Weekend Economists Commemorate the Dark Knight July 25-27, 2014

[Demeter]

It was a time of uncertainty and peril, great crimes and general chaos....

Debuting in 1938 and 1939 respectively, Superman and Batman have always had an implicit correlation. The only reason Batman was even conceived by Bill Finger and Bob Kane was due to DC Comics wanting to create a hero like Superman. Keep in mind this is before there was really a “superhero” genre to draw from, so they seemed similar enough.

Ironically, the characters have been re-envisioned over time as diametrically opposed. Superman – the “Blue Boy Scout” – surveys Metropolis, a city that is as much the pinnacle of civilization as he is the pinnacle of heroism. Batman – the “Dark Knight Detective” – prowls Gotham, a slum so corrupt that it warrants having a shadowy vigilante protecting it. They’re kinda different...

While both heroes have strict codes against killing, that wasn’t always the case. Before the Comics Code Authority in the 50′s forced comic book companies to adhere to strict censorship, it wasn’t uncommon for either Superman or Batman to cause the death of a criminal through accident or intention. In Batman’s first appearance, he casually chucks a criminal off a roof! Post-Comics Code Authority, both heroes have curbed their violence, but Batman often still has murderous impulses.

In “The Dark Knight Returns”, Batman rigs some thugs’ bomb to blow up before they can use it, resulting in their deaths. He muses that “two men die, leaving the world no poorer”. Compare that to the anguish Superman has over killing Zod, someone much more threatening than two mooks. As the paragon of heroism, it wouldn’t be crazy to think Superman might find Batman’s laxness towards violence objectionable and confront him over it. That’s not even mentioning some of Bats’ other questionable methods such as using children as partners, terrifying citizens, and using nigh-lethal weaponry.

...If a random mugger shot a ten year old’s parents in front of him, that kid would probably grow up with trust issues. Likewise, Batman is often shown to distrustful of people’s intentions, even other superheroes...

http://whatculture.com/film/batman-vs-superman-10-potential-reasons-theyre-going-to-fight-one-another.php

In large part, the character and history of Batman is defined by the medium: comic books.

While the form originated in 1933, American comic books first gained popularity after the 1938 publication of Action Comics, which included the debut of the superhero Superman. This was followed by a superhero boom that lasted until the end of World War II. After the war, while superheroes were marginalized, the comic book industry rapidly expanded, and genres such as horror, crime and romance became popular. The 1950s saw a gradual decline, due especially to new censorship laws and the spread of television. The 1960s saw a superhero revival, and superheroes continue to be the dominant character archetype into the 21st century today.

Since the later 20th century, comic books have gained note as collectable items. Comic shops cater to fans, and particularly valuable issues have fetched in excess of a million dollars. Systems of grading comic books have emerged, and plastic bags and backing boards are available to maintain the comic books' condition....

Aficionados know the period from the late 1930s through roughly the end of the 1940s as the Golden Age of comic books. It featured extremely large print-runs, with Action Comics and Captain Marvel selling over half a million copies a month each; comics provided very popular cheap entertainment during World War II especially among soldiers, but with erratic quality in stories, art, and printing. Unusually, the comics industry provided jobs to an ethnic cross-section of Americans (particularly Jews), albeit often at low wages and in sweatshop working-conditions.[citation needed] In the early 1940s over 90 percent of girls and boys from seven to seventeen read comic books.

Following the end of World War II, the popularity of superheroes greatly diminished, while the comic book industry itself expanded. A few standard characters like Superman, Batman and Wonder Woman continued to sell, but superheroes as a genre became relegated to the status of a subgenre of adventure comics, a genre which itself was not amongst the popular genres at the time. Between 1950 and 1952 all attempts at publishing new superhero comic books were in vain.

Dell's comic books accounted for a third of all North American sales in the early 1950s. Its 90 titles averaged a circulation of 800,000 copies each issue, with Walt Disney's Comics and Stories peaking with a circulation of three million in 1953. Eleven of the top 25 best-selling comic books at the time were Dell titles. Out of forty publishers active in 1954, Dell, Atlas (Marvel), DC and Archie were the major players sales-wise. By this time, former big-time players Fawcett and Fiction house had ceased publishing.

Circulation peaked out in 1952, when 3161 issues of various comics were published with total circulation at about one billion. After 1952, the number of individual releases dropped every year for the rest of the decade, with the biggest losses coming in 1955–56. These rapid losses followed the introduction of laws that curbed the sales of comic books that were seen as being harmful to children, as well as a crackdown on press wholesalers by the U.S. Senate, which freed retailers from tie-ins. While there was only a 9% drop in the number of releases between 1952 and 1953, circulation plummeted by an estimated 30–40%. The cause of the decrease is not entirely certain. Television had come to provide competition with comic books, or the rise of conservative values that came with the election of Dwight Eisenhower. The Comics Code Authority, a self-censoring body founded to curb juvenile delinquency believed to be influenced by crime and horror comics, has been targeted as the culprit, though sales had begun to drop the year before it was founded. The major publishers were largely unaffected by the drop, but smaller publishers like EC (the prime target of the CCA) were wiped out. By the 1960s, output stabilized at about 1500 releases per year.

The dominant comic book genres of the post-CCA 1950s were funny animals, humor, romance, television properties and Westerns. Detective, fantasy, teen and war comics were also popular, while adventure, science fiction, superheroes and comic strip reprints were in decline, with Famous Funnies seeing its last issue in 1955.

https://en.wikipedia.org/wiki/American_comic_book

Batman and other comic books were basic cheap, fantasy entertainment for the young and not terribly sophisticated. I remember scrounging for 6 pop bottles (2 cents deposit) to buy the latest 12 cent issue...

[Demeter]

1. No Bank Failures Reported at 7 PM

[Demeter]

2. DC ENTERTAINMENT DECLARES JULY 23, 2014: BATMAN DAY

http://www.dccomics.com/blog/2014/04/29/dc-entertainment-declares-july-23-batman-day

Batman Day: Celebrating 75 Years of the Caped Crusader

http://www.boston.com/entertainment/2014/07/23/batman-day-celebrating-years-the-caped-crusader/TZhCxpl0H1YA5Niv5v4rOJ/story.html



On the eve of the first day of Comic Con, DC Comics is commemorating the Caped Crusader’s milestone 75th anniversary by giving the superhero his own day (although, he already has his own month...and year).

The company is also offering free, special editions of “Detective Comics #27,” featuring a retelling of the Dark Knight’s first appearance by author Brad Meltzer, available online and at comic book stores around the country. https://www.comixology.com/ https://www.comixology.com/Batman-Superman/list/454

[Demeter]

3. Who Bled Detroit Dry? By Peter Rugh

http://www.vice.com/read/who-bled-detroit-dry

George Boukas fanned himself with a shutoff notice he'd received a few days earlier from the Detroit Water and Sewage Department. The total amount due, $340.32, was highlighted in red. “I just paid this thing,” he told me with a grin...“Water used to be something you could hold off paying until you got enough cash together,” he said. “Not anymore.”

...on July 14, Valerie Blakely was making breakfast for her children when she looked out the window and noticed a truck parked in front of her North End home. The 55-year-old stay-at-home mom marched outside and sat down a few inches from her curb, blocking access to the underground valve that provides water to her family, including her four kids—ages five to 14.

“You can call the police, but I'm not moving,” she told the two men with the Detroit Water Collections Project. The men were employees of Homrich Wrecking, a private corporation that was handed a $5.6 million contract by Detroit's water department to shut off the taps of thousands of Detroit residents, some of whom are as little as two months behind on their bills.

Balking at Valerie's presence, the men with Homrich Wrecking simply moved on. Valerie followed their truck as it lurched down her street, shutting off water to approximately 25 homes on her block. Since then, Valerie has turned her front lawn into an emergency center, like the kind that pop up after hurricanes. She is working with local NGOs to distribute water and keeps a cauldron of stew or vegetable chili brewing at all times. “My neighbors can't cook, can't bathe. They have nothing to drink,” she said. “My neighborhood is now a disaster area.”

Awash with empty homes, skyscrapers, and factories and saddled with nearly 15 percent unemployment, Detroit has been economically water-boarded and bled dry. Most of the city's inhabitants have fled the city in the last several decades, or else they are holding on for dear life. At the same time, the wealthy business elites have remained are buying up land for pennies a pop, creating a powerful wave of gentrification that looms over the city—that is, if it can survive its latest crisis.

Tens of thousands of people who live beside a river and the largest freshwater source in the world, the Great Lakes, can't even drink from their own faucets. As of July 1, 141,137, or 48 percent, of Detroit's residential water accounts were at least 60 days overdue—the cutoff threshold set by the Water and Sewage Department. Fifty-four percent of the city's commercial accounts and 47 percent of its industrial accounts were two or more months delinquent as well. Nearly half of Motor City is under threat of losing its water, the price of which has risen 110 percent over the last decade.

On Monday the water department announced that it was suspending the shutoffs for 15 days to allow Detroit's residents time to scrounge up cash, but damage has already been inflicted on thousands of households and the threat of losing water continues for some 300,000 citizens including children, the elderly, and the ill. America's registered nurses declared Detroit a “public health emergency zone,” in a statement distributed to the press last week through their 180,000 member union, National Nurses United. The United Nation's High Commission on Human Rights condemned the shutoffs in June and said it would reach out to the Obama Administration to prevent further violations to people's right to water. Locally, mutual recriminations have been flying all over the place. The Water and Sewage Department has claimed some residents could pony up if they really wanted to but were simply mooching off the city. This was a view shared by the surly cabdriver who gave me a lift into town from the airport. The city is “going to shit” he said before making the sinking sound of a bomb landing with his lips. The citizens of Detroit are, by and large, slovenly idiots—the kind of people who keep going back to the convenient store for cans of beer instead of buying the whole six-pack, he explained. The cabby had lived in the city for 35 years after immigrating from Iraq, but, he told me, these days “Detroit is worse than Baghdad.”

And certain statistics back him up. Baghdad actually has both a lower unemployment rate and a lower murder rate than Detroit.

We drove past the field where the old Tigers' stadium once stood and where rows of shabby bars that had counted on customers the team brought their way remained. I stationed myself at Corktown Inn, the kind of place most people rent by the hour. A vending machine by the front desk dispensed underwear for two dollars. There was a realtor’s sign on the front lawn, but there couldn't have been many eager buyers. It looked as if the Rapture had taken place outside, an impression eerily reinforced by a billboard on the corner of Trumbull and Michigan, put up by evangelists, that asked, “What is after death?”

While Detroit has been dying of neglect and malfeasance for decades, now it is dying of thirst.

The water shutoffs began when Detroit's unelected emergency manager, Kevyn Orr, who was appointed by Governor Rick Snyder in 2012, filed the city for Chapter Nine bankruptcy last year, in an effort to rid it of approximately $18 billion in municipal debt....A large chunk of the city's obligations are the result of borrowing, dating back to 2005, conducted by the city's former mayor, Kwame Kilpatrick, who was convicted on federal corruption charges last year. To cover budget shortfalls, Kwame issued $3.7 billion worth of bonds in complicated interest-rate swap deals with the likes of UBS, Chase, and Bank of America. When the the stock market tanked in 2008, it sent interest rates skyrocketing. Liabilities on the loans later jumped to $15 billion, more than four times the amount originally borrowed. To pay its way out of one bond deal, the Department of Water and Sewage borrowed $300 million in 2012.

“It all ties in together,” said Vanessa Fluker, a short, matter-of-fact housing attorney who, in her 60s, could still pass for a lightweight boxer. Walking past the Chase building with me downtown, she noted that the same banks who suckered the city into interest-rate swap deals created a housing crisis through subprime loans. These were bundled and sold to investors with bullshit triple-A ratings. When homeowners couldn't make mortgage payments and were shown the curb, it sent global markets plummeting and interest rates on the city's swaps through the roof.

Automation and globalization had already been gradually shrinking the workforce of the big auto giants and the population of Detroit, which reached a height of 1.85 million people in 1950 but has now dwindled to approximately 700,000. The 2008 financial crisis, however, proved to be a knockout blow to Motor City's staple employers. Chrysler and General Motors (currently immersed in litigation surrounding faulty ignition switches that led to at least 16 deaths) filed for bankruptcy, and a fresh round of layoffs ensued. The federal government bailed out the automakers and the big banks, but Detroit and its “economically abused” citizens, as Vanessa describes them, have gotten no relief.

In April, Bank of America and UBS agreed to accept a flat $85 million from the city to cover further debt obligations tied to the swaps, a deal the judge overseeing Detroit's bankruptcy signed off on. But in order to cover the budget shortfalls caused by its dealings with Wall Street, the Water and Sewage Department is still twisting the arms of residents and businesses already feeling the pinch of the Great Recession.

