Weekend Economists' Sumer Is Icumen In June 20-22, 2014

[Demeter]

"Sumer Is Icumen In" is a medieval English rota of the mid-13th century. It is also known as "The Cuckoo Song".

The title translates approximately to "Summer Has Come In" or "Summer Has Arrived". The song is composed in the Wessex dialect of Middle English. Although the composer's identity is unknown today, it may have been W. de Wycombe. The year of composition is estimated to be c. 1260.

This rota is the oldest known musical composition featuring six-part polyphony (Albright, 1994), and is possibly the oldest surviving example of independent melodic counterpoint.

It is sometimes called the Reading Rota because the earliest known copy of the composition, a manuscript written in mensural notation, was found at Reading Abbey; it was probably not drafted there, however. The British Library now retains this manuscript.




Middle English lyrics

Sumer is icumen in,
Lhude sing, cuccu;
Groweth sed
and bloweth med,
And springth the wode nu;
Sing, cuccu!

Awe bleteth after lomb,
Lhouth after calue cu;
Bulluc sterteth,
Bucke uerteth,

Murie sing, cuccu!
Cuccu, cuccu,
Wel singes thu, cuccu;
Ne swic thu naver nu.

Sing, cuccu, nu; sing, cuccu;
Sing, cuccu; sing, cuccu, nu!

[Demeter]

1. And to celebrate, we have TWO banks with Identical Names that failed!

Valley Bank, Moline, Illinois, was closed today by the Illinois Department of Financial & Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Southern Bank, Reeds Spring, Missouri, to assume all of the deposits of Valley Bank.

The 13 branches of Valley Bank will reopen as branches of Great Southern Bank during their normal business hours. ...As of March 31, 2014, Valley Bank had approximately $456.4 million in total assets and $360.0 million in total deposits. In addition to assuming all of the deposits of Valley Bank, Great Southern Bank agreed to purchase approximately $375.4 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $51.4 million. Compared to other alternatives, Great Southern Bank's acquisition was the least costly resolution for the FDIC's DIF. Valley Bank is the 10th FDIC-insured institution to fail in the nation this year, and the third in Illinois. The last FDIC-insured institution closed in the state was AztecAmerica Bank, Berwyn, on May 16, 2014.

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

The four branches of Valley Bank will reopen as branches of Landmark Bank, National Association during their normal business hours...

As of March 31, 2014, Valley Bank had approximately $81.8 million in total assets and $66.5 million in total deposits. In addition to assuming all of the deposits of Valley Bank, Landmark Bank, National Association agreed to purchase essentially all of the failed bank's assets...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.7 million. Compared to other alternatives, Landmark Bank, National Association's acquisition was the least costly resolution for the FDIC's DIF. Valley Bank is the 11th FDIC-insured institution to fail in the nation this year, and the first in Florida. The last FDIC-insured institution closed in the state was Bank of Jackson County, Graceville, on October 30, 2013.

[Demeter]

2. Instrumental version

[Demeter]

3. We are having a traditional English Summer, here in Ann Arbor

It's 58F and lightly raining...

[Demeter]

4. Hastings College Choir

[Demeter]

5. Citigroup’s Dark Pools: Here’s Why the Public Doesn’t Trust Wall Street By Pam and Russ Martens

http://wallstreetonparade.com/2014/06/citigroup%E2%80%99s-dark-pools-here%E2%80%99s-why-the-public-doesn%E2%80%99t-trust-wall-street/

In 2008, the sprawling global bank, Citigroup, created under the controversial repeal of the Glass-Steagall Act, blew itself up with toxic debt hidden in the dark in the Cayman Islands in an exotic framework called Structured Investment Vehicles or SIVs. The unwilling taxpayer was forced into servitude to bail out this hubris that had occurred at the hands of captured regulators, infusing $45 billion in equity, over $300 billion in asset guarantees, and $2.5 trillion in below-market loans.

At the time of its implosion, Citigroup had over 2,000 subsidiaries, affiliates or joint ventures, many of which operated in the dark in foreign locales.

Flash forward to today: in March, the Federal Reserve said Citigroup had flunked its stress test and the Fed prevented it from boosting its dividend. (The so-called stress test is how the Fed measures a mega bank’s ability to withstand a major economic upheaval.) In rejecting Citigroup’s capital plan for 2014, the Fed said that Citigroup “reflected a number of deficiencies in its capital planning practices, including in some areas that had been previously identified by supervisors as requiring attention, but for which there was not sufficient improvement. Practices with specific deficiencies included Citigroup’s ability to project revenue and losses under a stressful scenario for material parts of the firm’s global operations.”

Most Americans, and, sadly, members of Congress, believe that Citigroup is the parent of all those branch banks holding FDIC-insured deposits across America and bearing that angelic red halo over the word “Citi.” But Citigroup is far more than that. A recent record search by Wall Street On Parade suggests that Citigroup may be operating one of Wall Street’s largest collections of dark pools, trading stocks 24/7 around the globe in de facto unregulated stock exchanges which it operates under a dizzying array of different names...MORE...The ability to rig markets is always so much easier in the dark. And until Congress brings sunshine into the nether world of Wall Street’s dark pools, public confidence is not coming back any time soon.

[Demeter]

6. From Spain?

[Ghost Dog]

14. Catalonia.

Catalunya.

[Demeter]

7. For Fuddnik: Harley-Davidson introduces electric motorcycle

http://apnews.excite.com/article/20140619/us--harley-electric_motorcycles-1639e8d2c8.html

Harley-Davidson will unveil its first electric motorcycle next week, and President Matt Levatich said he expects the company known for its big touring bikes and iconic brand to become a leader in developing technology and standards for electric vehicles.

Harley will show handmade demonstration models Monday at an invitation-only event in New York. The company will then take several dozen riders on a 30-city tour to test drive the bikes and provide feedback. Harley will use the information it gathers to refine the bike, which might not hit the market for several more years.

The venture is a risk for Harley because there's currently almost no market for full-size electric motorcycles. The millions of two-wheeled electric vehicles sold each year are almost exclusively scooters and low-powered bikes that appeal to Chinese commuters. But one analyst said investment by a major manufacturer could help create demand, and Levatich emphasized in an interview with The Associated Press that Harley is interested in the long-term potential, regardless of immediate demand.

"We think that the trends in both EV technology and customer openness to EV products, both automotive and motorcycles, is only going to increase, and when you think about sustainability and environmental trends, we just see that being an increasing part of the lifestyle and the requirements of riders," Levatich said. "So, nobody can predict right now how big that industry will be or how significant it will be." At the same time, Levatich and others involved in creating the sleek, futuristic LiveWire predicted it would sell based on performance, not environmental awareness. With no need to shift gears, the slim, sporty bike can go from 0 to 60 mph in about 4 seconds. The engine is silent, but the meshing of gears emits a hum like a jet airplane taking off.

"Some people may get on it thinking, 'golf cart,'" lead engineer Jeff Richlen said. "And they get off thinking, 'rocket ship.'"

MORE

[Demeter]

9. Singalong!

[Fuddnik]

80. Well I'm certainly cuckoo for Coco Puffs.

But, I'll keep my noisy old V-Twin.

I did e-mail the article to a few people, and they liked the idea, and were interested in the range per charge.

[Demeter]

82. It looks like a moped, though

It would be the only motorcycle I'd even consider riding. I hate the noise.

I've never even ridden a moped, but I did bike in my youth.

[antigop]

8. How Credit Suisse Got Off Easy

http://www.newsweek.com/2014/06/27/how-credit-suisse-got-easy-255453.html

Last fall, James Cole, the No. 2 man at the Justice Department, sent an intriguing email about the criminal investigation of Credit Suisse’s offshore tax-evasion schemes for wealthy American clients. He asked Kathy Keneally, the agency’s top official directing the protracted investigation of Switzerland’s second biggest bank, “Can you give me an update on where we are with them?”

In that September 4 email, whose contents were obtained by Newsweek, Cole added this eyebrow-raising detail: “I got a call from Broderick Johnson who says the CEO wants to get this resolved.”

Broderick Johnson would be a lawyer and former lobbyist close to President Barack Obama. Last January, Obama named him assistant to the president and cabinet secretary—his job is to liaise with various government agencies, including the Justice Department. Cole’s email was of interest in part because Johnson’s former K Street lobbying firm, Collins Johnson Group, was representing Credit Suisse. But it was also notable because of the timing: The Justice Department had just finalized a deal for most of Switzerland’s banking industry, more than 300 banks, to pay fines for enabling tax evasion for American clients. That agreement, the capstone of the Justice Department’s seven-year crusade against offshore tax evasion through Swiss private banks, didn’t include more than a dozen Swiss banks under criminal investigation, most notably, Credit Suisse.

Johnson’s intervention appears to have worked: After some 18 months of stalemate, the bank started serious negotiations with the Justice Department. On May 19, Credit Suisse pleaded guilty to a single count of conspiring to aid tax evasion over decades, up to 2009, and agreed to pay the largest criminal tax fine in U.S. history—$2.6 billion—for having deceived the Justice Department, the Internal Revenue Service, the Federal Reserve and the Securities and Exchange Commission (SEC).

Big win for the Justice Department, right? Some say no. Despite that record-setting fine, many argue that Credit Suisse got off easy because it wasn’t forced to reveal the names of what a Senate subcommittee said were 22,000 tax-dodging Americans hiding up to $12 billion offshore through the bank.

[Crewleader]

10. The 10 most corrupt states in the U.S.

New research takes a look at decades of corruption convictions to find the crookedest states in the union.

When we think of government corruption (as one tends to do), our biased minds often gravitate to thoughts of military juntas and third world governments. But, of course, corruption is everywhere, in one form or another. And it’s costing U.S. citizens big time.

A new study from researchers at the University of Hong Kong and Indiana University estimates that corruption on the state level is costing Americans in the 10 most corrupt states an average of $1,308 per year, or 5.2% of those states’ average expenditures per year.

The researchers studied more than 25,000 convictions of public officials for violation of federal corruption laws between 1976 and 2008 as well as patterns in state spending to develop a corruption index that estimates the most and least corrupt states in the union. Based on this method, the the most corrupt states are:


1. Mississippi
2. Louisiana
3. Tennessee
4. Illinois
5. Pennsylvania
6. Alabama
7. Alaska
8. South Dakota
9. Kentucky
10. Florida

http://fortune.com/2014/06/10/most-corrupt-states-in-america/?xid=ob_rss

[Demeter]

16. One could argue that those are the LEAST corrupt states

Since they did prosecute a FEW of their white collar criminals.....unlike, say, Michigan, which has a Statehouse FULL of them, walking around free....

[Crewleader]

81. You would know, thank you for all you do!

Have a safe and good summer friend.

[Demeter]

83. Thank you! And may summer bring you all you wanted.

and nothing worse.

[Warpy]

11. Perfect

Our temporary break in the weather is now over and we'll be up to typical June temperatures in the high 90s this weekend. Maybe I'll get the swamper running, maybe not. It's been 20 years since the last time I toughed out a NM summer without a cooler, I'll just have to see how it goes.

The cat needs another bath, her fur is starting to spike again and she looks like Sid Vicious. She really doesn't mind baths as long as the water is about 104F and she doesn't get chilled afterward.

Things chez Bundy are likely heating up, as well. Someone speculated earlier that the militia has probably eaten a quarter of his herd by now. Temperatures above 120 will get the temps in their campers around 150 so I doubt they'll be peaceful for long. Most will leave quietly, at night when it's cool enough to put miles between them and the rest of the loons. The rest will probably go cuckoo and start blasting away at cactus and then at each other.

The economy will sink into the doldrums as people nervously eye the price of oil futures and how quickly they show up at the pump and wonder if the bicycles have air in their tires. Bus ridership is already increasing around here, a sign that many gas guzzlers are staying parked because their owners can't afford to feed 'em.

About the only thing to do now is make book on how long before the election Congress finally bites the bullet and raises the minimum wage, with the Republicans taking 100% of the credit, of course. My Spidey sense says it'll go up by a magnificent buck an hour. They don't dare raise it to what it should be, their bosses are terrified that paying people enough to live on will cause inflation.

[Hotler]

43. I remember when my mom tried to give one of our cats a bath in the kitchen sink.

I must have been about ten years old. It was a battle of wills and my mom finally one, but not before there was blood drawn (my mom's). That was the last she time tried to give the cat a bath. The sounds were horrible and the screams loud. The dogs ran and hid. Mom yelled for me to come help. I said no way. It was quite the deal.

[Warpy]

48. I can imagine.

I put the cat's front paws up and out of water and don't get anywhere near her face. That illusion of control seems to be all she needs. If the water's too cold or too hot, I expect to have her claw marks on the top of my head as she goes flying out of harm's way. A bucket would be better than the sink, but the sink is more convenient.

Well, for me, not the cat.

[hamerfan]

12. Musical interlude

Summertime, by George Gershwin, performed by Ella Fitzgerald and Louis Armstrong:

[hamerfan]

13. Musical Interlude II

Now for something completely different.
In The Summertime by Mungo Jerry:

[MattSh]

15. Time for another Top Ten!

If the answer to this question was "somewhere in the EU", the original DU post would have gotten 30 recs...

Which Country Leads in Proportion of Women in Senior Management?

Instead, it only got three. Look at the image to see why...



Yes, Russia leads the world in the proportion of women in senior management. And the USA is in the bottom ten.

http://www.internationalbusinessreport.com/files/IBR2014_WiB_report_FINAL.pdf

original DU link... http://www.democraticunderground.com/10025122676

[Demeter]

17. Russia has actively encouraged women's promotion since 1917

That's nearly 100 years of affirmative action!

The more I learn about nations, the more I envy you, Matt. You got out in time.

[MattSh]

26. Sadly, there's more than enough bullshit for USA consumption...

so there's plenty to export. We received a big dose of that this year.

[Demeter]

18. The Terrible News Economists Are Trying to Hide About American Jobs by Jim Hightower:

http://www.alternet.org/labor/terrible-news-economists-are-trying-hide-about-american-jobs?akid=11932.227380.Ki1xRw&rd=1&src=newsletter1004340&t=13




Have you noticed "the powers that be" employ an entirely different standard for measuring the health of America's job market than they use for the stock market? They're currently telling us that, "The job market is improving." What do they mean? Simply that the economy is generating an increase in the number of jobs available for workers. But when they say, "The stock market is improving," they don't mean that the number of stocks available to investors is on the rise. Instead, they're measuring the price, the value of the stocks. And isn't value what really counts in both cases? Quality over quantity. Employment rose by 217,000 jobs in the month of May, according to the latest jobs report -- and that brought us up to 8.7 million. That is how many new jobs the American economy has generated since the "Great Recession" officially ended in 2009 -- and it also happens to be the number of jobs that were lost because of that recession. You can break out the champagne, for the American economy is back, baby -- all of the lost jobs have been recovered!

