless Topix, while still teaching at Art Instruction.

Career

Schulz's first regular cartoons, Li'l Folks, were published from 1947 to 1950 by the St. Paul Pioneer Press; he first used the name Charlie Brown for a character there, although he applied the name in four gags to three different boys and one buried in sand. The series also had a dog that looked much like Snoopy. In 1948, Schulz sold a cartoon to The Saturday Evening Post; the first of 17 single-panel cartoons by Schulz that would be published there. In 1948, Schulz tried to have Li'l Folks syndicated through the Newspaper Enterprise Association. Schulz would have been an independent contractor for the syndicate, unheard of in the 1940s, but the deal fell through. Li'l Folks was dropped from the Pioneer Press in January 1950.

Later that year, Schulz approached the United Feature Syndicate with his best strips from Li'l Folks, and Peanuts made its first appearance on October 2, 1950. The strip became one of the most popular comic strips of all time. He also had a short-lived sports-oriented comic strip called It's Only a Game (1957–1959), but he abandoned it due to the demands of the successful Peanuts. From 1956 to 1965 he contributed a single-panel strip ("Young Pillars&quot featuring teenagers to Youth, a publication associated with the Church of God.

In 1957 and 1961 he illustrated two volumes of Art Linkletter's Kids Say the Darndest Things, and in 1964 a collection of letters, Dear President Johnson, by Bill Adler.


Schulz receiving his star on the Hollywood Walk of Fame at Knott's Berry Farm in June 1996

Charlie Brown, the principal character for Peanuts, was named after a co-worker at the Art Instruction School; Schulz drew much more inspiration from his own life:

Like Charlie Brown's parents, Schulz's father was a barber and his mother a housewife.

Schulz and Charlie Brown were shy and withdrawn.

Schulz had a dog when he was a boy, although unlike Snoopy the beagle, it was a pointer.

References to Snoopy's brother Spike living outside of Needles, California were likely influenced by the few years (1928–1930) that the Schulz family lived there; they had moved to Needles to join other family members who had relocated from Minnesota to tend to an ill cousin.

Schulz's "Little Red-Haired Girl" was Donna Mae Johnson, an Art Instruction Schools accountant with whom he fell in love. When Schulz proposed to her, she turned him down and married another man.

Linus and Shermy were both named for good friends of his (Linus Maurer and Sherman Plepler, respectively).

Peppermint Patty was inspired by Patricia Swanson, one of his cousins on his mother's side.The name came from the candy "Peppermint Patties."

Influences

The Charles M. Schulz Museum counts Milton Caniff (Terry and the Pirates) and Bill Mauldin as key influences on Schulz's work. In his own strip, Schulz regularly described Snoopy's annual Veterans Day visits with Mauldin, including mention of Mauldin's World War II cartoons.

Critics have also credited George Herriman (Krazy Kat), Roy Crane (Wash Tubbs), Elzie C. Segar (Thimble Theater) and Percy Crosby (Skippy) among Schulz's influences. However,

“It would be impossible to narrow down three or two or even one direct influence on Schulz's personal drawing style. The uniqueness of Peanuts has set it apart for years... That one-of-kind quality permeates every aspect of the strip and very clearly extends to the drawing. It is purely his with no clear forerunners and no subsequent pretenders.

— Good Grief: The Story of Charles M. Schulz, Rheta Grimsley Johnson, p. 68 ”


Sparky in 1956, and sometime thereafter....

http://en.wikipedia.org/wiki/Charles_M._Schulz


When Schulz announced his retirement for health reasons in December 1999, Peanuts was in more than 2,600 newspapers worldwide; he died shortly thereafter, on Saturday, February 12, 2000, just hours before the final Peanuts Sunday strip appeared in newspapers.... http://openlibrary.org/authors/OL4361397A/Charles_M._Schulz

[Demeter]

1. Continued on next panel...

Peanuts ran for nearly 50 years, almost without interruption. During the life of the strip, Schulz took only one vacation, a five-week break in late 1997 to celebrate his 75th birthday; reruns of the strip ran during his vacation. At its peak, Peanuts appeared in more than 2,600 newspapers in 75 countries. Schulz stated that his routine every morning consisted of eating a jelly donut and sitting down to write the day's strip. After coming up with an idea (which he said could take anywhere from a few minutes to a few hours), he began drawing it, which took about an hour for dailies and three hours for Sunday strips. He stubbornly refused to hire an inker or letterer, saying that "it would be equivalent to a golfer hiring a man to make his putts for him." In November 1999 Schulz suffered several small strokes along with a blocked aorta and later it was discovered that he had colon cancer that had metastasized. Because of the chemotherapy and the fact he could not read or see clearly, he announced his retirement on December 14, 1999. This was difficult for Schulz, and he was quoted as saying to Al Roker on The Today Show, "I never dreamed that this would happen to me. I always had the feeling that I would stay with the strip until I was in my early eighties, or something like that. But all of sudden it's gone. I did not take it away. This has been taken away from me."[cite this quote] In his later years, Schulz also suffered from Parkinson's Disease. As a result, he experienced hand tremors that made his linework shaky. He admitted that the tremors sometimes were so bad that while working, he had to hold onto the side of his desk with one hand to steady himself. In addition, he had to reduce the strip from four panels to three (starting on February 29, 1988) to reduce the amount of drawing.

Charles Schulz died in his sleep at home around 9:45 p.m. on February 12, 2000. Although he was dying of cancer, he suffered a fatal heart attack. The last original Peanuts strip was published the very next day, on Sunday, February 13, 2000, just hours after his death the night before. Schulz was buried at Pleasant Hills Cemetery in Sebastopol, California.

Schulz indicated that his family wished for the strip to end when he was no longer able to produce it. Schulz had previously predicted that the strip would outlive him, with his reason being that comic strips are usually drawn weeks before their publication. As part of his will, Schulz had requested that the Peanuts characters remain as authentic as possible and that no new comic strips based on them be drawn. United Features had legal ownership of the strip, but honored his wishes, instead syndicating reruns of the strip to newspapers. New television specials have also been produced since Schulz's death, but the stories are based on previous strips, and Schulz always stated that Peanuts TV shows were entirely separate from the strip.

Schulz had been asked if, for his final Peanuts strip, Charlie Brown would finally get to kick that football after so many decades. His response: "Oh, no! Definitely not! I couldn't have Charlie Brown kick that football; that would be a terrible disservice to him after nearly half a century." Yet, in a December 1999 interview, holding back tears, he recounted the moment when he signed the panel of his final strip, saying, “All of a sudden I thought, 'You know, that poor, poor kid, he never even got to kick the football. What a dirty trick — he never had a chance to kick the football!'”

He was posthumously honored on May 27, 2000, by cartoonists of more than 100 comic strips paying homage to him and Peanuts.

[Demeter]

2. You're a Good Man, Charlie Brown!

&feature=related

You're a Good Man, Charlie Brown is a 1967 musical comedy with music and lyrics by Clark Gesner, based on the characters created by cartoonist Charles M. Schulz in his comic strip Peanuts. The musical has been a popular choice for amateur theatre productions because of its small cast and simple staging.

John Gordon was credited with the book of the show, but according to Gesner's foreword in the published script, John Gordon is a "collective pseudonym" that covers Gesner, the cast members and the production staff, all of whom worked together to assemble the script.

During the early 1960s, Gesner had begun writing songs based on Charles Schulz’s Charlie Brown comic strip characters but was unable to get permission from the United Features Syndicate to use the characters in his songs. Eventually Gesner sent Schulz a tape of some of the songs and Gesner soon had permission to record them, which he did in 1966.

At the time, Gesner had no plans for a musical based on this pre-production "concept album." However, producer Arthur Whitelaw, who would later go on to write another musical based on Peanuts, encouraged Gesner to turn the album into a musical.

The stage adaptation of the concept album, entitled You're a Good Man, Charlie Brown, went into rehearsal in New York City on February 10, 1967. Prior to its opening, the musical had no actual libretto; it was several vignettes with a musical number for each one.

Original New York productions and U.S. tour

On March 7, 1967, the musical premiered off-Broadway at Theatre 80 in the East Village, featuring Gary Burghoff (Radar O'Reilly of MASH) as Charlie Brown, Reva Rose as Lucy, Bob Balaban as Linus, Skip Hinnant as Schroeder, Karen Johnson as Patty and Bill Hinnant appearing in person as Snoopy. Joseph Hardy directed and choreographer Patricia Birch was billed as "Assistant to the Director". This production of You're A Good Man, Charlie Brown lasted 1,597 performances, closing on February 14, 1971.

The rest is history.

[Fuddnik]

3. OK. Let's stop calling Mitt Romney a "Vulture Capitalist".

It's entirely off base.

A vulture has the decency to let you die first, before devouring you.

A rattlesnake on the other hand, kills you first. Then devours you.

[Demeter]

4. What? You Don't Like Vultures?

More Snoopy:

&feature=related

[Fuddnik]

17. I'm defending the vultures honor.

Comparing them to a snake like Romney is beyond civilized.

[Po_d Mainiac]

24. Rattlers often just hit and run

The boa constrictor squeezes the life outa its prey and has invaded habitats it don’t belong in.

[xchrom]

5. cheers! it's the weekend --

[Demeter]

6. Even though it's Friday the 13th, Georgians can sleep safely

No banks have failed in the Eastern Time Zone....check back later for updates in different parts of the country.

[Demeter]

41. NO BANK FAILURES THIS WEEKEND

How odd....maybe because they've got their hands full with BofA?

[xchrom]

7. war w/ iran later this year? == keep in mind these are 'managers' so a grain of salt is in order

Rickards, Bacchus on Iran Tensions, Europe Crisis

http://bloom.bg/yTyU7f#ooid=Q1cWVhMzryvmDCeYzao1LnxInT96MhRD

Jan. 13 (Bloomberg) -- James Rickards, senior managing director of Tangent Capital Partners, and James Bacchus, chair of global practice at Greenberg Traurig LLP, talk about tensions between the U.S. and Iran and the possibility of a war. Rickards and Bacchus also discuss Europe's sovereign debt crisis and President Barack Obama's request to streamline the executive branch. They speak with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

[Demeter]

8. Senate GOP Calls Fed Proposal to Reduce Mortgage Payments ‘Completely Egregious’ By Pat Garofalo

http://www.nationofchange.org/senate-gop-calls-fed-proposal-reduce-mortgage-payments-completely-egregious-1326385589

The Federal Reserve last week released a set of proposals for aiding the battered American housing market, including a series of ways to help homeowners who are buried under the weight of unsustainable mortgage payments or who now find themselves significantly underwater on their home (meaning they owe more on their mortgage than their house is worth). New York Federal Reserve President William Dudley added to the list a proposal for reducing mortgage principal (the outstanding amount on the loan) for underwater homeowners.

The Senate GOP, which had obstructed all manner of help for homeowners, reacted with outrage, saying that helping homeowners in such a way would be, in the words of Sen. Bob Corker (R-TN), “completely egregious“:

Republican Senators Orrin Hatch of Utah and Bob Corker of Tennessee criticized the Federal Reserve for overstepping its role by making policy recommendations on how the U.S. government should try new ways to spur the housing market.

Hatch, the top-ranking Republican on the Senate Finance Committee, said the housing study sent by Chairman Ben S. Bernanke to Congress last week, along with recent Fed speeches, “intrudes too far into fiscal policy advice and advocacy.” Corker said New York Fed President William C. Dudley’s suggestion last week that Fannie Mae and Freddie Mac reduce the principal of the loans they guarantee was “absolutely egregious.”

Reducing principal is one of the most effective ways to keep troubled borrowers — many of whom are underwater or behind on their mortgage payments through no fault of their own — out of foreclosure, and it would also boost the economy. A report from the The New Bottom Line — a coalition of community, faith-based and labor groups — found that “if banks wrote down all underwater mortgages to market value and refinanced the homeowners into 30-year, fixed-rate loans at current market interest rates, that would pump $71 billion into the national economy.”

The Senate GOP, instead, derides the idea, after filibustering an Obama administration nominee because he may have been sympathetic towards principal reductions. But, perhaps that’s not surprising from a party that thinks foreclosure prevention efforts simply “need to stop.”

[Demeter]

9. The Housing Bubble and What Greenspan Should Have Done By Dean Baker

http://www.nationofchange.org/housing-bubble-and-what-greenspan-should-have-done-1326379565



....what happened is very straightforward. We had a huge run-up in house prices that had no basis in the fundamentals of the housing market. After 100 years in which nationwide house prices just kept even with the overall rate of inflation, house prices began to sharply outpace inflation beginning in the late 90s. By 2002, when some of us first noticed the bubble, house prices had already risen by more than 30 percentage points in excess of inflation. By the peak of the bubble in 2006, the increase in house prices was more than 70 percentage points above the rate of inflation. This was a huge problem because this bubble was driving the economy. It drove it directly by creating a boom in residential housing construction. We were building housing at a near-record pace in the years 2002-2006. This was in spite of the fact that we had an aging population and record levels of vacancies at the start of the period. The other way in which the bubble was driving the economy was through its effect on consumption. The bubble created more than $8 trillion in ephemeral wealth in housing. Homeowners thought this wealth was real and spent accordingly. The result was a massive consumption boom that sent the saving rate down to zero in the years from 2004-2006.

When the bubble burst, the building boom went bust. Construction fell to its lowest levels since the 50s as the country waits to gradually work off a glut of housing. Consumption fell back to more normal levels as people came to grips with the fact that they had lost tens of thousands or even hundreds of thousands of dollars of equity in their home. The combined impact of the plunge in construction and consumption spending together with the collapse of a bubble in non-residential real estate is to lower annual demand in the economy by more than $1.2 trillion. This is the reason for the prolonged downturn. There is nothing in the economists’ bag of tricks that will allow the economy to quickly and easily replace $1.2 trillion in lost demand. That is the reason we are still 10 million jobs below full employment four years after the onset of the recession.

...MUCH DISCUSSION OF BANKSTERS AND REGULATORS ACTIONS...

Finally, some quick points on what could have been done. First, the Fed has responsibility for maintaining the stability of the U.S. economy. Alan Greenspan should have recognized the bubble and done everything in his power to burst it before it grew to such dangerous levels. Step one in this process should have been to document its existence and show the harm that its collapse would bring. This means using the Fed’s huge staff of economists to gather the overwhelming evidence of a bubble and to shoot down anyone who tried to argue otherwise. Greenspan should have used his Congressional testimony and other public appearances to call attention to the bubble. This would have put the bubble clearly on everyone’s radar screen. And, the reality was that there were no serious counterarguments. It is difficult to believe that this action by itself would not have slowed the home buying frenzy and curbed the issuance of junk loans, or at least their repurchase for securitization.

Second, the Fed has enormous regulatory power beginning with setting guidelines for issuing mortgages. They first issued draft guidelines in December of 2007. It was not hard to find abusive and outright fraudulent practices in the mortgage industry, if anyone in a position of authority was looking for it. Finally, the Fed could have used interest rate increases as a mechanism to rein in the bubble. This should have been a last resort, since higher rates would have slowed the economy at a time when it was still recovering from the collapse of the stock market bubble. To maximize the impact of any rate increases, Greenspan could have announced that he was targeting the housing market. He could have said that he would continue to raise rates until house prices were brought back to a more normal level. This surely would have gotten the attention of the mortgage industry and potential homebuyers. Would it have been an extraordinary action from a Fed chair? Sure, but so what? It might have prevented the economic devastation that is ruining tens of millions of lives. If this required Alan Greenspan to deviate from the standard script for Fed chairs, that would have been a very small price.

[ozone_man]

31. And why he should be behind bars.

But, we don't prosecute Wall Street or FED shysters like Greenspan. Maybe if history is written fairly, he will get his due.

[Demeter]

37. where there's life, there's hope

that justice will be done sometime in this country for the 1%.

[Demeter]

10. New Bill Would Put Taxpayer-Funded Science Behind Pay Walls By Lena Groeger

http://www.nationofchange.org/new-bill-would-put-taxpayer-funded-science-behind-pay-walls-1326388105

PRIVATIZING THE COMMONS--21ST CENTURY STYLE

Right now, if you want to read the published results of the biomedical research that your own tax dollars paid for, all you have to do is visit the digital archive of the National Institutes of Health. There you’ll find thousands of articles on the latest discoveries in medicine and disease, all free of charge.

A new bill in Congress wants to make you pay for that, thank you very much. The Research Works Act would prohibit the NIH from requiring scientists to submit their articles to the online database. Taxpayers would have to shell out $15 to $35 to get behind a publisher’s paid site to read the full research results. A Scientific American blog said it amounts to paying twice.

Two members of Congress — Reps. Darrell Issa, R-Calif., and Carolyn Maloney, D-N.Y. — introduced the bill. Rebecca Rosen of The Atlantic finds it curious that Issa, a well-known champion of the open Internet whose own website displays the words “keep the web #OPEN,” would back a bill that appears to be the polar opposite of open access. As Michael Eisen, a University of California, Berkeley, biologist and open access supporter, notes, Maloney's support seems no less mystifying since she represents “a liberal Democratic district in New York City that is home to many research institutions.”
Both Issa and Maloney have received campaign contributions from the Dutch company Elsevier, which calls itself the world’s leading publisher of scientific and medical information. According to MapLight, a website that tracks political cash, Elsevier and its senior executives last year made 31 contributions to House members totaling $29,500. Twelve contributions totaling $8,500 went to Maloney; Issa received two for a total of $2,000.

This isn’t the first effort by publishers to push Congress to roll back the NIH’s public access policy, which was enacted in 2008 and applauded by doctors, patients, librarians, teachers and students. Under the policy, all research funded by the NIH was required to be made freely available to the public one year after publication on PubMed Central. (The NIH also runs PubMed, a biomedical research database that includes articles that aren’t federally funded and cost money to access.)...