“I will tell you the same thing a hundred thousand people in Detroit will tell you,” Valerie Blakely told me. “My husband lost his job at Lapeer Metal Stamping in 2008, and he's been fixing cars here and there just to get by ever since.” On top of everything else, Detroit is coming off a brutal polar-vortex winter where, Valerie said, “our utility bills literally quadrupled.” At this point she estimates she owes the city about a grand in back payments. She is not alone.

“Right now we've got about $89 million out there in delinquencies,” Greg Eno, a spokesperson for the water department told me when I reached him by phone. “That's why we've decided to ramp up our efforts.” Last August, 2,752 accounts were shut off; 3,487 in September. By June of this year the number of shutoffs had escalated to 7,210. “It's working,” said Greg. “We're getting people's attention. We've collected almost $2 million since February.”

Public funds totaling $284 million will go towards building the new $650 million home for the Red Wings, who already have a stadium just a few blocks away—the Joe Louis Arena, also owned by Ilitch Holdings. It's a win-win for the Ilitch family, since the $284 million will come from a pot administered by Detroit's Development Authority, based on taxes collected on downtown properties. Because Ilitch Holdings already owns many of those properties, it will essentially be reinvesting in itself when it pays taxes.

Some might question why a city that can barely keep water in its pipes and its lights on would help a land baron like Christopher Ilitch build a new arena when he already has a perfectly good one. Others are hoping to ride his coattails.

[Demeter]

4. Some Money Market Funds Will Have to Be Honest With You

http://www.bloombergview.com/articles/2014-07-23/some-money-market-funds-will-have-to-be-honest-with-you

The basic deal of a money market fund is that you give it your money, it invests it in stuff, it pays you a little bit of interest, and whenever you want you can take your money back out. (This is the basic deal of a bank account, too.) The basic problem is that, if your money market fund has $1,000 of your money, and $99,000 of other people's money, and invests it in $100,000 worth of stuff, every so often that stuff ends up being worth, like, $98,000. And then the fund has a problem when you go to it and ask for your $1,000 back.

It's a weird empirical fact that this problem rarely occurs, and almost always gets solved somehow when it does. (1) But every once in a long while it doesn't, and people lose money. And they're not supposed to lose money, because a money market fund is where you put the money you don't want to lose. (There are plenty of other places to put the money you want to lose, and they all pay more interest than money market funds.)

Money-Market Funds

So the prospect of losing money is scary. So if you think your money market fund is on the way to being worth only $98,000, you might want to go and demand your $1,000 back right now. They'll probably just give it to you. I mean, there'll still be $97,000 left over. And you don't want to be the guy holding the bag when 98 other people have asked for their money back and there's no money left. But everyone thinks the same way, so everyone takes their money out, so the money market fund has to sell all its stuff, so the price of the stuff drops, so everyone loses money. This is called a "bank run," only it's a money market fund, so it's mostly just called a "run."

Today, the Securities and Exchange Commission approved some rules that basically say, if the stuff loses value, the money market fund can't give you your $1,000 back. That is: If the fund only has $99,900 worth of stuff right now, it has to tell you that, and when you ask for your money back you can only get back $999. (This is called a "floating net asset value.&quot And if the fund is worried that it'll end up with only, say, $98,000 worth of stuff, then it can impose fees and delays before giving back your money. This all seems sensible enough to a lot of people.(2)

But one important thing to keep in mind is that that last paragraph was a lie. The SEC didn't pass any rules saying that your money market fund has to have a floating net asset value, or that it can impose fees and delays on redemptions. Not if you're a human. If you're a corporation or an institutional investor, then yes, that previous paragraph is true,(3) but if you're a human you can keep on like before. The net asset value doesn't float(4) -- you can still treat your $1,000 investment as, like, $1,000 of "cash" in an "account" -- and no one is going to prevent you from "withdrawing" it.

So now, basically, there's a two-tier in which companies and institutions get to know the cold hard truth about how much their money market investments are worth, but individuals can continue to be coddled in the warm fiction that those investments never lose value.

Why is this? Well here's Mary Jo White:

Retail and government money market funds have not to date faced significant runs even in the worst of times .... At the same time, retail investors in particular have come to rely on the liquidity and stability of money market funds, and they lack investment substitutes with similar characteristics, including those that may be available to institutional investors.

The second sentence there means: Retail investors really like being coddled. And the first sentence means: Retail money market funds don't have to worry about runs, because retail investors don't run, because retail investors are ... the polite term is, "preternaturally calm"? "Dumb" would be the impolite term? But not dumb dumb. Just, like, rational-ignorance dumb. Regular humans spend approximately zero percent of their time monitoring the quality of their money market investments. So they don't tend to run at the first, or second, or seventeenth, sign of trouble. That makes retail money market funds pretty stable.(5)

You have to tell companies how much their money market investments are worth, because they pay attention to that sort of thing, but you don't have to tell individuals, because honestly they couldn't care less.

Here is a good column from Brian Reid of the Investment Company Institute, responding to Bank of England chief economist Andy Haldane's call for greater regulation of systemically risky asset managers. I like this paragraph:

For capital markets regulators, the answer to such problems is to clarify what the risks are and who bears them, so that willing investors can knowingly judge and accept risks. But in the banking world, where investment and systemic risk are intertwined, bank regulators instead resort to microprudential tools to intricately manage bank balance sheet activities and macroprudential tools to manage capital flows and banks’ overall levels of risk-taking. Haldane and other central bankers would bring these tools to capital markets. Haldane for example, speculates about central banks taking ‘an explicit role in managing the risk-taking cycle and activity in the wider economy.’

Those are two extremely different ways of looking at the world. In one -- following Reid, let's call it the "capital markets view" -- the people whose money is at risk are supposed to decide how much risk they're willing to take, and what's a good risk. This is always hard, because there are agency costs and information asymmetries, but the job of a regulator is to try to give everyone the best information possible, and then hope they make the right decisions.

In the other, call it the "banking view," investors know nothing, and nothing will ever convince them to find out. They don't want to find out. The point of a bank account is that you don't need to know what your bank is doing with your money. The job of the regulators here is rather more involved, and more important. They have to know what the banks are doing with everyone's money, and try to make sure it's all above-board and not too risky. Also they probably have to bail out the banks when things go wrong.(6)

People say that money market funds are part of the "shadow banking" industry. Roughly speaking, "shadow banking" refers to the parts of the world that are regulated according to the capital markets view -- lots of disclosure regulation, much less capital-and-risk regulation -- but treated by their investors more according to the banking view, where the customers try not to think too hard about the risks. You can see why this would be scary: If regulators aren't worrying about the risks (it's not a bank!), and investors aren't worrying about the risks (ehhhh it's a bank!), then ... no one is worrying about the risks? That seems bad.

So the first step, broadly speaking, is to assign bits of the shadow banking world to one world view or the other: Either force investors to think about the risks, or let regulators regulate the risks.(7) But there's no obvious reason that everything has to get the same world view.(8) Some things should be treated like capital markets: Inform investors of the risks, and then leave the investors to take those risks. This seems to be the fate of institutional money market investors, who are understandably grumbly about it. They want their $1,000 to be worth $1,000.

But other things should be treated like banks: Don't make the investors worry about the risks, just leave that to regulators. As a first cut, if something is actually safer when its risks are concealed, then why not conceal those risks? That seems to be the SEC's reasoning on retail money market funds.(9) Why worry retail investors unnecessarily? For them, ignorance can remain bliss.

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

FOOTNOTES

(1) It rarely occurs because money market funds -- both by desire and by regulation -- invest only in relatively safe, relatively short-term, relatively liquid stuff, so they tend not to lose too much money. And when it does occur, various ad hoc things tend to happen -- the fund's sponsor makes good the losses, or everyone just sits very still until the stuff goes back up to $100,000, or I don't know there's a government bailout -- so everyone can still get all their money back.

(2) To me, anyway, and to Barry Ritholtz here at Bloomberg View, and to Republican SEC Commissioner Daniel Gallagher, who said ""Addressing a three decade old error in a nuanced and tailored manner to reinstate market based pricing should not be seen, as some have argued, as a heavy handed act of government," which is about right. (These changes passed on a 3-2 vote of the SEC, by the way, so I guess some people disagree.)

(3) For "prime" money market funds, that is. Money market funds that just invest in U.S. government securities get a pass, because those can't lose value. (Hahahaha no of course they can, through interest rate fluctuations, but no one worries that much I guess.) Also there's "a two-year transition period to enable both funds and investors time to fully adjust their systems, operations and investing practices."

(4) This hugely exaggerates because there's actually only a narrow band in which the NAV doesn't float. Basically if your account's value drops below $995, then the fund "breaks the buck" and has to tell you that. But if it's worth $996, they can keep telling you that it's worth $1,000. But it's some cushion, and in practice it matters because, again, money market funds don't tend to lose all that much money.

(5) And similarly for banks, which is why retail deposits tend to be an extremely stable funding base for banks, even troubled banks. (Even banks in Cyprus, good lord.) Obviously deposit insurance on small retail deposits helps with that too, though even uninsured deposits are probably more stable than, like, repo.

(6) I said the other day, "The point of banking is to conceal risk." This glib line of thinking draws on much more sophisticated thinking from Arnold Kling, Steve Randy Waldman, Gary Gorton and his co-authors, etc. Also of course there's Bagehot, on the bailing out part.

(7) Reid mentions tri-party repo, where regulators have pushed to reduce banking-like features (like the daily unwind) and increase capital-markets-like features (like longer-term repo agreements with counterparties who are thus more incentivized to do credit work).

(8) And Reid has some good arguments against applying bank-like regulation to capital markets:

The risk of relying on such tools in securities markets is that microprudential rules could lead more asset managers to act in a similar manner -- in other words, they could increase ‘herding.’ Macroprudential rules would direct capital flows by tilting the investment landscape in favour of one set of assets over another.

(9) Obviously the objection here is that retail money market funds are not subject to lots of bank-like regulation; in particular they tend to have roughly zero capital buffer. (But of course their investments are all short-term, high-grade, etc., and there's some sort of informal capital buffer from the reputational pressures on their sponsors to avoid breaking the buck.) And tentative regulatory efforts to make money market funds have some capital buffer have not gone well.

[antigop]

5. Musical interlude: "I Need a Hero" Bonnie Tyler

[Demeter]

9. Excellent!

Hotler has been replaced.

[Demeter]

6. All But 4 High-Profile Domestic Terror Plots In Last Decade Were Crafted From The Ground Up By FBI

https://www.techdirt.com/articles/20140722/14463127971/report-all-four-high-profile-domestic-terrorism-plots-last-decade-were-crafted-ground-up-fbi.shtml

Human Rights Watch has just published a report containing the facts needed to back up everyone's suspicions that the FBI counterterrorism efforts are almost solely composed of breaking up "plots" of its own design. And the bigger and more high-profile the "bust" was, the better the chance that FBI agents laid the foundation, constructed the walls… basically did everything but allow the devised plot to reach its designed conclusion.

All of the high-profile domestic terrorism plots of the last decade, with four exceptions, were actually FBI sting operations—plots conducted with the direct involvement of law enforcement informants or agents, including plots that were proposed or led by informants. According to multiple studies, nearly 50 percent of the more than 500 federal counterterrorism convictions resulted from informant-based cases; almost 30 percent of those cases were sting operations in which the informant played an active role in the underlying plot.

Of those four exceptions, two (Boston Bombing/LAX shooting) were successfully pulled off. Feeling safer with the g-men's increased focus on preventing terrorist attacks? Within the report is even more damning information that shows the FBI preyed on weak individuals in order to rack up "wins" in the War on Terror.

Although an FBI agent even told Ferdaus’ father his son “obviously” had mental health problems, the FBI targeted him for a sting operation, sending an informant into Ferdaus’ mosque. Together, the FBI informant and Ferdaus devised a plan to attack the Pentagon and US Capitol, with the FBI providing fake weaponry and funding Ferdaus’ travel. Yet Ferdaus was mentally and physically deteriorating as the fake plot unfolded, suffering weight loss so severe his cheek bones protruded, loss of bladder control that left him wearing diapers, and depression and seizures so bad his father quit his job to care for Ferdaus. He was eventually sentenced on material support for terrorism and explosives charges to 17 years in prison with an additional 10 years of supervised release.

Those that weren't weak enough were broken.

Abu Ali, a US citizen, was swept up in a mass arrest campaign in Saudi Arabia in 2003. Ali alleged being whipped, denied food, and threatened with amputation, and ultimately provided a confession he says was false to Saudi interrogators.

Ali was given a life sentence and is currently serving it at a Supermax prison.