You say you don't feel "recovered"? Well, it's true that the U.S. population has kept growing since the crash, so about 15 million more working-age people have entered the job market, meaning America still has millions more people looking for work than it has jobs. And it's true that long-term unemployment is a growing crisis, especially for middle-aged job seekers who've gone one, two or more years without even getting an interview, much less an offer -- so they've dropped out of the market and are not counted as unemployed. Also, there are millions of young people who are squeezed out of this so-called recovery -- the effective unemployment rate for 18- to 29-year-olds is above 15 percent, more than double the national rate of 6.3 percent. But take heart, people, for economists are telling us that full employment may be right around the corner. Is that because Congress is finally going to pass a national jobs program to get America working again? Or could it be that corporate chieftains are going to bring home some of the trillions of dollars they've stashed in offshore tax havens to invest in new products and other job-creating initiatives here in the USA? No, no -- don't be silly. Economists are upbeat because they've decided to redefine "full" employment by -- hocus pocus! -- simply declaring that having 6 percent of our people out of work is acceptable as the new normal. And you thought American ingenuity was dead.

Now, let's move on to the value of those jobs that have economists doing a happy dance. As a worker, you don't merely want to know that 217,000 new jobs are on the market; you want to know what they're worth -- do they pay living wages, do they come with benefits, are they just part-time and temporary, do they include union rights, what are the working conditions, etc.? In other words, are these jobs ... or scams?

So, it's interesting that the recent news of job market "improvement" doesn't mention that of the 10 occupation categories projecting the greatest growth in the next eight years, only one pays a middle-class wage. Four pay barely above poverty level and five pay beneath it, including fast-food workers, retail sales staff, health aids and janitors. The job expected to have the highest number of openings is "personal care aide" -- taking care of aging baby boomers in their houses or in nursing homes. The median salary of an aid is under $20,000. They enjoy no benefits, and about 40 percent of them must rely on food stamps and Medicaid to make ends meet, plus many are in the "shadow economy," vulnerable to being cheated on the already miserly wages...To measure the job market by quantity -- with no regard for quality -- is to devalue workers themselves. Creating 217,000 new jobs is not a sign of economic health if each worker needs two or three of those jobs to patch together a barebones living -- and millions more are left with no work at all.

[MattSh]

19. Two Thirds Of Gen X Households Have Less Wealth Than Their Parents Did At The Same Age | Zero Hedge

While the endless propaganda regurgitated from every media outlet will have the average American believe (in-between trips to collect and cash unemployment checks) that in the first quarter the economy crashed due to weather, or that millions of Americans are bailing on the labor force - oddly enough, most of those Americans are in in the 16-19 age group: retiring early, right?...

... the reality is far, far simpler: the myth of the US economic recovery is nothing more than a lie of mythic proportions.

Take Generation X: those millions of Americans born between 1960 and 1980 who in a truly recovering and thriving economy would be at the forefront of career opportunities and of wealth creation. Instead, as an extended Bloomberg profile of Gen X shows, there has hardly been a generation in worse shape than Americans between their mid-30s and mid-40s... perhaps with the exception of Gen Y, and the Millennials of course.

So propaganda aside, what is life really like for a group of people that in a parallel universe, one with a truly vibrant, growing economy, should have never been better? Sadly, "life" as it is lived and not shown on TV makes one wonder if X stands for Exterminate.

http://www.zerohedge.com/news/2014-06-10/generation-xterminate-only-third-gen-x-households-had-more-wealth-their-parents-held

[Demeter]

22. Robert Reich: Why Even Business Leaders Now Realize Widening Inequality is a Terrible Problem

http://www.alternet.org/economy/robert-reich-why-even-business-leaders-now-realize-widening-inequality-terrible-problem?akid=11936.227380.QY3liR&rd=1&src=newsletter1004716&t=6





A few weeks ago I was visited in my office by the chairman of one of the country’s biggest high-tech firms who wanted to talk about the causes and consequences of widening inequality and the shrinking middle class, and what to do about it.

I asked him why he was concerned. “Because the American middle class is the core of our customer base,” he said. “If they can’t afford our products in the years ahead, we’re in deep trouble.”

[MattSh]

46. And it took these so-called "leaders" this long to figure that out?

Sort of inspires confidence, doesn't it?

(Finally at 2000 posts (this one). Wonder if I'll hit 2014 in 2014)?

[Demeter]

47. Yes, it did. No, it doesn't. And Congress STILL hasn't figured it out

as for the White House, we have the daughters sent out to minimum wage jobs....

the visuals on that are appalling.

Instead of lifting up American children, he's oppressing his own. In solidarity, no doubt. Like sending the women and children out as a political shield against GOP sniping....

[xchrom]

20. ECB'S CHIEF DRAGHI : TIME FOR MORE INTEGRATION

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_DRAGHI?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-21-05-58-17

AMSTERDAM (AP) -- European Central Bank President Mario Draghi says current rules limiting European Union member states' budgetary policies - notably deficit spending - are not sufficient, and states should surrender some sovereignty in some economic policy areas, notably labor laws.

In an interview with Dutch newspaper De Telegraaf published Saturday, Draghi said "economic policy cannot be a purely national matter" because of the impact European countries' policies have on each other.

Draghi's office confirmed the remarks were accurate.

In the same interview, Draghi said that a further decline in price inflation in the eurozone could be a reason for his office to begin buying government debt, as well as private loans, in a so-called "quantitative easing" program similar to those undertaken in the U.S. and Japan.

[Demeter]

21. Happy Anniversary, Julian Assange!

http://www.theguardian.com/commentisfree/2014/jun/19/hypocrisy-freedom-julian-assange-wikileaks

...Today, 19 June, marks two years since Julian Assange was ... permanently confined to the apartment that houses the Ecuadorian embassy in London. Were he to step out of the apartment, he would be arrested immediately. What did Assange do to deserve this? In a way, one can understand the authorities: Assange and his whistleblowing colleagues are often accused of being traitors, but they are something much worse (in the eyes of the authorities).

Assange designated himself a "spy for the people". "Spying for the people" is not a simple betrayal (which would instead mean acting as a double agent, selling our secrets to the enemy); it is something much more radical. It undermines the very principle of spying, the principle of secrecy, since its goal is to make secrets public. People who help WikiLeaks are no longer whistleblowers who denounce the illegal practices of private companies (banks, and tobacco and oil companies) to the public authorities; they denounce to the wider public these public authorities themselves.

We didn't really learn anything from WikiLeaks we didn't already presume to be true – but it is one thing to know it in general and another to get concrete data. It is a little bit like knowing that one's sexual partner is playing around. One can accept the abstract knowledge of it, but pain arises when one learns the steamy details, when one gets pictures of what they were doing. When confronted with such facts, should every decent US citizen not feel deeply ashamed? Until now, the attitude of the average citizen was hypocritical disavowal: we preferred to ignore the dirty job done by secret agencies. From now on, we can't pretend we don't know....

MORE

[xchrom]

23. ENERGETIC STOCK MARKET PUSHES TOWARD MILESTONES

http://hosted.ap.org/dynamic/stories/U/US_DOW_17000?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-20-17-42-07

NEW YORK (AP) -- The U.S. stock market is back to setting records.

After treading water for most of March and April, stocks are nudging deeper into record territory and are closing in on milestones with lots of zeros attached to them. The Dow Jones industrial average is within 53 points of 17,000 while the Standard & Poor's 500 is just shy of 2,000 after rising 6 percent this year.

A harsh winter in the U.S. that hobbled growth made investors cautious. There were also worries about the conflict in Ukraine and slowing growth in China, the world's second-biggest economy.

But now the economy appears to be on track again, and investors are rediscovering their appetite for stocks.

[xchrom]

24. DETROIT 'GRAND BARGAIN' VOTE KEY TO BANKRUPTCY END

http://hosted.ap.org/dynamic/stories/U/US_DETROIT_BANKRUPTCY_GRAND_BARGAIN?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-20-14-56-32

DETROIT (AP) -- An effort by deep-pocketed philanthropists to save the bankrupt city of Detroit's art treasures began with a chance meeting last year and culminated Friday when Michigan Gov. Rick Snyder signed a bill authorizing millions in state help.

But all parties excited about the bill signing know that work could be for naught if the city's pensioners and workers, who are nearing a deadline for a historic vote on Detroit's plan to get out of bankruptcy, reject what has been dubbed the Grand Bargain.

"It is really not in our hands," said Rip Rapson, president of the Kresge Foundation, which has pledged $100 million toward the plan. "We fully understand that the pensioners have to make very hard decisions as to whether this is something they can support."

The state's contribution of $195 million, along with $366 million from foundations and a $100 million pledge from the Detroit Institute of Arts, would replace hundreds of millions being cut from retiree pensions, while stopping bond insurers and other creditors from forcing the sell-off of city-owned art such as Van Gogh's "Self Portrait." The money would come over 20 years, placing the value at about $816 million.

[Demeter]

34. When the pensioners reject the grand bargain

because their pensions are protected by the State Constitution and they have no reason to give away their economic survival, will Snyder take it back?

To tell the truth, I was astonished that Snyder signed the bill prior to the election close and results.

And I wouldn't for a moment expect the State to honor its agreement over 20 years...Michigan's legislature isn't that honorable. Ditto all those "pledges". We know how that always works.

Cash up front, you 1% deadbeats!

[Demeter]

37. Detroit retiree representative: If pensioners reject Grand Bargain, 'you will have no sympathy from

Detroit retiree representative: If pensioners reject Grand Bargain, 'you will have no sympathy from anybody'

http://www.mlive.com/news/detroit/index.ssf/2014/06/detroit_retiree_representative.html

The city's retirees are being urged by some of their representatives to vote in favor of a plan that would cut their monthly pension checks at far lower rates than initially proposed. Gov. Rick Snyder on Friday signed legislation that would send $194.8 million in state funds and $466 million in private donations to Detroit's underfunded pension systems -- but only if city employees and retirees approve the plan in a vote taking place as part of the bankruptcy process. AHA! I KNEW IT!--DEMETER

The money would cap reductions in monthly pension checks at 20 percent (!) and keep most cuts at 4.5 percent for non-uniformed former workers, and less for police and fire retirees. Without approval of the settlement, in which retiree groups would give up the right to fight cuts, pensioners could lose 30 cents on the dollar, Detroit Emergency Manager Kevyn Orr said Friday.

State Rep. Thomas Stallworth said he's been hearing from retirees who feel betrayed and fearful, and that he shares some of their frustration. But he still urged a vote in favor of the shallower cuts.

"In many ways, we failed the citizens of Detroit," Stalworth said.

UNDERSTATEMENT OF THE YEAR, THE CENTURY, THE MILLENIUM!

"... But this package of bills really does represent the best possible option under the circumstances that we face."

Shirley Lightsey, president of the Detroit Retired City Employees Association and a member of the federally appointed committee representing Detroit's retirees in bankruptcy court, said pensioners have only one rational choice.

"Even now," she said on stage with the governor as he prepared to sign the legislation Friday, "we are not happy to give up some of our promised benefits and legal rights."

"But it's now time to use the wisdom and discernment we all have. I now know that the only way to vote is yes. When you look at a 4.5-percent reduction vs. 27 percent, just look at the money."

She said many retirees have vowed a 'no' vote as a matter of principle.

"We can't eat principles and uncertainty does not pay the bills," she said.

"... If you give that money up, you will have no sympathy from anybody."

Don Taylor, president of the Retired Detroit Police and Fire Fighters Association, also urged approval

"The decision that retirees are now making will determine the conditions many of us will be under for the remainder of our lives," he said.

Retiree Renetta Major, 53, of Southfield said this week she begrudgingly voted in favor of the plan.

"If I took a chance on not voting at all or voting no, they would have been able to take whatever they want," she said.

She said she did janitorial work for the city for 11 years before retiring due to illness. She now collects a $612 monthly pension check.

"I didn't work as long as them, but I'm thing about the ones who put in 30 years," she said. "You were told that you work 30 years and you've got something down at the end of the tunnel for you, and you find out they're going to take some that... I have a problem with that."

Another retiree Mary Highgate takes a harder line against the cuts. She told the Associated Press she plans to return her ballot July 1 with a 'no' vote.

"Everybody I know is voting 'no' because we don't trust them," said Highgate, 69. "I'm voting No! No! No!"

"All they care about is the art. Do you really think they care about the little people? Have they ever?"

[xchrom]

38. +1

[Demeter]

44. "You Can't Eat Principles" - Detroit's Grand Bargain Moves Another Step Forward by Melissa Jacoby

http://www.creditslips.org/creditslips/2014/06/you-cant-eat-principles-detroits-grand-bargain.html

... Detroit's Grand Bargain continues to defy expectations and make forward progress. A significant step today: A big press conference as Governor Snyder signed the necessary bills. ... Shirley Lightsey, President of the association, produced the slogans: You Can't Eat Principles, and Uncertainty Doesn't Pay the Bills. Of the speakers at the press conference today who advocated for the Grand Bargain, Ms Lightsey was the most persuasive. And practical too. Some retirees are skeptical, but it is hard to imagine retirees will do financially better by voting no or abstaining and hoping for an appellate court victory on the Michigan Constitution questions. Voting is not, though, the last hurdle for the Grand Bargain - a point lost in the shuffle of the bill-signing press conference.

Regular readers of Detroit's major newspapers know the facts: Detroit's plan cannot go into effect until the bankruptcy court finds that it satisfies all federal law requirements... Federal court approval is the ticket to get extraordinary relief: binding holdouts to a different deal. The State of Michigan and other Grand Bargain participants and advocates need the bankruptcy court to hoist the ship over the mountain, as much as they need the vote of retirees.

And so, solid as Detroit's plan of adjustment may or may not be, Judge Rhodes will face enormous pressure, implicitly and perhaps explicitly, to okay the plan - reminiscent, perhaps, of the pressure to approve lightning quick sales in GM, Chrysler, and Lehman Brothers. Indeed, the mediator whom Judge Rhodes appointed - Chief District Judge Gerald Rosen - attended and spoke at the Governor's press conference, leaving no doubt that he wants the Grand Bargain to be implemented, even as other aspects of the plan remain highly contested by several types of creditors.