[kickysnana]

11. Why this St Paul teen didn't really know about Peanuts until 4th grade when I saw the Mpls Star

[link:http://ignatz.brinkster.net/crejects.html

Fifty years ago, an editor at the Pioneer Press in St. Paul, Minn., made a legendary blunder. He refused to pay $10 a week to keep publishing a comic strip created by a young employee, a St. Paul artist named Charles Schulz. The newspaper has regretted it ever since, as Peanuts became the most famous strip in history....

...As the story goes, Schulz started out working for nothing, which was customary at the time, but eventually wanted to be paid. Editor Vernon "Doug" Fairbanks thought it was too much for the newsroom budget. So Schulz took his strip to a newspaper syndicate, which began selling it under the name Peanuts.

The rival Minneapolis Tribune bought the exclusive rights to publish "Peanuts" in the Twin Cities. It has never again appeared in the Pioneer Press.

[Demeter]

12. Delightful story!

Last edited Fri Jan 13, 2012, 09:01 PM - Edit history (1)

Penny wisdom and pound foolishness at its best.

[Demeter]

13. Taxes: How To Turn In Your Neighbor to the IRS By LAURA SAUNDERS

http://online.wsj.com/article/SB10001424053111903352704576540840395329676.html

Maybe it's your brother-in-law, who has a new Mercedes and likes to quip that only fools pay all their taxes. Or else a contractor who overcharged for a home renovation and then demanded you make the check payable to "cash." Or perhaps your company's chief tax accountant, who is cutting corners to boost his bonus. If tax cheating sticks in your craw, the Internal Revenue Service has a deal for you: Turn in a lawbreaker and collect some of the proceeds. The bigger the amount recouped, the bigger your take. The agency has two whistleblower programs: The small-awards program is for cases involving less than $2 million of tax, and the award can be as high as 15%, though it often is less. The large-awards program is more generous: For cases involving $2 million or more of tax, the reward can go as high as 30%.

So what's the catch? Among others: The IRS takes relatively few cases, and those it does pick up often take five or more years to resolve. It often takes copious leg work on your part to pique Uncle Sam's interest. And while the IRS tries to protect whistleblowers' privacy, there isn't any legal protection from retaliation by an employer. Still, it can be worth the effort. This spring the IRS made its first award in the large-case program: $4.5 million, to an unnamed retired accountant.

The U.S. has been rewarding people who turn in fellow citizens or companies defrauding government programs since Congress's passage of the False Claims Act in 1863. Whenever there has been an income tax—briefly during the Civil War, and permanently since 1913—the IRS (or its predecessor) has had its own whistleblower program, says tax historian Joseph Thorndike of Tax Analysts, a nonprofit publisher. But payments tended to be small and rare because IRS officials were uncomfortable with "bounty hunting."...The landscape changed in 2006. Heartened by the success of a whistleblower program for nontax issues such as government contracts, Congress overhauled the special tax provisions on whistleblowers and set up the IRS's large-award program. Since then, according to just-released data, the agency has had 1,328 qualified submissions involving nearly 10,000 alleged tax cheats under the large-awards program. (Some cases, such as tax shelters, involve multiple taxpayers.) Scott Knott of the Ferraro Law Firm in Washington says the IRS has accepted from his firm alone cases involving claims of $98.6 billion of unpaid tax, with one case involving unpaid corporate tax of more than $10 billion. The IRS doesn't break out data on pending cases.

In April, tax experts say, the agency paid the first-ever award under this new program: the $4.5 million to a former in-house accountant for a large financial-services firm. The taxpayer's lawyer, Eric Young of Egan Young in Blue Bell, Pa., announced the payment and said it was 22% of the tax collected. Mr. Young, who has won three big nontax whistleblower cases, wouldn't disclose his client's name or firm, but did say the person is retired. The IRS doesn't confirm individual awards out of concern for taxpayer privacy, and won't release data on large awards such as this one until next summer. Experts say other whistleblowers are waiting for what they hope are imminent payments on large issues as varied as payroll tax withholding, tax shelters, illicit foreign accounts or arcane corporate accounting matters like transfer pricing. One is Bradley Birkenfeld, who has a pending claim involving $580 million in fines paid by Swiss banking giant UBS as part of a deferred prosecution agreement involving charges of conspiring to defraud the U.S by providing undeclared offshore accounts to U.S. taxpayers. He also has submitted other whistleblower claims as well, according to his lawyer, Dean Zerbe of the law firm Zerbe, Fingeret, Frank & Jadav in Washington. Notably, the law doesn't prohibit convicted felons from receiving whistleblower awards unless they were architects of the cheating. Mr. Birkenfeld, who was a private banker at UBS, was convicted of conspiring to help a billionaire hide money in UBS accounts. He is serving a 40-month prison sentence. Experts say Mr. Birkenfeld's involvement in UBS's activities will likely lower his award for turning in the big bank, but Mr. Zerbe says he believes he will receive one. "The government made clear that thanks to Brad's coming forward to blow the whistle on UBS and illegal offshore accounts, the Treasury has recovered billions of dollars."

HOW-TO GUIDE FOLLOWS...

[Demeter]

18. I wonder if this is the same Laura Saunders Who Wrote a Column

that was probably the ugliest right-wing garbage I ever read....

[Demeter]

34. GOP War on the IRS Costs U.S. Billions

AND WHAT ABOUT THE HEDGE FUND LOOPHOLES?

http://crooksandliars.com/jon-perr/gop-war-on-irs-costs-us-billions


For any American concerned about the federal budget deficit, job one must be to collect all of the tax revenue owed to the United States Treasury. That's why supposed Republican deficit hawks simply aren't serious about the national debt. After all, a new report confirmed that steep GOP budget cuts at the Internal Revenue Service (IRS) are hurting customer service, delaying refunds and costing Uncle Sam billions of dollars annually. Thanks to the never-ending Republican war on the IRS dating back to the late 1990's, tax evasion and cheating are now depriving the U.S. of $400 billion each year.

In April, Congressional Republicans extracted $600 million in cuts from the IRS in return for a spending deal with President Obama, reductions which at the time were forecast to cost the Treasury $4 billion in lost revenue. Now, the annual report to Congress from the National Taxpayer Advocate shows, "IRS is not adequately funded to serve taxpayers or collect revenue."

MORE

IT'S A SCANDAL....CORRUPTION PERMEATES THE GOVERNMENT DOWN TO THE LAST PENNY

[Demeter]

14. NY Fed in new move to sell AIG assets Financial Times (POSTED IN FRIDAY'S SMW)

YVES SMITH REMARKS: The Fed has been eager to unload this garbage barge for over a year. I take this to mean they think this is as good as the market is gonna get.

[Demeter]

15. Stop coddling Europe’s banks Morris Goldstein

http://www.voxeu.org/index.php?q=node/7511

Throughout the European debt soap opera, Europe’s leaders have expressed their willingness to “do whatever it takes” to restore stability and save the euro. This column argues that, too often, policymakers have in fact been “doing whatever it takes” to serve the banks.

After initial denials, Europe’s leaders have started to acknowledge that IMF Chief Christine Lagarde was right. Through their statements and decisions, policymakers are showing their agreement with her assessment in August 2011 at the Federal Reserve’s Jackson Hole symposium that there was an urgent need for recapitalisation of Europe’s banks (Lagarde 2011).
This recognition of reality is the good news. The bad news is the EU’s bank recapitalisation is being handled in a way that will make a recovery from the Europe’s debt crisis more problematic than it needs to be. There are five concerns:

Incentives for deleveraging;

Absence of firm guidelines on dividends and executive compensation;

Omissions of a recession scenario and of an unweighted leverage ratio from the stress tests;

Inequitable burden-sharing during debt restructuring; and

Insufficient measures to permit an escape from the adverse feedback loop between sovereign debt and bank debt.

I address these in turn....MORE AT LINK

[Demeter]

20. Video: The Euro Bailout Explained WATCH IT!

http://www.creditwritedowns.com/2011/10/the-euro-bailout-explained.html

CARTOON IN THE FASHION OF THE TWO BEARS....MUST SEE!

[Demeter]

16. Virginia Bill to Consider Establishing a State-Owned Bank

YVES SMITH REMARKS: Mirabile dictu! The bill comes from a Republican!

http://www.americanbanker.com/issues/176_250/virginia-state-owned-bank-1045240-1.html

A Virginia lawmaker is urging his colleagues in Richmond to consider creating a state-owned bank that would use deposits from residents and state agencies to lend to local businesses and stimulate economic growth.

The Washington Business Journal reported Wednesday that Del. Bob Marshall, a Republican, introduced legislation this week to study the viability of opening a bank that would be modeled after Bank of North Dakota, the only state-owned bank in the country. Marshall introduced a similar bill in 2010, but that bill failed to make it out of committee.

The idea of creating a state-owned bank has been gaining traction in a number of state legislatures of late. Lawmakers in California, Massachusetts, Oregon, Hawaii and several other states all introduced bills last year that sought to establish a state-owned bank or study the idea of creating one and it is expected that similar bills will be reintroduced early this year when state legislatures convene. (Virginia's legislative session begins Jan. 11.)

In introducing bills last year, most lawmakers said that state-owned banks could pick up the slack from traditional banks that have scaled back their lending in the wake of the financial crisis. A state-owned bank could also help states close budget shortfalls because, if it is modeled after the Bank of North Dakota, all profits would be returned to state coffers.

[Demeter]

19. MOVE YOUR MONEY - Bank Of America Branch Manager Begs Customer Not To Close Accounts OCTOBER

http://dailybail.com/home/move-your-money-bank-of-america-branch-manager-begs-customer.html

?__SQUARESPACE_CACHEVERSION=1319932313720

This is a great story FROM OCTOBER, 2011.

By Tripnman

Over the past two weeks, I have been closing down and moving money out of my Bank of America accounts. I have done my personal and business (I own a consulting business) banking there for over ten years but have decided to vote with my wallet and express my displeasure with the system by removing my money from their clutches. One by one, I have zeroed out the balances on various accounts by transferring and consolidating via their website. After each transfer I then called to close the accounts over the phone without issue.

Yesterday was different. I visited a branch to make a business deposit and when I arrived, there were signs on the ATMs indicating that the system was down and that customers should come into the branch. Before I got to the business customers' line, I was stopped by a banking associate and asked the purpose of my visit. I told him I was there to make a deposit and he waved me to a desk. When I sat down the banker first asked for my account number. I don't know it, so I handed him my ATM card. That's when he explained that all of their computers were down, and although they would accept the deposit, without the account number they would have to give me a generic receipt. Say what huh? When I told him that my newly opened accounts at a local (small, community) credit union would like the deposit he insisted that their computers were down too. Fifteen minutes after leaving BoA I found that to not be true and the money was happily deposited into a new account at the CU without issue.

Later in the afternoon I hit up a different branch of BoA and found their computers working just fine. I went in, asked to speak with a banker and was seated in an office. When the young associate came in and asked the purpose of my visit, I handed her my ATM card and requested that she tell me the balance. When she did, I then asked for a cashiers check in that amount. That's when things got wonky. She froze, stumbled over her words and asked why I needed that amount (It was not a small sum). This gave me an opportunity to explain that although I personally would not be affected by their new fees I know plenty of friends and family that would feel the pain. In solidarity with them, I wished to close the account and move on. She unwittingly suggested that if I just use my debit card once a month then there would be no fee. That was good for a belly laugh from me, then I again requested the balance to be issued to me in the form of a cashier's check. She then told me that there would be a $10 fee for this service. Another laugh. I guess it didn't sink in when I told her that I was fee adverse. There was an easy work-around anyway - I requested the cash. That finished my time with this associate banker as the amount I was requesting was "well past" her daily limit for withdrawals. I asked if there would be an issue with securing the cash and she said "I honestly don't know if we have that here" and walked out to get the branch manager.

The manager was pleasant enough and very direct. After introducing herself she flat out asked "What can we do to change your mind?" "We don't want to see you go" she emphasized. This opened a door for me to further explain my decision to leave the bank and why I was doing it. Amazingly, it did not fall on deaf ears. She indicated that understood where I was coming from and actually showed genuine surprise at some of the facts I provided her about the less than consumer friendly policies and machinations of her employer. She did make some feeble counter-arguments and repeatedly asked me if I would change my mind (with a hint of desperation!). I stood firm and by the end of our conversation she asked if I would be willing to put it all in writing so she could send it up the chain.

She shared that management is nervous, they are seeing money leaking out of the bank and realize that they have made mistakes. She even hinted that there has been high-level discussion on reversing the new fess since there has been so much consumer push-back. They are also aware of the growing momentum behind the November 5th move your money movement.

Why do I share all of this with you? For one, I wanted to let people know that it IS still possible to withdraw large sums of cash from BoA and close your accounts - just be ready for them to beg. Two, that management is aware that people are angry (how could they not be!) and have put an ear to the ground.

[Demeter]

23. Bank of America Prepares Emergency Plans at Fed Behest, May Need to Amputate on Geographic Basis

http://www.nakedcapitalism.com/2012/01/bank-of-america-prepares-emergency-plans-at-fed-behest-may-need-to-amputate-on-geographic-basis.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Every study on bank efficiency in the US has found that once banks hit a certain size level (the most commonly found one seems to be ~$5 billion in assets) banks exhibit a slightly positive cost curve, which means they are more, not less, costly to run. Any economies of scale are probably offset by diseconomies of scope...BUT CEO pay is highly correlated with the size of the bank, measured in total assets....So no one should cry at the prospect that Bank of America might have to shrink to if it continues to be in financial and litigation hot water. Those of you who have been in the financial services industry will recall that it was built out of mergers of large regional banks: NCNB (North Carolina National Bank, later Nationsbank) ate First Union, Bank of America, Fleet, and of course, Countrywide and Merrill.

The Wall Street Journal has gotten some details about “emergency moves” the Charlotte bank would take if it condition worsens. This is not its Dodd Frank mandated “living will” but apparently a set of plans prepared at the request of the Fed. Bank of America is on a short leash known as a memorandum of understanding, which is accompanied by more intrusive oversight. What is striking is that it did not contemplate a sale or spinoff of Merrill Lynch, which is the operation which makes it most difficult to resolve. Instead, it would issue a tracking stock as a way to raise money.

In other words, even for a bank developing scenarios on how to cope with serious financial trouble, the priority is to raise dough quickly rather than reconfigure the business into something tidier. Even if still not TBTF, it would be less costly to rescue. But, predictably, the priorities of management and their enablers, the regulators, is to prefer quick fixes to badly needed surgery. Notice that a Countrywide bankruptcy was apparently not included as an option.

From the Wall Street Journal:

Bank of America Corp. has told U.S. regulators that it is willing to retreat from some parts of the country if its financial problems deepen, according to people familiar with the situation….

Bank of America Chief Executive Brian Moynihan put a possible geographic retrenchment on the list submitted in the middle of last year to Fed officials. Also on the list is a potential sale of a separate class of shares tied to the performance of Merrill Lynch & Co., the securities firm owned by Bank of America, according to people familiar with the matter. Merrill was sinking when Bank of America swooped in to buy the firm in 2008, but has since turned itself around. The Fed, which acts as the company’s primary regulator, asked for documentation about contingency plans last year in response to uncertainty about a U.S. recovery and the downward swing in Bank of America’s share price.

The drastic moves would be seriously considered only if Bank of America needs to raise more capital to cushion itself from mortgage woes and other turmoil. The exercise wasn’t intended to force immediate action but rather to prepare Bank of America if its situation worsened, according to a person familiar with the Fed’s approach….

The bank still is operating under a secret U.S. sanction known as a memorandum of understanding, which puts the bank under stricter oversight, despite steps taken by Mr. Moynihan to consolidate risk controls and shed assets. Regulators have warned the board that the sanction could escalate to a more formal, public enforcement action if they aren’t satisfied with the results of the ongoing shake-up.

The article also devotes a surprising amount of space to CEO Brian Moynihan’s leadership. Needless to say, it portrays him as struggling. This sort of account would normally be a sign that he was on his way out, and the story suggests the board would be rid of him if they thought it could find a better replacement:

Another person familiar with the board’s recent discussions about Mr. Moynihan said they are working hard to help him improve his performance. “Who else is going to run the ship?” this person said. “That’s a dilemma.”

As a mortgage investor said to me, “Can you imagine what it’s like being C level at Bank of America? It’s like being in the brace position on an airplane running on one engine.”

[Demeter]

27. Refusing To Take Yes For An Answer On Bank Reform

http://baselinescenario.com/2012/01/12/refusing-to-take-yes-for-an-answer-on-bank-reform/

The debate over megabanks and – in the aftermath of the 2008 financial crisis – how to deal with all the problems associated with “too big to fail” in the financial sector has not been easy for many politicians. The problems and potential real solutions do not map readily into the standard left vs. right divide in American politics.

The left generally wants the state to do more, and these days most of the right usually wants the state to do much less. But in this space regulators are “captured”, meaning that too many of them are effectively working to promote the interests of the big banks rather than to limit the dangers to the rest of us – so “more regulation” does not make much sense. And these big banks have a strong incentive to get even bigger – it’s their size that gives them economic and political power. If you leave these banks to their own devices, they will become even bigger and blow themselves up at greater cost to ordinary citizens (see Western Europe for details). So “no regulation” is also not an appealing proposition.

As a matter of presidential year politics, there is a remarkable convergence between President Obama and Mitt Romney, the Republican frontrunner. Both think that we can tweak the rules to keep the banks from becoming dangerous. The Obama administration calls their approach “smart regulation”, while Mr. Romney has spoken of repealing the Dodd-Frank financial reform legislation (although his website is devoid of any further specifics). But as far as anyone can see, their proposed approaches for the next four years are very similar – relying on the state to play a particular oversight role that has not gone well in recent decades. They are both “statist” in this very particular sense.