Uzair Paracha was held in solitary confinement for nearly two years before he was convicted on charges of material support. Nine months after his arrest and while he was refusing to take a plea deal, the federal government moved Paracha to a harsh regime of solitary confinement pursuant to Special Administrative Measures (SAMs)—special restrictions on his contact with others imposed on the grounds of protecting national security or preventing disclosure of classified material—ostensibly due to ties with Al-Qaeda. For a time, Paracha was only permitted to speak to prison guards.

As much as the DHS and FBI have stated concerns about "radicalization" and domestic terrorism, those captured in FBI sting operations were strongly pushed in that direction by informants and undercover agents. The FBI created threats where none existed.

MORE DISGUSTING, OFFICIAL CRIMINALITY AT LINK

[antigop]

7. Musical interlude: "Batman" Intro

[Demeter]

14. HERE'S A PICTURE

[Demeter]

15. Super Position By David Graeber

... Batman, the billionaire playboy, is a scion of the military-industrial complex that was created, just as he was, at the beginning of World War II. ...

http://thenewinquiry.com/essays/super-position/

[antigop]

8. Musical Interlude: "The Batman Theme"

[DemReadingDU]

10. Company In Which Joe Biden's Son Is Director Prepares To Drill Shale Gas In East Ukraine

7/25/14 Company In Which Joe Biden's Son Is Director Prepares To Drill Shale Gas In East Ukraine

Recall what we said earlier today: the proxy Ukraine war just like that in Syria preceding it, "is all about energy."

Recall also the following chart showing Ukraine's shale gas deposits, keeping in mind that the Dnieper-Donets basin which lies in the hotly contested eastern part of the nation and where as everyone knows by now a bloody civil war is raging, is the major oil and gas producing region of Ukraine accounting for approximately 90 per cent of Ukrainian production and according to EIA may have 42 tcf of shale gas resources technically recoverable from 197 tcf of risked shale gas in place.

Finally, recall our story from May that Joe Biden's son, Hunter, just joined the board of the largest Ukraine gas producer Burisma Holdings. From the press release:

Now put it all together and what happens next should be rather clear.
Still confused? It's very simple, really.

In a nutshell Ukraine (or rather its puppetmasters) has decided to let no crisis (staged or otherwise) or rather civil war, go to waste, and while the fighting rages all around, Ukrainian troopers are helping to install shale gas production equipment near the east Ukrainian town of Slavyansk, which was bombed and shelled for the three preceding months, according to local residents cited by Itar Tass. The reason for the scramble? Under peacetime, the process was expected to take many years, during which Europe would be under the energy dictatorship of Putin. But throw in some civil war and few will notice let alone care that a process which was expected to take nearly a decade if not longer while dealing with broad popular objections to fracking, may instead be completed in months!

Not only them but also all-important Germany, which two weeks ago announced it would halt shale-gas drilling for the next seven years over groundwater pollution concerns. Which clearly makes Ukraine, potentially the last place with massive shale gas deposits and no drilling ban, quite valuable to those who want to develop a major source of shale gas, one which reduces Europe's reliance on Russian gas even more, yet one whose future depends on one simple question: who controls East Ukraine? Because what better way to accelerate "next steps" than to start drilling for gas in the middle of the Donetsk republic as a civil war is waging in all directions, and where public mood has shifted decidedly against the local "separatists" in the aftermath of the MH-17 tragedy.

The punchline: who will develop the gas field in conjunction with Shell (jointly owned by the Netherlands and the UK: the two countries that loathe Putin the most in the aftermath of the MH-17 disaster) which in May 2012 announced a tender for the right to develop the Yuzovka shale gas deposit?

Burisma, Ukraine’s oil and gas production holdings, also has the right to develop the shale gas fields in the Dnieper-Donetsk basin of Eastern Ukraine. The same Burisma where R. Hunter Biden, Joseph's son, was appointed a director two months ago.

Q.E.D.


more links at this posting...
http://www.zerohedge.com/news/2014-07-25/company-which-joe-bidens-son-director-prepares-drill-shale-gas-east-ukraine

[Demeter]

11. You can never be too rich, or too cynical

forget about being thin.

[Demeter]

12. DC Comics Releases New Pic of Ben Affleck As Batman

http://time.com/3033834/ben-affleck-batman/

VIDEO AT LINK

[Demeter]

13. Batman's Traumatic Origins

A horror in Bruce Wayne's childhood created the Dark Knight. Did a real-life childhood horror create Bruce Wayne?

http://www.theatlantic.com/entertainment/archive/2014/05/batmans-traumatic-origins/361638/



When a really bad thing happens to children unexpectedly, the event can change them forever. As a child psychologist, I see firsthand what that means. Traumatized children often try to avoid thinking about a terrifying ordeal, but the horrible experience nevertheless replays itself in their minds and, as a consequence, in their lives. Sometimes this happens in immediate, obvious, and direct ways: bad dreams at night, phobias during the day. Other times, the traces of trauma can be delayed, subtle, indirect, and symbolic...Early psychologists who studied trauma were concerned about its negative effects, and not surprisingly that is what they learned about. But more recent studies have searched for positive outcomes of trauma and have learned what novelists and historians have known for generations: Many people draw strength from adversity. They take inspiration from their suffering. They transcend their traumas and become better people.

Reenactments of childhood traumas can benefit the rest of us when they reverberate in creative pursuits that go beyond children’s play, such as in art. Horrors from youth creep into an adult’s artwork in the form of recurring themes, literal re-creations of the original terrifying events, and pervasive dark tones. The result sometimes provides entertainment that appeals to a broad audience. But post-traumatic reenactments speak more personally to audience members who also have experienced trauma...Years ago I became aware that a particular superhero, who has entertained millions of people, had special appeal to the traumatized children who visited my office. I had a hunch that a trauma had inspired the creation of this superhero. See if you think my hunch was correct.

The Dark Night

His pals nicknamed him “Doodler” because he was constantly drawing pictures. His pals had nicknames, too—they were fellow members of a neighborhood club know as “The Zorros,” an appellation that a young Robert Kahn had chosen, inspired by the cinematic crusader for justice played by Douglas Fairbanks, Sr. The Zorros’ clubhouse was built with wood stolen from the neighborhood lumber yard—a place whose many nooks and crannies made it the location of choice for their games of hide-and-seek. One night, when he was 15 years old, Kahn—who went by “Robbie” at the time—had a terrifying encounter. Walking home through rough neighborhoods of the Bronx after a music lesson, carrying a violin case, he was followed by “a group of seedy-looking roughnecks from the tough Hunts Point district,” as he wrote in his autobiography 57 years later:

They wore the sweatshirts of the Vultures, and they were known to be a treacherous gang. They were whistling at me and making snide remarks that only “goils” played with violins. I stepped up my pace and so did they. Finally, I started running and they did likewise, until I reached my neighborhood. Unfortunately, my buddies were not hanging around the block at the time.

Kahn’s memoir goes on to give a very lengthy, melodramatic blow-by-blow account of his dash to the familiar lumberyard, the Vultures’s pursuit (“with terrifying menace in their eyes”), and his attempts at self-defense, complete with “Zorro” leaps, grappling hook, and mid-air kicks while swinging on a rope. He fought bravely, he writes, but for naught:

My worst fears came true. Two Vultures pinned both my arms behind my back and held me firm while another beat a staccato rhythm on my belly, knocking the wind out of me. Another bully stepped in and used my face for a punching bag—while he cracked a couple of my front teeth.

I was in a fog, when I felt my right arm crack at the elbow after a gang member deliberately twisted it behind me in order to break it. The pain was excruciating and I screamed in agony.

Before I blacked out and fell to the ground like a limp rag doll, I heard him laugh sardonically, “Just to make sure dat da Fiddler ain’t gonna play his fiddle no more!” Little did he know that it wasn’t playing the violin again that concerned me, but the fact that he had broken my drawing arm.

Then he stepped on the hand of my broken arm! I don’t remember how long I remained in a blanket of darkness before I regained consciousness, but when I came to, I was a beaten, bloody wreck. Somehow I managed to pull myself up and it was then that I noticed my violin on the ground, smashed to pieces. This was the coup de grace!

This whole episode, to this day, remains in my subconscious like a nightmare. I had played Zorro and lost! Had it really been a dream or a movie, I would have emerged victorious. But this real-life drama had almost cost the life of a reckless fifteen-year-old.

Here we have a boy who was attacked by a gang of Vultures in the night. He defended himself by playing Zorro, using a grappling hook to fend off his attackers. He was unsuccessful and was hospitalized, severely injured, with the possibility that he would be unable to pursue his chosen career. In spite of permanent injuries—scars, chipped teeth, and limited mobility in one arm—he went on to become a cartoonist. Seven years after being brutalized, he created a comic-book superhero that would become a pop-culture legend—and whose appeal may be deeply, subtly connected to what happened that night in the lumber yard.

The Dark Knight

In 1938, the first superhero arrived on the scene—Superman—and the comic book industry leapt from infancy into what is now known as its golden age. The “Man of Steel” not only changed the course of comic books, he set the course for Robert Kahn’s entire professional career. Here is how that happened...Superman was a huge commercial success. So one Friday, a DC Comic’s editor asked Kahn, who now used the name Kane and drew slapstick comics, to come up with his own superhero to complement the Man of Steel.

Kane wrote, “Over the weekend I laid out a kind of naked superhero on the page, with a figure that looked like Superman or Flash Gordon. I placed a sheet of tracing paper over him so that I could create new costumes that might strike my fancy. Then, POW! It came to me in a flash—like the old cliché of an electric light bulb lighting up over a cartoon character’s head when he has a brainstorm. I remembered Leonardo da Vinci’s drawing of a bat-like flying machine.”

And that’s when Bob Kane created Batman. Kane also acknowledged the influence of other movies on what he called “the dark, mysterioso atmosphere” he tried to evoke in Batman. “Movies like Dracula,” Kane writes, “... left an indelible impression on me. The first year of Batman was heavily influenced by horror films, and emulated a Dracula look.” Kane never acknowledged any link between his attack by the Vultures and his creation of Batman. His conscious purpose in relating the lumberyard nightmare in his autobiography was to show how close he came to losing his career as a cartoonist.

MORE

[xchrom]

16. Russia's surprise interest rate rise 'to curb inflation'

http://www.bbc.com/news/business-28483159

Russia's central bank has unexpectedly raised its key bank interest rate over concerns about inflation and "geopolitical tension".

The bank's board decided to raise the interest rate by 50 basis points, or half a percent, to 8% per year.

Analysts said that they had not expected the move.

The rate hike will come after Western sanctions over the crisis in the Ukraine were boosted.

[Demeter]

33. That's why Russia will bury us, in our own QE

THEIR interest rate mechanism is NOT broken; their currency is not turning into toilet paper. Russia is breaking bonds with Western banks and building its own financial infrastructure. Russia has reined in its oligarchy with some pretty stiff jail sentences. Russian intends to survive and thrive, on the pieces of stuff the US has destroyed.

[xchrom]

17. Brazilian central bank frees up $13bn to boost economy

http://www.bbc.com/news/world-latin-america-28490310

Brazil's central bank has announced plans to reduce the amount of money commercial banks keep in reserve, in a bid to boost economic growth.

The bank says the measure will free up some $13bn (£7.6bn), which banks could lend to businesses and individuals.

The Brazilian economy is expected to expand by 1% this year - the fourth consecutive year of sluggish growth.

The central bank announcement comes less than three months before presidential elections.

[xchrom]

18. Deutsche Bank, HSBC Accused of Silver Fix Manipulation

http://www.bloomberg.com/news/2014-07-25/deutsche-bank-hsbc-accused-of-silver-fix-manipulation.html


Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA) and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix.

The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.

“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”

The lawsuit is the latest to be brought against banks alleging manipulation of a benchmark. Suits have been filed against Deutsche Bank and Bank of Nova Scotia, HSBC and other banks in federal court in New York over allegations involving the London gold fix.

[xchrom]

19. Goldman Sees Risk of Stock Decline on Rising Bond Yields

http://www.bloomberg.com/news/2014-07-25/goldman-sees-risk-of-stock-decline-on-rising-bond-yields.html

Global equities and bonds may retreat in the next three months, with stocks at risk of a brief selloff, as rising inflation boosts yields, according to a quarterly strategy report by Goldman Sachs Group Inc.

The bank cut its rating on stocks to neutral, the equivalent of hold, for the next three months, a note to clients from its portfolio strategy group showed. Goldman Sachs also lowered corporate credit to underweight and predicted that government bond yields will increase.

“We are concerned that a selloff in government bonds will lead to a temporary selloff in equities in line with what we saw last summer, though the magnitude is likely to be smaller as the need for bond yields to correct is lower,” a group of 11 strategists, including David Kostin, Kathy Matsui and Peter Oppenheimer, said in the report, known as the global opportunity asset locator.