Backbones are not lacking here. Earlier this year, Judge Rhodes rejected the interest rate swap settlement that the mediators endorsed. (A revised deal was ultimately approved). Judge Rhodes also has emphasized his independent duty to assess the plan's feasibility even if creditors do not object - a position consistent with language in several U.S. Supreme court decisions. None of this means the bankruptcy court should or will reject the plan, or condition approval on amendments. Evidence must be presented, legal issues argued persuasively and resolved. Maybe more settlements will roll in, easing the path to confirmation...

YOU CAN'T EAT EMPTY PROMISES, EITHER, WHICH IS WHAT THE CITIZENS OF DETROIT HAVE BEEN FED FOR 45 YEARS....

I THINK THE JUDGE IS NOT CORRUPT, AND PERHAPS THE ONLY HONEST PERSON IN THE DEAL. THAT MAY BE THE SAVING GRACE FOR RETIREES.

[xchrom]

25. HOUSE COMMITTEE ORDERED TO COURT IN INSIDER PROBE

http://hosted.ap.org/dynamic/stories/U/US_CONGRESS_INSIDER_TRADING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-21-00-58-51

NEW YORK (AP) -- A powerful U.S. House of Representatives committee was ordered on Friday to appear before a judge next month to explain why it should not be required to turn over documents in an insider-trading probe.

U.S. District Judge Paul Gardephe in Manhattan set a July 1 hearing for the Ways and Means Committee to appear. He also required a committee staffer, Brian Sutter, to appear. He said the committee must show why it should not be ordered to produce documents demanded by the Securities and Exchange Commission in May.

In court papers, the SEC said its probe relates to whether secrets were passed to certain members of the public surrounding an April 2013 announcement by the U.S. Centers for Medicare and Medicaid Services about a Medicare program.

Sutter, the health subcommittee's staff director, disclosed on May 9 to House Speaker John Boehner, a Republican, that he had received a subpoena from the SEC for documents and testimony along with a grand jury subpoena from federal prosecutors in Manhattan, according to the congressional record of that day.

[xchrom]

27. US REGULATORS CLOSE 2 BANKS IN ILLINOIS, FLORIDA

http://hosted.ap.org/dynamic/stories/U/US_BANK_CLOSURES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-20-19-02-17

NEW YORK (AP) -- Regulators have closed two lenders in Illinois and Florida, bringing U.S. bank failures this year to 11 after 24 closures in all of 2013.

The Federal Deposit Insurance Corp. said Friday that it has taken over Valley Bank in Moline, Illinois. The bank had 13 branches, assets of $456.4 million and deposits of $360 million.

Great Southern Bank of Reeds Spring, Missouri, will assume all of the deposits of Valley Bank. It's the 10th bank to fail this year, and the third in Illinois.

The FDIC also is taking over another Valley Bank, this one based in Fort Lauderdale, Florida. It has four branches, assets of $81.8 million and deposits of $66.5 million. Landmark Bank N.A. of Fort Lauderdale is assuming all of the deposits of Valley Bank. Valley Bank of Fort Lauderdale is this year's first bank failure in Florida.

[Demeter]

28. How to Tell If Your Member of Congress Is a Crony Capitalist

http://www.alternet.org/how-tell-if-your-member-congress-crony-capitalist?akid=11931.227380.bV21m3&rd=1&src=newsletter1004236&t=22




Last Tuesday, Rep. Eric Cantor learned the hard way that crony capitalism comes at a political cost. In a decisive 10-point upset, Cantor's Republican primary opponent David Brat defeated the Virginia congressman after charging that he was "trying to buy this election with corporate cash." Few inside Washington thought charges like this would stick; for decades they've opened their campaign coffers to millions of dollars from Fortune 500 firms without fearing any consequences at the ballot box.

Since arriving on Capitol Hill in 2001, Cantor has received corporate contributions extending from Bank of America to Verizon and beyond. Only four other lawmakers took in more corporate cash during the most recent election cycle. In exchange, Cantor became big businesses' "ace in the hole." According to TIME, big banks, energy and defense industries, insurance firms, and phone and cable companies knew they could rely on Cantor to put their interests before those of his constituents back in Virginia's 7th District.

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

But what distinguishes crony capitalists ... is not the fact that they take corporate money  -- every member of Congress does  -- but the degree to which they shape shift to earn it, molding their views in a way only their benefactors could love. The Center for Responsive Politics website is a good place to discover whether your member of Congress is also a crony capitalist. First, find who his or her biggest corporate donors are. Then check his or her record on policies that may impact the bottom lines of those companies. Does she support or oppose financial-sector reform? Has he recently signed a letter or released a statement opposing EPA curbs to coal-plant emissions? Do those positions match those of his or her largest corporate donors? Yes? If that doesn't bother you, it should. And you should let your members of Congress know whom they really work for.

For decades our elected officials have shrugged off grassroots concerns about the corrupting influence of corporate cash. After Cantor's defeat last week, many should be having second thoughts.

THAT WEBSITE?
https://www.opensecrets.org/

[xchrom]

29. MAJOR PARTIES ALREADY GETTING $625M IN DONATIONS

http://hosted.ap.org/dynamic/stories/U/US_POLITICAL_MONEY_NEWS_GUIDE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-21-04-55-08

DEMOCRATS PAY DOWN DEBT

The Democratic National Committee is making progress at whittling down a once-enormous debt, trimming its red ink to less than $5 million for the first time since mid-2012.

The DNC amassed significant debt as it spent heavily on President Barack Obama's re-election bid in 2012. At the end of July 2012, the DNC reported almost $4.8 million in red ink, but that number ballooned to a high of almost $23 million in March 2013 as bills came due and donors tired of giving.

Despite raising $107 million this election cycle, the DNC is still carrying $4.9 million in debt. The biggest of the 44 outstanding bills is for Obama pollster Joel Benenson. The Benenson Strategy Group is owed $824,000.

---

RNC CONTINUES STEADY FUNDRAISING

The Republican National Committee again posted steady fundraising, bringing in another $8.2 million in May.

Although the DNC raised slightly more - $8.8 million - the RNC has been a reliable fundraising operation that sends donors dollars out to state affiliates. The RNC has outraised the DNC in 10 of the last 17 months.

[xchrom]

30. World’s Richest Gain $16 Billion as U.S. Stocks Hit Highs

World’s Richest Gain $16 Billion as U.S. Stocks Hit Highs

http://www.bloomberg.com/news/2014-06-20/world-s-richest-gain-16-billion-as-u-s-stocks-hit-highs.html

The world’s 300 wealthiest people added $15.6 billion to their collective net worth this week as the Standard & Poor’s 500 Index (SPX) and Dow Jones Industrial Average (INDU) closed at record highs amid optimism that the economic recovery will accelerate.

One of the week’s biggest gainers was Tesla Motors Inc. (TSLA) chairman Elon Musk, who added $1.1 billion, according to the Bloomberg Billionaires Index. The Palo Alto, California-based company has soared 17.5 percent since May 20, driving up Musk’s fortune to $10.9 billion. Earnings for the electric carmaker are forecast to increase 46 percent this year, based on the average analyst estimate from a Bloomberg survey.

The comeback in technology shows that an appetite for risk is returning as investors overcome concern about the economy and stock valuations.

“Stocks continue to melt up,” Walter “Bucky” Hellwig, a senior vice president at BB&T Wealth Management, said in a phone interview. “The real story is that there’s more money on the sidelines than there are opportunities in risk assets.”

[Demeter]

36. Yellen gives the green light for more stock gains

http://www.reuters.com/article/2014/06/21/us-usa-markets-fed-analysis-idUSKBN0EV0CH20140621?feedType=RSS&feedName=businessNews

Federal Reserve chief Janet Yellen signaled that rational exuberance is just fine. That, at least, is how some of America's largest money managers interpreted her comments on Wednesday suggesting interest rates will remain low through 2016. It reinforced their views that easy money means the U.S. stock market rally has further to run despite notching a series of record highs already this year. That could easily put the S&P 500 benchmark on track to surpass 2000 for the first time, and to do so well before the end of the year.

Such a gain for 2014, after a 30 percent rise in 2013, would surprise those who worried that stocks might be getting overvalued and were due for a sizable pullback. One reason for increasing confidence is that the resilience of the market has been very strong in the face of various shocks this year. A combination of an improving economy, rising earnings, and the cheap borrowing costs, has made that possible. Stock investors have shaken off last year's budget uncertainty in Washington, a sharp drop in high-growth technology companies and biotech shares, the conflict in Ukraine, and more recently the apparent tearing apart of Iraq that resulted in a spike in oil prices.

"What I have is a sweet combination of a self-sustaining, long lasting economic expansion joined with a long-lasting monetary accommodation," said Steven Einhorn, vice chairman of Leon Cooperman's hedge fund Omega Advisors Inc, which has $10.5 billion in assets under management.

"I don't think this bull market is over," he said, adding he estimates stocks could rise another 3 to 5 percent this year

.

That may sound modest but when added to an average S&P 500 dividend yield of 2 percent, it looks pretty attractive against the 2.62 percent yield of a 10-year Treasury note.

MORE PUFFERY AT LINK

MY GOD! ARE THEY MAD?

[xchrom]

31. Argentina Bonds Rally as Fernandez Says Debt Talks Are On

http://www.bloomberg.com/news/2014-06-19/jpmorgan-to-nomura-see-argentine-bluff-in-threat-to-cancel-talks.html

President Cristina Fernandez de Kirchner said Argentina will go ahead with talks to resolve a dispute with holdout creditors, sending the country’s bonds to the biggest gains in emerging markets.

“We want to meet our obligations with 100 percent of our creditors,” she said in a nationally televised address. “We only ask that they give us fair conditions for negotiation that are in line with the Argentine constitution and national laws.”

Fernandez’s comments provided some clarity to investors whipsawed this week by conflicting statements from government officials about the nation’s next steps after a U.S. court decision this week compelling it to pay holders of defaulted debt in full. Wall Street banks from JPMorgan Chase & Co. to Nomura Holdings Inc. had said Argentina was bluffing with threats to walk away from talks with billionaire Paul Singer that could end the decade-long dispute.

“After having no strategy with this whole holdout situation, the government is finally realizing that they need to negotiate,” Juan Carlos Rodado, head of Latin America research at Natixis, said in an e-mail. “She needs to show in the end that she is responsible.”

[Demeter]

32. 5 industries that Millennials are destroying

https://secure.marketwatch.com/story/5-industries-that-millennials-are-destroying-2014-06-21?siteid=YAHOOB

There’s a lot to be said for watching demographic shifts as you craft your long-term investing strategy. And while Baby Boomer stocks like health care and insurance get a lot of attention, long-term investors should also consider the impact Millennials will have on businesses — and their portfolios. There are about 80 million Americans who were born between 1980 and 1995. And while much has been made about the challenges for Millennials to get good jobs or contribute to the economy, that is sure to change. As the Boomer population starts its inevitable decline, the power of this age group will grow substantially in the years ahead. Some of that will be good, as the tech talents of younger Americans are put to work in the economy and as they grow into a powerful consumer class....here are five specific businesses that Millennials are shunning, which could cause a lot of pain for investors over the long-term if current trends continue.

1. Cars Cruising around in my rusty Chevrolet Cavalier with the sunroof open and the radio up was the very definition of freedom to me at 18 years old. But these days, there’s simply not the interest in cars like there used to be. Consider that in 2010, a mere 28% of 16-year-olds had driver’s licenses, compared with 44% in 1980, according to another study from the University of Michigan Transportation Research Institute. Car sales in America have rebounded in recent years thanks, in part, to pent-up demand after the Great Recession, but the sad reality is that the U.S. love affair with the automobile may be coming to an end. That’s in large part due to a lack of interest among Millennials who look to live in walkable, urban locations and prefer car-sharing services like ZipCar or ride sharing services like Uber. A car is just an expensive hassle for the younger generation, as technology equals freedom in 2014...
   
   JOBS, INCOME, DEBTLOAD, GAS PRICES, AND WHERE IS THERE TO GO, ANYWAY?--DEMETER
   
   
2. Cable TV. It’s unclear where streaming video is headed in the next several years. But it’s clear that the future is likely with Netflix or Google property YouTube and not an old-guard cable company. Consider that for the first time ever, the number of pay-TV lines in the U.S. fell last year — with a drop of about 250 million subscriptions over the calendar year. That’s a big number, and a number that seems to be growing at an alarming rate... Part of the problem is “cord cutting” as folks with cable TV find options on Netflix or other streaming providers at a fair price. But increasingly, traditional cable-TV businesses are going to face the big pressure of Millennials and so-called “ cord nevers ” who haven’t ever had an affinity to cable and see no reason to start anytime soon when so much of their entertainment is consumed via laptop, tablet or smartphone...
   
   OBSCENE PRICING, BUNDLING, INANE PROGRAMMING, AND FIXED SCHEDULING--DEMETER
   
   
3. Brick-and-mortar retail. In the short term, I think retail is in big trouble. But folks blaming bad first-quarter weather are missing the broader long-term pressure of e-commerce that is reshaping the entire sector as more shoppers go online instead of to the mall. Broadly, online sales continue to outpace brick-and mortar results. Online retail sales grew about 17% in 2013 , with total overall retail sales up only a fraction of that. So it’s no surprise that some of the biggest laggards in retail are stores that simply can’t get their online acts together...Brick-and-mortar retailers that can’t change with the times and evolve to a digital-sales platform are going to continue to feel the pain as more retail sales go online in the years to come.
   
   THE BRICK AND MORTAR HAVE NOTHING IN STOCK, OR NOTHING WORTH BUYING, GAS IS TOO EXPENSIVE FOR WINDOW-SHOPPING, AND THE PARKING IS AS BAD AS EVER, AS MOBS ROAM THE MALLS AS A GATHERING PLACE, NOT A COMMERCIAL PLACE--DEMETER
   
   
4. Homebuilders. By now, you’ve certainly seen all the stories about why Millennials are a drag on the housing recovery. The reasons are numerous, but the biggest one-two punch tends to focus on the personal desire to live urbanely and the financial practicalities of less income and a lot of student-loan debt. Consider that about half of home-buying Millennials lately are asking mom and dad to shoulder their down payments, according to a recent Trulia survey. Others are so spooked by the Great Recession and mountains of student-loan debt that they have no desire to take on a mortgage at all considering other financial concerns. Homebuilders like PulteGroup and Toll Brothers have been under pressure for the last year or so as the rebound in housing has petered out and construction has tapered off. But just imagine what would happen if interest rates tighten and the cost of borrowing climbs even higher! Millennials don’t want to live in surburbia, and either can’t or won’t take on a mortgage payment. And that trend is not going away.
   