The way to cut our Gordian financial knot is simple – force the big banks to become smaller. Small banks and other financial institutions can be allowed to fail unencumbered by any kind of government bailout. MF Global failed recently with about $40 billion in total assets; the shock waves did not bring on global panic. A properly functioning market economy involves failure of this kind (although it is traumatic for employees and, in this specific case, also for many customers.)..

MORE--MUST READ

[Po_d Mainiac]

21. hot shit

NEW YORK -- Metal tissue holders contaminated with low levels of radioactive material may have been distributed to Bed, Bath & Beyond stores in more than 20 states including New York, federal regulators said Thursday.

http://www.huffingtonpost.com/2012/01/13/bed-bath-beyond-radioactive-tissue-holders_n_1204974.html

[Demeter]

25. NOW I Know What to Get Everyone for Xmas! Geiger Counters!

Radioactivity is invisible, has no smell, makes no sound - in fact it cannot be detected by any of our senses.

However, because radioactivity affects the atoms that it passes, we can easily monitor it...

Geiger-Müller tube (alpha, beta and gamma radiation detected)

Geiger detectors are still favored as general purpose alpha/beta/gamma portable contamination and dose rate instruments, due to their low cost and robustness...The current version of the "Geiger counter" is called the halogen counter. It was invented in 1947 by Sidney H. Liebson.[3] It has superseded the earlier Geiger counter because of its much longer life. The devices also used a lower operating voltage.

http://en.wikipedia.org/wiki/Geiger_counter


SEE ALSO
http://www.darvill.clara.net/nucrad/detect.htm

[Demeter]

22. Did You Hear the One About the Bankers? By THOMAS L. FRIEDMAN FROM OCTOBER

http://www.nytimes.com/2011/10/30/opinion/sunday/friedman-did-you-hear-the-one-about-the-bankers.html

CITIGROUP is lucky that Muammar el-Qaddafi was killed when he was. The Libyan leader’s death diverted attention from a lethal article involving Citigroup that deserved more attention because it helps to explain why many average Americans have expressed support for the Occupy Wall Street movement. The news was that Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.

It doesn’t get any more immoral than this. As the Securities and Exchange Commission civil complaint noted, in 2007, Citigroup exercised “significant influence” over choosing $500 million of the $1 billion worth of assets in the deal, and the global bank deliberately chose collateralized debt obligations, or C.D.O.’s, built from mortgage loans almost sure to fail. According to The Wall Street Journal, the S.E.C. complaint quoted one unnamed C.D.O. trader outside Citigroup as describing the portfolio as resembling something your dog leaves on your neighbor’s lawn. “The deal became largely worthless within months of its creation,” The Journal added. “As a result, about 15 hedge funds, investment managers and other firms that invested in the deal lost hundreds of millions of dollars, while Citigroup made $160 million in fees and trading profits.”

Citigroup, which is under new and better management now, settled the case without admitting or denying any wrongdoing. James Stewart, a business columnist for The Times, noted that Citigroup’s flimflam made “Goldman Sachs mortgage traders look like Boy Scouts. In settling its fraud charges for $550 million last year, Goldman was accused by the S.E.C. of being the middleman in a similar deal, allowing the hedge fund manager John Paulson to help choose the mortgages and then bet against them without disclosing this to the other parties. Citigroup dispensed with a Paulson figure altogether, grabbing those lucrative roles for itself.” (Last Thursday, the U.S. District Court judge overseeing the case demanded that the S.E.C. explain how such serious securities fraud could end with the defendant neither admitting nor denying wrongdoing.)

This gets to the core of why all the anti-Wall Street groups around the globe are resonating. I was in Tahrir Square in Cairo for the fall of Hosni Mubarak, and one of the most striking things to me about that demonstration was how apolitical it was. When I talked to Egyptians, it was clear that what animated their protest, first and foremost, was not a quest for democracy — although that was surely a huge factor. It was a quest for “justice.” Many Egyptians were convinced that they lived in a deeply unjust society where the game had been rigged by the Mubarak family and its crony capitalists. Egypt shows what happens when a country adopts free-market capitalism without developing real rule of law and institutions...

[Demeter]

29. Big Defection in Attorney General Mortgage Settlement: 12 States Having Parallel Talks

http://www.nakedcapitalism.com/2012/01/big-defection-in-attorney-general-mortgage-settlement-12-states-having-parallel-talks.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


....it seems as if the Obama administration has completely lost the plot in what was formerly called the 50 state attorney general negotiations, and that appears to have fed directly into the news today of meetings of a breakaway group interested in concrete results.

Remember that despite the successful effort of by the Feds to make the AG group the face of the effort, this drill is being quietly guided by the Administration (the DoJ, HUD, and other federal regulators are participating in the negotiations). A telling moment occurred when Iowa AG Tom Miller, the leader of the state AGs, practically fawned over then assistant Treasury secretary Michael Barr in Congressional hearings in late 2010.

When the talks started, it was clear that the Administration wanted to get the housing mess out of the headlines, based on the false premise that the use of enough cheap credit, regulatory forbearance (official speak for “extend and pretend”) plus some helpful-around-the-margins programs to distract the peasants, would allow the housing market to heal on its own. The evidence is overwhelmingly to the contrary. Housing credit is entirely dependent on government support, and there is not even a remote chance that this will change any time soon. The authorities are not only oblivious to the way servicers abuse investors, but New York Fed president William Dudley made it clear that he thinks it’s a great idea to reverse the creditor hierarchy and burn first mortgage investors to save second lien investors, who happen to be banks. And the supposedly helpful programs like HAMP turned out to be utter disasters.

But the most remarkable to see federal regulators do the equivalent of sticking fingers in their ears and yelling “Lalala” whenever the issue of servicer and foreclosure mill fraud comes up (they give servicing deficiencies plenty of lip service in testimony and speeches, but their actions convey a completely different message). As Michael Olenick discussed in a recent post, there is a massive overhang of shadow housing inventory. Buyers are reluctant to come into the market if they think (correctly in many locales) that prices have not bottomed. In states that for various reasons now have more teeth in foreclosure documentation requirements (New York, Nevada, and New Jersey), foreclosures have come to a near standstill. That’s a de facto admission that the parties representing creditors (almost always securities trusts) failed to live up to their promises to investors in the pooling & servicing agreements. It also raises the ugly likelihood that the borrower IOU, the note, never made it to the trust, but is in limbo earlier in the transfer chain.

So the Administration’s puppets, the cooperating attorneys general, have been engaged in truly bizarre negotiations. The banks know the real objective is to “reduce uncertainty” which is really “get possible sources of trouble neutralized”. AG suits can be very powerful, as Eliot Spitzer’s prosecutions of big corporate accounting abuses and dubious behavior by sell side analysts demonstrated. They change perceptions of what will be tolerated and also pave the way for private lawsuits. And as we’ve pointed out repeatedly, the banks keep asking for more and more at the negotiating table. That’s a bad faith bargaining strategy, one you pursue only if you are certain the other side is desperate to get a deal done. But the whole process has looked less and less plausible as the banks keep upping their demands and Tom Miller keeps saying, month after month, that a deal is mere weeks away....

[Demeter]

30. The Glee Club Rehearsal

[Hotler]

86. Fucking fuckers. n/t

[bread_and_roses]

26. Why it's better for you to read Peanuts than to listen to NPR

... and I say this though I loath "Peanuts." (btw, Demeter, that's NOT a complaint - I don't expect to like every theme, likes and dislikes of any art form are, imho, purely idiosyncratic and so my dislike is not an aesthetic judgement, and besides, your title, "working for peanuts" is BRILLIANT).

http://www.alternet.org/economy/153722/mr._davidson%27s_planet%3A_npr_nyt_guru_adam_davidson%27s_discredited_economic_principles_/

Mr. Davidson's Planet: NPR/NYT Guru Adam Davidson's Discredited Economic Principles
Adam Davidson's economic principles are alien to a just and prosperous society.

January 10, 2012

You’d be hard-pressed to find a discipline that shapes our world more than economics, and yet none has weaker foundations or more misguided evangelists. The rise of economic guru du jour Adam Davidson, the co-founder of NPR’s “Planet Money” and columnist for the New York Times Magazine, is perhaps one of the most disturbing illustrations of this unfortunate fact.

... Mr. Davidson possesses gifts as a storyteller--gifts that make him very dangerous. As an economic observer, he commands an extremely powerful platform. Mr. Davidson wants to make us think that he’s one of us. You know, just a curious guy without formal training in economics who wants to know how things work. But in reality he is what we might call a “One Percent Whisperer”—a salesman for conservative economic philosophy who regurgitates ruinous myths that have led to policies that depress prosperity and chuck justice out the window. Take a quick look at the most recent example of his one percent apologia, “What Does Wall Street Really Do for You?” and you’ll get an idea of where he’s really coming from.

edit to try to use "link" feature which doesn't seem to be working - or I'm doing it wrong - anyway, added link manually

[Demeter]

28. Another Eurozone Country Bites The Dust (FROM OCTOBER) UNBELIEVABLE!

http://www.testosteronepit.com/home/2011/10/29/another-eurozone-country-bites-the-dust.html

Real estate in the Republic of Cyprus has been popular with foreigners who own about 100,000 homes—in a country with 803,000 people. The British alone, whose colony this was until 1960, own more than 60,000 homes. Turns out, real estate is Cyprus' national sport sponsored by dumb money. But now it has become a nightmare that is unraveling the finances not only of expat home owners, but also of developers, banks, and the government. Yet it's hushed up. By comparison, the banks' impending losses on Greek sovereign debt, significant as they are, seem outright manageable...."The most common mistake people make when buying property in Cyprus is to use a lawyer who has been introduced or recommended to them by a property developer," says Nigel Howarth who has helped foreign property buyers in Cyprus for more than 10 years. Foreign buyers are sitting ducks. They're unaware of the local business culture and don't suspect that their lawyers are in cahoots with developers--aided and abetted by the banks.

The country acceded to the Eurozone in 2008, but it's already in a heap of trouble. A recent loan agreement with Russia of €2.5 billion will keep it afloat for a few months into 2012. Then it's bailout and haircut time. On October 27, Standard & Poor's cut Cyprus to BBB. The big problem: exposure of its banks to Greek sovereign, corporate, and bank debt. But not a word about the title-deed scandal and the billions that evaporated with it.

As in the U.S., after years of speculative overbuilding, the real estate market is collapsing. Building permits are down 40.2% for the first eight months of the year and 49.4% for August. Home prices have dropped for six consecutive quarters, according to the Central Bank. The steepest declines were in the coastal regions favored by foreigners. Of the 45,000 unsold properties, many are unfinished, and some are essentially abandoned. The Cyprus Property News points out that they "were built for buy-to-flip investors and are unsuitable for permanent living."...Prices would have dropped even more steeply if the banks had dealt with their non-performing loans. But instead of pressuring developers to sell properties to service their loans, they're pressuring appraisers not to reduce values so that loans appear to be adequately secured....These kinds of issues have cropped up in the U.S. as well. What's unique in the collapsing housing bubble in Cyprus is a title-deed scandal of unimaginable proportions. And it has embroiled waves of foreign buyers. "The bulk of the problems stem from the archaic Ottoman land law still in existence in Cyprus which allows these dubious practices," writes the Cyprus Property Action Group. Insufficient industry regulation and lacking enforcement of consumer protection laws also play a role.

The scheme works this way: A developer takes out a mortgage on the land but hides it from foreign buyers. The bank retains the title deed as collateral. When the developer sells the property, the buyers' lawyer, who is in cahoots with the developer, doesn't perform a title search and doesn't "discover" the original mortgage. Buyers, assuming that their part of the property is free an clear, either pay cash or take out a mortgage. The developer pockets the money instead of paying off the original mortgage. The bank goes along because it can collect interest on one or two mortgages. But it retains the title deed as collateral for the original mortgage, and the buyer never sees it. Throughout, buyers are told by everyone, including the government, that a buyer of immovable property is absolutely protected once the sales contract is lodged with the Cyprus Land Registry, and that they don't need the title deed...

NICE WORK IF YOU CAN GET IT

[Demeter]

39. Standard & Poor’s cuts credit ratings for France and eight other European nations

http://www.washingtonpost.com/business/economy/france-loses-aaa-in-euro-downgrade/2012/01/13/gIQAxALzwP_story.html?hpid=z1

Standard & Poor’s downgraded the credit ratings of France and eight other European nations Friday, further weakening the region’s finances and potentially raising costs for governments at time when they already face a debt crisis. The downgrade robs France of its prized AAA rating, despite vows by the French government to defend its pristine standing through recent measures to cut spending and raise taxes....The downgrades will likely increase borrowing costs for the affected governments as they try to raise hundreds of billions of dollars on international bond markets this year. France alone needs to borrow about $240 billion to finance its existing debts and annual deficit. Italy and Spain, two large nations that are facing escalating debt problems, were also among the countries downgraded.

The S&P actions could also undermine the effectiveness of the region’s bailout fund, which European leaders have been counting on to help ailing countries such as Greece and stem the crisis from spreading onward to Italy and Spain. The bailout fund’s AAA rating, and its ability to raise money cheaply, depends in part on the credit standing of France, the euro zone’s second largest economy.

...Another top-rated country, Austria, lost its AAA rating. The ratings of Portugal, Cyprus, Malta, Slovakia and Slovenia also were downgraded...The downgrade of France by one notch brings its rating to the same level as that of the United States, which was stripped of its AAA rating by S&P in August amid concerns over Washington’s handling of the federal debt...

The ratings agency said its actions were based on concerns about weak economic conditions in the euro zone, coupled with what it judged as the “insufficient” steps taken by European leaders to address the situation. Despite a plethora of summits, declarations and bailout deals, Europe has “not produced a breakthrough of sufficient size and scope to fully address the euro zone’s financial problems,” the ratings agency concluded. Political leaders, the agency contended, did not even fully appreciate the scope of a crisis that extends far beyond overspending in small countries like Greece to encompass the competitiveness of the euro zone itself.

[Demeter]

42. Analysts say S&P’s downgrade of France and 8 other euro nations won’t panic markets

http://www.washingtonpost.com/business/economy/analysts-say-sandps-downgrade-of-france-and-8-other-euro-nations-wont-panic-markets/2012/01/14/gIQALbcxxP_story.html

...beleaguered Europeans can take some comfort: It could have been worse.

Investors had plenty of time to brace for the bad news. S&P put 15 countries, including Germany and France, on notice last month that they faced potential downgrades. The advance notice means the downgrades likely won’t panic financial markets and drive up European governments’ borrowing costs much higher than they already are.

“People knew it was coming, and it was only one rating agency,” said Marc Chandler, head of global currency strategy at Brown Brothers Harriman. Moody’s and Fitch Ratings have yet to follow S&P. Stocks fell Friday as downgrade rumors reached the trading floors of Europe and the United States. But the declines were nothing like the wrenching swings of last summer and fall, when the debt crisis threw the markets into turmoil.

When the news came Friday, it wasn’t as harsh as it might have been. S&P had threatened last month to knock France’s credit rating down two notches. Instead, it settled for one, demoting France to AA+, just where it put the U.S. credit rating in an August downgrade.

S&P spared Europe’s mightiest economy the indignity of a downgrade, leaving Germany with its AAA rating intact...

[Tansy_Gold]

32. Carlitos

The textbook for my high school third year Spanish class was titled Leer, Hablar, y Escribir (To Read, To Speak, and To Write), written by Elizabeth Keesee, Gregory G. LaGrone, and Patricia O'Connor and published by Holt, Rinehart and Winston (c) 1963.

Our teacher was the inimitable and irrepressible Charles C. Schlereth, occasionally and affectionately referred to (when he wasn't within hearing) as "Carlitos."

The textbook was structured into nine "issues" of a compiled magazine titled Leer, each issue to correspond with a month out of the typical school year. And each issue of this magazine contained the usual features one would find in such a publication -- articles, essays, news items, advertisements, sports, advice columns -- all of which had actually been published in Spanish and Latin American periodicals. One article was titled "Impressiones de un Estudiante Norteamericano Sobre América Latina" (Impressions of a North American Student about Latin America) and the student was Jeremiah Dodd, son of the late Senator Thomas J. Dodd and brother of Senator Christopher Dodd of Connecticut.

Our favorite part of each "magazine," of course, was the jokes page, which was complete each month with a strip of "Carlitos," aka Charlie Brown.

We "rented" our textbooks each year, but many years later, I happened to be visiting the high school and stopped to see my first and second year Spanish teacher, Mrs. Dietrich. (Why they both had German names, I have no earthly idea) By then Leer, Hablar y Escribir was no longer the current text, but she happened to have several old copies lying around and generously gave me one. I share a page with you all --

[Demeter]

33. Meet the 0.01 Percent: War Profiteers

http://blogs.alternet.org/speakeasy/2011/10/27/meet-the-0-01-percent-war-profiteers/?akid=7788.77792.ABzpkj&rd=1&t=21

There’s the top 1% of wealthy Americans (bankers, oil tycoons, hedge fund managers) and there’s the top 0.01% of wealthy Americans: the military contractor CEOs.

If you’ve been following the War Costs campaign, you already know that these corporations are bad bosses, bad job creators and bad stewards of taxpayer dollars. What you may not know is that the huge amount of money these companies’ CEOs make off of war and your tax dollars places them squarely at the top of the gang of corrupt superrich choking our democracy. These CEOs want you to believe the massive war budget is about security — it’s not. The lobbying they’re doing to keep the war budget intact at the expense of the social safety net is purely about their greed.

In many areas, including yearly CEO salary and in dollars spent corrupting Congress, these companies are far greater offenders than even the big banks like JP Morgan Chase or Bank of America....MORE

[Demeter]

35. Leaderless Global Governance By Dani Rodrik

http://www.nationofchange.org/leaderless-global-governance-1326472394

The world economy is entering a new phase, in which achieving global cooperation will become increasingly difficult. The United States and the European Union, now burdened by high debt and low growth – and therefore preoccupied with domestic concerns – are no longer able to set global rules and expect others to fall into line.