The MSCI All-Country World Index lost 8.8 percent from May 21 to June 24 in 2013, a period in which yields on 10-year Treasuries (USGG10YR) rose to about 2.54 percent from 1.93 percent, data compiled by Bloomberg show. The 10-year yield is about 2.46 percent now. Goldman forecasts it will rise to 3 percent by the end of 2014 and to 4 percent by the end of 2017.

[xchrom]

20. U.S. Sets Duties on Solar-Energy Gear From China, Taiwan

http://www.bloomberg.com/news/2014-07-26/u-s-sets-duties-on-solar-energy-gear-from-china-taiwan.html

The U.S. Commerce Department proposed expanded penalties on some Chinese solar-energy imports in a victory for the U.S. unit of SolarWorld AG (SWVK), which accused China of shifting production to Taiwan after it lost an earlier case.

The agency issued a preliminary finding yesterday that said overseas producers, including China’s Trina Solar Ltd. and Taiwan’s Gintech Energy Corp. (3514), sold the goods in the U.S. at unfairly low prices, a practice known as dumping. It called for duties ranging as high as 165 percent for some Chinese manufacturers and 44 percent for those in Taiwan, according to a department fact sheet.

“We should not have to compete with dumped imports or the Chinese government,” Mukesh Dulani, president of SolarWorld Industries America Inc., based in Hillsboro, Oregon, said yesterday in an e-mail. The Commerce Department’s actions “should help the U.S. solar manufacturing industry to expand and innovate.”

The SolarWorld case has split the U.S. solar-energy industry, with manufacturers seeking protections against being undercut by cheap imports, and installers pressing for low-cost equipment, regardless of origin. It’s also the latest spat between the U.S. and China, the world’s largest economies, which are vying to become the global base for clean-energy manufacturing.

[xchrom]

21. Citi Wasn't So Clear on What 'Hidden Orders' Meant

http://www.bloombergview.com/articles/2014-07-25/citi-wasn-t-so-clear-on-what-hidden-orders-meant

Coincidence or not, ever since "Flash Boys" came out four months ago, alleging that U.S. equity markets are rigged by high-frequency traders and crooked dark-pool operators, there's been a whole lot of regulatory attention paid to high-frequency traders and crooked dark-pool operators in U.S. equity markets.1 New York Attorney General Eric Schneiderman has been on quite a tear, going especially hard after Barclays's dark pool. The Securities and Exchange Commission has upped its game, fining Liquidnet $2 million for using dark-pool customer data to pitch issuer business. Even Finra has gotten involved, fining Goldman Sachs $800,000 for messing up the clock on its dark pool.

Here's another one! It's a $5 million SEC settlement with LavaFlow Inc., a big stock trading venue owned by Citigroup. LavaFlow is not a dark pool; it's an electronic communications network (ECN) that displays orders. (Basically: It's a stock exchange within Citigroup.) But it allows subscribers to submit various sorts of non-displayed orders,2 which are, you know, not supposed to be displayed. And the problem was with those non-displayed orders.

LavaFlow had an affiliate called Lava Trading,3 whose main business was running a smart order router called ColorBook. From the SEC's order:

Lava Trading’s flagship product was ColorBook, which was software that provided smart order routing services to over 100 registered broker-dealers that principally used ColorBook to route their customers’ orders to execution venues. ... An “order router” is an application that generally allows an end user to submit an order to an execution venue. A “smart order router” applies preprogrammed analytics that carry out an execution strategy for order flow provided to the smart order router.

The point here is that, if you just want to buy some stock, that's a weirdly hard thing to do. You can't just go to the New York Stock Exchange and say "buy 100 shares of IBM," because IBM shares are traded on a bunch of different exchanges and ECNs and dark pools, and you want to buy them at the lowest price offered on any of those venues. Or maybe you don't -- maybe you prefer convenience to getting the lowest price. But that doesn't matter, because Regulation NMS says that your broker can't buy you 100 shares of IBM at $195 on the New York Stock Exchange if someone is offering 100 shares for $194.95 on, say, the LavaFlow ECN.4 So you're forced to deal with all the venues anyway.

[Demeter]

29. Okay, That Just Makes Me Dizzy/Crazy

Why anyone wouldn't rather go to Vegas and play blackjack is beyond me.

[MattSh]

22. Twenty-first-century energy wars - Le Monde diplomatique - English edition

8 JULY, by Michael Klare

Iraq, Syria, Nigeria, South Sudan, Ukraine, the East and South China Seas: wherever you look, the world is aflame with new or intensifying conflicts. At first glance, these upheavals appear to be independent events, driven by their own unique and idiosyncratic circumstances. But look more closely and they share several key characteristics — notably, a witch’s brew of ethnic, religious, and national antagonisms that have been stirred to the boiling point by a fixation on energy.

In each of these conflicts, the fighting is driven in large part by the eruption of long-standing historic antagonisms among neighboring (often intermingled) tribes, sects, and peoples. In Iraq and Syria, it is a clash among Sunnis, Shiites, Kurds, Turkmen, and others; in Nigeria, among Muslims, Christians, and assorted tribal groupings; in South Sudan, between the Dinka and Nuer; in Ukraine, between Ukrainian loyalists and Russian-speakers aligned with Moscow; in the East and South China Sea, among the Chinese, Japanese, Vietnamese, Filipinos, and others. It would be easy to attribute all this to age-old hatreds, as suggested by many analysts; but while such hostilities do help drive these conflicts, they are fueled by a most modern impulse as well: the desire to control valuable oil and natural gas assets. Make no mistake about it, these are twenty-first-century energy wars.

It should surprise no one that energy plays such a significant role in these conflicts. Oil and gas are, after all, the world’s most important and valuable commodities and constitute a major source of income for the governments and corporations that control their production and distribution. Indeed, the governments of Iraq, Nigeria, Russia, South Sudan, and Syria derive the great bulk of their revenues from oil sales, while the major energy firms (many state-owned) exercise immense power in these and the other countries involved. Whoever controls these states, or the oil- and gas-producing areas within them, also controls the collection and allocation of crucial revenues. Despite the patina of historical enmities, many of these conflicts, then, are really struggles for control over the principal source of national income.

Moreover, we live in an energy-centric world where control over oil and gas resources (and their means of delivery) translates into geopolitical clout for some and economic vulnerability for others. Because so many countries are dependent on energy imports, nations with surpluses to export — including Iraq, Nigeria, Russia, and South Sudan — often exercise disproportionate influence on the world stage. What happens in these countries sometimes matters as much to the rest of us as to the people living in them, and so the risk of external involvement in their conflicts — whether in the form of direct intervention, arms transfers, the sending in of military advisers, or economic assistance — is greater than almost anywhere else.

The struggle over energy resources has been a conspicuous factor in many recent conflicts, including the Iran-Iraq War of 1980-1988, the Gulf War of 1990-1991, and the Sudanese Civil War of 1983-2005. On first glance, the fossil-fuel factor in the most recent outbreaks of tension and fighting may seem less evident. But look more closely and you’ll see that each of these conflicts is, at heart, an energy war.

http://mondediplo.com/openpage/twenty-first-century-energy-wars

[xchrom]

23. De Beers Sees Resurgent Diamond Demand in Modi’s India

http://www.bloomberg.com/news/2014-07-25/de-beers-sees-resurgent-diamond-demand-in-modi-s-india.html

De Beers expects new Indian Prime Minister Narendra Modi to champion the diamond industry and sees a return to growth for the world’s third-biggest market.

“India is the good news versus last year,” Philippe Mellier, De Beers chief executive officer, said in an phone interview in London today. “It is clearly starting to grow again. The election of Mr. Modi is clearly changing the paradigm there. We all believe he is going to support the industry.”

Mellier said he expected “high single digit” growth in Indian demand in the second half of the year, reviving a market that’s lagged behind after volatility in the rupee reduced consumers’ buying power. Global diamond demand will probably rise 4 percent to 4.5 percent this year with U.S. consumption increasing as much as 6 percent, he said.

De Beers, the world’s biggest diamond producer, is increasing output of the gems to meet demand. The company mined 16 million carats in the first half, a 12 percent increase from last year, and Mellier said full-year production would be “closer” to the top end of its 31 million to 32 million carat range.

[xchrom]

24. Draghi Safety Net Becomes Blindfold to Risk as Bonds Soar

http://www.bloomberg.com/news/2014-07-25/draghi-safety-net-becomes-blindfold-to-risk-as-bonds-soar.html

Two years since European Central Bank President Mario Draghi’s historic promise to defend his currency bloc, there are signs bond investors are growing too complacent under his protection.

While Draghi’s pledge, backed up with unprecedented policy action, held the euro region together, recent price moves suggest it also immunized investors against risk. The average yield on bonds from Europe’s most-indebted nations touched a record low yesterday, even after the downing of a passenger plane over Ukraine, an escalation of conflict in Gaza and financial woes at Portugal’s Espirito Santo Group.

“It’s been an exercise in central banks desensitizing markets,” Marc Ostwald, a strategist at ADM Investor Services International Ltd. in London, said in a July 23 phone interview. “It’s a dictated complacency because globally there is a huge amount of liquidity. Everyone views everything as a localized problem.”

Bond markets show Draghi’s July 26, 2012 pledge to do “whatever it takes” to protect the euro was the turning point in the region’s debt crisis. The day before the message, delivered in a speech in London, Spanish 10-year (GSPT10YR) bond yields had surged to a euro-era record 7.751 percent, above the 7 percent level that pushed the Greek, Irish and Portuguese governments to seek international aid.

[xchrom]

25. Time Warner Dares Murdoch to Bid More Than He Can Pay

http://www.bloomberg.com/news/2014-07-24/time-warner-dares-murdoch-to-bid-more-than-he-can-pay.html

Time Warner Inc. (TWX)’s board is daring Rupert Murdoch to make an offer he can’t afford.

In rejecting an $85-per-share takeover bid by Murdoch’s 21st Century Fox Inc. last week, Time Warner said its own growth plan “is superior to any proposal that 21st Century Fox is in a position to offer.”

That language -- “in a position to offer” -- was no accident. After evaluating Fox’s books, Time Warner concluded that Murdoch would be uncomfortable financing a deal above $100 a share, people familiar with the matter said. The purchase would require so much borrowing it could sacrifice Fox’s credit rating, or use so much stock that existing investors’ holdings would diminish in value, said the people, who asked not to be identified because internal deliberations are private.

Convinced the media company was worth at least $100 a share based on future earnings, Time Warner’s board decided it won’t begin talks at much less than that number, the people said. Fox isn’t currently planning to bid more than $90 to $95 a share, according to a person familiar with Fox’s position.

[MattSh]

26. M of A - Ukraine: Financial Rating Propaganda Likely To Fail

International credit rating agencies like S&P are nothing but political instruments. Consider this from July 11:

Ukraine had its credit-rating outlook raised to stable from negative by Standard & Poor’s after the country obtained a $17 billion bailout loan from the International Monetary Fund.
...
“Full disbursement of the IMF program and related multilateral lending should enable Ukraine to meet its external financing needs over the next year,” S&P analysts said in an e-mailed statement.

Now compare that with a real world report from July 17:

The IMF now expects Ukraine's economy to shrink by 6.5% this year, compared with 5% at the time the emergency loans were agreed. GDP stagnated last year.

Ukraine's government is spending more than expected on security as it battles the separatists. Having lost control of parts of the country, revenue collection is also falling behind schedule.

And state gas firm Naftogaz is struggling to force customers to pay their debts.

...
"The program hinges crucially on the assumption that the conflict will begin to subside in the coming months," the IMF said. "A significant prolongation of the crisis would seriously strain their ability to [reform the economy] without a substantial increase in external support on adequate terms."

The IMF more explicitly formulated: "Expect more of your money being wasted on the Nazis in Kiev."

Fortunately, after the rating disaster of mortgage bonds and derivatives that led to the financial crisis, smart real world investors have become mostly immune of the rating companies' nonsense, diminishing their influence further into the pure propaganda territory. From the last lines of first piece:

Global bond yields showed investors ignored 56 percent of Moody’s and 50 percent of S&P’s rating and outlook changes in 2012, more often disagreeing when the companies said governments were becoming safer or more risky, data compiled by Bloomberg show.

The S&P propaganda effort will therefore likely fail.

http://www.moonofalabama.org/2014/07/ukraine-financial-rating-propaganda-likely-to-fail.html

[MattSh]

27. Company In Which Joe Biden's Son Is Director Prepares To Drill Shale Gas In East Ukraine | Zero Hedg

Recall what we said earlier today: the proxy Ukraine war just like that in Syria preceding it, "is all about energy."

Recall also the following chart showing Ukraine's shale gas deposits, keeping in mind that the Dnieper-Donets basin which lies in the hotly contested eastern part of the nation and where as everyone knows by now a bloody civil war is raging, is the major oil and gas producing region of Ukraine accounting for approximately 90 per cent of Ukrainian production and according to EIA may have 42 tcf of shale gas resources technically recoverable from 197 tcf of risked shale gas in place.