   
5. Soft drinks
   
   Sugary, carbonated beverages like Coca-Cola and Pepsi seem like the staple junk food of any young American. But not anymore, thanks to a focus on fighting childhood obesity and a rise of healthier alternatives. As a result, Millennials drink much less soda (or pop or whatever you want to call it). And that number is declining every year. A recent Morgan Stanley report illustrates how the shift to energy drinks and sports drinks in the past decade is partially to blame. But while that’s good news for America’s health, it’s very bad news for investors like Warren Buffett, who have always considered Coca-Cola the gold standard of consumer staples. Sure, Coca-Cola has tried to hedge its bets with lines like its Odwalla juices and Powerade sports-drink lines. But the flagship soda brands of Coke and Sprite are facing real headwinds in the years ahead. Perhaps companies like Coca-Cola and Pepsi can continue to diversify and evolve, both at home and abroad. But investors need to know what they are getting into with these consumer-staples companies that are increasingly less popular with younger Americans.
   
   OVER-PRICED, AGAIN. WHEN THESE ARE USED AS LOSS-LEADERS AT $1/2 LITER, THEY SELL.--DEMETER

[xchrom]

33. Long-Term Jobless Find Work as Employers Shun Raises; Boon to Yellen

http://www.bloomberg.com/news/2014-06-20/long-term-unemployeed-are-finally-catching-a-break.html

Americans who have been hunting for employment for more than six months are finally catching a break.

Among them is Tracey Mutz, who landed a job this month as director of project management for 1st Money Center Inc. after being out of work since March 2013. “It was terrible,” said Mutz, 52. “I wasn’t getting any responses.”

Now, she’s “happy” with the position she found. The specialty financing company is located a mile from her home in Hurst, Texas, and has “a great office environment.”

Mutz isn’t alone in experiencing better times. Faced with a shrinking pool of available workers and incipient wage pressures, companies are starting to give the longer-term unemployed a second look. The number of Americans without a job for 27 weeks or more fell to 3.37 million in May from 4.35 million a year earlier, though some of that drop reflects people leaving the workforce.

[xchrom]

35. Canada Inflation Tops 2% Target for First Time Since 2012

http://www.bloomberg.com/news/2014-06-20/canada-inflation-tops-2-target-for-first-time-since-2012.html

Inflation exceeded the Bank of Canada’s target last month for the first time in more than two years, an unexpected acceleration led by energy costs that sparked increases in the currency and bond yields.

The consumer price index rose 2.3 percent in May from a year ago following April’s 2 percent pace, Statistics Canada said today from Ottawa. The core rate, which excludes eight volatile products, increased 1.7 percent after a gain of 1.4 percent the prior month. Both increases were higher than all forecasts in Bloomberg economist surveys that called for total inflation of 2 percent and core prices to rise 1.5 percent.

Bank of Canada Governor Stephen Poloz kept his key lending rate at 1 percent on June 4 with a neutral bias, and said the risk of persistent low inflation remains after a rise in energy costs. The Canadian dollar and bond yields jumped after today’s report suggested Poloz may change his view that core inflation will remain below 2 percent.

“We have pretty clearly seen the lows for inflation, at least for some time,” said Robert Kavcic, a Bank of Montreal senior economist in Toronto. For the central bank, “I don’t think it’s going to change the policy path, but they won’t explicitly be talking about downside risks to inflation.”

[hamerfan]

39. Musical Interlude III

Summer In The City by The Lovin' Spoonful:

[xchrom]

40. Eurozone recovery not strong enough, says IMF

http://www.bbc.com/news/business-27931445

The recovery in the eurozone is not strong enough, according to the International Monetary Fund (IMF).

That's the assessment IMF head Christine Lagarde is delivering to eurozone finance ministers at a meeting in Luxembourg.

The IMF also says the European Central Bank (ECB) should consider buying financial assets with newly created money, if inflation remains low.

But the IMF's regular eurozone health check sees some signs of progress.

[Demeter]

41. Narcissistic Personality Quiz

ARE YOU FIT TO JOIN THE 1% ELITE?

http://psychcentral.com/quizzes/narcissistic.htm

[DemReadingDU]

42. Ellen Brown - Buying Up the Planet: Out-of-control Central Banks

6/20/14 Buying Up the Planet: Out-of-control Central Banks on a Corporate Buying Spree by Ellen Brown

When the US Federal Reserve bought an 80% stake in American International Group (AIG) in September 2008, the unprecedented $85 billion outlay was justified as necessary to bail out the world’s largest insurance company. Today, however, central banks are on a global corporate buying spree not to bail out bankrupt corporations but simply as an investment, to compensate for the loss of bond income due to record-low interest rates. Indeed, central banks have become some of the world’s largest stock investors.

This is a rather alarming development. Central banks have the power to create national currencies with accounting entries, and they are traditionally very secretive. We are not allowed to peer into their books. It took a major lawsuit by Reuters and a congressional investigation to get the Fed to reveal the $16-plus trillion in loans it made to bail out giant banks and corporations after 2008.

What is to stop a foreign bank from simply printing its own currency and trading it on the currency market for dollars, to be invested in the US stock market or US real estate market? What is to stop central banks from printing up money competitively, in a mad rush to own the world’s largest companies?

As former Federal Reserve Chairman Alan Greenspan quipped, “Quite frankly it does not matter who is president as far as the Fed is concerned. There are no other agencies that can overrule the action we take.”

That is how “independent” central banks operate, but it evidently not the US central bank that is gambling in the stock market. After extensive quantitative easing, the Fed has a $4.5 trillion balance sheet; but this sum is accounted for as being invested conservatively in Treasuries and agency debt (although QE may have allowed Wall Street banks to invest the proceeds in the stock market by devious means).

Which central banks, then, are investing in stocks? The biggest player turns out to be the People’s Bank of China (PBoC), the Chinese central bank.

more...
http://ellenbrown.com/2014/06/20/buying-up-the-planet-out-of-control-central-banks-on-a-corporate-buying-spree/

[Demeter]

45. October Surprise?

Or is the month immaterial?

One thing about the Chinese...they don't have to do any counterfeiting of their currency. They already have ours.

[Demeter]

49. Understanding economics without economists

Ha-Joon Chang also recently posted another list at Huffington Post, which he covers in more detail in a lecture thats embedded below:

1. Economics was originally called ‘political economy’

2. The Nobel Prize in Economics is not a real Nobel Prize

3. There is no single economic theory that can explain Singapore’s economy

4. Britain and the US invented protectionism, not free trade

5. Free trade first spread mostly through un-free means

6. It was arch-conservative Otto von Bismarck who introduced the first welfare state in the world

7. Capitalism did best between the 1950s and the 1970s, an era of high regulation and high taxes

8. The internet was invented by the US government, not Silicon Valley

9. Before tax and welfare spending, Germany and Belgium are more unequal than the US

10. Finland, one of the most equal countries in the world, has grown faster than the US

11. The ‘lazy’ Greeks are the hardest working people in the rich world after South Koreans

12. Switzerland and Singapore are not living off banking and tourism alone

13. Most poor people don’t live in poor countries

http://www.macrobusiness.com.au/2014/06/understanding-economics-without-economists/

[Demeter]

50. How the U.S. compares on income inequality and poverty

http://www.pbs.org/newshour/rundown/u-s-compares-income-inequality-poverty/

There’s new data on income inequality out from the OECD Thursday, so we thought we’d take a look to see how the U.S. compares against the group’s 33 other countries — and its upcoming World Cup matches (more on that in a bit).

When we look at income, the U.S. has had a wider gap — meaning less equal distribution of income — than the OECD average for at least the past 30 years.
Gini CoefficientIncome InequalityThe Gini Coefficient is a measure of income inequality. Zerorepresents equal distribution of income across the population, and 1represents a single person has all the income. Thus, a higher scorerepresents greater income inequality.

INTERACTIVE GRAPH AT LINK

The data also shows that lower-income households across the OECD were hit harder by the financial crisis — the poor either lost more during the crisis or benefited less from the recovery than did their higher-income neighbors.

While real household income hasn’t changed much (stagnated) across the 34 member countries, young adults have been hit the hardest since the financial crisis. By age, 18- to 25-year-olds “suffered the most severe income losses,” while those 65 and older “were largely shielded from the worse effects of the crisis,” according to the release. The young also continue to beat the elderly for greater risk of poverty, a trend the OECD has tracked for at least 25 years.

While the report doesn’t give much explanation as to why this is, high youth unemployment and more generous social services for those 65 and older are likely to have something to do with it.

In the U.S., poverty has averaged around 26.92 percent of the population with an income less than 50 percent of the country’s median income, after taxes and benefits are added (how the OECD defines “relative income poverty”). For years with data available since 1983, it maxed at just under 18 percent in 1989; the lowest was 16.5 percent in 2009. In fact, the U.S. poverty rate in 2011 was higher compared to all other OECD countries other than Israel, Mexico and Turkey.

MORE

[Demeter]

51. Poll: Fewer Americans Blame Poverty on the Poor WELL, THAT'S ALL RIGHT

http://www.nbcnews.com/feature/in-plain-sight/poll-fewer-americans-blame-poverty-poor-n136051

As millions of Americans continue to struggle in a sluggish economy, a growing portion of the country says that poverty is caused by circumstances beyond individual control, according to a new NBC News/Wall Street Journal poll.

The poll shows a significant shift in American opinion on the causes of poverty since the last time the question was asked, nearly 20 years ago. In 1995, in the midst of a raging political debate about welfare and poverty, less than a third of poll respondents said people were in poverty because of issues beyond their control. At that time, a majority said that poverty was caused by "people not doing enough." Now, nearly half of respondents, 47 percent, attribute poverty to factors other than individual initiative.

“In hard economic times, people become more sympathetic to the poor,” says Martin Gilens, Ph.D., a political scientist at Princeton University. “In 1995, we were in a period of economic expansion. Even the less well-off benefitted considerably. Now we’re in the most visible period of dire economic circumstances for Americans. If you look around and you see that there’s high unemployment and a generally poor economy, you’re more likely to explain poverty through those factors.”

[Demeter]

52. Only Things Standing Between BofA & $17B Justice Dept Fine:Brian Moynihan’s Negotiating Skills, Late

The Only Things Standing Between Bank Of America And A $17 Billion Justice Department Fine Are Brian Moynihan’s Negotiating Skills, Latent Charisma

http://dealbreaker.com/2014/06/the-only-things-standing-between-bank-of-america-and-a-17-billion-justice-department-fine-are-brian-moynihans-negotiating-skills-latent-charisma/

So, that’s something.

Representatives of Bank of America Corp have asked U.S. Attorney General Eric Holder to meet with Moynihan, its chief executive officer, in an attempt to resolve differences over a possible multibillion-dollar settlement involving shoddy mortgage securities sold by the second-largest U.S. bank and its units, according to people familiar with the negotiations. Negotiators for Bank of America and the Justice Department have not met in more than a week and have no plans to do so after a flurry of meetings did not bring them close to a settlement amount, sources said…The Department of Justice has not yet responded to Bank of America about the possibility of the meeting, sources said. The bank requested the meeting late last week, the people said…

Sources said the Justice Department’s silence about a meeting between Moynihan and Holder suggested Bank of America’s request was premature. Bank of America has discussed paying about $12 billion, including more than $5 billion to help struggling homeowners, to resolve a range of federal and state probes, primarily into whether the company and its units defrauded mortgage bond investors in the run-up to the financial crisis, people familiar with the matter said. The Justice Department suggested a $17 billion settlement in the latest round of negotiations and did not view Bank of America’s offer as a serious one, one source said last week.


By Bess Levin I'M TOLD IT'S SATIRE...

[Demeter]

53. Last Time Corporate America Did This, The Stock Market Crashed

http://www.testosteronepit.com/home/2014/6/20/last-time-corporate-america-did-this-the-stock-market-crashe.html

The S&P 500 stock index bumbles to new highs no matter what. But it has been a slog: serial GDP downward revisions forward and backward, unceremonious abandonment of “escape velocity” for the fifth year in a row, wars or civil wars in Ukraine and Iraq with consequences for gas supplies to Europe and oil supplies to the world, US inflation heating up. And stocks nevertheless rise because.... The Fed Rules, Metrics and Ratios Are Just for Decoration.

In the Business Roundtable’s second quarter CEO survey, the chiefs of the largest US corporations weren’t exactly in an ecstatic mood either. They lowered their GDP growth forecast for the year to 2.3%; among other tidbits, they also expected to spend less money on capital investments...Capital investments are crucial to the economy. One, they crank up GDP when the money is spent. And two, investing in productive assets creates future growth. But only 44% of these CEOs are planning to increase capital investment, down from 48% last quarter.

Companies axe capital investments brutally when dark clouds appear at the horizon. It started in early 2000 as the stock market was blowing up and lasted through the recession that followed. Then capex recovered and peaked in the summer of 2008, even as the financial crisis was spreading. In either case, that sudden cut in corporate investment deepened the recessions. This chart of new orders of non-defense capital goods (St. Louis Fed) shows the brutality of the cuts – for example, slashing them by a third from $69 billion in August 2008 to $46 billion in April 2009:

?__SQUARESPACE_CACHEVERSION=1403242517912

But note how the chart has stayed within its range over the last two decades – a time when the US population has soared 19% and GDP, adjusted for inflation, 51%. Turns out, corporations had found other things to do with their money: stock buybacks. Which have been skyrocketing. In the first quarter, buybacks jumped 50% from a year ago to $154.5 billion, according to FactSet‘s report released yesterday. It was the third-largest in the data series, behind only 2007 when in Q2 and Q3 $161.8 billion and $177.9 billion were spent on buybacks, while the financial crisis was already fermenting underneath. Tech blew $47.4 billion on buybacks, a record in the data series, up 175% from a year ago. A cool $18.6 billion of that came from Apple. IBM was in second place with $8.3 billion. Industrials, up 119% from a year ago, also set an all-time high. Overall, Apple and IBM led the pack, followed by FedEx, Boeing, Abbott Laboratories, Corning, and eBay. For the trailing 12 months, our corporate heroes bought back $535 billion – funded largely with borrowed money – a notch below the $603 billion record set during the trailing twelve months ended in Q3 2007, on the eve of the financial crisis (chart by FactSet):

?__SQUARESPACE_CACHEVERSION=1403242584122


IF YOU DON'T FEEL QUEASY YET, THERE'S MORE AT THE LINK

[Demeter]

54. Stocks are ‘dangerously overvalued,’ M&A deals suggest

https://secure.marketwatch.com/story/stocks-are-dangerously-overvalued-ma-deals-suggest-2014-06-20

Analysis: Every big wave of mergers has ended with a drop in equities

NOT TO MENTION AN ECONOMIC CRASH AND WHOPPING UNEMPLOYMENT...