Compounding this trend, rising powers such as China and India place great value on national sovereignty and non-interference in domestic affairs. This makes them unwilling to submit to international rules (or to demand that others comply with such rules) – and thus unlikely to invest in multilateral institutions, as the US did in the aftermath of World War II...

..............................................

Economic policies come in roughly four variants. At one extreme are domestic policies that create no (or very few) spillovers across national borders. Education policies, for example, require no international agreement and can be safely left to domestic policymakers.

At the other extreme are policies that implicate the “global commons”: the outcome for each country is determined not by domestic policies, but by (the sum total of) other countries’ policies. Greenhouse-gas emissions are the archetypal case. In such policy domains, there is a strong case for establishing binding global rules, since each country, left to its own devices, has an interest in neglecting its share of the upkeep of the global commons. Failure to reach global agreement would condemn all to collective disaster.

Between the extremes are two other types of policies that create spillovers, but that need to be treated differently. First, there are “beggar-thy-neighbor” policies, whereby a country derives an economic benefit at the expense of other countries. For example, its leaders restrict the supply of a natural resource in order to drive up its price on world markets, or pursue mercantilist policies in the form of large trade surpluses, especially in the presence of unemployment and excess capacity. Because beggar-thy-neighbor policies create benefits by imposing costs on others, they, too, need to be regulated at the international level. This is the strongest argument for subjecting China’s currency policies or large macroeconomic imbalances like Germany’s trade surplus to greater global discipline than currently exists.

Beggar-thy-neighbor policies must be distinguished from what could be called “beggar thyself” policies, whose economic costs are borne primarily at home, though they might affect others as well. Consider agricultural subsidies, bans on genetically modified organisms, or lax financial regulation. While these policies might impose costs on other countries, they are deployed not to extract advantages from them, but because other domestic-policy motives – such as distributional, administrative, or public-health concerns – prevail over the objective of economic efficiency. The case for global discipline is quite a bit weaker with beggar-thyself policies. After all, it should not be up to the “global community” to tell individual countries how they ought to weight competing goals. Imposing costs on other countries is not, by itself, a cause for global regulation. (Indeed, economists hardly complain when a country’s trade liberalization harms competitors.) Democracies, in particular, ought to be allowed to make their own “mistakes.”

Of course, there is no guarantee that domestic policies accurately reflect societal demands; even democracies are frequently taken hostage by special interests...

[Demeter]

36. "The Doctor Is In" from You're a Good Man, Charlie Brown at Theatre Victoria

&feature=related

[Demeter]

38. Too Bad I've No Barry, Timmy, Larry and Ben-bashing Posts

because THIS is the theme song for our crack economic leadership team!

&feature=related

(the tag line should be: LUCY: "What happened to your kite, Charlie Brown? It looks like it ran into a brick wall! HAHAHAH!)

[Demeter]

40. Amid downturn, more older Americans employed than ever before

http://www.washingtonpost.com/business/economy/amid-downturn-more-older-americans-employed-than-ever-before/2012/01/11/gIQATFA5tP_story.html

Though the recession has thinned the ranks of other generations in the workforce, more people older than 55 are employed than ever before, according to the latest figures from the Bureau of Labor Statistics.

The reasons for the surge of older workers are complex, experts said, but one of the primary economic forces behind it is the growing fear among older Americans that they lack the means to support their retirement needs. The phenomenon is closely linked to the broad shift in the United States that began in the ’80s away from reliance on company pensions toward the adoption of 401(k) plans and other personal savings. That shift in retirement financing, combined with the recession, has dramatically increased the incentives to work into old age and appears to be reshaping how Americans ride out the latter part of their lives.

Like it or not, millions of graying Americans, some past 75 years old, are rejoining the workforce or staying in it longer than once might have been expected...The number of people older than 55 who are working has actually risen by 3.1 million, or 12 percent, since the beginning of the recession, according to the latest figures from the Bureau of Labor Statistics. The phenomenon extends even to people 75 years and older; there are more of them working today than before the recession, too. By contrast, the number of people between the ages of 25 and 54 who are working has shrunk by 6.5 million, for a drop of 6.5 percent...

“Fear is a wonderful motivator,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “Some of these people are just clinging by their fingernails to jobs.”

[Tansy_Gold]

78. The real issue here, though, should be WHAT jobs are these non-retirees holding?

I'd venture to guess that many of those who have left the workforce -- voluntarily or not -- and are returning to it are working low-wage jobs so as not to endanger social security benefits. That's a very different scenario than those who simply remain in their positions past opportunites for "early" or even "normal" retirement.

And many, of course, will never be able to retire at all.

[Demeter]

43. EU’s Iran Oil Embargo Said Likely to Be Delayed Six Months

http://www.businessweek.com/news/2012-01-13/eu-s-iran-oil-embargo-said-likely-to-be-delayed-six-months.html

A European Union embargo on imports of Iranian oil will probably be delayed for six months to let countries such as Greece, Italy and Spain find alternative supplies, two EU officials with knowledge of the talks said. The embargo, which would need to be accepted by the 27- nation bloc’s foreign ministers on Jan. 23, is also likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA, Italy’s largest oil company, according to the officials, who declined to be identified because the talks are private.

A ban on petrochemical products would start sooner, about three months after EU ministers agree to the measure, one official said yesterday. Once a decision is made, member states would be barred from concluding new oil contracts with Iran or renewing those that are due to expire, while existing deals will be terminated within six months, according to a second diplomat today. Long-term contracts constitute the bulk of Europe’s purchases of Iranian oil.

“Work by experts from the 27 member states is in a very intensive phase,” Maja Kocijancic, a spokeswoman for the European Commission, said by phone yesterday from Brussels. “They are looking into different options for restrictive measures with a view to adoption on Jan. 23.” She declined to comment on possible phase-in periods or exemptions.

Crude prices dropped on the news, falling 1.8 percent to $99.10 a barrel yesterday on the New York Mercantile Exchange, the lowest settlement since Dec. 30. Oil was at $98.22 today...

[Demeter]

44. US seeking to 'close down' Iran central bank

http://www.breitbart.com/article.php?id=CNG.140d0aa1e4b9fa1f6d9de393aaae039f.621&show_article=1


The latest round of American sanctions are aimed at shutting down Iran's central bank, a senior US official said Thursday, spelling out that intention directly for the first time. "We do need to close down the Central Bank of Iran (CBI)," the official told reporters on condition of anonymity, while adding that the United States is moving quickly to implement the sanctions, signed into law last month. IS THAT YOU, TIMMY? WHO ELSE WOULD HAVE THE GALL?

The sanctions, broadly aimed at forcing Tehran to shift course on its nuclear program, targeted Iran's crucial oil sector and required foreign firms to make a choice between doing business with Iran or the United States. Foreign central banks that deal with the Iranian central bank on oil transactions could also face similar restrictions under the new law, which has sparked fears of damage to US ties with nations like Russia and China. "If a correspondent bank of a US bank wants to do business with us and they're doing business with CBI or other designated Iranian banks... then they're going to get in trouble with us," the US official said.

The measures were contained in a mammoth $662 billion defense bill, which President Barak Obama signed on December 31 at a time of rising tension with Tehran, which has threatened to block the Strait of Hormuz -- through which more than a third of the world's tanker-borne oil passes. The United States has warned it will "not tolerate" such an interruption.

There are fears that increased sanctions on Iran's central bank could force the global price of oil to suddenly soar, and actually give Tehran a financial windfall on its existing oil sales. Rising oil prices could also crimp the fragile economic recovery in the United States and inflict pain on American voters in gas stations -- at a time when Obama is running for reelection next year...

THEY ARE ALL INSANE AND RABID

[Demeter]

45. The Foreclosure-to-Rental Screwjob By Mike Whitney MUST READ

http://www.informationclearinghouse.info/article30237.htm

Federal Reserve chairman Ben Bernanke wants US taxpayers to purchase more of the garbage loans and mortgage-backed securities (MBS) that the big banks still have on their books. (Cash for trash) That’s the impetus behind the Fed’s 26-page white paper that was delivered to Congress last Wednesday. The document outlines the Fed’s plan for ‘stabilizing the housing market’, which is a phrase that Bernanke employs when he wants to provide more buy-backs, giveaways, subsidies and other corporate welfare to big finance. “Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery,” Bernanke opined in a letter to the Senate Banking and House Financial Services committees. Indeed. The housing depression continues into its 5th year with no end in sight, mainly because the people who created the crisis are still in positions of power. And, they’re still offering the same remedies, too, like handing the banks another blank check to save them from losses on their bad bets. That’s what this new “housing stabilization” boondoggle is really all about, bailing out the bankers. Here’s a summary from Bloomberg:

“Bernanke’s Fed study said “more might be done,” including eliminating entirely the reduced fees for risky loans, “more comprehensively” cutting lenders’ put-back risks; and further streamlining refinancing for other Fannie Mae and Freddie Mac borrowers. The U.S. also should consider having Fannie Mae and Freddie Mac refinance loans not already backed by the government, which would add credit risk for the companies, according to the report….” (Bloomberg)

First of all, Fannie and Freddie only return loans (“put-backs”) that don’t meet their standards and which the banks foisted on them so they wouldn’t have to face the losses. The idea that the publicly-funded GSE’s should just “eat the losses” is ridiculous. And, why–in heaven’s name–would congress want to take on more risk when they can keep millions of people in their homes by simply reducing the principle on their mortgages to the present value of the house? (aka–”Cramdowns”) Naturally, the losses would have to be absorbed by the banks who–by everyone’s admission–were responsible for the present crisis due to their lax lending standards and, oftentimes, fraudulent behavior. This would lead to a restructuring of the country’s biggest banks through a Resolution Trust Corporation (RTC) so their toxic assets and backlog of foreclosed properties can be auctioned off as soon as possible. This is a straightforward way to fix the housing market and it should have been done long ago. Bernanke’s solution is not only unreasonable, it’s also deceitful. Here’s more from the Fed’s paper: “Continued weakness in the housing market poses a significant barrier to a more vigorous economic recovery”..(without action)…“the adjustment process will take longer and incur more deadweight losses, pushing house prices lower and thereby prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.”

Did it really take Bernanke 5 years to figure out that housing is a “drag on the economy”?

No, of course not. So, what’s going on now that has suddenly spurred him to act?

Well, for one thing, the banks are losing a great deal of money on the mortgage-backed securities (MBS) that they bought in the last few years. Here’s the story in the Wall Street Journal:

“After flickering to life early in 2011, the market for subprime- and other risky residential-mortgage bonds has returned to its comatose state. And many investors believe a revival could be years away.

Prices on some bonds, which are backed by mortgages that don’t meet the standards needed to get backing from government-controlled companies like Fannie Mae and Freddie Mac, plummeted as much as 30% last year. The ABX, an index that tracks the value of subprime bonds, ended the year at 43.44 cents on the dollar, down from 59.90 cents at year-end 2010 and a peak of 62.68 cents in February 2011

While that decline pushed yields up to as much as 17%—bond yields rise as prices fall—many fund managers have pulled out of the market due to worries about further price declines. Moreover, repeated downgrades have left too few investment-grade securities for them to own. Wall Street banks, which traditionally have played a key role in the market matching buyers and sellers, are backing away ahead of new regulations that will make it more expensive to hold riskier assets.” (Investors Sour on Subprime Bonds, WSJ)

So, Wall Street’s financial geniuses got back into the MBS-biz (for a second time) and got whacked again? That’s right; and now they want John Q. Public to pay for it with another bailout. And, there’s more to this story, too. European banks own roughly $100 billion of these mortgage-backed turkeys which they’re presently shedding like crazy in order to meet new capital requirements. That means US bank balance sheets are dripping red as the value of their financial asset-stockpile continues to plunge. That’s why Sugar Daddy Bernanke has stepped in, because it’s time for another multi-billion dollar bank rescue...Look, the Fed has already purchased over $1.25 trillion of these toxic MBS which represents humongous long-term losses for the taxpayer. Do we really need more of this sludge?

Bernanke promised that the first round of quantitative easing (QE1) would boost employment (It hasn’t) and improve housing sales (it never happened) The only uptick in sales occurred because the colluding banks deliberately reduced the supply of foreclosed homes they put on the market. The reduction has led to a massive 1.7 million backlog of housing units (shadow inventory) that will eventually be dumped onto the market triggering another sharp decline in housing prices. Bernanke wants to do something about the bulging inventory as well as prop up the value of sagging MBS. So, the Fed’s plan actually has two main objectives; in other words, it’s the double whammy. Here’s more from Bloomberg:

“Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.”

Did you catch that? Taxpayers are going to get slammed for another $750 billion. That’s nearly as much as Obama’s American Recovery and Reinvestment Act (ARRA), the fiscal stimulus that added 2 percent to GDP and kept unemployment from rocketing to 13 percent. Bernanke wants to throw that same amount down a Wall Street sinkhole....So maybe you think this won’t happen, after all, could Congress really be so gullible as to fall for Bernanke’s fearmongering flim-flam again? Maybe and maybe not. But there are some pretty wealthy and well-connected people who are betting that the Fed will do as it’s told and pave the way for another hefty bailout. In fact, the world’s largest bond fund (Pimco) has stumped up a mountain of cash betting that good buddy Bernanke will get the printing presses whirring sometime in mid-January. Here’s the story from Zero Hedge:

”….in December the fund (Total Return Fund or TRF) doubled down on its QE3 all in bet, by “borrowing” even more cash, or a record $78 billion, using the proceeds to buy even more MBS, as well as Treasurys, which hit a combined 31% of the TRF’s holdings. In other words, between MBS and USTs, Pimco holds a whopping 79% of total, mostly in very long duration exposure. In fact, this combination of long duration and pre-QE exposure has not been seen at PIMCO since late 2008, early 2009, meaning that as many banks have been suggesting, (Bill) Gross is convinced that the Fed will announce if not outright QE3 this January, then at least intimate it is coming.”(“Pimco Doubles Down On All In Bet Fed Will Monetize MBS”, Zero Hedge)

So what does Pimco know that we don’t know? More importantly, from whom are they getting their information?

And, there’s another thing, too. This whole deal about converting foreclosed homes into rental properties is another scam. Here’s the scoop from another article in the Wall Street Journal:

“The paper also signaled that the Fed…. will try to involve banks more directly in housing-revival approaches… One area involves efforts to turn foreclosed homes into rental properties….

Banking regulations typically direct banks to sell foreclosed homes quickly, although the rules do recognize this isn’t always practical and so these properties can be held up to five years. The Fed said it is now “contemplating issuing guidance” to banks and regulators that would possibly allow banks to turn some of these foreclosed homes into rental properties…..The hope is this may help stanch the flow of foreclosed properties into markets…” (“Fed Up With the Depressed State of Housing”, Wall Street Journal)

Bingo. The banks are not only sitting on 1.7 million shadow inventory of homes they’ve stockpiled to keep prices artificially high. They also have millions more in the pipeline when a settlement is finally reached on the robo-signing scandal. So, what are they going to do with all that backlog? That’s easy. They’ll schluff it off on the taxpayer by creating a foreclosure-to-rental swindle where the government provides lavish incentives for banks and private equity scavengers to buy the homes (in bulk) for pennies on the dollar with loans provided by–you guessed it–Uncle Sam. Here’s a summary of what’s going on behind the scenes:

“As the Obama administration and federal regulators work on a program to sell government-owned foreclosures in bulk to investors, those investors aren’t wasting any time stockpiling cash and buying foreclosed properties at auction and from the major banks.

Oakland, California-based Waypoint Real Estate Group, a major acquirer of so-called “REO to Rental” (Real Estate Owned) just announced a partnership with a private equity firm, Menlo Park, California-based GI Partners, to buy foreclosed properties….

“Our approach to buying distressed single-family houses, renovating them, and leasing to residents who are committed to a path to future home ownership is a viable solution to our nation’s housing crisis,” said Colin Wiel, managing director and co-founder of Waypoint in a press release. “Our partnership with GI Partners ensures we can take the next step in our company’s evolution.”

GI is taking an increasingly popular bet on distressed real estate, closing on a $400 million fund with Waypoint, which has plans to purchase $1 billion in distressed real estate assets over the next two years, according to its release. (“Private Equity Readying a Run on Foreclosures”, Diana Olick, CNBC)

So, what do these guys know that we don’t know? And why are they plunking down big money when the details have not even been released yet? None of this really passes the smell test, does it? The only thing we know for sure is that the “fix is in” and that Bernanke will do what he always does when the banks are in a pinch. Throw them a lifeline.

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

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press. He can be reached at [e-mail]

[Demeter]

46. Obama seeks $1.2 trillion debt limit rise

http://www.reuters.com/article/2012/01/13/us-usa-debt-obama-idUSTRE80B20P20120113

President Barack Obama formally notified Congress on Thursday that he plans a $1.2 trillion increase in the U.S. debt limit, prompting Republicans to level election-year charges that deficits are out of control.

Obama, in a one-sentence letter to House of Representatives Speaker John Boehner, the top Republican in Congress, said "further borrowing is required to meet existing commitments."

The proposed increase would push the debt ceiling to $16.394 trillion.

The move by the Democratic president, who is seeking re-election in November, gives Congress 15 days to vote on a resolution of disapproval under terms of budget control legislation passed last year...

[Demeter]

47. Draghi Says Debt-Crisis Strategy Is Working as ECB Postpones ‘Armageddon’

WORKING? FOR WHOM?

http://www.bloomberg.com/news/2012-01-12/draghi-says-debt-crisis-strategy-working-as-ecb-postpones-armageddon-.html

...The ECB’s massive injection of cash into the financial system last month is beginning to lubricate seized credit markets and there are “tentative signs” of economic stabilization in the euro area, Draghi said in Frankfurt yesterday. While “substantial downside risks” remain, he pointed to falling yields on Italian and Spanish debt this week.