.....

Still confused? It's very simple, really.

In a nutshell Ukraine (or rather its puppetmasters) has decided to let no crisis (staged or otherwise) or rather civil war, go to waste, and while the fighting rages all around, Ukrainian troopers are helping to install shale gas production equipment near the east Ukrainian town of Slavyansk, which was bombed and shelled for the three preceding months, according to local residents cited by Itar Tass. The reason for the scramble? Under peacetime, the process was expected to take many years, during which Europe would be under the energy dictatorship of Putin. But throw in some civil war and few will notice let alone care that a process which was expected to take nearly a decade if not longer while dealing with broad popular objections to fracking, may instead be completed in months!

“Civilians protected by Ukrainian army are getting ready to install drilling rigs. More equipment is being brought in,” they said, adding that the military are encircling the future extraction area.

The people of Slavyansk, which is located in the heart of the Yzovka shale gas field, staged numerous protest actions in the past against its development. They even wanted to call in a referendum on that subject. Environmentalists are particularly concerned with the consequences of hydrofracing, a method used for shale gas extraction, because it implies the use of extremely toxic chemical agents which can poison not only subsoil waters but also the atmosphere. Experts claim that not a single country in the world has invented a method of utilization of harmful toxic agents in the process of development of shale gas deposits.

Countries like the Czech Republic, the Netherlands and France have given up plans to develop shale gas deposits in their territories.

Complete story at - http://www.zerohedge.com/news/2014-07-25/company-which-joe-bidens-son-director-prepares-drill-shale-gas-east-ukraine

[Demeter]

30. Is there some part of Ukraine that could hold its own against outside forces?

Or is Ukraine destined to disappear, as Poland did for 123 years (1795-1918)?

I'll be going to inquire at the post office, UPS and FedEx this week, Matt. I've survived Hell Week.

[MattSh]

44. Instead of trying to explain the whole thing...

Which I'm not capable of doing, let me just post a couple of things from other sources...

#1 - Metaphysical Doubts Concerning the Existence of Modern Ukraine, a 1918 Creation of the German General Staff « TARPLEY.net

News reports on the reaction in Kiev to the reunification of the Crimean peninsula with Russia have included the idea that some Ukrainians resent the failure of the United States or the western European powers to intervene militarily against Russia in favor of the new Kiev fascist government. At the same time, it appears that Ukrainian military units have uniformly refused to fight for their borders, their bases, their headquarters, or other strategic assets under their control. Much of the Ukrainian army and navy located in the Crimea has chosen rather to become part of the Russian forces. Repeated attempts by the Yatsenyuk government in Kiev to call up reservists or otherwise to mobilize manpower for military purposes have met with a very meager response.

What can we make of a country which refuses to fight for itself, and at the same time, expects foreign countries to pull its chestnuts out of the fire? The reasons may lie in the historical genesis of modern Ukraine, which is a nation called into being during World War I, not by a popular movement of its own people, but rather by the German military leadership, and then propped up in recent years by the United States and the European Union.

International attention has lately been much focused on Ukraine, but world publics know very little of the history involved. The country located on the Pontic step (the flatlands north of the Black Sea) currently calling itself Ukraine has only existed for 23 years, since the failure of the August 1991 KGB-inspired coup in Moscow. Before that, to find something that corresponds to modern Ukraine, we must go back to the Kievan Rus late in the first millennium of the Common Era. This was a state set up by Vikings (called Varangians) along the Dnieper River, which was the main inland waterway between Scandinavia in the north and the Byzantine Empire in the South. It was here that grand Duke Vladimir converted to Orthodox Christianity in the year 988, thus establishing a religious tradition which continues to be decisive in Russian history down to the present day. But Vladimir’s state did not call itself Ukraine, considering itself rather the leading state of Russia, which the Latin West sometimes called Ruthenia.

Complete story at - http://tarpley.net/metaphysical-doubts-concerning-the-existence-of-modern-ukraine-a-1918-creation-of-the-german-general-staff

#2 - Historic map of Ukraine

Note the 1654 boundaries of Ukraine. Before this it did not exist as Ukraine though, it was part of the Polish empire.

The added 1654 - 1917 portion was added by Russian Czars while a part of the Russian empire. It was a part of an administrative area (I think) known as Ukraine, but certainly not independent in any way.

The portion added in 1922? That was added by the hated Vladimir Lenin. Should any parts leave Ukraine in the near future, it would be all or part of this area.

The portion added 1939 - 1945 was part of the pre-war, post-war maneuvering before, during, and after WW2. This part was added by Joseph Stalin.

The portion added in 1954 and already gone was added by Nikita Khrushchev, himself of Ukrainian origin.




#3 - Lies, Damned Lies, and (Ukrainian Language) Statistics

Language analysis of today's Ukraine. Something I wrote in fact...

Anybody who has been following the Ukrainian situation over the last few months knows that there is a great divide between the Russian speakers, mostly concentrated in the east and south of Ukraine, and the Ukrainian speakers, which dominate the rest of the country. Journalists, pundits, and other professionals have bought out the maps and charts numerous times, so if there's one thing that's true, it must be this. Everybody agrees on this, correct?

Let's look at some of the maps that are representative of numerous maps found online these days. Though not all agreed on where the exact boundaries are located, many look similar to this map.



So, overall, the country in general is one big happy Ukrainian family, with a small minority of malcontents concentrated in the east and the south. The areas on the map that these malcontents occupy is quite small; but since they occupy some of the most productive land in the country, they've just got to man up, swallow their pride, and get along with everybody else. That's not asking much, is it?

Continued at... http://bread-circuses-today.blogspot.com/2014/06/lies-damned-lies-and-ukrainian-language.html

[Demeter]

57. Your first link is most intriguing

Because after reading it through, it looks like somebody decided to run the old German playbook a second time....and I'm willing to bet they get the same results! In a word: nada.

I have to admire your guts, staying there in the midst of the elephant dancing.

I've bookmarked your blog for the future. Thanks! I especially liked the Afghani interview. I do not know why Americans are so ignorant of other ways of looking at things...one wouldn't expect a nation of immigrants to turn into the BFEE. W clones, all of them. Too much DAR and inbreeding, too little exposure or integration with the real world. Boys in bubbles.

David Vetter
Born David Phillip Vetter
September 21, 1971
Houston, Texas, U.S.
Died February 22, 1984 (aged 12)
Montgomery County, Texas, U.S.


NOW, THERE'S A SAD STORY...

Cause of death
Lymphoma; complications from SCID

David Phillip Vetter (September 21, 1971 – February 22, 1984) was a prominent sufferer of severe combined immunodeficiency (SCID), a hereditary disease which dramatically weakens the immune system. Individuals born with SCID are abnormally susceptible to infections, and exposure to pathogens can be fatal. Vetter was referred to as "David, the bubble boy" by the media. Vetter's surname was not revealed to the general public until 10 years after his death in order to preserve his family's privacy.

In his first years of life he lived mostly at Texas Children's Hospital in Houston, Texas. As he grew older, he lived increasingly at home with his parents and older sister Katherine in Shenandoah, Texas. He died in 1984, at the age of 12.

Vetter's parents were David Joseph Vetter, Jr. and Carol Ann Vetter. Their first son, David Joseph Vetter III, was also born with SCID and died at 7 months of age. Vetter's parents were advised by physicians that any future male children they might conceive would have a 50% chance of inheriting the disease. At the time, the only management available for children born with SCID was isolation in a sterile environment until a successful bone marrow transplant could be performed. The Vetters, who already had a daughter, decided to proceed with another pregnancy. Their third child, David Phillip Vetter, was born September 21, 1971...

https://en.wikipedia.org/wiki/David_Vetter

[MattSh]

32. Sigh...

I posted this elsewhere on DU too, and got alerted.

In case you didn't know, this was a close one.

Mail Message

I voted to leave btw, but the alerter had a point. Just giving you a head's up. I hope that you and your family stay safe. It must be a strange and interesting time to be in Kiev.

On Sat Jul 26, 2014, 12:11 PM an alert was sent on the following post:

Company In Which Joe Biden's Son Is Director Prepares To Drill Shale Gas In East Ukraine | Zero Hedg
http://www.democraticunderground.com/10025294654

REASON FOR ALERT

This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate.

ALERTER'S COMMENTS

Right-wing source that refers to Obama as "ObamaFraud" and "Obummer" on a regular basis. Has no place at DU.

You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Sat Jul 26, 2014, 12:30 PM, and the Jury voted 3-4 to LEAVE IT.

Yeah, I've seen those types of comments at Zero Hedge... In the comments section. And I've seen those types of comments at the Guardian. Washington Post. And probably every website that deals with financial news. There are times I just want to give up.

[Demeter]

34. DU has become "Lord of the Flies" in many fora

I seldom venture out of this area, because the crazies are running the place. If that's what Skinner wants.....he's crazy, too.

It isn't the purpose of DU to run a political purity test, or at least, that was what I was led to believe. It certainly has no redeeming value, if it is.

Obama isn't as adept as Bill Clinton. Clinton's shine wore off, as the actual results of his machinations leaked out, AFTER he left office. The smart and honest, thinking people on DU learned a lesson from this, the not-so-smart, not-so-honest just became vicious defenders of Obama's nonexistent virtues.

...I'm watching the hawks outside, soaring over my community. I hope they are hawks. I'd hate to think they were vultures.

[antigop]

35. the "not-so-smart, not-so-honest" group may just benefit from the status quo. nt

[Demeter]

37. I don't see how

Their number will come up....the system knows no limits in destruction.

[antigop]

38. they think they are immune. nt

[Fuddnik]

53. Holy shit Batman!

I think you hit the nail right on the head.

Mayhem going on all around them, but somehow it will never effect them.

Reminds me of the Hil-bots of 2008. I had already resigned from my local DEC, but we had a woman who was a rabid Clinton supporter. One of her major funders was an outsourcing firm in India called TaTa, which just happened to buy her employer, and got bundles of tax breaks to bring new jobs to the area. Yeah, they laid off most of their employees, and replaced them all, including her, with H1-B drones from India.

I almost feel sorry for her. She lied to me about them and the DLC drones giving back-door support to a congressional candidate during a primary. I was managing the campaign for the progressive. They really got pissed when we trounced "the annointed one" by 10 points in the primary.

[antigop]

55. it won't happen to me...they just can't go there. Thanks, Fudd. nt

[antigop]

56. I"ve posted this link in GD

The Third Way sycophants have no response.

[antigop]

59. I might add...they have to think this way or else...

they might actually have to get off their *ss and do something about it.

[antigop]

28. Musical interlude: "Let Me Walk Among You" from "Bat Boy, the Musical"

http://www.dramatists.com/cgi-bin/db/single.asp?key=3013

THE STORY: Based on a story in The Weekly World News, BAT BOY: THE MUSICAL is a musical comedy/horror show about a half boy/half bat creature who is discovered in a cave near Hope Falls, West Virginia. For lack of a better solution, the local sheriff brings Bat Boy to the home of the town veterinarian, Dr. Parker, where he is eventually accepted as a member of the family and taught to act like a "normal" boy by the veterinarian's wife, Meredith, and teenage daughter, Shelley. Bat Boy is happy with his new life, but when he naively tries to fit in with the narrow-minded people of Hope Falls, they turn on him, prodded by the machinations of Dr. Parker, who secretly despises Bat Boy. Shelley and Bat Boy, who have fallen in love, run away together from the ignorant townfolk and have a blissful coupling in the woods, but their happiness is shattered when Meredith arrives and reveals a secret. Soon the entire town arrives and hears the shocking story of Bat Boy's unholy origin.

&list=RDjkPNyWta_lE

imo, a really bad musical, but it seems to have a cult following.

[Demeter]

31. I think the part about Batman that interested me (US engineering-minded kid)

was the technology. I am serious! I thought the characters uninteresting, strange, incomprehensible; the villains were more appealing!

But the high-tech gadgets! Now there was something to dream about....until we started building them, and misusing them to spy on people, to shred the Constitution and the Rule of Law; to kill innocents abroad and stalk innocents at home; to destroy the ecology and the future.

Not only am I ashamed of my country, I'm ashamed of my former profession.

[hamerfan]

36. Musical Interlude

I Just Want To Be A Superhero:

It's not bad, actually.