Medtronic has offered $43 billion to buy Covidien, a medical-device competitor.

Here’s one sign a significant stock market decline might occur sooner rather than later: the rapid acceleration of recent merger and acquisition activity.

This past week saw news of another big deal, led by medical-device maker Medtronic’s /quotes/zigman/233680/delayed/quotes/nls/mdt MDT -1.25% announcement of its $43 billion bid to acquire rival Covidien /quotes/zigman/4475320/delayed/quotes/nls/cov COV -1.24%

At the current pace, M&A deals could reach $3.51 trillion this year, the most since 2007, according to data provider Dealogic.

It wasn’t a fluke that a surge in M&A activity coincided with that year’s market top, according to Matthew Rhodes-Kropf, a professor at Harvard Business School and an expert in the field. “Each of the last five great merger waves on record” — going back more than 125 years — “ended with a precipitous decline in equity prices,” he says.

Some experts have found that merger activity surges when stocks are richly priced, at least in part because companies can use their inflated shares to pursue acquisitions.

[Demeter]

55. Obama’s housing nominee open to ending Fannie and Freddie

ANOTHER RUBINITE. 3RD WAY NEOLIBERAL NEOCON? TIMMY'S UNDERSTUDY?

WHERE DO THEY GET THESE PEOPLE, OUT OF 3-D PRINTERS?

http://thehill.com/policy/finance/209626-obamas-housing-nominee-open-to-ending-fannie-and-freddie


President Obama’s nominee for Housing secretary on Tuesday told the Senate Banking Committee he is open to shuttering the mortgage giants Fannie Mae and Freddie Mac. Senators expressed little opposition to San Antonio Mayor Julián Castro’s nomination for secretary for Housing and Urban Development (HUD), a job that would give him a major role in the push for reforms to the housing system. Though he declined to endorse any specific legislative proposals, Castro said he supports ending the federal backstop that Fannie and Freddie now enjoy.

"I absolutely believe that there are better alternatives than what we have in place with this duopoly and with the conservatorship," Castro said.

That was enough for Sen. Bob Corker (Tenn.), who said he will support Castro’s nomination.

"You will be involved in what happens with Freddie and Fannie," Corker told Castro at the hearing. "You were a little vague on your support of the bill, and you should be at this point, but relative to {Fannie and Freddie status quo] you agree with that 100 percent."

Corker and Sen. Mark Warner (D-Va.) put forward a housing finance proposal that became the foundation for a bipartisan bill from Banking Committee Chairman Tim Johnson (D-S.D.) and Sen. Mike Crapo (Idaho), the committee’s ranking Republican.

"I believe that reform would be preferable to what we have in place now," Castro said in response to a question from Sen. Jon Tester (D-Mont.). "If the nation were to experience another downturn and another housing crisis as we just experienced, for that reason I commend the committee for working toward a housing finance model that takes the taxpayers out of their position of first loss and puts the private sector in that position."

The committee approved the Johnson-Crapo bill last month on a 13-9 vote, with liberal Sens. Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.) opposing it because of concerns the legislation did not do enough to address affordable housing. The lack of liberal support likely killed the bill’s chances of receiving a floor vote this year.

"I fully understand though, as well, the concerns of folks with regards to the other part of the balance, which is access to credit," Castro continued in his response to Tester. "We have had a housing finance system in place that seeks to ensure opportunity for Americans with modest means who are credit borrowers."

Housing finance reform has been one of the largest financial regulatory issues left unresolved from the 2008 economic crisis. The government took control of Fannie and Freddie in September 2008 and gave them a $187.4 billion taxpayer bailout. Now, eight years after the crisis, the government is still conservator. Further complicating the issue is that Fannie and Freddie have become profitable again and have paid back the bailout money.

Johnson asked Castro about a 2012 HUD inspector general report that found San Antonio had mishandled $8.6 million in HUD allocations to the city. Castro said the city returned $125,000 of that money, and that he had personnel removed who were involved with the decision. Castro, a rising Democratic star who is often named as a potential vice presidential 2016 contender, had a packed crowd of about 50 people inside the Dirksen Senate Building, which is unusual for a Banking Committee confirmation hearing. He was introduced by Sen. John Cornyn (R-Texas). Castro was joined by his family, including his twin brother, Rep. Joaquín Castro (R-Texas), who arrived late the hearing.

"You'll have to forgive him. He's the second-born twin and sometimes he's late," the mayor quipped of his brother's tardiness.

President Obama nominated Castro for HUD secretary because the current chief, Shaun Donovan, has been nominated to lead the Office of Management and Budget.

[Demeter]

56. France endeavours to revive Paris stock exchange

AND THAT IS HOW THEY PUT THE SQUEEZE ON FRANCE...

http://www.euractiv.com/sections/euro-finance/france-endeavours-revive-paris-stock-exchange-302902

Finance minister Michel Sapin has launched a new committee aimed at reviving the Paris stock exchange whose competitiveness is increasingly undermined by European rivals. EurActiv France reports.

Sapin revealed a new committee titled "Place de Paris 2020" on Tuesday (16 June). According to Sapin, its goal is to increase financial support for the real French economy and to revive competitiveness of the Place de Paris (Parisian Financial market) that is running out of steam.

"Developing a financial industry which ensures financing to all sections of the economy, especially companies, in a competitive and certain way is very important for France," Sapin said.

This initiative comes as Euronext will be listed on the stock exchange. Euronext is a pan-European exchange whose major shareholder is the bourse of Paris. In 2007, it merged with the NYSE group which was then acquired by IntercontinentalExchange (ICE) in 2013. ICE will pursue an initial public offering (IPO) of Euronext on 20 June.

The French government is ready to intervene in order to prevent other big players from moving in when it enters the market. BNP Paribas and Société Générale, two of France's biggest banks, have been assigned to secure a blocking minority of 33%.

MORE

[Demeter]

57. AND THIS IS HOW FRANCE PUTS THE SQUEEZE ON GE...Gen. Elect. revises bid for Alstom, pledges jobs

http://www.dw.de/general-electric-revises-bid-for-alstom-pledges-jobs-in-tie-ups/a-17721730



General Electric (GE) has sweetened its offer to buy the power generation business of France's Alstom. The US engineering giant hopes the proposal will convince Paris and beat off a rival bid by Germany's Siemens... General Electric's revised bid offered $17 billion (12.48 billion euros) in cash for Alstom's power business and provided new guarantees on jobs and decision-making structures, the US-based company said in a statement released Thursday.

While leaving the overall value of the deal unchanged, GE Chief Executive Jeff Immelt said in a statement the revised offer would create jobs, establish headquarters in France and ensure that the Alstom name would endure.

MORE QUIBBLING AT LINK

[hamerfan]

58. Musical Interlude IV

Summertime Blues by Eddie Cochran:

[xchrom]

59. REPORT: POLISH MINISTER SAYS US TIES WORTHLESS

http://hosted.ap.org/dynamic/stories/E/EU_POLAND_GOVERNMENT_SCANDAL?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-22-06-25-10

WARSAW, Poland (AP) -- A Polish magazine says it has obtained recordings of a conversation in which Foreign Minister Radek Sikorski says the country's strong alliance with the U.S. "isn't worth anything" and is "even harmful because it creates a false sense of security."

A short transcript of the conversation was released on Sunday by Wprost, a weekly magazine that set off a political storm last weekend with the publication of secret recordings of other top officials making compromising remarks.

In the transcript, a person that Wprost identifies as Sikorski tells former finance minister, Jacek Rostowski, that Poles naively believe the U.S. bolsters their security.

The Foreign Ministry says it won't comment until the entire conversation has been released. Wprost says it will publish the sound files of the recording Monday.

[Demeter]

70. Well, Yes....so pleased my Motherland has come to this realization so quickly

Only took....since Reagan? That's when being an ally meant being screwed all began.

[xchrom]

60. Rosneft CEO Gave A Subtle Warning Against Increasing Sanctions On Russia

http://www.businessinsider.com/rosneft-ceo-warns-against-increasing-sanctions-2014-6

In the New York and London markets brokers and bankers explain that they are being discreetly called by US Treasury officials with this message: buying Russian equity or debt paper is legal, but in the event there is a new round of sanctions, it will be illegal to re-sell them, so there can be no profit in Russian assets.
The market is calling this campaign “stealth sanctions”. It is an attack on the international market for Russian corporations, and on the international currency and security clearance systems on which the market depends.

According to the highest UK and European courts — reported here on March 25 — the type of formal sanctions which the US and the EU have already introduced are likely to be found illegal, if they are challenged in court. Stealth sanctions are more difficult to substantiate in court -– and also financially much more damaging. Until now, there has been no Russian retaliation for the sanctions, and no litigation.

Yesterday, Igor Sechin, chief executive of Rosneft, said in a television interview with a New York network: “The sanctions have been discussed a lot and I would like us to abstain from this discussion because the more we talk about the sanctions, the more important they seem. I am trying to put myself in the shoes of those people who introduce sanctions and I believe that there should be some purpose of the sanctions and some justification of them.” The reference to purpose and justification is also a discreet reference to the court judgements in London and Strasbourg.

“I cannot understand any justification or basis for taking the sanctions. I don’t think that my active cooperation with the American companies that is aimed at ensuring mutual profit could be a basis for sanctions…serious people should not take any serious decisions under pressure.”



Read more: http://johnhelmer.net/?p=11015#ixzz35MeFFgcw

[Demeter]

71. It's a foot-stomping, breath-holding two-year-old's tantrum

Which does seem to be the hallmark of this particular Administration...

Consider it comic relief.

[xchrom]

61. Income tax to fall 12.5% over two years{SPAIN}

http://elpais.com/elpais/2014/06/20/inenglish/1403279451_832167.html

The government has announced income tax relief for Spaniards, who can expect it to kick in next year.

Under the tax reform presented by the Popular Party (PP) administration on Friday, income tax on wages will go down an average 12.5 percent over the course of two years, said Deputy Prime Minister Soraya Sáenz de Santamaría.

Santamaría added that for 62 percent of taxpayers – those earning less than €24,000 a year – the income tax rebate will be an average 23.5 percent in 2016.

The deputy prime minister also denied there would be any further hikes to value-added tax (VAT), save those on certain sanitary products to comply with orders from Brussels.

[xchrom]

62. Mayday: Berlin's Ill-Fated Airport Faces Insolvency

http://www.spiegel.de/international/germany/new-berlin-airport-faces-major-funding-difficulties-a-975863.html

Hartmut Mehdorn, CEO of Berlin's still unfinished new airport, isn't one for transparency. "This isn't a sandbox where everyone can just snoop around," he said in March. In other words, comptrollers looking into his project's finances are decidedly unwelcome, and indeed, when federal auditors from the Bundesrechnungshof, Germany's Federal Court of Auditors, recommended an independent audit, Mehdorn wanted none of it, and the public officials backed down.

But because the EU provided some of the funding for the problem-plagued airport, the 71-year-old Mehdorn was unable to prevent comptrollers from the European Court of Auditors from digging around in his sandbox last year, in an effort to find out what had happened to that money.

Now, the group has completed a report critical of the multi-billion euro project in Berlin. Even the cover letter addressed to Siim Kallas, the European Commission vice president responsible for the Mobility and Transport portfolio, notes "manifold errors" and a "weakness of management and monitoring systems."

Generally, the European Commission reacts to these kinds of findings by demanding that its subsidies be reimbursed, which would mean that Berlin's airport consortium, already short of cash, might be forced to send €30 million ($41 million) back to Brussels.

[xchrom]

63. Hollande Rallies EU Socialists Around Juncker for Commission Job

http://www.bloomberg.com/news/2014-06-21/hollande-rallies-eu-socialists-around-juncker-for-commission-job.html

French President Francois Hollande and German Vice-Chancellor Sigmar Gabriel signaled they are ready to back former Luxembourg Prime Minister Jean-Claude Juncker to head the European Commission.

Hollande and Gabriel met in Paris, along with Italian Prime Minister Matteo Renzi, Belgian Premier Elio di Rupo and five other heads of governments from European Union countries to stake out a common socialist position before all EU leaders gather in Ypres June 26. The summit is being held in the Belgian town as part of World War I centenary commemorations.

The endorsement of Juncker to run the EU’s executive arm next year sets up a clash with U.K. Prime Minister David Cameron, who is refusing to drop his opposition to appointing the Luxembourg politician, a British government official said yesterday. Parties backing center-right Juncker won the most seats in elections to the European Parliament last month.

“We said, let’s respect the spirit of the European elections, which is to say that the party that came in first should propose the candidate that was presented -- in this case Mr. Juncker,” Hollande said today in Paris, adding that the group would like socialist candidates considered for other commission jobs.

[Demeter]

72. Juncker must really live up to his name

[xchrom]

64. Europe's Worst Central Banker

http://www.bloombergview.com/articles/2014-06-20/europe-s-worst-central-banker


Polish central bank Governor Marek Belka has been caught on tape asking a government official to dismiss the finance minister, in return for engineering an economic rebound to help the government win re-election. If he doesn't resign, the government should fire him.

Poland's Wprost magazine last week published transcripts of a July 2013 conversation between Belka and Polish Interior Minister Bartlomiej Sienkiewicz, in which Belka effectively asks for the ouster of Jacek Rostowski, the finance minister at the time. Although media attention has focused on some salacious comments the governor made about one of his fellow Monetary Policy Council members, it's the besmirching of the independence of his office that makes Belka's position untenable.

The implication is that Belka would have been unwilling to rescue a slowing economy if he didn't get his way. The idea of a central banker blackmailing the elected representatives in government, using monetary policy as a weapon or bribe, is unacceptable, as is the idea that the governor might favor one political party over another.

The central bank's decision to keep Polish interest rates at a record low of 2.5 percent since July 2013 may be judicious and appropriate, and have nothing to do with ensuring the current government retains office in elections scheduled for 2015. And Rostowski's subsequent dismissal in November may have been a coincidence, unrelated to Belka's demands. But Belka's recorded comments cast doubts that can't be easily dismissed.