That may mitigate the need for further interest rate cuts in the short term and muffle calls for the ECB to step up its government bond purchases. While the 17-nation euro region is still in danger of sliding into recession after the debt crisis spread to Italy and Spain, driving up borrowing costs and hurting the export markets of stronger economies such as Germany, recent data suggest the worst may be over.

“The ECB can be rightly justified in saying that the Armageddon we were facing toward the end of last year does seem to have been addressed,” said James Nixon, chief European economist at Societe Generale SA in London. “Further rate cuts will only be forthcoming if, for example, we see signs of an outright credit crunch.”

...Asked if the ECB is open to cutting rates further, Draghi said it depends on the inflation outlook. He indicated rates will remain low for an extended period. “The monetary stance is and will remain accommodative,” Draghi said. “Uncertainty is very high. We will monitor all developments and stand ready to act.” Signs of economic stabilization may stay the ECB’s hand for the time being...MORE

[Demeter]

48. ECB bond buying "at beginning of process" - Draghi

http://uk.reuters.com/article/2012/01/12/uk-ecb-rates-bonds-idUKTRE80B15120120112

The European Central Bank's bond-buying programme has only just begun to achieve its goal of ensuring that market distortions do not stop its main policy measures from working properly, ECB President Mario Draghi said on Thursday.

"The main rationale for having the Securities Markets Programme is the unclogging of the monetary policy transmission channels," Draghi told a news conference after the ECB left interest rates unchanged at a record low of 1.0 percent.

The ECB kept its purchases of government bonds to a minimum in the first week of 2012, spending just 1.1 billion euros and leaving markets guessing how it will use the controversial programme this year.

"We still see that even nowadays the interbank market is still not functioning ... It was rather comforting to see some opening of the unsecured bond market is actually taking place ... but we really are at the beginning of this process," Draghi said.

[xchrom]

49. saturday morning -- cartoons!

[xchrom]

50. Workers Now Have Right to Class-Action Lawsuits Against Bosses

http://www.alternet.org/economy/153741/workers_now_have_right_to_class-action_lawsuits_against_bosses/

Last week, the National Labor Relations Board (NLRB) ruled that it is illegal for employers to require their workers to sign mandatory arbitration agreements that prevent them from joining together to file class-action employment-related lawsuits. According to Alex Colvin of Cornell University School for Industrial and Labor Relations, 25 percentof nonunion employees are currently forced to sign mandatory arbitration agreements as a condition of employment that prevents them from filing class-action lawsuits.

The NLRB ruled that mandatory arbitration agreements preventing joint action were illegal in a case involving a group of nonunion construction workers who claimed they were misclassified as superintendents in an effort by the contractor to deny the workers overtime pay. (Workers classifed as superintendents are exempt from The Fair Labor Standards Act, which establishes a minimum wage and overtime pay, among other things.) Because of a mandatory arbitration clause in their contracts, the workers had been barred from suing the contractor as a part of a class action over lost pay.

Often times, it can be very expensive for workers to bring an arbitration case or a lawsuit against an employer since their claims are rarely more than a few thousand dollars and the lawyer fees that most attorneys would collect would not be sufficient to pay for the amount of time they invested in litigating these cases. Thus, class action lawsuits are much more appealing for lawyers to file against companies on charges like wage theft because the collective fee they can collect on behalf of their clients whose claims are relatively small is at least adequate.

The NLRB, which enforces labor laws, ruled that the right of employees—whether in a union or not—to join collectively together to take action against their employees was a concerted activity protected by the NLRA.




*** some good news -- but i'm so skeptical of this admin -- i'm always left wondering if anything will come of it.

[Demeter]

53. EXCELLENT!

[DemReadingDU]

51. Bloomberg: Apocalypse How? Dire 2012 Forecasts

1/14/12 Apocalypse How? Dire 2012 Forecasts

Pessimistic Prognosticators

Only the gloomiest of Wall Street's prognosticators got it right in 2008 and 2009. Since then, their pessimism has been infectious. On almost any investing topic -- from emerging markets to U.S. stocks, from commodities to sovereign debt -- there are respected experts predicting the worst.

So far, apocalypse hasn't arrived. The U.S. economy shows signs of life. Europe is muddling through its debt concerns. The economies of China and India have slowed but not stalled.

If these commentators, who range from short-seller Jim Chanos to GMO's Jeremy Grantham, prove prescient -- and Bloomberg.com will check in later this year to see if they are -- the biggest surprise in 2012 would be some truly good news.


click on the series of pictures to see predictions
http://www.bloomberg.com/money-gallery/2012-01-14/apocalypse-how-dire-2012-forecasts.html

[Demeter]

57. It reminds of this: The Book Report - You're a Good Man, Charlie Brown

&feature=related

[xchrom]

52. Germany Could Face Recession in 2012

http://www.spiegel.de/international/business/0,1518,808582,00.html

It's good news for financial markets. Despite the European debt crisis, new figures released on Wednesday show solid growth for Germany in 2011. The price-adjusted gross domestic product (GDP) increased by 3 percent year-on-year, the German Federal Statistical Office reported.

For the second year in a row, the German economy showed steady recovery from the economic crisis in 2009, when the country had its worst recession since World War II and GDP shrunk by 5.1 percent. But the latest figures show Germany's GDP exceeding its pre-crisis level for the second year in a row, Destatis reported.

Consumers happy to part with their cash were the main driver of the growth last year, with private consumer spending up by 1.5 percent -- an increase higher than any seen in the last five years.

But by year's end, the worldwide economic downturn still negatively impacted the German economy. In the final quarter of 2011, GDP declined by approximately 0.25 percent compared to the previous quarter, Destatis estimated.

Economists Predict Recession for Early 2012

The German economy is expected to continue weakening this year due to the ongoing debt crisis in Europe, with economists predicting growth for the year to top out at just 0.5 percent. Some experts have even forecast a recession in Germany, Europe's largest economy, beginning in the final quarter of 2011 and lasting into the first half of 2012.

[Demeter]

54. You're a Good Man, Charlie Brown- A "C???"

&feature=related

[xchrom]

56. ...

i was just like her as a little boy! -- except i was into wedding dresses and veils.

[Demeter]

81. Merkel says eurozone must act fast

German chancellor Angela Merkel has called on eurozone governments speedily to implement tough new fiscal rules after Standard & Poor’s downgraded the credit ratings of France and Austria and seven other second-tier sovereigns.

Ms Merkel on Saturday called on governments to implement rules outlined in December, and to activate “as quickly as possible” the €500bn-European Stability Mechanism, currently scheduled to succeed the old eurozone rescue fund EFSF midyear.

Read more >>
http://link.ft.com/r/5F39HH/XHMMMR/6ADGM/SPBPD2/DWF0W2/1G/t?a1=2012&a2=1&a3=14

----------

[Demeter]

55. A SCENE FOR THE 1%

"I'm going to be a Queen" scene from You're a Good Man Charlie Brown

&feature=related

[xchrom]

58. yay! nt

[hamerfan]

83. LOL!

Much love to you, xchrom!

[Demeter]

59. Dept. of Awkward Optics: Obama May Move Convention Speech to BofA Stadium

http://www.alternet.org/newsandviews/article/761539/dept._of_awkward_optics%3A_obama_may_move_convention_speech_to_bofa_stadium/#paragraph4

This won't look bad, at all. From Bloomberg:

President Barack Obama’s re-election campaign is considering moving the final day of the Democratic National Convention in Charlotte, North Carolina, to Bank of America Stadium to sell more skyboxes to wealthy donors, according to three Democrats involved in the fundraising.
The almost 74,000-seat home of the Carolina Panthers professional football team would also have room for the convention to sell more floor passes close to the stage. Planners for the event are struggling to meet a $36.6 million fundraising goal, according to the Democrats, who spoke on condition of anonymity because they weren’t authorized to discuss the matter.

Fortunately, the team isn't totally lacking in self-awareness:

Obama’s advisers are aware of the political downside of the president delivering his nationally televised acceptance in a stadium named for a bank that considered imposing a fee that he said would have “mistreated” customers, they said.
That would be outweighed by the chance to lure more big- dollar contributors, including corporate foundations, to cover the convention’s costs, the three Democrats said. The rest of the convention, scheduled to begin Sept. 3, will be conducted at the Time Warner Cable Arena.

Of course, it's not just BofA's fees that are odious--the banking giant is the epitome of 1% financial greed.

[Demeter]

60. Not that the Time-Warner Cable Arena Sounds Like a Better Venue

[Demeter]

62. 10 Reasons Bank of America Is the Most Hated Bank in America

http://www.alternet.org/occupywallst/152887/10_reasons_bank_of_america_is_the_most_hated_bank_in_america/?page=entire

[xchrom]

61. Economic upturn in America? Don't be too hopeful

http://www.guardian.co.uk/business/economics-blog/2012/jan/13/economic-upturn-america-hopeful

Macroeconomic indicators for the United States have been better than expected for the last few months. Job creation has picked up. Indicators for manufacturing and services have improved moderately. Even the housing industry has shown some signs of life. And consumption growth has been relatively resilient.

But, despite the favourable data, US economic growth will remain weak and below trend throughout 2012. Why is all the recent economic good news not to be believed?

First, US consumers remain income-challenged, wealth-challenged, and debt-constrained. Disposable income has been growing modestly – despite real-wage stagnation – mostly as a result of tax cuts and transfer payments. This is not sustainable: eventually, transfer payments will have to be reduced and taxes raised to reduce the fiscal deficit. Recent consumption data is already weakening relative to a couple of months ago, marked by holiday retail sales that were merely passable.

At the same time, US job growth is still too mediocre to make a dent in the overall unemployment rate and on labour income. The US needs to create at least 150,000 jobs per month on a consistent basis just to stabilise the unemployment rate. More than 40% of the unemployed are now long-term unemployed, which reduces their chances of ever regaining a decent job. Indeed, firms are still trying to find ways to slash labour costs.

[Demeter]

63. Curse You, Red Baron!

&feature=related

[xchrom]

65. snoopy

[Hotler]

112. Snoopy vs. The Red Baron. A blast from the past.

Remember this? I still have this album somewhere in my collection. Showing my age.

[Demeter]

64. Pennsylvania's GOP governor announces plans to make it tougher to get food stamps.

http://www.alternet.org/story/153745/why_do_republicans_hate_poor%2C_hungry_people?akid=8115.227380.DDlT_c&rd=1&t=22

It’s almost as if Republicans are actively striving to get a reputation for being mean to poor, hungry people. On Tuesday, the Philadelphia Inquirer reported that the administration of Gov. Tom Corbett plans to start restricting eligibility to the Supplemental Nutrition Assistance Program (formerly known as the food stamp program). Specifically, the state is imposing an “asset test” — anyone under 60 years old with savings of more than $2,000 is no longer eligible for assistance...The news isn’t quite as bad as some outlets are spinning it. Pennsylvania’s proposed asset test conforms to federal guidelines for SNAP and doesn’t include the value of a recipient’s home, retirement savings or car. But what’s troubling is that the nationwide trend has been headed in exactly the opposite direction. Only 11 states currently impose asset tests for SNAP eligibility. Just four years ago, in fact, Pennsylvania’s Democratic governor, Ed Rendell, abolished the state’s asset test.

And with good reason, as we can readily learn from two new freshly updated informational fact sheets on SNAP coincidentally published on Tuesday by the Center on Budget Policy and Priorities.

SNAP serves as the bedrock of the federal safety net. Ninety-two percent of SNAP’s $78 billion budget goes to benefits that can only be used to buy food. Seventy-five percent of SNAP participants are families with children. There are already plenty of restrictions in place that ensure that SNAP benefits primarily go to people who are legitimately poor. According to CBPP, “93 percent of SNAP benefits go to households with incomes below the poverty line, and 55 percent goes to households with incomes below half of the poverty line (about $9,155 for a family of three).”

SNAP gets high marks for low levels of waste and fraud, kicks into action quickly and efficiently when the economy craters, and is rated by the Congressional Budget Office as one of the two most effective forms of federal stimulus. Perhaps best of all, the number of recipients usually declines just as quickly when the economy rebounds. According to a recent study by the USDA, in the mid-2000s, “More than half of all new entrants to SNAP in the mid-2000s participated for less than one year and then left the program when their immediate need had passed.”

As the U.S. economy continues to recover, SNAP outlays will surely decline. So why hurry it along? Could it be because conservatives think there’s something fundamentally wrong with providing nutritional support? Or is it the racial angle — the intersection of poverty and race that encourages people like Newt Gingrich to call Obama “the food stamp president.”

[xchrom]

66. One look at the Christmas figures proves we're not all in it together {uk}

http://www.guardian.co.uk/business/2012/jan/13/retail-consumerspending

If there has been one message from the high street over Christmas it is that we are not all in it together. While John Lewis were heaving with well-heeled middle Englanders, and trollies at Majestic Wine were piled high with champagne and Argentinian Malbec, there were no queues at the Argos collection counter.

Homeowners splurged after banking the savings made on mortgage payments during 2011 while lower-income families and those in rented accommodation continued to bear the brunt of the economic downturn.

According to investment bank Espirito Santo, 50% of shoppers have dipped into their savings to finance spending over the past six months – an option that doesn't exist for the fifth of households that have no savings at all.

The way the pain of the financial crisis is being shared about is reflected in the fortunes of the shops where different income groups spend their cash. Nowhere is the divide between the haves and have nots more apparent than at the supermarket checkout.

[Demeter]

67. Why Now? What's Next? Naomi Klein and Yotam Marom in Conversation About Occupy Wall Street

http://www.truth-out.org/why-now-whats-next-naomi-klein-and-yotam-marom-conversation-about-occupy-wall-street/1326378296

Naomi Klein is a journalist, activist and author of The Shock Doctrine: The Rise of Disaster Capitalism and No Logo. She writes a syndicated column for The Nation and The Guardian. Yotam Marom is a political organizer, educator, and writer based in New York. He has been active in the Occupy Wall Street Movement, and is a member of the Organization for a Free Society. This conversation was recorded in New York City.

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

Naomi Klein: One of the things that’s most mysterious about this moment is “Why now?” People have been fighting austerity measures and calling out abuses by the banks for a couple of years, with basically the same analysis: “We won’t pay for your crisis.” But it just didn’t seem to take off, at least in the US. There were marches and there were political projects and there were protests like Bloombergville, but they were largely ignored. There really was not anything on a mass scale, nothing that really struck a nerve. And now suddenly, this group of people in a park set off something extraordinary. So how do you account for that, having been involved in Occupy Wall Street since the beginning, but also in earlier anti-austerity actions?

Yotam Marom: Okay, so the first answer is, I have no idea, no one does. But I can offer some guesses. I think there are a few things you have to pay attention to when you see moments like these. One is conditions—unemployment, debt, foreclosure, the many other issues people are facing. Conditions are real, they’re bad, and you can’t fake them. Another sort of base for this kind of thing is the organizing people do to prepare for moments like these. We like to fantasize about these uprisings and big political moments—and we like to imagine that they erupt out of nowhere and that that’s all it takes—but those things come on the back of an enormous amount of organizing that happens every day, all over the world, in communities that are really marginalized and facing the worst attacks.

So those are the two kind of prerequisites for a moment like this to take place. And then you have to ask, What’s the third element that makes it all come together, what’s the trigger, the magic dust? Well, I’m not sure what the answer is, but I know what it feels like. It feels like something has been opened up, a kind of space nobody knew existed, and so all sorts of things that were impossible before are possible now. Something just got kind of unclogged. All sorts of people just started to see their struggles in this, started being able to identify with it, started feeling like winning is possible, there is an alternative, it doesn’t have to be this way. I think that’s the special thing here...MORE

[Demeter]

68. I'D SAY, IT'S THE PURSUIT OF HAPPINESS

&feature=related

[Demeter]

69. MF Global Sold Assets to Goldman While It Was Looting Their Customer Accounts

http://jessescrossroadscafe.blogspot.com/2012/01/mf-global-sold-assets-to-goldman-days.html


It turns out that MF Global sold hundred of millions in assets to Goldman in the last two business days before its bankruptcy. It is not clear that MF Global actually received the payment for the sale, or if the funds were held by their clearing agent and banker, JP Morgan, who knew that they were going to be bankrupt....That revolving line of credit at JPM of $1.2 Billion is about the size of the missing customer funds. I wonder if JPM withheld payment on the sale of Goldman assets, and took customer assets as collateral for the credit line. As MF Global's banker they were at the center of most if not all of these transactions. The idea that the customer money was 'missing' is ludicrous. It would be more correct to say that the ownership of the money was disputed, and was in the hands of JP Morgan and perhaps Goldman.

These are serious offenses. But it becomes even worse if JPM afterwards sought to withhold the stolen funds and cover up the transactions, impeding an official investigation. And then their legal maneuvering afterwards to cut the customer interests in the courts is of course beneath contempt.

Nasty business indeed. I wonder how long the Obama Administration and the Congress are going to cover this up. I am sure the details are known to the regulators already. I still remain hopeful that the customers will receive their funds. I am not so confident at all that justice will be done. At least the UK has placed the last minute London traders bonuses at the end of the queue.

As far as the restoration of sound markets and money, the looting is only just begun.