[Demeter]

39. Gail Tverberg: Debt - Eight Reasons This Time is Different

http://www.planbeconomics.com/2014/07/gail-tverberg-debt-eight-reasons-this.html



In today’s world, we have a huge amount of debt outstanding. Academic researchers Carmen Reinhart and Kenneth Rogoff have become famous for their book This Time is Different: Eight Centuries of Financial Folly and their earlier paper This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. Their point, of course, is that the same thing happens over and over again. We can learn from past crises to solve our current problems. Part of their story is of course correct. Governments have gotten themselves into problems with debt, time after time. This is happening again now. In fact, the same two authors recently prepared a working paper for the International Monetary Fund called Financial and Sovereign Debt Crises: Some Lessons Learned and Some Lessons Forgotten, talking about ideas such as governments inflating their way out of debt problems and pushing problems off to insurance companies and pension funds, through regulations requiring investment in certain securities.

Many seem to believe that if we worked our way out of debt problems in the past, we can do the same thing again. The same assets may have new owners, but everything will work together in the long run. Businesses will continue operating, and people will continue to have jobs. We may have to adjust monetary policy, or perhaps regulation of financial institutions, but that is about all...I think this is where the story goes wrong. The situation we have now is very different, and far worse, than what happened in the past. We live in a much more tightly networked economy. This time, our problems are tied to the need for cheap, high quality energy products. The comfort we get from everything eventually working out in the past is false comfort. If we look closely at the past, we see that in some cases the outcomes are not benign. There are situations where much of the population in an area died off. This die-off did not occur directly because of debt defaults. Instead, the same issues that gave rise to debt defaults, primarily diminishing returns with respect to food and other types of production, also led to die off. We are not necessarily exempt from these same kinds of problems in the future.

Why the Current Interest in Debt Levels and Interest Rates

The reason I bring up these issues is because the problem of too much world debt is now coming to the forefront. The Bank for International Settlements, which is the central bank for central banks, issued a report a week ago in which they said world debt levels are too high, and that continuing the current low interest rate policy has too many bad effects. Something needs to be done to normalize monetary policy....Janet Yellen, Federal Reserve Chair, and Christine Lagarde, managing director or the International Monetary Fund, have also been making statements about the issue of how to fix our current economic problems (News Report; Video). There is the additional rather bizarre point that back in January, Lagarde used numerology to suggest that a major change in policy might be announced in 2014 (on July 20?), with the hope that the past “seven miserable years” can be followed by “seven strong years.” The IMF has talked in the past about using its special drawing rights (SDRs) as a sort of international currency. In this role, the SDRs could act as the world’s reserve currency, be used for issuing bonds, and be used for setting the prices of commodities such as gold and oil. Perhaps a variation on SDRs is what Lagarde has in mind...So with this background, let’s get back to the main point of the post. How is this debt crisis, and the likely outcome, different from previous crises?

1. We live in a globalized economy. Any slip-up of a major economy would very much affect all of the other major economies. Banks hold bonds of governments other than their own. If a major government fails to make good on its promises, it can affect other governments as well. Smaller countries, like Greece or Cyprus, can be bailed out or their problems worked around. But if the United States, or even Japan, should run into major difficulties, it would affect the world as a whole. See my post, Twelve Reasons Why Globalization is a Huge Problem.

2. Our problem now is not simply governmental debt; it is debt of many different types, affecting individuals and businesses of all kinds, as well as governments. In the studies of historical debt by Reinhart and Rogoff, the focus is on governmental debt. Now there is much more debt, some through banks, some through bonds, and some through less traditional sources. There are also derivatives that are in some ways like debt. In particular, if there are sharp moves in interest rates, it is possible that some issuers of derivatives will find themselves in financial difficulty. There are also promises that are in many ways like debt, but that technically aren’t guaranteed, because legislatures can change the promised benefits whenever they choose. Examples of these are our current Social Security program and Medicare benefits. Citizens depend on these programs, even if there is no promise that they will continue to exist in their current form. With all of these kinds of debt and quasi-debt, we have a much more complex situation than in the past.

3. Our economy is a self-organized system that has properties of its own, quite apart from the properties of the individual consumers, businesses, governments, and resources that make up the system. Circumstances now are such that the world economy could fail, even though this could not happen in the past...I recently wrote about the nature of a networked economy, in my post Why Standard Economic Models Don’t Work–Our Economy is a Network. In that post, I represented our networked economy as being somewhat like this dome that can be built with wooden sticks.


?w=640
Figure 1. Dome constructed using Leonardo Sticks


Years ago, when a civilization collapsed, the network of connections was not as dense as it is today. Most food was not dependent on long supply chains, and quite a bit of manufacturing was done locally. If one economy collapsed, even a fairly large one like the Weimar Republic of Germany, the rest of the world was not terribly dependent on it. Figuratively, the “hole” in the dome could mend, and over time, the economy could strengthen and go on as before. We cannot count on this situation today, however.

4. Fossil fuels (coal, oil and natural gas) available today are what enable tighter connections than in the past, and also add vulnerabilities. Early economies relied mainly on the sun’s energy to grow food, gravity to help with irrigation, human energy and animal energy for transport and food growing, wind energy to power ships and wooden windmills, and water energy to operate water wheels. Wood was used for many purposes, including heating homes, cooking, and making charcoal to provide the heat needed to smelt metals and make glass. In the past two hundred years we have added fossil fuels to our list of fuels. This has allowed us to make metals in quantity, as well as concrete and glass in quantity, enabling the development of much technology. The use of coal enabled the building of hydroelectric dams as well as electrical transmission lines, thus enabling widespread use of electricity. Fossil fuels enabled other modern fuels as well, including nuclear energy, and the manufacture of what we today call “renewable energy,” including today’s wind turbines and solar PV.

Of the fossil fuels, oil has been especially important. Oil is particularly good as a transport fuel, because it is easily transported and very energy dense. With the use of oil, transport by smaller vehicles such as cars, trucks and airplanes became possible, and transport by ship and by rail was improved. Such changes allowed international businesses to grow and international trade to flourish. Economies were able to grow much more rapidly than in the pre-fossil fuel era. Governments became richer and began offering education to all, paved roads, and benefits such as unemployment insurance, health care programs, and pensions for the elderly. Thus, fossil fuels enable a very different lifestyle, and very different governments and government programs than existed prior to fossil fuels. If something were to happen to all fossil fuels, or even just oil, most businesses would have to cease operation. Governments could not collect enough taxes to continue functioning. Very few farmers would be able to produce food and transport it to market, because oil is used to transport seeds to farmers, to operate machinery, to operate irrigation equipment, to transport soil amendments, and to create herbicides and pesticides. This situation now is very different from the past, when most food was produced using human and animal labor, and transport was often by a cart pulled by an animal. Before fossil fuels, even if governments collapsed and most people died off, the remaining people could continue growing food, gathering water, and going about their own lives. If we were to lose oil, or oil plus electricity (because oil is required to maintain electric transmission and because businesses tend to close when they are missing either oil or electricity), we would have a much harder time. Most of our jobs would disappear. Banks wouldn’t be able to operate. Our water and sewer systems would stop working. We would find it necessary to “start over,” in a very different way.

5. Because of the big role of debt today, economic growth is essential to keeping the current economic system operating. It is much easier to pay back debt with interest when an economy is growing than when it is shrinking, because when an economy is shrinking, people are losing their jobs. Even if only, say, 10% lose their jobs, this loss of jobs creates many loan defaults. Banks are likely to find themselves in a precarious position and are likely to cut back on lending to others, making the situation worse. If the economy starts shrinking, businesses will also have difficulty. They have fixed costs, including rent, management salaries, and their own debt repayments. These costs tend to stay the same, even if total revenue shrinks because of an economic slowdown. Because of these problems, businesses are also likely to find it increasingly difficult to pay back their own debt in a recession. They are likely to find it necessary to lay off workers, making the recession worse.

If economic growth is very low, this lack of growth can to some extent be covered up with very low interest rates. But such very low interest rates tend to be a problem as well, because they encourage asset bubbles of many sorts, such as the current run-up in stock market prices. It is not always clear which bubbles are being run up by low interest rates, either. For example, it is quite possible that the recent run-up in US oil extraction (see Figure 4, below) is being enabled by ultra-low interest rates debt (since this is a cash-flow negative business) and by investors who a desperate for an investment that might yield a slightly higher yield than current low bond yields...Actually, the current need for growth to prevent defaults is not all that different from the situation in the past 800 years. In Reinhardt and Rogoff’s academic paper mentioned above, the authors remark, “It is notable that the non-defaulters, by and large, are all hugely successful growth stories.” Reinhardt and Rogoff didn’t seem to understand why this occurred, however.

6. The underlying reason regarding why we are headed toward debt problems is different from in the past. We now are dependent both on oil products and electricity, two very concentrated carriers of energy, instead of the more diffuse energy types used in the past. Our problem is that these energy carriers are becoming high-cost to produce. It is these high costs (a reflection of diminishing returns) that lead to economic contraction. This time, in order to continue economic growth, we need a growing supply of very high-quality energy products, namely oil products and non-intermittent electricity, to support the economy that we have built. These products need to be low-priced, if customers are to afford them. Thus, it should not be surprising that economic growth in the past seems to have been driven by a combination of (1) falling prices of electricity as we learned to more efficiently produce it, and (2) continued low prices for oil.


?w=640&h=442

Figure 2. Electricity prices and electrical demand, USA 1900 – 1998 from Accounting for Growth, the Role of Physical Work by Robert Ayres and Benjamin Warr, Structural Change and Economic Dynamics, February, 2004).

According to Ayres and Warr (Figure 2), power stations in 1900 converted only 4% of the potential energy in coal to electricity, but by 2000, the conversion efficiency was raised to 35%. This improvement in efficiency allowed the continuing decrease in electricity prices. With lower prices, more individuals and businesses were able to afford electricity, and more technology using electricity became feasible. Cheap electricity allowed goods to be produced at prices that workers could afford, and the system tended to grow. For oil, the price of oil remained relatively flat in inflation-adjusted terms for a very long time, even as engineers developed ever-more-efficient devices to use that oil.

?w=640&h=385
Figure 3. Historical oil prices in 2012 dollars, based on BP Statistical Review of World Energy 2013 data. (2013 included as well, from EIA data.)

We ran into our initial problems extracting oil cheaply in the early 1970s, after US oil production started to decline (Figure 4).

?w=640&h=384
Figure 4. US crude oil production split between tight oil (from shale formations), Alaska, and all other, based on EIA data. Shale is from AEO 2014 Early Release Overview.


Back in the 1970s, we were able to work around the price spike by bringing oil production online in several additional places, including the Alaska, the North Sea, and Mexico. Unfortunately, those areas are now declining as well. Thus, we are increasingly forced to extract oil from areas that are high priced either (a) because of high extraction costs (such as the tight oil now being extracted in the United States) or (b) because of high indirect costs (such as the need for desalination plants and food subsidies in the Middle East). These can only be funded if oil prices are high, allowing governments to collect high levels of taxes...There is considerable evidence that high oil prices are associated with recession. The Great Recession of 2007-2009 was associated with a huge spike in oil prices. I have written about the way high oil prices contribute to recession in a peer-reviewed article published in the journal Energy called Oil Supply Limits and the Continuing Financial Crisis. James Hamilton has shown that has shown that 10 out of 11 US recessions since World War II were associated with oil price spikes. Hamilton also showed that the effects of the oil price spike were sufficient to cause the recession of that began in late 2007. Now the cost of oil production is high, and electricity prices have stopped falling. We read U. S. electricity prices may be going up for good, from the L. A. Times. It should be no surprise that economic growth is now a problem.

7. In historical periods, defaults were mostly associated with the transfer of ownership of various productive assets (such as land and factories) from one owner to another. Now, we are vulnerable to changes that could ultimately cut off oil and electricity, and thus bring the system down–not just transfer ownership. The kinds of things that could bring the system down are diverse. They include:

War in the Middle East that would vastly disrupt oil exports. We do not have alternative suppliers–the world would have to do without part of its supplies. We are vulnerable now, because oil exporters are getting “squeezed” by prices that have not risen substantially since 2011. This makes it harder for Middle Eastern countries to fund their budgets, making wars and civil disorder more likely.

A spike in oil prices, perhaps caused by a war in the Middle East, that would vastly disrupt oil exports. Oil importing countries would head back into recession, with many layoffs. Governments are in worse shape for fighting this situation than they were in 2007-2008.

An increase in interest rates. While Quantitative Easing and Zero Interest rate policy may not look like they are doing much, an increase in interest rates would not work well at all. With higher interest rates, governments would owe more in interest payments, so would need to raise taxes (leading to recessionary effects). The monthly payments required for buying high-priced goods (from cars, to houses, to factories) would rise, cutting back on demand, also tending to lead to recession.

A decrease in lending, or even a failure of debt to keep rising, would also be a problem. Janet Yellen’s recent IMF speech highlighted the possibility of using regulation to prevent excessive debt. Unfortunately, increasing debt is very much needed to keep oil prices high enough to enable extraction at today’s high cost levels. See my post The Connection Between Oil Prices, Debt Levels, and Interest Rates. If debt levels drop, we run the danger of oil prices dropping as dramatically as they did in late 2008, when lending froze up.