[Demeter]

73. He's been peeking in Timmeh's playbook!

[xchrom]

65. Give Norway's Beggars a Break

http://www.bloombergview.com/articles/2014-06-20/give-the-beggars-a-break

Norway, one of the world's richest nations, is about to ban begging in a move some see as a sign of rising anti-immigrant sentiment. Whatever the motivation, it's the work of misguided people who want to hide what they can't understand.

A recent government-commissioned report says there are between 500 and 1,000 foreign beggars on the streets of Oslo. The city estimates it will spend 5 million kronor ($824,000) this year just cleaning up after them. Locals believe most of them are Roma, a group commonly known as Gypsies who arrived from Romania and other east European countries in search of free food and clothes in the oil-rich country, which was largely unscathed by the global financial crisis and boasts one of the world's highest incomes per capita. Local charity organizations are relatively generous, but no one will rent housing to the beggars, so they are forced to squat or live rough, which in Norway often means sleeping on the ground in sub-zero temperatures.

Politicians from the anti-immigrant Progress Party, part of the country's ruling coalition, believe the beggars are part of organized crime syndicates. It's an idea that has a long history all over the world. "The professional beggar makes New York his hunting ground, and dresses for his character like any other actor," went a 1894 article in The North American Review, entitled "Street Begging As a Fine Art." "Nor is the occupation very unpleasant. Inured to the open air, beggars are much healthier than the pent-up factory hand or shop-girl." Last April, Lisa Scaffidi, the mayor of Perth, Australia, insisted the city's beggars were an organized group and asked the state legislature to outlaw them: "We are not making this stuff up," she said.

Although the claim is hard to substantiate, the Norwegian politicians have mustered enough votes in parliament first to allow municipalities to forbid begging and now to impose an outright national ban from 2015. While making life more difficult for the supposed pros, the ban would also wipe off the street the genuine sympathy cases -- people like Nathaniel Ayers, the talented violinist brought low by schizophrenia whom the journalist Steve Lopez found in Los Angeles playing a two-stringed violin for change.

[xchrom]

66. Why We're Stuck With Coin-Op Laundromats

http://www.citylab.com/tech/2014/06/why-were-stuck-with-coin-op-laundromats/373177/



***SNIP

1. Laundry is big business

According to an industry study prepared by MSG in 2011, there are some 35,000 coin-operated laundries in the U.S., and they generate $5 billion in annual gross revenue. They serve an estimated 100 million Americans, the majority of whom live in rental housing. (The figures include coin laundromats and coin-operated machines in apartment buildings.)

As Yglesias points out, most U.S. homes built today come with washing machines and dryers. But of course, that wasn't always the case.

***SNIP

2. Laundry is a passive business

One more thing worth noting about Big Laundry: Laundromats are passive income generators. The demand for laundry is steady month to month, meaning that revenue is steady and accounting is easy. Expenses are few and fixed—water, of course, but also licenses, insurance, advertising, legal, and maintenance. There's no inventory, no receivables, and almost no employees. There is sometimes mopping. I need to buy a laundromat.

3. Laundromats are obsessed with the dollar coin




The Dollar Coin Alliance argues that switching from paper dollar bills to dollar coins would save the U.S. economy $13.8 billion. The editorial boards of The New York Times, The Washington Post, Chicago Tribune, Los Angeles Times, and USA Today are all on board. This led some laundromats to join the armored-car industry and paper money–printing industry in Americans for George, which lobbied (successfully) to preserve the print dollar in 2012.

[Demeter]

74. I seriously considered buying a laundromat

but all the condos and even the apartments in town were either adding laundry rooms or installing machines in each unit. It's practically a dead business here, compared to 15 years ago. The convenience of not having to drag clothes around in the slush outweighs the higher price.

[DemReadingDU]

78. Our laundromat recently closed

I miss the super max triple loader. It was great for washing those awkward bulky items like rugs or bed comforters. Cost a fortune in quarters, if I recall, $7.50 for 1 load!

[xchrom]

67. The U.N. Has Been Undercounting the World's Poor—by 400 Million

http://www.theatlantic.com/business/archive/2014/06/weve-been-measuring-the-number-of-poor-people-in-the-world-wrong/373073/

Poverty got redefined this week.

The Oxford Poverty & Human Development Initiative (OPHI) released a report, the Global Multidimensional Poverty Index 2014 (MPI), on Tuesday looking at the state of poverty in the world today. It is being touted as the most accurate reflection of the world’s poor, a sort of census of the global impoverished population.

Didn’t that exist already? For more than a decade, the United Nations Development Programme has measured world poverty using its Human Poverty Index (HPI). The HPI defined poverty as those making less than $1.25 a day.

But it lacked in two key areas. First, it counted countries as one whole mass, unable to differentiate degrees of poverty within a country and locate the worst pockets. And second, it placed all of its scrutiny on income, without considering other indicators such as health and education.

Sure, making a certain amount a day is one way to measure the physical comforts a person might be lacking: home, food, clothing. But what about limited (or a total lack of) access to medical care? Or barriers to getting an education? And just because someone has a roof over his or head doesn’t mean it’s a sanitary, safe place to live—impoverished people in cities are often concentrated in slums where open sewage, crowding, and rickety housing make for dangerous living conditions. Consequently, many didn’t consider HPI’s income index to be particularly accurate.

So OPHI reconsidered poverty from a new angle: a measure of what the authors term generally as "deprivations." They relied on three datasets that do more than capture income: the Demographic and Health Survey, the Multiple Indicators Cluster Survey, and the World Health Survey, each of which measures quality of life indicators. Poverty wasn't just a vague number anymore, but a snapshot of on-the-ground conditions people were facing.

[xchrom]

68. let's measure the job market the way we gauge stock market health

let's measure the job market the way we gauge stock market health

http://www.nationofchange.org/let-s-measure-job-market-way-we-gauge-stock-market-health-1403356524



Have you noticed that the Powers that Be employ a different standard for measuring the health of America’s job market than they use for the stock market?

They’re currently telling us that the job market is “improving.” What do they mean?

Simply that the economy is generating more jobs for workers. But when they talk about the stock market “improving,” they don’t mean that the number of stocks investors may purchase is on the rise. Instead, they’re measuring whether assets are generally getting more valuable and making investors richer.

As a worker, you don’t merely want to know that 200,000 new jobs are on the market. You want to know what they’re worth: Do they pay living wages, do they come with benefits, are they just part-time and temporary, do they include union rights, and what are the working conditions? In other words, are these jobs or are they scams?And isn’t value what really counts for workers and investors alike?

So, it’s interesting that the recent news of job market “improvement” doesn’t mention that of the 10 occupation categories projecting the greatest growth in the near future, only one pays a middle-class wage. Four pay barely above poverty level, and five pay beneath it, including fast food workers, retail sales staff, health aides, and janitors.

[Demeter]

69. NOT MUCH STRIKES ME AS MORE THAN IRONIC, TODAY

[Demeter]

75. The perils of returning a central bank balance sheet to ‘normal’

http://www.ft.com/intl/cms/s/0/47e50644-ea63-11e3-8dde-00144feabdc0.html?siteedition=intl

With the US Federal Reserve on its way to bringing its bond-buying programme to an end, many are asking how to return the central bank’s balance sheet to “normal” – that is, to its pre-crisis size and composition. The same debate is under way at other central banks. Should they sell their bonds, or hold on to them until they mature? And if they are going to sell, which securities should go first? Yet there is another question that is equally important but seldom asked: is it sensible to return central banks’ balance sheets to “normal”? There are good reasons not to. At the beginning of 2007, the Federal Reserve System’s assets totalled $880bn. Today, the balance sheet stands at $4.3tn, including $2.4tn of Treasuries and $1.7tn of mortgage-backed securities. The reason for buying these assets was not to reduce the federal funds rate, which had reached zero by late 2008, but to lower the interest rates at which loans are extended to people and businesses, stimulating demand.

The evidence shows that these bond purchases indeed lowered long-term rates relative to short-term rates, and lowered rates on more-risky compared with less-risky obligations. A conservative estimate is that a $600bn bond purchase (the size of the Fed’s second round of bond buying) lowered long-term interest rates by about 25 basis points: not enormous, but a worthwhile contribution to the US economic recovery. And the effect of lower long-term rates was probably reinforced by higher equity prices and a cheaper dollar. The composition of the assets that the central bank buys matters too. Buying mortgage-backed securities narrowed the difference between the interest rate American homeowners paid on their mortgages and the rate at which the US government could borrow. This helped stop house prices from falling and spurred residential construction. Buying or selling bonds gives the Fed a way of influencing longer-term interest rates in general, and mortgage rates in particular. This lever will remain useful long after short-term rates begin to rise. But it will be out of reach if the central bank returns its balance sheet to its pre-crisis state. Before the crisis, many people urged the Fed to tighten policy to arrest the developing bubble in the mortgage and housing markets. An increase in short-term interest rates would have helped cool asset markets, but it also risked impeding growth in other sectors. If the Fed’s balance sheet had included mortgage-backed securities, it could have sold them, scooping froth out of those particular markets without depressing the rest of the economy.

What are the potential drawbacks of maintaining a balance sheet significantly larger than the pre-crisis “normal”? First, the central bank may suffer losses if it buys securities that fall in value. So far, this has not happened; central banks’ bond buying programmes have made them – and, therefore, taxpayers – record profits. Moreover, while such losses might ultimately impose costs on taxpayers, there is no risk from insolvency of the central bank itself. Unlike at private banks, which must keep cash on hand to meet withdrawals, central bank liabilities are not redeemable for anything else. Second, because asset purchases have to be paid for, the huge increase in central banks’ holdings has required a corresponding increase in their outstanding liabilities. Those economists who think of prices and wages as determined by the liabilities of the central bank expected hyperinflation to follow. Yet no increase in inflation – not even a few percentage points – has yet appeared in any economy that has pursued this course. That is because the central banks in question have made it advantageous for banks to redeposit the additional reserves instead of lending against them. This has prevented these asset purchases from triggering what might otherwise be an inflationary flood of credit.

For decades, it has been commonly understood that the central bank’s policy interest rate is the only independent instrument of monetary policy. We now see that there are two: the policy interest rate and asset purchases or sales. But the central bank cannot sell what it does not own. To keep this additional policy tool available, the Fed and other central banks should hold on to an ample supply of assets. They should not shrink their balance sheets to the pre-crisis size.

The writer Benjamin Friedman is a professor of political economy at Harvard University


WELL, THAT DEPENDS ON WHAT YOU WANT THE CENTRAL BANK TO BE, I SUPPOSE.... PERSONALLY, I'D BE HAPPY IF IT WERE EXTINCT. I DEFINITELY WOULDN'T LIKE IT TO HAVE EVEN MORE POWER OVER US ALL.

[Demeter]

76. The Metaphysics of Money

http://www.nakedcapitalism.com/2014/06/metaphysics-money.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. As a finance person, I can’t readily relate to the distinction the author makes between money once being seen as something tangible and it now being widely regarded as a mechanism for facilitating commerce. And I don’t see the rise of speculative finance as being the result of the abandonment of the Bretton Woods system. That devolution has many causes, including an active anti-regulatory ideology that started in the 1970s and gained tremendous momentum under Reagan. Nevertheless, I believe this post will resonate with many readers and thus I believe it will make for useful grist for discussion.

The end of Bretton Woods was an effect of the inflation of the 1960s, which in turn was due to the refusal of the Johnson Administration to raise taxes to pay for the war in Vietnam, the war on poverty, and the space race. Running fiscal deficits when the economy was already at full employment was bound to end badly. That inflation in turn was a major impetus to bank deregulation, as the old regime of simple products and fixed rates broke down as interest rates increased and became volatile.

But that distinction may help explain why some people have such a visceral, negative reaction to Modern Monetary Theory. MMT lays bare the role that money plays in a fiat currency regime. The notion that it is in some sense arbitrary, as opposed to representing something tangible, may explain some of the distaste....

By Dr Paul Tyson, Honorary Associate Professor, Theology, University of Nottingham. Cross posted from Yanis Varoufakis’ blog

Recently I was at a coffee shop, and to test a metaphysical hunch I asked a few of my fellow caffeinated confreres this question: “What is money?” They all gave answers along the following lines. Money is an arbitrary symbol of exchange value that we just make up in order to facilitate trade and investment. Money itself isn’t any thing but it is a collectively believed in fiction which operates as a very useful means of exchange. This sort of answer confirmed my hunch nicely: us Modern people have no idea how (or even if) money is connected to real wealth. It was Medieval economics that opened my eyes to this fascinating and possibly very important insight.

If you were to ask a medieval person the question “What is money?” they would not tell you that it is simply a made up means of marketplace exchange. They would not say anything like that for a number of interesting reasons. The first of these reasons is that they would assume a “what is… ?” question is a question about something’s essential nature rather than a question about its conventional function or instrumental effect. This assumption reflects a huge difference between Modern and Medieval reality outlooks to start with. To the Medievals, everything has an essential meaning, and accurately discerning true meaning determines right use. To us Moderns, it is the other way around: everything has a use – effective manipulative power, based on a scientific knowledge of how things work, is the criteria of real world truth – and each person can make up whatever meanings and values they like. Indeed, to us, nothing has an essential meaning. To us, use defines value, but value itself has no essential meaning.

Because they were interested in essential meanings the Medievals did not believe in a notion so relativistic and contingent as ‘classical’ supply and demand determined “market value”. Instead, they believed in “true value” where the true (essential) value of anything sold in the market needed to be reasonably reflected in the price if it was to be sold fairly. Here a fair price was seen as a function of properly appreciated real value (knowing what something was really worth). Fair price was a function of the essential value of the traded thing itself and the real value of the skills, labour and pious stewardship of the people who produced and distributed that good. Here also the essential value of the buyer (such as a God-imaged, though poor serf, needing food) must determine the price of, say, bread if that price is to reflect true value. So you would not get an instrumental answer to a “what is?” question of any sort from a Medieval. Further, in relation to the question “what is money?” it would not occur to a Medieval that real wealth, and any means by which wealth is exchanged, would be an arbitrary fiction that had nothing to do with moral and spiritual truths.