[Demeter]

74. Interview with Attorney James Koutoulas on the Legal Battle with MF Global and JP Morgan

PODCAST AT LINK

http://www.financialsense.com/node/7250

[Demeter]

70. Eight Strategic Factors to Consider in 2012

http://oilprice.com/Geo-Politics/International/Eight-Strategic-Factors-to-Consider-in-2012.html

1. Global Economic and Financial Trends: Economic fragility is everywhere, even in fairly robust and growing economies. Some of the new engines of economic and financial growth — Brazil, India, and the People’s Republic of China (PRC) — face significant hurdles in 2012. Indeed, it is likely that we may see economic growth couple with instability, and with an inability of even substantial growth to meet social (and therefore political) expectations. Absent major surprises, watch for India to fall still further behind the PRC in terms of economic, and therefore strategic, competitiveness. But the delicacy of the global situation, as well as the PRC’s leadership transition in 2012, means that the PRC is unlikely, during this year, to see its yuan (renminbi) transform into a major global currency. Three of the major global economic lynchpins — the United States of America, the European Union, and Japan — remain in economic and financial difficulties, and this will constrain their strategic capabilities significantly. The rising debt-to-GDP ratio in both the US and the EU will hollow economic recovery efforts. This situation also means that the US dollar and the euro will retain their status as global trading currencies only by default, and will help reinforce a continuation of a fundamentally inflationary situation in the global marketplace. National statistics, which are biased politically, will continue to obscure real, underlying inflation, and this will continue to be pervasive and exported from the US and eurozone.

2. Global Energy Supply and Demand: 2012 will see the start of a transformation in fossil fuel supply and demand patterns, driven to an increasing extent by technological capabilities (such as the increasing possibility of delivering fuels derived from shale deposits in Europe, North America, and elsewhere). Changing strategic power reach (such as the decline in US influence in the Middle East, Central Asia, and, increasingly, Africa; and the rise in the PRC’s and India’s acquisitiveness) will also change control and logistical patterns for oil and gas distribution. The US has the ability to move much of its fossil fuel dependence away from the Middle East and Africa through transforming political approaches to the exploitation of domestic oil and gas fields and through cooperation with Canada in the exploitation of Alberta’s shale deposits, but is unlikely to make headway in this arena in the short term, due to political inertia. Based on present evidence, the US energy dependence pattern will remain slow to change in 2012, and significant change is only likely to occur with a change in US political leadership, which could occur at the beginning of 2013. As a result, the US will continue to face high costs, and high security vulnerability, because of its ongoing dependence on the maritime delivery of its oil and gas imports. This dependence comes at a time of declining US ability to project power to protect or — through strategic influence — ensure security of supply from, say, the Gulf of Guinea or the Middle East. Declining US strategic reach has already ensured the loss of control over, for example, Central Asian/Caspian oil and gas supplies...

3. Strategic Recovery by the US. The US will not, in 2012, show signs of any recovery of its global strategic credibility or real strength. Its manufacturing and science and technology sectors will continue to suffer from low (even declining) productivity and difficulty (for political reasons, primarily) in capital formation. A significant US recovery is not feasible in the timeframe given the present political and economic policies and impasse evident. US allies will, as they did in 2011, increasingly look to their own needs while attempting to sustain their alliance relationship with the US to the extent feasible. Those outside the US alliance network, or peripheral to it, will increasingly disregard US political/diplomatic pressures, and will seek to accommodate the PRC or regional actors. The continued economic malaise of the US during 2012, even if disguised by modest nominal GDP growth, will make economic (and therefore strategic) recovery more difficult and ensure that it will take longer. In any event, the fact that the US national debt exceeds the GDP hollows the dollar and thus makes meaningful recovery impossible. The attractiveness of a low dollar value in comparison to other currencies in making US manufacturing investment more feasible than in recent years is offset by declining US workforce productivity and political constraints which penalize investment in manufacturing, or even in achieving appealing conditions for capital formation. Banks are as afraid of such investment as are manufacturing investors themselves.

4. EU/Eurozone Prospects. The unwillingness of eurozone leaders Germany and France to decouple economic and financial issues within the currency zone will continue to extract a growing cost on the Continental European economies. This, potentially coupled with a plateauing of demand from the PRC and India (among others) for German manufactured goods, could bring the eurozone to a period of stagnation. The option of a break-up of the eurozone, and the reversion to national currencies by some euro states (such as Greece, Italy, Spain, Ireland, Portugal [the PIIGS states], etc.) may be dampened by the fact that such a move may not address the underlying fiscal structures. But tempers are fraying within the EU, and moves toward the creation of Europe as a nation-state have slowed commensurately. Indeed, the desire for EU unity seems mainly driven by German and French fears of a return to 19th and 20th century nationalism and its potential to generate military competitiveness on the Continent. Claims that this fear is no longer a factor in German and French desires to sustain the eurozone miss the visceral underpinning of Franco-German policy in this regard. In the meantime, EU strategic projection has also come, in relative terms, to a standstill, and those EU and other European states active in the Coalition war in Afghanistan are anxious to withdraw from that engagement and to reduce military costs as rapidly as possible. All that this will do will be to further reduce the EU’s diplomatic influence on Turkey, the Middle East, Africa, and on global issues...

THE REST AT LINK

[Demeter]

71. The top risks of 2012

http://eurasia.foreignpolicy.com/posts/2012/01/03/the_top_risks_of_2012

1. The End of the 9/11 Era -- It was a truism of globalization: economics drives markets, and national security drives geopolitics. No longer. Following the 2008 financial crisis, the killing of Osama bin Laden, the withdrawal of U.S. troops from Iraq, and an end date for the war in Afghanistan, politics and economics will overlap almost entirely in 2012. Political officials around the world will worry mainly over economic risks -- the eurozone crisis, the strength of U.S. recovery, and China's evolving role in the global economy in 2012. Market players, in turn, are anxious mainly about political decisions, especially those that will be made in Europe, America, and China this year, as shortsighted leadership from virtually all the major geopolitical players generates policy stalemate and uncertainty.

2. G-Zero and the Middle East -- The inability/unwillingness of major powers to bolster the region's balance of force will generate greater turbulence across North Africa and the Middle East as unresolved religious, sectarian, and ethnic tensions threaten more unrest. The lack of a viable regional security framework, continuing protests, autocracies at risk, and enormous challenges facing newly democratic regimes will add to the potential turmoil. As this dynamic plays out in Syria, Egypt, Iraq, Libya, Yemen and Bahrain, regional heavyweights -- Saudi Arabia, Iran, and Turkey -- will generate friction as they vie for proxy influence.

3. Eurozone: the rollercoaster ride rolls on -- In Europe, it's not the breakup of the Eurozone we need to fear in 2012 but the "reactive incrementalism" that could spin beyond the control of political officials. The uncertainty and volatility we saw in 2011 has only just begun.

4. United States: right after elections -- Once the votes are counted in November, lawmakers will take up the $5 trillion worth of tax and savings decisions that must be taken in the final nine weeks of the year. Investors face uncertainty about their taxes and government contracts as well as about the broader impact of lawmakers' choices on economic growth...

[Demeter]

72. 7 Geopolitical Predictions for 2012

http://oilprice.com/Geo-Politics/International/7-Geopolitical-Predictions-for-2012.html

[Demeter]

73. Footsteps to Follow in the Coming Year

http://www.nytimes.com/2011/12/31/your-money/financial-footsteps-to-follow-in-the-coming-year.html?_r=1

...Personal finance is more personal than it is finance.

Strip away the numbers and the returns and the 50-page financial plans, and what you’re left with is people and all of their associated baggage. It is their raw emotions — fear, greed, guilt — that drive most financial decisions for better or (frequently) for worse.

So this column is by the people — the most interesting ones who turned up in the Your Money column and the stand-alone reports we co-produced with American Public Media’s Marketplace Money radio show in 2011.

And it’s for the people who have set a personal goal in 2012 to do just a bit more to keep their emotions in check and their money under control....

VIGNETTES FOLLOW

[Demeter]

75. As Economic Growth Fails, How Do We Live? THREE PART SERIES

http://www.energyeconomyonline.com/As_Growth_Fails_Part_I.html

http://www.energyeconomyonline.com/As_Growth_Fails_Part_II.html

http://www.energyeconomyonline.com/As_Growth_Fails_Part_III.html

[Demeter]

76. SNOOPY--THE MUSICAL

Complete animated production of the Broadway musical (catchy songs!)

[Demeter]

77. And that's it for Saturday, come back tomorrow for more!

It's snowed enough to cover the grass...I actually did some paid work yesterday, and lived to do it again today. Sigh.

[Hotler]

79. Rec. Thank you Demeter. Did you guys catch that Matt Taibbi article..

in Good Reads? "Everything You Need to Know About Wall Street, in One Brief Tale" It's fucking crazy. You can get 40-50 thousand in the stands for a Bronco game, but you can't even get 500 people in the streets of Denver or any other city to protest the fucking we're getting from Wall St. and our corupt officals in Washington. Nothing is going to change until more people feel the pain.
I really am trying to see some hope. But????

[DemReadingDU]

87. It's crazy

No one around me has any clue. They will feel lots of pain and too late to do anything about it then.

[bread_and_roses]

80. "Jobless and wageless" - "Recovery, what recovery?" Must see chart

This is from July '11 but despite the continual claims to the contrary I don't see much different now:

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/28/useconomy-economics

The so-called economic "recovery" since mid-2009 was chiefly hype, a veneer of good news to disguise and minimise the awful underlying economic realities. The few (large corporations and the rich) who bear much of the responsibility for the crisis made sure that the government they finance used massive amounts of public money to support a recovery for them. The mass of the population was excluded from the government-financed recovery for the few. We now have the summary official statistics to expose this grotesque injustice.

... What did recover in the US, partly or wholly, were only corporate profits (especially those of banks) and the stock markets. The report's chart 14 shows three vertical bars indicating the size of profit and stock recoveries from the second quarter of 2009 through the first quarter of 2011.

... The countless claims of "recovery" as if it were a general economic event spread across the entire US economy were, and are, lies. They hide the tragic truth of ongoing economic crisis for the many.

The chart is an absolute eye-popper - but too small in the article and the link to original in article is broken. Thanks to Google I could find it - along with other eye-candy, but do look at Chart 14 on page 23 comparing Corporate/Wall Street profits to wages/payroll data - in visual form, it's staggering

http://www.employmentpolicy.org/sites/www.employmentpolicy.org/files/field-content-file/pdf/Mike%20Lillich/Revised%20Corporate%20Report%20May%2027th.pdf

on edit: meant to add, Guardian article is by Richard Wolff

[Demeter]

82. PETITION FOR CONSTITUTIONAL "CORPORATIONS ARE NOT PEOPLE" AMENDMENT

http://www.democracyforamerica.com/activities/726?t=kos1

[Demeter]

84. It's Official--It's been snowing for two days straight

and we have two inches to show for it....why bother?

[hamerfan]

85. Musical Interlude

The Coasters. Charlie Brown:

[xchrom]

88. German conservative advises UK downgrade

http://uk.reuters.com/article/2012/01/13/uk-germany-ratings-britain-idUKTRE80C1UA20120113

(Reuters) - A senior German lawmaker Friday accused ratings agency Standard and Poor's of playing politics, saying the U.S. agency should also downgrade Britain if it downgrades France as expected.

Michael Fuchs, deputy leader of the parliamentary group for Chancellor Angela Merkel's Christian Democrats, said S&P had a distorted view of the euro zone and that downgrades of its member states were politically motivated.

"This step is out of order," he told Reuters on the sidelines of a party meeting, in reference to reports S&P would cut the ratings of several euro zone states later in the day.

"Standard and Poor's must stop playing politics... why doesn't it act on the highly indebted United States or highly indebted Britain?" he said, pointing out that Britain has higher public debt and deficits than France.

[Demeter]

90. "Stop Playing Politics"?

The world would come to an end first. This is proof that it's politics, not economics, that's the name of the game.

[xchrom]

91. Princes and Principalities.

whether it's the financial sector or any other -- the major corporations certainly have a political game they are playing.

and i have one too -- Off With Their Heads.

[xchrom]

89. good morning

[Demeter]

92. Good Morning! Ready for More Bad News?

I'd post good news, if there were any to post. At least we're not totally in the dark....

[xchrom]

94. the news is bad -- but at least we can have

fun bashing the Hell out of 'em.

so Bring It, Miss Demeter!

[Demeter]

93. European Crisis: Multiple Credit Downgrades, Greek Debt Talks Collapse

http://news.firedoglake.com/2012/01/13/european-crisis-multiple-credit-downgrades-greek-debt-talks-collapse/

Europe has lived in an almost perpetual state of collapse lately, with promising deals followed by despair. Today was one of the despair days.

First, Standard and Poor’s cut the credit rating for nine Eurozone nations, including France, which previously had AAA-rated debt.

S&P lowered its long-term rating on Cyprus, Italy, Portugal and Spain by two notches, and cut its rating on Austria, France, Malta, Slovakia and Slovenia by one notch.

“Today’s rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said in a press release announcing the downgrade.

I’ve documented S&P’s political advocacy and use of leaks toward that advocacy. But I can’t see much wrong with their analysis. Europe has catastrophically bungled their response to the financial crisis, and with the weakness of their political structures, I fail to understand how they can fix it. The currency union and reticence of the ECB to act like a central bank really does threaten default events and total collapse.

As the debt downgrade was an expected event, it may not have much of an impact. The big problem is that it will probably lead to a downgrade of the European bailout fund, the EFSF, because of France’s involvement in that. But the far bigger problem is what happened in Greece today.

Greece’s creditor banks broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds, increasing the risk of the euro-area’s first sovereign default.

Proposals by a committee representing financial firms haven’t produced a “constructive consolidated response by all parties,” the Washington-based Institute of International Finance said in a statement today. Talks with Greece and the official sector are “paused for reflection on the benefits of a voluntary approach,” the group said.

Greek officials and the nation’s creditors agreed in October to implement a 50 percent cut in the face value of Greek debt, with a goal of reducing Greece’s borrowings to 120 percent of gross domestic product by 2020. More than two months after the accord was announced, the two sides still need to agree on the coupon and maturity of the new bonds to determine losses for investors. The IIF has aimed to implement the swap this month.

Germany and France have said that without a deal, Greece will not receive the next tranche of bailout funds. That almost certainly means a default. So the creditors really don’t have a strong hand here, as they have a choice between a haircut and nothing. But they probably think that the contagion would be so great that the big European powers will not let it happen, and as a result they can get paid off at par if they make a credible threat. So everyone’s trying to game everyone.

The one fly in the ointment is that hedge funds hold a lot of Greek debt, and they may find a default even more lucrative, because they would stand to reap payouts from credit default swaps. So in the insanity of global finance, there are some entities practically rooting for default, regardless of the implications on the people of Europe.

Hold on to your hats, everyone.

[Demeter]

105. FROM OCTOBER: Making a mockery of sovereign CDS

http://www.nakedcapitalism.com/2011/10/making-a-mockery-of-sovereign-cds.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

What happens when you get a default that equates to a 50% loss for most investors without triggering default insurance? Massively negative unintended consequences.

Europe has just made a mockery of the sovereign credit default swap (CDS) market by trying to structure a default via voluntary 50% haircuts in order to avoid triggering CDS claims. It makes absolutely no sense to act as if Greece is not defaulting here.

As I wrote earlier today:

In Greece, I find it odd that private sector creditors are invited to write down notional debt while the European Central Bank and the Troika are not. Clearly, the voluntary and private sector nature of this structure is necessary to at once avoid triggering credit default swaps, to assuage voter anxiety about taxpayer losses outside of Greece, and to protect the ECB from an explicit loss of capital which would render it technically insolvent.

All of these are legitimate aims. But the optics of this are poor and I am not at all convinced participation in the voluntary arrangement will be adequate to cut the debt burden enough to prevent a further ‘haircut’ down the line.

Bottom line: It’s a sham. And it will lead to either much higher bond yields or massive litigation or both. Choose your poison.

Reggie Middleton was on RT discussing this very issue. He has some very astute commentary. Take a look:

&feature=player_embedded

[Demeter]

107. How gross and net CDS notionals really work

http://ftalphaville.ft.com/blog/2011/10/27/713826/how-gross-and-net-cds-notionals-really-work/

LONG AND WONKY EXPOSITION, WITH GRAPHIC PORN...I CANNOT SUMMARIZE OR EXCERPT..YOU'LL HAVE TO GO SEE

[Demeter]

111. It’s All Connected: An Overview of the Euro Crisis

INTERACTIVE GRAPHIC PORN--SEE LINK:

http://www.nytimes.com/interactive/2011/10/23/sunday-review/an-overview-of-the-euro-crisis.html

[Demeter]

95. Bankers' Comeuppance: B of A Out of Some U.S. Regions; Will Obama Pick the 99% Or Jamie Dimon?

http://www.alternet.org/newsandviews/article/762336/bankers%27_comeuppance%3A_bank_of_america_faces_possible_retreat_from_some_u.s._regions%2C_and_will_obama_pick_the_99_over_jamie_dimon/#paragraph7

According to the Wall Street Journal, Bank of America told U.S. regulators "it is willing to retreat from some parts of the country," if its financial woes continue to intensify.

According to WSJ:

While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems.

Among the 7,400 U.S. banks and savings institutions, Bank of America, J.P. Morgan Chase & Co. and Wells Fargo & Co. are the only coast-to-coast giants. For the past 20 years, Bank of America and predecessor Nations Bank Corp. relentlessly acquired other financial institutions in a form of manifest destiny that shook the U.S. banking industry. The 1998 takeover of BankAmerica Corp., of San Francisco, and 2004 purchase of FleetBoston Financial Corp., Boston, left the combined bank with sizable muscle in nearly every large metropolitan area in the country.

Over the course of its long expansion, Bank of America, currently the country's second-largest bank by assets, pushed its way into every nook and cranny of the financial system. But in doing so the bank left itself more exposed than any major bank to the severe economic downturn of 2008-2009, the weak recovery since and a litany of mortgage-related lawsuits.

And:

Its share price has tumbled 55% in the past year, the worst performance of any major U.S. bank.