?w=640&h=385
Figure 5. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

8. The world is now filled with a large number of people in powerful positions who mistakenly think they know answers to questions, when they really do not. The problem is that researchers tend operate in subject-matter “silos.” They build models based on their narrow understanding of a problem. These models may temporarily work, but as we reach limits in a finite world, these models produce misleading results. The users of these models do not understand the problem and make decisions based on badly flawed models. Economists do not understand energy issues. They seem to think that their models, which ignore energy issues, are fine. All they need to do is fine-tune regulation, or tweak interest rates, and everything will be fine. Unfortunately, these economic models no longer work, as I explained in a recent post, Why Standard Economic Models Don’t Work–Our Economy is a Network...In fact, the issue is more basic than just bad models that economists are using. The whole “peer-reviewed paper” system, with its pressure to write more peer-reviewed papers, each resting on prior peer-reviewed papers, is flawed. Models are built and used endlessly, in part because that is the way things have been done in the past. Once an approach is used frequently, everyone assumes it is correct. Models can and do have short term-predictive power, but that fact does not mean that the approach works for the long term.

The problem we are running into is the fact the world is finite. Growth can’t continue indefinitely. The way that the physical world enforces the end to growth is not obvious, until we start hitting the limits. The limits are cost of production limits for oil and for our supply of stable grid electricity. (I have talked about selling prices, but selling prices are not really the limits, in themselves. It is the fact that with higher costs of production, either selling prices must go up, or profits and the ability to invest in new production must go down–that is the problem. Right now, the rising cost of production of oil is being hidden in prices that are too low for oil producers. So many assume we don’t have a problem. The issue of adequate government funding is also mixed into the price/cost of production issue.) Models that are no longer correct fill every area of study, from actuarial models, to financial planning models, to economic models, to models forecasting future oil and gas production, to climate change models. Some models are deceptively simple–the idea that the number of years of future production of oil (or gas or coal) can be estimated by (Amount of Resources / Current Annual Production) is a simple model. Unfortunately, this model doesn’t work, because we can never get enough investment capital to extract all of the fossil fuel that seems to be available–the price can never go high enough, and stay high enough. High prices simply bring on recession. See my post, IEA Investment Report – What is Right; What is Wrong.

In fact, it is pretty hard to find any model that continues to work, as we reach limits in a finite world. This is not intuitively obvious. If a model worked before, why wouldn’t it work now? Researchers and well-meaning leaders follow models that sort of worked in the past, but don’t really model the current situation. Thus, we have well-meaning leaders, doing their best to make things better, inadvertently making things worse. In a finite world, everything is “connected” to everything else, so things that look beneficial from one perspective can have a bad outcome viewed another way. For example, a reduction in carbon dioxide emissions from closing coal plants risks major electrical outages is New England and seems likely to raise electricity prices. Such changes push the economy toward recession, and perhaps ultimately toward collapse...Governments are one area squeezed by higher oil and electricity costs. As governments cut back, whether these cut backs are in education, unemployment benefits, military spending, or healthcare spending, there are indirect effects on the economy as a whole. The problem is that government spending creates jobs. As government spending is cut, it pushes the economy toward contraction–even if part of today’s spending is clearly wasteful. It creates a conundrum–fixing one problem makes another problem worse.

Conclusion


We live in perilous times. We have leaders who think they know the answers but, in fact, they do not. The debt problems we face now are not just overspending problems; they are signs that we are reaching limits of a finite world. World leaders do not seem to understand this connection. It is not even clear that they understand the connection of debt problems to the need for cheap-to-produce, high-quality energy products. World leaders are nevertheless convinced that they know the answers, based on complex, but very flawed, models. Unfortunately, actions taken based on these models have a good chance of making the situation worse rather than better. For example, trying to tie a world economy closer together, when it is already heading toward collapse, seems like a recipe for disaster.

I find Christine Lagarde’s use of numerology in her January 14, 2014 speech at the National Press Club Luncheon disturbing. Is she trying to signal some “in crowd” to make different decisions, in advance of a big IMF announcement? Or is numerology being used for prediction? Such an approach to forecasting would seem to be even worse than using models based on silos of limited understanding.

[Demeter]

40. Dark Knight Shift: Why Batman Could Exist--But Not for Long

http://www.scientificamerican.com/article/dark-knight-shift-why-bat/


Batman is the most down-to-earth of all the superheroes. He has no special powers from being born on a distant world or bitten by a radioactive spider. All that protects him from the Joker and other Gotham City villains are his wits and a physique shaped by years of training—combined with the vast fortune to reach his maximum potential and augment himself with Batmobiles, Batcables and other Bat-goodies, of course.

In the 2005 blockbuster Batman Begins, vengeful Bruce Wayne (played by Christian Bale) hones his killer instincts in the streets for seven years before landing himself in a Bhutanese prison, where he falls in with the mysterious League of Shadows, who teach him the way of the ninja.

The Dark Knight, the next movie in the Batman franchise... To investigate whether someone like Bruce Wayne could physically transform himself into a one-man wrecking crew, ScientificAmerican.com turned to E. Paul Zehr, associate professor of kinesiology and neuroscience at the University of Victoria in British Columbia and a 26-year practitioner of Chito-Ryu karate-do. Zehr's book, Becoming Batman: The Possibility of a Superhero (The Johns Hopkins University Press), due out in October, 2012, tackles our very question. An edited transcript of the conversation follows.

What have comic books and movies told us about Batman's physical abilities?

There's a quote from Neal Adams, the great Batman illustrator, who said Batman would win, place or show in every event in the Olympics. Probably if I were Batman's handler, I'd put him in the decathlon. Although Batman is shown in the comics as being the fastest and the strongest and all these other things, in reality you can't actually be all of that at once. To be Batman properly, what you really need to do is be exceptionally good at many different things. It's when you take all the pieces and put them together that you get the Batman.

What's most plausible about portrayals of Batman's skills?

You could train somebody to be a tremendous athlete and to have a significant martial arts background, and also to use some of the gear that he has, which requires a lot of physical prowess. Most of what you see there is feasible to the extent that somebody could be trained to that extreme. We're seeing that kind of thing in less than a month in the Olympics.

What's less realistic?

A great example is in the movies where Batman is fighting multiple opponents and all of a sudden he's taking on 10 people. If you just estimate how fast somebody could punch and kick, and how many times you could hit one person in a second, you wind up with numbers like five or six. This doesn't mean you could fight four or five people. But it's also hard for four or five people to simultaneously attack somebody, because they get in each other's way. More realistic is a couple of attackers.

How long would Bruce Wayne have to train to become Batman?

In some of the timelines you see in the comics, the backstory is he goes away for five years—some it's three to five years, or eight years, or 12 years. In terms of the physical changes (strength and conditioning), that's happening fairly quickly. We're talking three to five years. In terms of the physical skills to be able to defend himself against all these opponents all the time, I would benchmark that at 10 to 12 years. Probably the most reality-based representation of Batman and his training was in Batman Begins.

Why such a long training time?

Batman can't really afford to lose. Losing means death—or at least not being able to be Batman anymore. But another benchmark is having enough skill and experience to defend himself without killing anyone. Because that's part of his credo. It would be much easier to fight somebody if you could incapacitate them with extreme force. Punching somebody in the throat could be a lethal blow. That's pretty easy to do.

But if you're thinking about something that doesn't result in lethal force, that's more tricky. It's really hard for people to get their heads around, I think. To be that good, to not actually lethally injure anyone, requires an extremely high level of skill that would take maybe 15 to 18 years to accumulate.

Where does that number of 15 to 18 years come from?

That comes from my own training in martial arts and seeing how long it takes people to respond to simple situations—let alone the complexities of smoke bombs going off and people having big Batsuits on. No matter how much training you have, when we're subjected to a lot of psychological stress, we make a bunch more mistakes. The police talk about this when they use things called reality-based training. It takes years and years and years and years to have the poise to be able to perform when somebody is attacking you for real.

What's a realistic training regimen?

I didn't give a training manual in my book, but he'd want to do specialized weight training to build up an ability to work at a really high rate for maybe 30 seconds to a minute (the maximum time period associated with his fights). One of the early comics shows him holding an enormous weight over his head. That's not the right kind of adaptation toward punching and kicking. He's got to make sure he's doing all the skill training at the same time so that he's actually using the (physical) adaptations he's slowly gaining. In conventional martial arts, when people take weapons training, you're doing a kind of power-strength training.

What effects would all that training have on Bruce Wayne's body?

I looked up what DC Comics and some other books said (about Batman's physique). I settled on the estimate that Bruce Wayne started off at about six-foot-two and 185 pounds. I gave him a body fat of 20 percent (slightly below average) and a body mass index of 26. Let's say after 10 or 15 years, after he's become the Batman, he's weighing about 210 pounds and has a body fat of 10 percent. He's probably gained 40 pounds of muscle. His bones will actually be more dense, kind of the opposite of osteoporosis.

Are we talking freakishly dense bones?

The percentage change is actually quite small—maybe 10 percent. In judo, where people do a lot of grappling and throwing, you're going to have more density in the long bones of the trunk. In karate and other martial arts where they're doing a lot of kicking, there's going to be a lot higher density in the legs. Muay Thai (kickboxing) is a great example. They're always doing these low shin kicks. They try to condition the body by kicking progressively harder objects and for longer.

What about his reaction speed?

There is evidence that experts in something like football or hockey have an improved ability to perceive movement in time. In the book I use the example of Steve Nash throwing the ball, even though he can't see where the receiver of the pass is going to be. Experts are able to extract more information faster than others. It's almost like their nervous systems become more efficient.

How would Batman get enough rest?

The difficulty for Batman is he's going to be trying to sleep during the day. He's going to be really tired, actually, unless he can shift himself over to just being up at night. If he were just a nocturnal guy, he would actually be a lot healthier and have a lot better sleep than if he were doing what he does now, which is getting some light here and there. That's going to mess up his sleep patterns and duration of sleep.

Wouldn't fighting Gotham's thugs every night take its toll?

The biggest unreal part of the way Batman's portrayed is the nature of his injuries. Most of the time, in the comics and in the movies, even when he wins, he usually winds up taking a pretty good beating. There's a real failure to show the cumulative effect of that. The next day he's shown out there doing the same thing again. He'd likely be quite tired and injured.

Is there any indication in the comics of how long Batman's career lasts?

The comics are really vague on this, of course. In Frank Miller's The Dark Knight Returns, he deliberately shows an aging Batman coming back after he's retired, and he highlights him being tired and weaker. Somewhere around age 50 to 55, he should probably retire. His performance is going down. He's always facing younger adversaries. That is well at the end of when he's going to be able to defend himself and be able to not have to deal that lethal force. This was actually shown in an animated series called Batman Beyond.

Oh right. It's the future; Batman is old and he trains a kid to replace him.
You're familiar with that one? What we learn is that Batman, when he was older but before he retired, actually picked up a gun against a thug because he had to. His skills had let him down so that he wasn't able to defend himself without harming another person. So that's when he decided to retire.

How would all those beat-downs have affected his longevity?

Keeping in mind that being Batman means never losing: If you look at consecutive events where professional fighters have to defend their titles—Muhammad Ali, George Foreman, Ultimate Fighters—the longest period you're going to find is about two to three years. That dovetails nicely with the average career for NFL running backs. It's about three years. (That's the statistic I got from the NFL Players Association Web site.) The point is, it's not very long. It's really hard to become Batman in the first place, and it's hard to maintain it when you get there.

There's research suggesting that concussions might cause depression in NFL players. Could that be one reason why the Dark Knight is so brooding?

I went through a lot of comics and graphic novels and I only found a couple of examples where some of those blows to Batman's head had the effect of something like a concussion. Whereas in reality, that would be a very likely outcome. He's able to offset some of the physical damage to his head because of the cowl—it works a bit like a helmet. But these things would definitely add up. Since they don't admit that he has concussions, you can't really ascribe repeated concussions as the reason why he's brooding.

Do you think Batman would take steroids to heal faster?

No. There is one comic where he did go on steroids. He went a little crazy and he went off them again.

How many of us do you think could become a Batman?

If you found the percentage of billionaires and multiply that by the percentage of people who become Olympic decathletes, you could probably get a close estimate. The really important thing is just how much a human being really can do. There's such a huge range of performance and ability you can tap into.

COMMENTARY

lalo22rp June 8, 2011, 8:39 PM

"Batman could exist but not for long"... That is exactly right but not only for the reasons here explained. They left out the social factor of the Batman; Can you imagine the level of (world) media attention a mysterious vigilante would attract! Besides friendly or not big government wouldn't let the Batman go for two weeks without hunting down his ass with some intel. And what about Bruce Wayne being so socially retracted and never actually seen in public at night but other than here and there while carrying a high social profile. Not so plausible l don't think.