Secondly, unlike today, the Medieval person would not think of money as an abstract numerical cypher, but as a tangible physical thing: a certain amount of a particular metal. (The Medievals, you must remember, lived before the birth of the modern nation state, and thus before central banking which guaranteed the wide spread stability of money as paper based notes of credit. ‘Money’ as we know it today first became widely viable in 1694 when the Bank of England was formed in order to fund a war for King William III.) To the Medievals money was no abstract numerical fiction, money was tangibly metallic. Further, metals were analogues of, even ontologically participants in, cosmic and spiritual realities. To the Medievals, money was always made out of gold and silver – the metals of the Sun and Moon – and other metals. Gold, for example, as the Sun’s metal participates symbolically (and ontologically) in the Sun. The Sun is the physical source of all life, and thus – so Ficino maintained – an analogy of God Himself, the source and giver of life to creation. The Sun is a tangible icon that points us to the intangible God who is the eternal source and final destiny of all that is. Harking back to Plato’s analogy of the sun, the via antiqua metaphysics of the Middle Ages as well as Renaissance Platonism, saw God is the Goodness beyond Being, out of whom all beings come, the glorious source of the real qualitative value of all that is. Gold as incorruptible, and as the lustrous colour of the Sun, speaks to us of the eternal beauty and splendour of God and iconographically points us to the divine source of all true meaning and value. The wealth and splendour of gold is thus a real, though twice analogically reflected, wealth, and the spiritual reality that gold ‘sacramentally’ points to is divine providence, the source and essence of all wealth which is given to creation by God so that creation might flourish. Reflecting on the theological meaning of money to a Medieval person, we can see that wealth was understood as a real feature of created reality, and that money was physically (though ‘sacramentally’) bonded to wealth. Thus money was not understood in its essence as an artificial, man-made construct. Unlike today, the Medievals could not envision money as an intangible construct to be used for whatever instrumental pursuit of transaction manipulating power the fertile imaginations of high finance simply dream up. No, to the Medievals money was an active function of real wealth, though wealth in no way reduced to human money.

The reason why I have taken you into the exotic realm of Medieval economics is that it shows us how different metaphysical approaches to money can be, and it makes us aware that our Modern understanding of the nature and meaning of money is not a fixed and certain reality. We can now hopefully see that our astonishingly instrumental and abstract assumed metaphysics of money is one option amongst many possible ways of understanding the nature and meaning of money. Modern money is one way of thinking and acting concerning the relations between work, commerce and finance; it is one way of approaching the nature of finance and its (non) relation to wealth, morality, reality and power. Perhaps, even, the abstract and instrumental nature of our assumed metaphysics of money is deeply implicated in the horrifying pathologies of high finance?

Bearing the above question in mind, let us return to gold...

The catastrophic global financial disaster of the Great Depression was in the vivid memories of those who gathered at Bretton Woods in 1944 to plan and set up the architecture for the post-war global economy. They were determined that the final popping of the massive speculative bubbles of the roaring 20s would not be repeated. How, they pondered, could they fix the value of money to reality so that speculative finance did not become the dog that wagged the tail of the real economy? The answer they came back to was gold. Currencies would be tied in value together, and the American dollar would undergird the new global economy by being tied to gold. $US35 per ounce of gold held money to some real wealth anchor and the fascinating thing is that whilst the gold standard lasted, so did the post-war boom. After the collapse of the gold standard in 1971, speculative finance took off again and the real economy started to take a back seat to high finance again. Come 2008 and the spectre of 1929 can again be seen riding its ghostly horse through the economies of Europe. High finance is now inherently unstable and the dynamic of financial implosion could spread to every corner of the globe at any time.

Perhaps we should think again about the metaphysics of money and the need to tie money in some way to real wealth rather than to let it float disconnectedly from the actual production and provision of human needs. For when that happens monetary bubbles are generated without any contact with real wealth, and money without any real wealth cannot fail – sooner or later – to unravel in bubble bursts that are profoundly destructive of real wealth. I am not suggesting a return to the gold standard. What I am suggesting is that we must come to terms with the obvious fact that our collective metaphysical assumptions about the nature of money are now failing us badly, For today, money has no contact with real wealth, for it has no contact with reality.. As Satyajit Das succinctly puts is “money and the games played by high finance are intangible, unreal, and increasingly virtual.” This entirely artificial conception of money has deep pathological tendencies which are profoundly destructive of real wealth.

High finance has a frankly criminal tendency such that it facilitates the transfer of real wealth from the public purse – the coffers of states in which wealth is gathered from the people for the common good of the people – into private hands. Yet our banks have this criminal ability because they are tied to our governments (as, since 1694, the big banking players have always been). Astonishingly, after the Federal Reserve Bank of the US poured trillions of tax payer guaranteed money into the private banking sector in 2008, no-one went to jail for extortion even though this is undoubtedly the largest single act of financial extortion in human history. Because global finance is dominated by institutions that are “too big to fail” this means we tax payers must keep them eating our very flesh, and the flesh of our children, in order that the economy – which apparently operates for our welfare (ha!?) – does not implode. Feed us or else we take you all down! This is extortion pure and simple.

Why do we let our governments and our high finance sectors act in so obviously criminal ways? Perhaps it is because we unquestioningly assume that money is an amoral, abstract, artificial and purely instrumental entity that is just made up. For if money is just a number that is ‘produced’ and manipulated by reserve banks and financial specialists, then we naturally assume a bizarre sort of ‘realism’ where entirely artificial finances are seen as the legitimate repositories of right order and real power. Assuming this sort of financial and political ‘realism’, it seems natural to us that our governments have the authority and legitimacy of an economic priest-caste which acts in consort with our magical banking gurus to keep the world as we know it chugging along in proper cosmic harmony

If we are to change this situation, we need to change the way we think about money, wealth and power. This is where the fundamental matters are that will determine our future.

We are not, of course, going to banish extortion or immoral instrumentalism just by having better metaphysics. Criminals, extortionist and abusers of violent power were as common and powerful in the Middle Ages as they are today. Yet if we do not appreciate the relationship between the prevailing order of wealth and power and the metaphysical assumptions which we all share when we engage in the use of money and the practise of politics, then the vital collective sources of our norms and of how power is sustained will be invisible to us. The main game is, indeed, a struggle for our minds. Plato saw this with characteristic insight. As long as we believe that illusions are reality, we are controlled by those who manipulate the collective illusions that structure the operational norms of the world of finance and power as we currently know it.

How do we get money tied to the realities of real human life so that it becomes a fair function of the actual production and distribution of real wealth? How do we re-introduce the idea that finance should be tied in some concrete way to the real world in which actual producing and consuming people live? How can we get finance to serve human (that is political) ends rather than politics facilitating financial ends for high flyers in investment banking? These are the vital questions for us today in the post-2008 world.

[Demeter]

79. The Fed’s Ever-Burgeoning Market Manipulation Support

http://www.nakedcapitalism.com/2014/06/feds-ever-burgeoning-market-manipulation-support.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A set of articles in the Financial Times puts a nasty spotlight on what mission creep, or more accurately, mission leap, at the Fed. The central bank is moving unabashedly into price-setting, and stealth or formally backstopping, of more and more markets.

It’s one thing for the central bank to step in to shore up financial firms during a crisis via the means of providing liquidity. That principle goes back to the Bagehot Rule: “lend freely, against good collateral, at a penalty rate.” The idea was to make otherwise solvent firms pay a price for managing liquidity badly. It was also explicitly not intended to bail out bust banks.

But as we pointed out repeatedly during and after the crisis, the officialdom pretended that the meltdown was a liquidity crisis, simply a massive loss of confidence, rather than a solvency crisis. That belief served as the justification for failing to force writedowns of bad debt, require much higher level of capital, and at a minimum imposeg management changes on firms that needed bailouts (better yet resolving the worst of the pour decourager les autres).

We’ve refrained from saying much about the central bank’s forays into the repo market. Here are the key sections of tonight’s article from the Financial Times:

The Federal Reserve Bank of New York has emerged as the single largest player in an important segment of the short-term lending market that was at the epicentre of the financial crisis…

Armed with a balance sheet of $4.3tn of bonds purchased during quantitative easing, the Fed is using what it calls its reverse repo programme, or RRP, to trade with money funds at a time when tough new regulatory standards have made such borrowing less attractive for the banks…

When official short-term rates are eventually pushed higher, the Fed plans to use the RRP to drain cash from the financial system via short-term loans of Treasuries from its huge balance sheet.

Robert Grossman, managing director at Fitch, said the change in the Fed’s presence in the repo market had been dramatic and that the central bank could use RRP to significantly escalate its role…

Bill Dudley, New York Fed president, warned last month that if use of the repo facility were to grow too quickly it might “result in a large amount of disintermediation out of banks through money market funds and other financial intermediaries into the facility. This could encourage further enlargement of the shadow banking system.”

Without a cap on use of repo with the Fed, investors who ordinarily lend to banks could instead flock to the central bank in times of market stress, exacerbating a flight from funding of banks, he warned.

Yves here. Notice how perverse this all is. First, Paul Volcker violently disapproved of money market funds precisely because they competed with government guaranteed deposits. He was a big fan of having a floating net asset value to make the risk of money market funds more explicit. But during the crisis, they were backstopped. The big reason for the panic was that repo originally was done only with pristine collateral, meaning Treasuries. But demand for repo grew as more and more dealers needed to provide collateral for derivatives positions. That led to a need for more collateral, and increased acceptance of riskier collateral. The crisis in money market funds took place because the Reserve Fund, a large player, held Lehman commercial paper and “broke the buck,” leading to panicked withdrawals from other money market funds.

One remedy would be to discourage the use of derivatives, particularly since those markets have shown growth well in excess of GDP and the proliferation of derivatives is of questionable social value. That would reduce the need for collateral and would lead to a higher general quality of repo collateral. But the central bank is instead venturing into a new role, of controlling repo more directly and even at the early stage of this experiment, making itself a dominant player in the market.

A second disconcerting article was an opinion piece by Harvard economics professor Benjamin Friedman (hat tip Scott), The perils of returning a central bank balance sheet to ‘normal’: Asset holdings enable policy makers to regulate the economy. Now there are arguments to be made in favor of the Fed keeping its super-sized balance sheet and letting it run off as bonds mature. But Financial Times readers on the whole were quite negative about Friedman’s argument. SEE ARTICLE POSTED TWO STEPS UP...



There is so much wrong here that it is hard to know where to begin. To the extent that the not-all-that-significant impact of QE on interest rates has affected the real economy, it has been through the wealth effect, not on real economy lending. As we’ve discussed at length, putting money on sale induces more borrowing only from parties where the cost of money is a major part of the cost of their product. Even then, they also have to be confident of end-market demand. Only players in the financial services game have fit that picture. The weak housing recovery, which depended mainly on private equity firms bidding up the most distressed properties, is already floundering. Similarly, banks don’t lend against reserves.

Friedman also fails to acknowledge that central banks can run up against an inflation constraint and thus require taxpayer recapitalization (as in they can’t monetize their losses without making inflation unacceptably high). And as for the Fed making money now, at ZIRP, that’s a given. If the Fed were ever to raise the Fed funds rate over 3%, the duration of its mortgages would lengthen and the economics of holding them would change radically, to put it politely. Finally, selling the sort of mortgages that the Fed holds now (government guaranteed) would not have done anything to stem demand for subprime pre-crisis. We discussed at length in ECONNED how CDOs based heavily on credit default swaps subverted normal market mechanisms and drove demand to the very worst mortgages. In fact, the Fed’s interest rate increases had greatly reduced demand for prime mortgages but didn’t dent subprime demand, the opposite of what you’d expect in a normal tightening cycle.

The third worrisome piece was by Pimco’s Paul McCulley, Make shadow banks safe and private money sound, which called for the Fed to backstop shadow banks. The fact that it did that during the last crisis (and the market expects that to happen again) does not make it sound policy. Financial claims are already a huge multiple of the real economy. Throwing more guarantees underneath them will only lead to the creation of even more speculative product. While it makes sense to prevent the collapse of the financial system, that needs to include serious penalties with no discretion, including the ouster of the management and repayment of the assistance out of firm capital over time. The price of a rescue has to be huge penalties for the firm and its key decision-makers or they will just pile on risk.

But this is where we are. Our central bank seems happy to be the counterparty of the last resort and absorb all sorts of risks so as to provide smooth sailing for financiers. Where this ends I cannot fathom, but I do not expect it to be pretty.

[Demeter]

77. The Ugly Truth About Electronic Health Records

http://www.nakedcapitalism.com/2014/06/ugly-truth-electronic-health-records.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. While this post on electronic health records may seem a big far afield of usual Naked Capitalism fare, it illustrates some of the themes we’ve seen in other contexts. The first is code is law, the notion that underlying, well-established procedures and practices are revised to conform to the dictates of computer systems, with result being crapification of the activity. Second is the distressing way that health care is becoming all about the money, with patient outcomes taking a back seat. This article describes in considerable detail how electronic health records, which in theory should reduce errors and allow for more consistent delivery of medical services, were instead designed only with patient billing and control over doctors in mind. As a result, they are if anything worsening medical outcomes.

By Informatics MD, a medical doctor, and medical informatics professional via NIH-sponsored postdoctoral fellowship at Yale School of Medicine. Expertise in clinical IT design, implementation, refinement to meet clinician needs, and remediation of HIT projects in difficulty in both hospitals and the pharmaceutical industry. Former Director of Scientific Information Resources and The Merck Index (of chemicals, drugs, and biologicals) at Merck Research Labs. Faculty, Drexel University, College of Information Science and Technology, Philadelphia, PA.. Originally published at Health Care Renewal

The Citizen’s Council for Health Freedom (CCHF) is an independent 501(c)3 non-profit organization with a mission “to protect health care choices and patient privacy” (www.cchfreedom.org/about.php). Its president, Twila Brase, wrote this piece about Electronic Health Records in the CCHF newsletter of June 18, 2014, observing some “inconvenient truths” and highlighting one of the most asinine statements I’ve ever seen about computers made by (of course) a venture capital official who happened to play a significant role in formulating the Affordable Care Act a.k.a. “Obamacare”:

http://healthenews.cchfreedom.org/newsletter.php/148

The Truth about Electronic Health Records

Propaganda only works for so long. Pretty soon truth catches up to it. This is exactly what’s happening with electronic health records.

If you’re a doctor you know how bad the government-mandated electronic health record (EHR) is. But if you’re a patient, you may not realize that EHRs are endangering your life and jeopardizing medical excellence.

The EHR is nothing like what Big Government, Big Data, and Big Health said it would be. They promised convenience, coordinated care, fewer medical errors, more efficient medical practice, and portable medical records. They never meant it and it hasn’t happened. These data systems were created for billing, data collection and government control of doctors, not patient care.