Meanwhile, Francine McKenna writes on AmericanBanker.com that "Jamie Dimon Will Have His Comeuppance in 2012. "She says that the race for Treasury Secretary TIm Geithner's replacement may not come down to Jon Corzine and Jamie Dimon, who have been "touted as equally like candidates," because of their sketchy behavior and what she thinks will be Obama's attempt to make nice with the 99%.

Here's why:

It’s not a stretch to imagine that Jon Corzine’s days as a wealthy free man may be numbered. The longer the mystery of the missing MF Global $1.2 billion goes on, the more we see him bob and weave in front of angry legislators, the more arrogant and entitled his excuses for knowing nothing sound, the more likely it is prosecutors will make him the poster boy for criminal prosecutions of Wall Street banksters.

….

So my first prediction is an easy one: This is the beginning of the end for Corzine. It’s gloves-off time. Look for an indictment by the Department of Justice’s Preet Bharara before the end of 2012 for criminal misappropriation of customer funds at MF Global.

My next prediction isn’t so obvious.

I think the Obama administration will pull Jamie Dimon down along with Jon Corzine.

They’ll do this to regain momentum with working-class voters—the 99%. Winning the November election, less than a year away, will require a significant show of prosecutorial force against banks and senior executives yet to be held accountable for the impact of the financial crisis on the middle class.

Jamie Dimon will have the misfortune, I believe, of catching a significant amount of fallout from the MF Global mess. As MF Global’s primary banker, JPMorgan Chase has been consistently accused in the media and by the attorney representing a customer coalition of taking advantage of the firm’s vulnerable financial state. Bloomberg News reported that the MF Global trustee said “certain” actions of JP Morgan Chase “are likely to be the subject of investigation.”

Maybe 2012 will bring some accountability...

[Demeter]

96. Hmmm....Maybe That's Good News

We will have to wait and see if

1. It happens at all

2. It makes any difference.

[Demeter]

97. Presenting The Exchange Stabilization Fund In 5 Parts: Is This The Real "Plunge Protection Team"?

http://www.zerohedge.com/news/presenting-exchange-stabilization-fund-5-parts-real-plunge-protection-team

5 VIDEOS AND SOME TEXT AT LINK

[xchrom]

98. Illinois Tool to let activist shareholder on board

http://www.marketwatch.com/story/illinois-tool-to-let-activist-shareholder-on-board-2012-01-14

llinois Tool Works Inc. /quotes/zigman/229839/quotes/nls/itw ITW -0.06% said Friday it had reached a deal with an activist investor that could cool calls for the breakup of one of the most diversified U.S. industrial conglomerates.

The Glenview, Ill., company reached a deal with Relational Investors LLC that would allow the investment-management company to appoint one its founders to the company's board in return for refraining from launching a proxy battle to redirect corporate strategy or gain a majority on the board. Relational, which owns 2.1% of ITW stock, also agreed to keep its stake in the company below 10%.

ITW runs more than 800 disparate businesses and has faced increasing pressure from shareholders and analysts alike to divest a significant portion of its portfolio to focus the company on higher-growth assets. The dissatisfaction with the company's performance in recent years is part of a broader unease on Wall Street with conglomerates that has led to a number of breakups.

Relational Investors was the driving force behind the dismantling of ITT Corp. /quotes/zigman/6941845/quotes/nls/itt ITT -0.01% last year, according to industry analysts and investors. The firm also has been pushing for the breakup the defense contractor L-3 Communications Holdings Inc. /quotes/zigman/218529/quotes/nls/lll LLL +0.14% .

[xchrom]

99. Asia looks for more clues on Chinese economy

http://www.marketwatch.com/story/asia-looks-for-more-clues-on-chinese-economy-2012-01-14

LOS ANGELES (MarketWatch) — For a second week running, Chinese economic data will take center stage for Asia markets, with investors waiting to see whether the numbers support further monetary easing measures from Beijing.

This past Thursday, China reported that consumer inflation eased slightly to 4.1% year-on-year in December, down from November’s 4.2%, and well below the above-5% level earlier in the year.

The result, some analysts said, was low enough to provide room for the central bank to support growth with further cuts to banks’ reserve requirements, and perhaps even interest-rate cuts. See report on Chinese inflation data.

This coming Tuesday, the markets will get the other half of the picture when China reports its fourth-quarter economic growth, along with other key data, such as retail sales and industrial output.

[Demeter]

100. Occupy the Neighborhood: How Counties Can Use Land Banks and Eminent Domain BY ELLEN BROWN

http://www.truth-out.org/occupy-neighborhood/1326472096

An electronic database called MERS (Mortgage Electronic Registration Systems) has created defects in the chain of title to over half the homes in America. Counties have been cheated out of millions of dollars in recording fees, and their title records are in hopeless disarray. Meanwhile, foreclosed and abandoned homes are blighting neighborhoods. Straightening out the records and restoring the homes to occupancy is clearly in the public interest, and the burden is on local government to do it. But how? New legal developments are presenting some innovative alternatives.

John O'Brien is register of deeds for Southern Essex County, Massachusetts. He is mad as hell and he isn't going to take it anymore. He calls his land registry a "crime scene." A formal forensic audit of the properties for which he is responsible found that:

• Only 16 percent of the mortgage assignments were valid.
  
  
• Twenty-seven percent of the invalid assignments were fraudulent, 35 percent were "robo-signed" and 10 percent violated the Massachusetts Mortgage Fraud Statute.
  
  
• The identity of financial institutions that are current owners of the mortgages could be determined for only 287 out of 473 (60 percent).
  
  
• There were 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership could be traced.

At the root of the problem is that title has been recorded in the name of a private entity called MERS as a mere placeholder for the true owners. The owners are a faceless, changing pool of investors owning indeterminate portions of sliced and diced securitized properties. Their identities have been so well hidden that their claims to title are now in doubt. According to the auditor:

What this means is that ... the institutions - including many pension funds - that purchased these mortgages don't actually own them....

The March of the Attorneys General

John O'Brien was thrilled when Massachusetts Attorney General Martha Coakley went to court in December against MERS and five major banks - Bank of America Corp., JPMorgan Chase, Wells Fargo, Citigroup and GMAC. Coakley says banks have "undermined our public land record system through the use of MERS."

Other attorneys general are also bringing lawsuits. Delaware Attorney General Beau Biden is going after MERS in a suit seeking $10,000 per violation. "Since at least the 1600s," he says, "real property rights have been a cornerstone of our society. MERS has raised serious questions about who owns what in America."

Biden's lawsuit alleges that MERS violated Delaware's Deceptive Trade Practices Act by:

• Hiding the true mortgage owner and removing that information from the public land records.
  
  
• Creating a systemically important, yet inherently unreliable, mortgage database that created confusion and inappropriate assignments and foreclosures of mortgages.
  
  
• Operating MERS through its members' employees, whom MERS confusingly appoints as its corporate officers so that they may act on MERS' behalf.
  
  
• Failing to ensure the proper transfer of mortgage loan documentation to the securitization trusts, which may have resulted in the failure of securitizations to own the loans upon which they claimed to foreclose.

This last allegation - that there are fatal defects in the loan documentation - may be even more conclusive than the MERS defect in establishing a break in the chain of title to securitized properties. Mortgage-backed securities are sold to investors in packages representing interests in trusts called REMICs (Real Estate Mortgage Investment Conduits). REMICs are designed as tax shelters; but to qualify for that status, they must be "static." Mortgages can't be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer after the closing date is invalid. Yet few, if any, properties in foreclosure seem to have been assigned to these REMICs before the closing date, in blatant disregard of legal requirements. The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS, but because the trusts purporting to foreclose do not own the properties by the terms of their own documents.

Courts Are Taking Notice

The title issues are so complicated that judges themselves have been slow to catch on, but they are increasingly waking up and taking notice. In some cases, the judge is not even waiting for the borrowers to raise lack of standing as a defense. In two cases decided in New York in December, the banks lost although their motions were either unopposed or the homeowner did not show up, and in one, there was actually a default. No matter, said the court; the bank simply did not have standing to foreclose.

In Citigroup v. Smith, 2011 NY Slip Op 52236 (U) (December 13, 2011), the mortgage document acknowledged that MERS was not the lender, but was "a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns." The court held that since MERS was not a party to the underlying note, when it assigned the mortgage to plaintiff Citigroup there was no assignment of the note; and "a transfer of [a] mortgage without the debt is a nullity and no interest is acquired by it."

Failure to comply with the terms of the loan documents can make an even stronger case for dismissal. In Horace v. LaSalle, Circuit Court of Russell County, Alabama, 57-CV-2008-000362.00 (March 30, 2011), the court permanently enjoined the bank (now part of Bank of America) from foreclosing on the plaintiff's home, stating:

The court is surprised to the point of astonishment that the defendant trust (LaSalle Bank National Association) did not comply with New York Law in attempting to obtain assignment of plaintiff Horace's note and mortgage....

Plaintiff's motion for summary judgment is granted to the extent that defendant trust ... is permanently enjoined from foreclosing on the property....

Relief for Counties: Land Banks and Eminent Domain

The legal tide is turning against MERS and the banks, giving rise to some interesting possibilities for relief at the county level. Local governments have the power of eminent domain: they can seize real or personal property if (a) they can show that doing so is in the public interest, and (b) the owner is compensated at fair market value.

The public interest part is easy to show. In a 20-page booklet titled "Revitalizing Foreclosed Properties with Land Banks," the US Department of Housing and Urban Development (HUD) observes:

The volume of foreclosures has become a significant problem, not only to local economies, but also to the aesthetics of neighborhoods and property values therein. At the same time, middle- to low-income families continue to be priced out of the housing market while suitable housing units remain vacant.

The booklet goes on to describe an alternative being pursued by some communities:

To ameliorate the negative effects of foreclosures, some communities are creating public entities - known as land banks - to return these properties to productive reuse while simultaneously addressing the need for affordable housing.

States named as adopting land bank legislation include Michigan, Ohio, Missouri, Georgia, Indiana, Texas, Kentucky and Maryland. HUD notes that the federal government encourages and supports these efforts. But states can still face obstacles to acquiring and restoring the properties, including a lack of funds and difficulties clearing title.

Both of these obstacles might be overcome by focusing on abandoned and foreclosed properties for which the chain of title has been broken, either by MERS or by failure to transfer the promissory note according to the terms of the trust indenture. These homes could be acquired by eminent domain both free of cost and free of adverse claims to title. The county would simply need to give notice in the local newspaper of an intent to exercise its right of eminent domain. The burden of proof would then transfer to the bank or trust claiming title. If the claimant could not prove title, the county would take the property, clear title and either work out a fair settlement with the occupants or restore the home for rent or sale.

Even if the properties were acquired without charge, counties might lack the funds to restore them. Additional funds could be had by establishing a public bank that serves more functions than just those of a land bank. In a series titled "A Solution to the Foreclosure Crisis," Michael Sauvante of the National Commonwealth Group suggests that properties obtained by eminent domain can be used as part of the capital base for a chartered, publicly owned bank, on the model of the state-owned Bank of North Dakota. The county could deposit its revenues into this bank and use its capital and deposits to generate credit, as all chartered banks are empowered to do. This credit could then be used not just to finance property redevelopment, but for other county needs, again on the model of the Bank of North Dakota. For a fuller discussion of publicly owned banks, see http://PublicBankingInstitute.org.

Sauvante adds that the use of eminent domain is often viewed negatively by homeowners. To overcome this prejudice, the county could exercise eminent domain on the mortgage contract rather than on title to the property. (The power of eminent domain applies both to real and to personal property rights.) Title would then remain with the homeowner. The county would just have a secured interest in the property, putting it in the shoes of the bank. It could renegotiate reasonable terms with the homeowner, something banks have been either unwilling or unable to do, since they have to get all the investor-owners to agree, a difficult task; and they have little incentive to negotiate when they can make more money on fees and credit-default-swaps on contracts that go into default.

Settling With the Investors

What about the rights of the investors who bought the securities allegedly backed by the foreclosed homes? The banks selling these collateralized debt obligations represented that they were protected with credit-default-swaps. The investors' remedy is against the counterparties to those bets - or against the banks that sold them a bill of goods.

Foreclosure defense attorney Neil Garfield says the investors are unlikely to recover on abandoned and foreclosed properties in any case. Banks and servicers can earn more when the homes are bulldozed - something that is happening in some counties - than from a sale or workout at a loss. Not only is more earned on credit-default-swaps and fees, but bulldozed homes tell no tales. Garfield maintains that fully a third of the investors' money has gone into middleman profits rather than into real estate purchases and "with a complete loss no one asks for an accounting."

Not only homes and neighborhoods, but 400 years of property law are being destroyed by banker and investor greed. As Barry Ritholtz observes, the ability of a property owner to confidently convey his property is a bedrock of our society. Bailing out reckless financiers and refusing to hold them accountable has led to a fundamental breakdown in the role of government and the court system. This can be righted only by holding the 1 percent to the same set of laws as are applied to the 99 percent. Those laws include that a contract for the sale of real estate must be in writing signed by seller and buyer, that an assignment must bear the signatures required by local law and that forging signatures gives rise to an actionable claim for fraud.

The neoliberal model that says banks can govern themselves has failed. It is up to county government to restore the rule of law and repair the economic distress wrought behind the smokescreen of MERS. New tools at the county's disposal - including eminent domain, land banks and publicly owned banks - can facilitate this local rebirth.

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

This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

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


ELLEN BROWN
Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. She is also chairman of the Public Banking Institute.

[Demeter]

101. Occupy Next Step: Reinvesting Our Money! By Michael Berkowitz

http://www.nationofchange.org/occupy-next-step-reinvesting-our-money-1326551491

The Great Recession has shed a harsh light on American economic practices...But one of the bright spots of last year was the return to progressive political action to hold financial institutions accountable. Not all of this action has been in the streets. Some of the most constructive attempts at change have taken place in local agencies where progressive political leaders have used their powers creatively. One such local activist is Abel Guillen, a bright, energetic education leader in his second term as Trustee of California's Peralta Community Colleges. These colleges -- Laney, Merritt, Berkeley and Alameda Colleges -- serve the large East Bay Alameda County working class population in the San Francisco East Bay (Alameda County). The schools are stepping stones for immigrant and blue collar families to achieve employment and improve their standards of living. Guillen himself, the son of a baker and a cook, the first in his family to graduate from college, grew up in a neighborhood where few people even considered college. He persevered through University of California, Berkeley, to earn his bachelor's degree, then a master's degree in public administration. For the last 10 years he has used these skills to give back to his community. Working as the vice president of a public school finance firm, he has helped raise over 2.5 billion dollars to build and modernize public schools and community colleges. But as he worked on funding, he saw taxpayers dollars and student fees in the college system being railroaded out of the district into investment schemes that jeopardized the schools and enriched the few at the expense of the many.

So Abel Guillen fought back. On Nov. 25, he introduced -- and the Peralta Community College District passed unanimously -- a resolution for the local reinvestment of its student fees and community tax dollars that will move its funds from large, for-profit banks to community-based financial institutions. Guillen noted that these goals were in line with the most constructive aspects of the popular Occupy Movement, but removed from the destructive vandalism of fringe groups that trashed store fronts and disruptions that harassed workers. "This practical action will redirect our college funds and spending power into community-based financial institutions and serve the interests of our students and the East Bay residents who make up the 99 percent," said Guillen. The Peralta Colleges serve more than 45,000 students and have an annual budget of $140 million dollars.

Guillen's resolution emulated the spirit of National Bank Transfer Day, the consumer action which paralleled and to some extent over-lapped Occupy Wall Street. For Transfer Day, consumers were urged to move their accounts from commercial banks to not-for-profit credit unions. Some in the Occupy movement did not think this action went far enough. But the Credit Union National Association reported that 650,000 people opened new accounts by the target date of Nov. 5. Some 80 percent of credit unions increased their new accounts as a result.

This movement gave concrete, constructive action to many who could not or would not join the movement in the streets and to those who wanted to take more than the symbolic act of demonstrating. Abel Guillen himself is seeking to take the next step... declaring himself a candidate for the California State Assembly. "There is much work to do," promised Guillen. "We are the generation to carry this all forward!"

[xchrom]

102. Want to understand the economy? Don't read the press

http://www.aljazeera.com/indepth/opinion/2012/01/2012111124839271411.html

New York, NY - Financial journalists are supposed to be among the most educated and savvy about the economy. Many have either worked on Wall Street, or have advanced degrees in economics and business.

Over the past few years, their "news hole" has expanded significantly as the financial crisis became a top global news story. As reporting on workers declined, reporting on business surged because it tends to attract corporate and institutional advertising.

And yet is the reporting we are getting on financial issues better than ever? Is it more trustworthy, and better informed?

Unfortunately, some of the same patterns that invariably lead to misunderstandings remain.

Here are three reasons:

1. An over-reliance on official sources skilled at spinning data to bolster politically motivated "consumer confidence", and create impressions, not backed by fact.

2. A tendency to quote and rely on experts and luminaries with questionable track records and personal or ideological agendas.

3. A tendency to look at "progress" through the eyes of people in power or in powerful economic institutions with the assumption that if they do well, wealth/prosperity will trickle down into the lives of ordinary people.

Here are some examples.

Last week, the press dutifully reported the "good news" that US economy had created 200,000 new jobs and that the unemployment rate had dropped. There was practically a celebration on the editorial pages.

Sounded good. Most readers stick with headlines on subjects they find dense or inaccessible and get little more than a quick take. Sometimes, the information is packaged in easy-to-read graphics, especially when the arrows point up.

It can all be misleading.

[bread_and_roses]

113. good article - supports my post on NPR above - far better to read Peanuts

I loved this - gave me a grin:

Now on to the "experts" who turn up again, and again, as analysts on the data. The Financial Times is a leading source on the economy. It has just begun a series that finally admits capitalism is in a crisis ...

... But to whom, then, does the FT turn to for analysis? None other than Larry Summers, who helped create the failed pro-business Obama policies. his argument, predictably, is: things are not as bad as they look. We merely need a "reinvention".