Dr. Strangelove July 23, 2012, 3:29 AM

C'mon guys a real-life Batman wouldn't be fighting criminals wearing a cape with his bare hands. A billionaire crime fighter will organize his own private elite strike force with assault rifles, grenade launchers, armored humvees, attack helicopters, etc.

It's hilarious a billionaire will train in decathlon to fight criminals. MMA is more like it but humans have learned to use weapons since the stone age.

WHAT IS MUCH MORE PLAUSIBLE IS HIRING MERCENARIES LIKE BLACKWATER, AND NAVY SEALS, AND CIA BLACK BAG OPS....OR, A BILLIONAIRE WITH BUDDIES, SCREWING UP THE GLOBAL ECONOMY...OR BOTH!

[Demeter]

41. This is a dark thread for a dark topic and a dark month of dark events

I cannot control the news, unfortunately.

I've got to do some real life, now, but I'll be back tomorrow--same bat time, same bat station!

[antigop]

43. Musical interlude: George Harrison -- "Beware of Darkness"

[antigop]

42. Bill Maher: 'Big Business IS The New Big Government' (video)

http://www.huffingtonpost.com/2014/07/26/bill-maher-big-business-big-government_n_5623418.html

[xchrom]

45. As Gap Between Rich and Poor Widens, Global Safety Net in Danger

http://www.commondreams.org/news/2014/07/25/gap-between-rich-and-poor-widens-global-safety-net-danger

Advances in human development risk being erased without a renewed global commitment to eradicating inequality, tackling climate change, and providing basic services, according to the UN's 2014 Human Development Report, Sustaining Human Progress: Reducing Vulnerabilities and Enhancing Resilience (pdf), released Thursday in Tokyo, Japan.

While poverty is shown to be in overall decline and gains have been made in health and nutrition, the report states that the 85 richest people in the world have as much wealth as the 3.5 billion poorest, and that 1.2 billion people live on less than $1.25 a day. It also found that more than 2.2 billion people are living in or near poverty and close to half of all workers are in informal or insecure employment.

"There is also a widespread sense of precariousness in the world today — in livelihoods, in personal security, in the environment and in global politics," the report notes. "There is evidence that the overall rate of progress is slowing across all human development groups. It is critical to deal with vulnerability now to secure gains and prevent disruptions to continuing progress."

Such vulnerability, according to the authors, stems from increasing income inequality, food insecurity, natural disasters, regional conflicts, and political corruption, among other causes. To combat these factors and boost what the report refers to as "human resilience," the UN recommends "universal provision of basic social services," such as education, water supply, health care, and promotion of full employment. It also highlights the importance of social protection — unemployment insurance, pensions, and labor market regulations — in a world where 80 percent of the population lacks such safety net programs.

[xchrom]

46. China's President Has Only Begun To Take Down The Tigers And Swat The Flies In His Historic Corrupti

http://www.businessinsider.com/chinas-corruption-crackdown-2014-7

China's President Has Only Begun To Take Down The Tigers And Swat The Flies In His Historic Corruption Crackdown

China has investigated over 25,000 people for corruption in the first six months of 2014. Probes into major cases were up 14% year-over-year.
182,000 officials were punished by discipline inspection agencies in 2013, up 13.3% year-over-year.

Remember, Chinese president Xi Jinping came to power on the back of a very ominous message from his predecessor. In late 2012, outgoing president Hu Jintao warned that corruption could prove "fatal" to the Chinese Communist party, and even "cause the collapse of the party and the fall of the state."

Xi, who has been described as "redder than red" took that message to heart. Under his watchful eye, China's anti-graft campaign has gathered steam.



Read more: http://www.businessinsider.com/chinas-corruption-crackdown-2014-7#ixzz38fB9uoRd

[xchrom]

47. A Zillow-Trulia Merger Could Clear Out America's Realtor Population Within Two Years

http://www.businessinsider.com/consequences-of-a-zillow-trulia-merger-2014-7

The Next Phase:

1. Realtor.com/Move Inc. makes a wimpy attempt to compete by spending half of the advertising money being spent by Zillow-Trulia to attack their inaccuracies (campaign currently underway). If you want a chuckle, here’s an example:

2. Corporate real estate companies join forces with Zillow (also underway).

3. Local MLS companies do nothing.

Zillow and Trulia will continue to dominate the headlines for the next few months, and realtor.com will be forgotten by consumers.

The local MLS systems don’t have to die – they just need to be irrelevant and/or a duplicate. Our local Sandicor MLS is faster and more accurate than the listings on Zillow, but does the consumer really NEED listings updated every 10-15 minutes? Realtors might, but not the consumers – they are on auto-notifications and will get the new listings soon enough (the frenzy is over, reducing the need for speed).



Read more: http://www.businessinsider.com/consequences-of-a-zillow-trulia-merger-2014-7#ixzz38fC9S400

[Demeter]

58. Who would buy a house sight unseen off the Internet?

I think they are crazy.

[xchrom]

62. that's why i posted this...i think it's nuts too. nt

[xchrom]

48. STUDY: EMBARGO WOULDN'T HURT RUSSIA

http://hosted.ap.org/dynamic/stories/E/EU_BRITAIN_RUSSIA_ARMS_?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-27-03-06-07

LONDON (AP) -- An arms embargo against Russia would be little more than symbolic because Russia is largely self-sufficient in supplying its armed forces, a report argued Sunday.

European Union countries exported $583 million of military equipment to Russia last year, less than 1 percent of the nation's $68 billion defense budget, according to a study by IHS Jane's, which provides analysis on the defense industry and security issues. The bulk of that was a $521 million payment to France, which is building two Mistral class warships for Russia.

The propriety of arms sales to Russia was questioned last week as the U.S. and EU debated tougher sanctions against President Vladimir Putin's government because of its support for Ukrainian rebels, who are believed to have fired the missile that brought down Malaysia Airlines Flight 17, killing all 298 people on board.

Many of the existing arms deals are the product of a brief period between 2010 and 2012, when Russia sought Western help in modernizing its military, said Guy Anderson, a senior principal analyst for aerospace, defense and security at IHS Jane's. Putin reversed that strategy in 2012, when he decided that Russia should be self-sufficient once more and ordered the military to stop buying Western materiel.

[xchrom]

49. US REGULATORS CLOSE SMALL BANK IN ILLINOIS

http://hosted.ap.org/dynamic/stories/U/US_BANK_CLOSURES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-25-19-38-25

WASHINGTON (AP) -- Regulators have closed a small lender in Illinois, bringing U.S. bank failures this year to 14 after 24 closures in all of 2013.

The Federal Deposit Insurance Corp. said Friday that it has taken over GreenChoice Bank FSB, based in Chicago.

The bank, which operated three branches, had about $72.9 million in assets and $71 million in deposits as of March 31.

Providence Bank LLC, based in South Holland, Illinois, has agreed to assume all of the failed bank's deposits.

[Demeter]

51. Thanks, X! They sneaked that in after the usual time...

GreenChoice Bank, fsb, Chicago, Illinois, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Providence Bank, LLC, South Holland, Illinois, to assume all of the deposits of GreenChoice Bank, fsb.

The three branches of GreenChoice Bank, fsb will reopen as branches of Providence Bank, LLC during their normal business hours...

As of March 31, 2014, GreenChoice Bank, fsb had approximately $72.9 million in total assets and $71.0 million in total deposits. In addition to assuming all of the deposits of the failed bank, Providence Bank, LLC agreed to purchase approximately $67.7 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition....

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $14.2 million. Compared to other alternatives, Providence Bank, LLC's acquisition was the least costly resolution for the FDIC's DIF. GreenChoice Bank, fsb is the 14th FDIC-insured institution to fail in the nation this year, and the fourth in Illinois. The last FDIC-insured institution closed in the state was Valley Bank, Moline, on June 20, 2014.

[xchrom]

50. GLOBAL TENSIONS DON'T DENT ENTHUSIASM FOR STOCKS

http://hosted.ap.org/dynamic/stories/U/US_RESILIENT_STOCKS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-25-16-47-16

A war breaks out between Israel and Hamas. An airliner is shot out of the sky in Ukraine. A Portuguese bank's finances look shaky.

And the U.S. stock market's response? After dipping briefly on the bad news, it climbs higher.

The market's resilience this year - which has pushed it to a series of records and extended its five-year bull run - is driven by investors' optimism over the growth of the U.S. economy and record corporate earnings. That helped the market overcome its latest dip, on July 17th, when a passenger jet was shot down in eastern Ukraine and Israel invaded the Gaza Strip, raising investor worries that conflicts around the world could escalate and destabilize financial markets.

As they have all year, investors responded by using it as an opportunity to buy stocks. In fact, they've "bought on the dip" consistently for three years, keeping the market's slips from becoming slides. Stock pullbacks since 2011 have been rare and relatively small, and none have become severe enough to qualify as a correction, Wall Street parlance for a fall of 10 percent or more from a peak.

[Demeter]

52. Machines don't get excited or depressed--they just keep on churning!

[Demeter]

54. Well, this was certainly a "dark (k)night of the soul"

"In a real dark night of the soul, it is always three o'clock in the morning, day after day." - F. Scott Fitzgerald, The Crack-Up

or

Dark Night of the Soul (Spanish: La noche oscura del alma) is the title of a poem written by 16th-century Spanish poet and Roman Catholic mystic Saint John of the Cross, and of a treatise he wrote later, commenting on the poem....

Next Weekend I'm featuring some brothers who were anything but Dulles...

[antigop]

60. Hedge Funds Bet Big on Overseas Tax Deals

http://online.wsj.com/articles/hedge-funds-bet-big-on-overseas-tax-deals-1406330775

Hedge funds are wagering billions of dollars on companies they believe will benefit from a wave of takeover deals designed to lower taxes for U.S. acquirers.

The boom in "inversion" deals, in which a U.S. firm buys a foreign company and moves overseas, has raised the ire of President Barack Obama, who has said the practice is "wrong." But many bankers and lawyers believe the trend could continue until at least the end of the year, potentially enabling hedge funds to make hefty profits.

Wall Street has long tried to guess which companies are likely to engage in takeovers, both acquiring companies and target firms, sometimes a lucrative game.

This time hedge funds are scouting for U.S. companies and the foreign firms they could target in a bid to reincorporate overseas to escape higher U.S. taxes.

Is this a great country or what?

[Fuddnik]

63. My wife went to refill a prescription at Walgreens today.

She told the pharmacist that this was the last time she would ever enter a Walgreens again. She said whe won't spend her money in a place that evades it's taxes and let's everyone else pick up their tab.

The pharmacist just kinda chirped that there was good and bad in everything. The wife replied, "Name something good".

*crickets*

[DemReadingDU]

64. Unfortunately, nearly impossible to find a local independent drugstore or

or hardware store, or clothing store or grocery store, or bank or any store.

[Fuddnik]

65. We have plenty of independents around here.

If we have to pay a couple of bucks more, so be it.

[Demeter]

61. Former Bear Stearns chairman Greenberg dead at 86

http://www.reuters.com/article/2014/07/25/us-banking-obituary-greenberg-idUSKBN0FU22F20140725

Alan "Ace" Greenberg, the former chairman and chief executive officer of Bear Stearns Cos Inc, died on Friday at the age of 86 after a bout with cancer. Greenberg has been credited with engineering the rise of Bear Stearns in the second-half of the 20th century, when it became one of the largest standalone investment banks on Wall Street. In 2008, when the investment bank's exposure to toxic mortgage bonds brought it to the brink of collapse, JPMorgan Chase & Co rescued Bear Stearns and kept Greenberg on as vice chairman emeritus of its global wealth management business.

"It's hard to imagine a financial services industry without Ace," wrote JPMorgan Chief Executive Officer Jamie Dimon and asset management chief Mary Erdoes in a note to employees on Friday. A spokesman for JPMorgan said Greenberg had still been coming to his office at the bank up until this week.

Greenberg's 65-year career on Wall Street began in 1949 when he joined Bear Sterns as a clerk. He rose through the ranks to become trader, partner and, in 1978, chief executive. Upon Bear Stearns' initial public offering in 1985, Greenberg was named chairman of the company. He ceded his role as CEO to Jimmy Cayne in 1993 and his role as chairman of the board in 2001, though he held onto the position of chairman of Bear Stearns's executive committee. In March 2008, as the subprime mortgage crisis was intensifying, Bear Stearns' share price began plunging, and the Federal Reserve Bank of New York helped engineer JPMorgan's rescue of the bank. That deal closed in May 2008 and JPMorgan later stopped using the Bear Stearns name.

THE STATUTE OF LIMITATIONS HAS DEFINITELY RUN OUT FOR "ACE"