From all I have seen over the years, I must agree with the last two sentences above. The pioneers who explored this technology back to the 1950′s warned against the nightmare that exists today, but I don’t think they believed we would ever get to where we are in 2014. Further, while Politico did not explicitly mention risk to life and limb caused by these systems, Twila Brase did. “EHRs are endangering your life” is the elephant in the living room that the industry and its well-captured (and perhaps lubricated?) “regulators” simply will not address in a serious manner.

It has been my belief this reflects self-serving willful blindness, gross negligence and/or pecuniary motives, but I also believe that a fundamental malevolence on the part of people and organizations who know better increasingly needs to be considered as a contributor to the recklessness in the health IT sector. These are experimental technologies of admittedly (by the regulators) definite but unknown risk, due to impediments to that knowledge. Demanding their rapid diffusion under threat of penalty while knowing about the risks, and the uncertainty about magnitude, certainly does not reflect a benevolent disposition.

For more on the above points see my April 9, 2014 post “FDA on health IT risk: reckless, or another GM-like political coverup?” (http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html) and its 11 points and hyperlinks. This post and its linked brethren represents an indictment of sorts against the health IT hyper-enthusiast culture and the unprecedented regulatory accommodation enjoyed by this sector.

Arthur Allen at POLITICO Pro eHealth (http://www.politico.com/story/2014/06/health-care-electronic-records-107881.html) says government-imposed EHRs are:

Driving doctors to distraction

Igniting nurse protests

Crushing hospitals under debt

“In short,” he writes, “the current generation of electronic health records has about as many fans in medicine as Barack Obama at a tea party convention.“

I guess that’s Politco’s way of saying “not very many at all.”

Doctors forced to use these EHRs say:

“They slow us down and distract us from taking care of patients.”

“We’re basically key-punch operators, transcriptionists having to input the data ourselves. It has essentially tripled the time to complete a medical record.”

“That’s why I’m retiring.”

“Before I took notes, wrote what I wanted to say. Now I write and I click. If you just click, the person who reads the record gets no idea of what the patient was going through, your thought process.”

“Anything that in a normal world would take at most two clicks, here it takes four or five.”

In fact, doctors and nurses forced to use this technology say far worse (e.g., see my posts on candid clinician feedback at http://hcrenewal.blogspot.com/2010/01/honest-physician-survey-on-ehrs.html , http://hcrenewal.blogspot.com/2013/11/another-survey-on-ehrs-affinity-medical.html , http://hcrenewal.blogspot.com/2014/02/ehrs-real-story-sobering-assessment.html , and http://hcrenewal.blogspot.com/2013/07/candid-nurse-opinions-on-ehrs-at.html).

Proponents falsely promised privacy. The real goal of Big Government, Big Data and Big Health was NO privacy. Data is valued as a tool of control and a means to profit. And today, 2.2 million entities today have legal access to your medical records without your consent because of the so-called HIPAA “privacy rule” and the 2009 HITECH Act. In addition, untold numbers of computer thieves, identity thieves and hackers have illegal access.

Not only that, but our data is sold in, in essence, data broker “back alleys” (e.g., see “Health IT Vendors Trafficking in Patient Data?” at http://hcrenewal.blogspot.com/2009/10/health-it-vendors-trafficking-in.html ). Worse, the phenomenon of mismanagement of the “sales” is international in scope (e.g., see “NHS slammed for MAJOR data blunders as scale of patient info sell-off is revealed” at http://www.theregister.co.uk/2014/06/17/nhs_blamed_for_major_data_blunders_with_sale_of_patient_info_to_private_outfits/).

Every doctor and hospital must use EHRs by January 1, 2015 or face financial penalties. This was part of Obama’s 2009 Recovery Act, and the foundation of Obamacare. The sheer cost of the mandate has forced many doctors to shut down private clinics and become health system employees, susceptible to being told by outsiders how to practice medicine.

It has also led medical centers such as the University of Arizona Health System, about to undergo the stresses of mass immigration of South American children no less, to sink $30 million into the red in large part in trying to fix EHR bugs (see my June 2, 2014 post “In Fixing Those 9,553 EHR “Issues”, Southern Arizona’s Largest Health Network is $28.5 Million In The Red” at http://hcrenewal.blogspot.com/2014/06/in-fixing-those-9553-ehr-issues.html).

Next Ms. Brase reveals a stunning fact about one of the architects of that 2009 Economic Recovery Act:

The arrogance of some EHR supporters is unpardonable. Bob Kocher helped write Obamacare, was trained as a doctor and is employed as a Venrock venture capitalist in health IT, but his credentials are those of a bureaucrat and profiteer (http://www.venrock.com/teammember/bob-kocher/).

Unpardonable arrogance indeed.

In other words, a speculator and profiteer in the health IT sector helped in the formulation of laws that pushed the technology onto physicians, nurses and hospitals with CMS penalties for non-adopters of “certified” systems. It would be interesting to know just how far such a potential conflict of interest went in the crafting of the ACA and HITECH itself.

Beyond that issue, this venture cap issues the following perverse statement, as cited by Politico and CCHF:

Per Politico pro eHealth, he says, “The reason so many computers] are inefficient is that doctors are inefficient. If they redesigned their workflows, computers would work better.”

Readers of this blog are familiar with perversity in health IT, but that statement is literally stunning. It would make for a funny Saturday Night Live or Rowan and Martin’s Laugh-In (to us 60′s folks) skit if the topic were not so serious.

If they {doctors] redesigned their workflows, computers would work better?

Where, exactly, is the evidence for that assertion? Exactly how should doctors “redesign” their workflows, considering the poorly bounded, conflicted, highly variable, uncertain, and high-tempo nature of the field?

How can one even have a well-defined and unvarying “workflow” in such a domain that would “make computers work better?”

Answer: it’s impossible.

(Perhaps patients should adjust the unpredictable nature of their illnesses and symptoms to make the computers work better, too?)

What Dr. Kocher seems to turn on its head is the recognition that:

“The reason so many {computers in healthcare] are inefficient is that they are grossly misdesigned for a domain like medicine. They are unfit for purpose. If they {the IT companies] redesigned their entire process in HIT production (from conception, design, implementation, marketing, and support) to be consistent with the needs of the field of clinical medicine and of clinicians, computers would work
better.” - Silverstein

The reality is that if the healthcare IT industry actually fired its ossified business-IT-oriented leaders (since business computing and clinical computing are two highly different fields, e.g., see http://hcrenewal.blogspot.com/2008/06/business-v-clinical-computing.html), or relegated them to managing accounting systems, and embraced the teaching of 50+ years of Medical Informatics in building good health IT (see definitions of good and bad health IT at http://cci.drexel.edu/faculty/ssilverstein/cases/), then we might actually get significant value and better safety from the technology.

Mr. Kocher, that’s an idea to consider.

As I wrote at that 2008 post on business v. clinical computing:

… The prevalent belief in MIS {management information systems a.k.a. business computing] seems to be that medicine is another area of transactional business subject to conventional modeling by generalists, to be followed by “business process re-engineering” and traditional information systems development processes and methodologies.

However, the belief that one could employ conventional business-oriented “analysis” in the clinical world always seemed to me to be oversimplistic, overoptimistic, and in fact not infrequently harmful to medical practice as a result of the simplistic assumptions. It is a belief that does not perform well even in the conventional business world where significant cost overruns, project difficulties, and project failures are commonplace, let alone in the unforgiving environments of medicine.

My fear is that many in business computing may lack the mental flexibility and capability to understand issues like that, that conflict directly with their linear-flow, business-oriented worldview.

In other words, Mr. Kocher wants doctors to practice according to the computer systems he helped impose, not the doctor’s patients. We must never let his agenda for medical practice prevail. State legislatures must act now to restore patient privacy rights and use Tenth Amendment powers to undo the EHR mandate.

Exactly. It’s certainly the simple way to big profits, and injured and dead patients be damned. Building good health IT is far more resource intensive.


Working to sustain an ethical patient-doctor relationship,

Twila Brase
President and Co-founder

Thank heaven someone is working towards those ends.

Notes:

[1] Per Medical Informatics researchers Nemeth and Cook’s “Hiding in plain sight: What Koppel et al. tell us about healthcare IT”, Journal of Biomedical Informatics 38 (2005) 262–263 available at http://www.ctlab.org/documents/Hiding%20in%20plain%20sight.pdf)

[Demeter]

84. TREKNOSIS: Forged in Battle: Team Aezon's Origin

http://www.startrek.com/article/treknosis-forged-in-battle-team-aezons-origin

You may have heard about Team Aezon already. They're the youngest team competing for the $10M Qualcomm Tricorder XPRIZE – an incentivized competition challenging teams around the world to create a real-life, Star Trek-inspired medical Tricorder. They're all undergrads at Johns Hopkins University. Whatever your impression of most undergrads is, it probably doesn't include a serious, innovative attempt to build a working medical Tricorder. So, how'd this team come together? And where'd their leader, Tatiana Rypinski, get her start?

Gladiatorial combat, basically.

Before her freshman year of high school, Rypinski found herself on a California university campus on vacation with her family. At some point, they wandered into a gym that boomed and rang with the noise of screams and cheering. As a field hockey and lacrosse player, Rypinski was no stranger to the sounds of competition, but what she saw in the arena was like nothing she'd encountered before: robots whirling and pounding on each other with built-in weaponry, controlled by teams of high school kids. And just like that, the seed was planted. "I really wanted to be a part of it, to learn what they were doing," she recalls.

Rypinski soon started her own high school team in Rockville, Maryland. For three years, she led them from competition to competition, picking up more than just the occasional trophy. Being a team leader taught her invaluable lessons not only in systems integration and materials, but also about the design process, how to work under intense deadlines and what makes a good team tick. "As leader," she said, "one of the most important things is to be a good listener, so you can hear the subtleties of what's going on with your team – or particular people – and work to resolve any conflicts that might come up."

At the same time, she was developing an interest in something entirely different. Rypinski's grandfather had a friend who'd been rendered quadriplegic, and his struggle to live a normal life, assisted by various devices and prosthetics, moved her: "I was interested in how they worked, and in their limitations from an engineering standpoint." Were there advances to be made? She'd read about cutting-edge prosthetics that could be connected to residual nerve endings, allowing them to be controlled by their users like replacement limbs, though they probably wouldn't be market-ready for a long time. Other promising-sounding medical technologies seemed just over the horizon, too, like nanotechnology designed for targeted drug delivery.

The time soon came to pick a college major. Rypinski's interest in advancing prosthetic technology jumped to the next level: biomedical engineering. In the Johns Hopkins program, one of the best in the country, she'd learn to design and create devices designed to enhance human health and our understanding of it. "I like to build things," she says, "and I'm really interested in both the human body and devices that can interface with it."

Then came that fateful morning when Rypinski read about the $10M Qualcomm Tricorder XPRIZE. "It seemed like a cool project," Rypinski said, "and a fun challenge." She composed an email that would go out to everyone across all the engineering departments at Hopkins, plus the science majors. "I had no idea what the response would be," she recalls, "but I had nothing to lose." She hit SEND....


Jon Sung is a contributing writer for XPRIZE and copywriting gun-for-hire to startups and ventures all over the San Francisco Bay area. When not wrangling words for business or pleasure, he serves as the first officer of the USS Loma Prieta, the hardest-partying Star Trek fan club in San Francisco.

XPRIZE is an innovation engine. We design and operate prize competitions to address global crises and market failures, and incentivize teams around the world to solve them. Currently, we are operating numerous prizes including the $30M Google Lunar XPRIZE, challenging privately funded teams to successfully land a robot on the Moon’s surface, and the $10M Qualcomm Tricorder XPRIZE, challenging teams around the world to create a portable, wireless, Star Trek-inspired medical device that allows you to monitor your health and medical conditions anywhere, anytime. The result? Radical innovation that will help us all live long and prosper.

Sign up today to join our mission, be a part of our campaign and win collectibles at: tricorderfederation.org.

[Demeter]

85. Anti-Star Trek: A Theory of Posterity

http://www.peterfrase.com/2010/12/anti-star-trek-a-theory-of-posterity/

In the process of trying to pull together some thoughts on intellectual property, zero marginal-cost goods, immaterial labor, and the incipient transition to a rentier form of capitalism, I’ve been working out a thought experiment: a possible future society I call anti-Star Trek. Consider this a stab at a theory of posterity.

One of the intriguing things about the world of Star Trek, as Gene Roddenberry presented it in The Next Generation and subsequent series, is that it appears to be, in essence, a communist society. There is no money, everyone has access to whatever resources they need, and no-one is required to work. Liberated from the need to engage in wage labor for survival, people are free to get in spaceships and go flying around the galaxy for edification and adventure. Aliens who still believe in hoarding money and material acquisitions, like the Ferengi, are viewed as barbaric anachronisms.

The technical condition of possibility for this society is comprised of of two basic components. The first is the replicator, a technology that can make instant copies of any object with no input of human labor. The second is an apparently unlimited supply of free energy, due to anti-matter reactions or dilithium crystals or whatever. It is, in sum, a society that has overcome scarcity.

Anti-Star Trek takes these same technological premises: replicators, free energy, and a post-scarcity economy. But it casts them in a different set of social relations. Anti-Star Trek is an attempt to answer the following question:

Given the material abundance made possible by the replicator, how would it be possible to maintain a system based on money, profit, and class power?

[Demeter]

86. Enjoy the summer while it's here, Everybody!

Remember what Ezra Pound had to say:

This piece was parodied as "Ancient Music" by the American poet Ezra Pound (Lustra, 1913–1915):

Winter is icumen in,
Lhude sing Goddamm,
Raineth drop and staineth slop,
And how the wind doth ramm!
Sing: Goddamm.
Skiddeth bus and sloppeth us,
An ague hath my ham.
Freezeth river, turneth liver,
Damm you; Sing: Goddamm.
Goddamm, Goddamm, 'tis why I am, Goddamm,
So 'gainst the winter's balm.
Sing goddamm, damm, sing goddamm,
Sing goddamm, sing goddamm, DAMM.


The song is also parodied by P. D. Q. Bach as "Summer is a cumin seed" for the penultimate movement of his Grand Oratorio The Seasonings.

Mark Alburger's Mary Variations includes a movement titled "Mary Is Icumen In", which sets Lowell Mason's "Mary Had a Little Lamb" to the melody.

Vernon Duke gently parodied and paid homage to the round with his song "Summer is A-Comin' In," with the verse making reference to "a troubadour / Way back in 1226." Each refrain of the song begins with the phrase "Summer is icumen in / Lhude sing cucu." The song has been recorded by Charlotte Rae (twice) and Nat King Cole, among others.