Summers, a master of obfuscation and regurgitating conventional wisdom, asks:

So how justified is disillusionment with market capitalism? This depends on the answer to two critical questions. Do today's problems inhere in the present form of market capitalism or are they subject to more direct solution? Are there imaginable better alternatives?

Huh?

"Huh?" indeed.

(edit to try "excerpt" instead of "blockquote&quot

[xchrom]

115. +1

[Demeter]

103. FROM OCTOBER, AND FOLLOWUP: CDOs on the brink of collapse

http://www.businessspectator.com.au/bs.nsf/Article/CDOs-on-the-brink-of-collapse-report-pd20111024-MXPXK?opendocument&src=rss

A move by the United States government to seize the main subsidiary of American mortgage insurer PMI Group, along with the broader struggles in the US housing market, have put hundreds of millions worth of collateralised debt obligations (CDOs), distributed exclusively in Australia, on the brink of collapse, according to a report by the Australian Financial Review.

The issue came to a peak yesterday when it became increasingly likely that three CDOs in particular-- Torquay, Scarborough and a portion of the Parkes CDO, would collapse, an event that would cost Australian investors up to $250 million.

Councils, charities, churches and wealthy individuals are particularly exposed to CDOs, with the City of Melville, in Perth, among the most exposed, with nearly $5 million invested. US mortgage insurer PMI was a popular company among CDO creators, ensuring that the company's seizure by the US government, and a subsequent credit event, would have a significant impact on a wide array of CDOs.

If PMI defaults, Scarborough would collapse, while Torquay and a portion of the Parkes CDO would lose some 98 per cent of their capital, according to the AFR.

SO WHAT HAPPENED?

NOV 10TH: PMI Group works to avoid default

http://www.bizjournals.com/sanfrancisco/morning_call/2011/11/pmi-works-to-avoid-default.html

PMI Group Inc. is trying to avoid a default on more than $700 million in bonds with plans to revive itself, the Mercury News reports. The Walnut Creek-based mortgage insurer is seeking court permission to undo a seizure of its main unit by state regulators in Arizona. PMI (NYSE: PMI) needs some $200 million to begin writing new mortgage insurance policies, the report notes.

NOVEMBER 28TH: PMI Group Seeks Bankruptcy After Regulators Take Over Main Unit

http://www.businessweek.com/news/2011-11-28/pmi-group-seeks-bankruptcy-after-regulators-take-over-main-unit.html

PMI Group Inc. filed for bankruptcy protection after the mortgage insurer lost a court bid to undo the takeover by Arizona regulators of PMI Mortgage Insurance Co. (MIC), its main unit. The company based in Walnut Creek, California, listed assets of $225 million and debt of $736 million as of Aug. 4 in a Chapter 11 petition filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

Arizona Director of Insurance Christina Urias took control of the PMI unit last month on an interim basis and directed claims to be paid at 50 cents on the dollar after losses on mortgage defaults drained capital. The Arizona regulator’s “action in seeking receivership of MIC, among other things, has led the debtor to seek bankruptcy protection in order to maximize value for its estate and creditors,” L. Stephen Smith, PMI’s chief executive officer, said in court papers. The Arizona Department of Insurance previously told PMI to halt sales of new policies and stop making interest payments on $285 million in surplus notes, the company said in August. PMI pays lenders after a homeowner defaults and a foreclosure fails to recover enough to cover the mortgage. The company is losing money amid the worst slump in U.S. housing prices since the Great Depression. Home prices have plunged 31 percent since their peak in 2006, according to the S&P/Case- Shiller index of property values in 20 cities.

‘Anticipated Demands’

The Arizona Department of Insurance sufficiently established that the insurer was so unsound that it “is or will become unable to meet the anticipated demands of its policyholders,” Arizona Superior Court Judge Richard Gama in Phoenix wrote in a five-page ruling, a copy of which was provided to Bloomberg News. PMI, founded in 1972, provides residential mortgage insurance through its main operating unit, MIC. Lenders require mortgage insurance for most homebuyers who have less than a 20 percent down payment. Under the Homeowners Protection Act (HPA) of 1998, consumers have the right to request cancellation of PMI policies when they pay down the mortgage to the point that it equals 80 percent of the original purchase price or the appraised value of their home when the loan was obtained, whichever is less, according to the Federal Reserve Bank of San Francisco Web site.

Cyclical Business

“Mortgage insurance companies like PMI are more susceptible to the cyclical nature of the economy in general, the housing and labor markets in particular, than many other types of insurance companies,” Smith said in court papers. Other mortgage insurers have faced financial difficulties because of the housing collapse. PMI has posted 16 straight quarterly losses...Triad Guaranty Inc. stopped selling policies when capital ran short in July 2008, and was ordered by a state regulator to defer 40 percent of claims payments because of “uncertainty” over whether it will meet its obligations. Fannie Mae, the government-controlled mortgage finance company, suspended a unit of Old Republic International Corp. as an approved guarantor of home loans in July after it failed to meet capital standards.

Credit-default swaps tied to PMI’s bonds rose after the bankruptcy filing, potentially triggering contracts totaling more than double the company’s debt. The cost to protect the company’s debt climbed 0.7 percentage point to 75.2 percentage points upfront, according to data provider CMA. That’s about twice the level in June and means investors would pay $7.52 million initially and $500,000 annually to protect $10 million of the insurer’s obligations...

DEC. 13TH: CDS Auction For PMI Group Suggests Payouts Of 81.875 Cents/Dlr

http://online.wsj.com/article/BT-CO-20111213-708656.html

The first round of a two-part auction to settle credit-default-swap protection tied to residential-mortgage insurer PMI Group Inc. (PPMIQ) generated an initial market midpoint of 18.125, according to results published Tuesday at 10.30 a.m. The initial market midpoint is the earliest measure the CDS market has of how eligible PMI Group debt has been valued by dealers, in this case at 18.125 cents on the dollar. If that midpoint does not change in the second round, the auction will determine that buyers of CDS protection get full value, or 100 cents on the dollar, minus that midpoint sum, equal to 81.875 cents on the dollar in compensation.

According to the latest available data from the Depository Trust & Clearing Corp., there are $1.73 billion of CDS outstanding on PMI Group, on a net basis. Not accounting for offsetting trades, the gross value of CDS on PMI now outstanding is $37.8 billion. The net sum is the maximum amount that can change hands between buyers and sellers of protection, assuming PMI debt was valued at zero.

The initial round of the auction saw $375.6 million in net open interest from dealers to sell PMI debt. Thirteen dealers participated in the auction. PMI was declared to have suffered a bankruptcy credit event, triggering CDS contracts for payouts, on Nov. 18 by a special committee convened by the International Swaps and Derivatives Association.

FRIDAY: PMI Group cutting 155 Walnut Creek jobs

http://www.bizjournals.com/sanfrancisco/morning_call/2012/01/pmi-cutting-155-walnut-creek-jobs.html

PMI Group Inc. is eliminating 155 jobs at its Walnut Creek headquarters, the Contra Costa Times reports.

State regulators in October seized the PMI units that write insurance policies on home loans, leading the company to file for bankruptcy in November, with $736 million listed in debts.

PMI said it is still servicing existing policies and will continue to do so in the future, the report notes.

SEE? THINGS CAN HAPPEN QUICKLY ENOUGH, IF YOU AREN'T TOO BIG TO FAIL...

[Demeter]

104. Decreasing Inequality Under Latin America’s “Social Democratic” and “Populist” Governments: Is the D

http://www.cepr.net/index.php/publications/reports/decreasing-inequality-under-latin-americas-social-democratic-and-populist-governments

This paper addresses the claim that the governments of Argentina, Bolivia, Ecuador and Venezuela, Latin America’s so-called “left-populist” governments, have failed to effectively reduce inequality in the 2000s and have only benefitted from high commodity prices and other benign external conditions. In particular, it examines the econometric evidence presented by McLeod and Lustig (2011) that the “social democratic” governments of Brazil, Chile and Uruguay were more successful and finds that their original results are highly sensitive to the use of data from the Socioeconomic Database for Latin America and the Caribbean (SEDLAC).

Conducting the same analysis using data on income inequality from the Economic Commission for Latin America and the Caribbean (ECLAC) leads to the exact opposite result: it is the so-called “left-populist” governments who appear to have effectively reduced income inequality over the last decade.

The key difference between data from SEDLAC and ECLAC is that the latter corrects for income underreporting—when households in an income survey underreport their true amount of income, thus biasing the measurement of inequality—while the former does not. Absent reasonable criteria for choosing one dataset over the other, the paper suggests that any econometric results based on income inequality data should prove robust to both sources.

http://www.cepr.net/documents/publications/inequality-latin-america-2011-10.pdf

[Demeter]

106. OCTOBER: Debunking “Paid Back TARP” Myth: Banks Should Pay Over $300 Billion/YR Systemic Risk Ins.

http://www.nakedcapitalism.com/2011/10/debunking-the-paid-back-the-tarp-myth-banks-should-be-paying-over-300-billion-a-year-in-systemic-risk-insurance.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


This Institute for New Economic Thinking interview with economist Ed Kane discusses how systemic risk should be measured. Kane argues that taxpayer are essentially disadvantaged bank shareholders, getting the downside and none of the bennies, like dividends or capital gains. He argues that banks should be paying taxpayers for the privilege of having them and their counterparties rescued, and that is over $300 billion a year.’

And that isn’t the only freebie banks are getting. For instance, the near zero interest rates are tantamount to a tax on savers (when per above, the banks should be making payments). Some have estimated the cost to savers is over $350 billion a year.

&feature=player_embedded

[Demeter]

108. Senators press Obama for swifter REO strategy (PAVLOV'S BELL AT WORK) OCTOBER!

http://www.housingwire.com/2011/10/27/senators-press-obama-for-swifter-reo-strategy

A group of 33 senators sent President Obama a letter Thursday asking his administration and the Federal Housing Finance Agency to expedite pending plans for selling and renting previously foreclosed homes held by the government.

Sens. Jack Reed (D-R.I.), Bob Menendez (D-N.J.) and banking committee chair Tim Johnson (D-S.D.) led the letter.

"We urge you to analyze, quickly and diligently, the input you have received so that all REO properties under your control may be best managed to produce the most value for Fannie Mae, Freddie Mac, and FHA," the senators wrote. "As part of this analysis, we ask that you also keep in mind the importance of looking for the most effective ways to stabilize neighborhoods and housing values."

In August, the White House sent a request for information from the housing industry, looking for new strategies to help these agencies better manage the supply of more than 90,000 REO homes currently on the market. Along with the plan to boost refinancing for underwater borrowers, the Obama administration is looking for local ways to alleviate this influx of inventory. The size of the Fannie Mae foreclosure inventory alone grew to 162,489 in 2010 from 25,125 three years earlier. Even more troubling are the 10.4 million mortgages set to default, according Amherst Securities analyst Laurie Goodman.

The senators asked for a deadline to review the RFI submissions and if there are any strategies surfacing at the moment. They also asked what the next step would be. "Foreclosures have taken a heavy toll on too many Americans," the senators wrote.

SO LET'S NOT SORT IT ALL OUT AND PROSECUTE--LET'S MAKE IT MUCH WORSE BY SELLING OFF PROPERTIES OF UNCLEAR TITLE TO BIG MONEY INVESTORS, AND REALLY SCREW OVER THE FORECLOSED!

[Demeter]

109. Mr. Hoenig Goes to Washington By Simon Johnson FED RESERVE HISTORY AND FUTURE

http://baselinescenario.com/2011/10/27/mr-hoenig-goes-to-washington/#more-9416

To fix a broken financial system – and to oversee its proper functioning in the future – you need experts. Finance is complex and the people in charge need to know what they are doing. One common problem, which is also manifest in the United States today, is that many of the leading experts still believe in some version of business-as-usual.

At the height of the Great Depression, Marriner S. Eccles was summoned to Washington from Utah – where he was a regional banker. He helped remodel the Federal Reserve through the Banking Act of 1935 and then became its first independent chairman – the Fed board had previously been chaired by the Treasury Secretary. Eccles was not a fan of big Wall Street firms and their speculative stock market operations; rather he understood and identified with smaller banks that lent to real businesses. Eccles was the right kind of expert for the moment. Who has the expertise to play this kind of role in our immediate future?

Tom Hoenig, formerly president of the Kansas City Fed, has long been a strong voice for financial sector reform along sensible lines. Within the official sector, he has spoken loudest and clearest on the most important defining issue: Too Big To Fail is simply too big. And last week he took a major step towards a more prominent role, when he was announced as the administration’s nominee to become vice-chair at the Federal Deposit Insurance Corporation (FDIC). The FDIC is not as powerful as the Fed. But in our current financial arrangements, it does have a critical role to play. The Dodd-Frank legislation has its weaknesses, but it gives the FDIC two important powers. First, with regard to big banks, the FDIC can help force the creation of credible “living wills” – explaining how the bank can be wound-down if necessary. If such wills are not plausible then, in principle, the FDIC could force simplification or divestiture of some activities. Second, the FDIC is now in charge of “resolution” for megabanks, i.e., actually closing them down and apportioning losses in the event of failure...One important concern is whether the FDIC has enough clarity of thought and – most critically – enough political support in order to take the preemptive actions needed to make our biggest banks smaller and safer...The FDIC senior team is already strong, with a great deal of experience handling the problems of small and mid-size banks. The current acting chairman, Martin J. Gruenberg, was vice chair under Sheila Bair. These are not people who are easily intimidated by big banks. And Mr. Gruenberg is highly regarded on Capitol Hill, where he worked on the Senate Banking Committee for nearly two decades. (Disclosure, I’m on the FDIC’s Systemic Resolution Advisory Committee, which meets in public; I’m not involved in any personnel or policy decisions.) I have been a strong supporter of Mr. Hoenig in recent years, endorsing his views and arguing in the past that he should become Treasury Secretary. In the current mix of Washington-based policymakers, Mr. Hoenig would be a great addition. He spoke out early and often against Too Big To Fail banks. In early 2009 His paper “Too Big Has Failed” became an instant classic. It is worth reading again because it contains a number of forward-looking statements that remain important today. Perhaps the most relevant for his FDIC role,

"Some are now claiming that public authorities do not have the expertise and capacity to take over and run a “too big to fail” institution. They contend that such takeovers would destroy a firm’s inherent value, give talented employees a reason to leave, cause further financial panic and require many years for the restructuring process. We should ask, though, why would anyone assume we are better off leaving an institution under the control of failing managers, dealing with the large volume of “toxic” assets they created and coping with a raft of politically imposed controls that would be placed on their operations?”

This sounds very much like the basis for a sensible strategy of thinking about Bank of America, which is in serious trouble – and where the FDIC should consider a more pro-active intervention...The European debt situation is also threatening to spiral out of control, with potentially serious consequences for our financial sector. If you have not yet reviewed the details of Bill Marsh’s graphic from Sunday’s New York Times, I strongly recommend that you do so – but you’ll need a big computer screen or the ability to print out on a very large piece of paper (The picture is literally big, 18×21 inches; there is also a nice interactive version, which lets you look at various scenarios)...Tom Hoenig is exactly the right person for the moment.

http://www.c-spanvideo.org/program/FinancialRegulationsLaw VIDEO SPEECH BY AUTHOR

MANY MORE USEFUL LINKS AT ORIGINAL LINK

[xchrom]

110. Credit Card Firms: They Don't Just Steal From Cardholders

http://www.rollingstone.com/politics/blogs/taibblog/credit-card-firms-they-dont-just-steal-from-cardholders-20120109

The story outlines the misfortunes of a successful Park City, Utah restaurant called Cisero's that is best known for serving the movie stars and film glitterati attending the nearby Sundance film festival. The restaurant is engaged in a legal battle with its bank, but the larger struggle is between the restaurant and major credit cards like Visa and MasterCard.

It's a complex tale, but the gist of it is that the credit-card companies invoked arcane provisions of operating contracts with the merchant, and unilaterally "fined" the restaurant for enormous sums of money without proving any of the charges. Some of that money was actually debited from the merchants' account before they managed to close it.

When a restaurant opens for business, it signs service contracts with middleman firms that allow them to accept charges from Visa and MasterCards. These middleman firms process the charges on behalf of the issuing cards, and also debit the accounts of merchants for things like debit fees.

The problem is that when merchants like these restaurant owners in Utah sign their service contracts, they also have to agree to a series of draconian security rules, under which they are automatically liable to the card companies if the card companies suspect fraud or lax security procedures.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/credit-card-firms-they-dont-just-steal-from-cardholders-20120109#ixzz1jXiLkocP

[DemReadingDU]

114. U.S. Stock Markets closed Monday MLK day

U.S Stock Market Holidays
http://www.money-zine.com/Investing/Stocks/Stock-Market-Holidays/


I wonder how Europe will react Monday to having 9 countries downgraded a couple days ago on Friday?

[Demeter]

116. OOPS! GUESS WE GO INTO OVERTIME

SEE YOU MONDAY!

[Demeter]

118. TANSY STARTED UP SMW REGARDLESS

SO THAT'S WHERE I'LL BE POSTING...SEE YOU THERE!

[Demeter]

117. By the pricking of my thmbs

I've got this awful feeling of premonition. Something big and ugly.

[bread_and_roses]

119. Hint?

Presuming - and certainly hoping - you're not talking about something personal. I don't mean to be nosy. But I'm not well versed enough to have premonitions on market/economy -

[Demeter]

120. Well, it looks like Greece

It's just not gonna make it to March, even.

[Hotler]

121. I'm with you. I got the hebejebes back in December.

I don't think it's going to be war. That will come later in the year. Europe or Greece is going to have trouble in mid-March or the first of April at the latest. My two cents.

[DemReadingDU]

122. Yeh, something ugly cometh