Weekend Economists' Book-Cooking Class May 28-31, 2010

[Demeter]

I've been helping a friend run away from home this evening...she needed a break from "family". Some families take all the "fun" out of "dysfunctional". (Let's put it this way, hers makes mine look normal).

Ahem! This long Memorial Day Weekend, we honor our fallen with sorrow and gratitude and sometimes, regret that we could not stop the foolishness in time.



We also honor the beginning of summer with a half-baked-off: submit your favorite recipes, real or imaginary, for eventual compilation in the Weekend Economists' Cookbook for a Crisis.

Include Depression specialties, comfort foods, jokes, family heirlooms--your pick! Anything good for summer, since this is the start of a long, hot summer, would be especially timely.

And while all humor and art are welcome here, I will be featuring Wayne and Shuster, the late comic duo from Canada, just to prove that yes, I really am a geek.

Post them if you've got them! And Happy Memorial Day!

[Demeter]

1. I Don't Believe It! We Have Bank Failures!

EverBank, Jacksonville, Florida, acquired the banking operations, including all the deposits, of three Florida-based institutions. To protect depositors, the Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement with EverBank.

Bank of Florida – Southeast, Fort Lauderdale, Florida; Bank of Florida – Southwest, Naples, Florida; and Bank of Florida – Tampa Bay, Tampa, Florida, were all closed today by the Florida Office of Financial Regulation, which appointed the FDIC as receiver. The three failed banks were owned by the same holding company, Bank of Florida Corporation, which was not part of this transaction.

Due to the Memorial Day holiday, all the branches of the three closed banks will reopen as branches of EverBank under their normal business hours on Tuesday. Depositors will automatically become depositors of EverBank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Bank of Florida – Southeast has six branches in Florida; Bank of Florida - Southwest has five branches in Florida; and Bank of Florida – Tampa Bay has two branches in Florida.

Customers of the three failed banks should continue to use their former branches until they receive notice from EverBank that it has completed systems changes to allow other EverBank branches to process their accounts as well...
As of March 31, 2010, Bank of Florida - Southeast had total assets of $595.3 million and total deposits of $531.7 million; Bank of Florida - Southwest had total assets of $640.9 million and total deposits of $559.9 million; and Bank of Florida – Tampa Bay had total assets of $245.2 million and total deposits of $224.0 million. Besides assuming all the deposits from the three Florida banks, EverBank will purchase essentially all of their assets.

The FDIC and EverBank entered into loss-share transactions on all three of the failed banks' assets. For Bank of Florida – Southeast the loss-share transaction was $437.3 million; for Bank of Florida – Southwest, $568.1 million; and for Bank of Florida – Tampa Bay, $210.8 million...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Bank of Florida - Southeast will be $71.4 million; for Bank of Florida - Southwest, $91.3 million; and for Bank of Florida – Tampa Bay, $40.3 million. EverBank's acquisition of all the deposits of the three institutions was the "least costly" option for the DIF compared to all alternatives.

The three closings bring the total number of failed banks in the nation so far this year to 76 and the total in Florida to 13. Prior to today, the last bank closed in the state was Bank of Bonifay, Bonifay, on May 7, 2010.

Granite Community Bank, N.A., Granite Bay, California, 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 Tri Counties Bank, Chico, California, to assume all of the deposits of Granite Community Bank, N.A...

As of March 31, 2010, Granite Community Bank, N.A. had approximately $102.9 million in total assets and $94.2 million in total deposits. Tri Counties Bank did not pay the FDIC a premium for the deposits of Granite Community Bank, N.A. In addition to assuming all of the deposits of the failed bank, Tri Counties Bank agreed to purchase essentially all of the assets.

The FDIC and Tri Counties Bank entered into a loss-share transaction on $89.3 million of Granite Community Bank, N.A.'s assets. Tri Counties Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.3 million. Tri Counties Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Granite Community Bank, N.A. is the 77th FDIC-insured institution to fail in the nation this year, and the sixth in California. The last FDIC-insured institution closed in the state was 1st Pacific Bank of California, San Diego, on May 7, 2010.

[Demeter]

2. That's $220.3 Million Smackeroos

No summer at the beach for YOU!

[DemReadingDU]

40. 1 more bank

must have failed after I went to bed

On Friday, May 28, 2010, Sun West Bank, Las Vegas, NV was closed by the Nevada Department of Business and Industry, Financial Institutions Division and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.
http://www.fdic.gov/bank/individual/failed/swbnevada.html

[Demeter]

43. Good Grief! I Hope They Didn't Pay Overtime!

Sun West Bank, Las Vegas, Nevada, was closed today by the Nevada Financial Institutions Division, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with City National Bank, Los Angeles, California, to assume all of the deposits of Sun West Bank.

Due to the Memorial Day holiday, the seven branches of Sun West Bank will reopen on Tuesday as branches of City National Bank...As of March 31, 2010, Sun West Bank had approximately $360.7 million in total assets and $353.9 million in total deposits. City National Bank will pay the FDIC a premium of 0.67 percent to assume all of the deposits of Sun West Bank. In addition to assuming all of the deposits of the failed bank, City National Bank agreed to purchase essentially all of the assets.

The FDIC and City National Bank entered into a loss-share transaction on $280.0 million of Sun West Bank's assets. City National Bank will share in the losses on the asset pools covered under the loss-share agreement.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $96.7 million. City National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Sun West Bank is the 78th FDIC-insured institution to fail in the nation this year, and the second in Nevada. The last FDIC-insured institution closed in the state was Carson River Community Bank, Carson City, on February 26, 2010.

[Demeter]

44. Grand Total: $317 M

[Demeter]

3. Summer is Baseball Season

and Wayne and Shuster are famous for their baseball skit, which is a bit more elaborate than the famous Abbott and Costello "Who's on First?"

But first, some background on our featured artists:

Wayne and Shuster were a Canadian comedy duo formed by Johnny Wayne and Frank Shuster. It was active professionally from the early 1940s until the late 1980s.

Wayne (born Louis Weingarten, May 28, 1918 – July 18, 1990) and Shuster (September 5, 1916 – January 13, 2002) were well known in Canada, and were two of Ed Sullivan's recurring guests.

Beginnings

Wayne and Shuster met as high school students at Harbord Collegiate Institute in Toronto, Ontario, Canada in 1930. They both studied at the University of Toronto, where they wrote and performed for the theatre there, and in 1941 they made their radio debut on CFRB in their own show, The Wife Preservers in which they dispensed household hints in a humorous fashion. This exposure resulted in the pair being given their own comedy show on the Canadian Broadcasting Corporation's Trans-Canada Network as Shuster & Wayne.

They enlisted in the Canadian Army in 1942, and performed for the troops in Europe during World War II as part of the Army Show (they would also later perform for the army in the Korean War). They returned to Canada to create the Wayne and Shuster Show for CBC Radio in 1946. They first performed on The Ed Sullivan Show in the United States in 1958, and set a record there by appearing 67 times over the next 11 years.

Wayne and Shuster turned down many offers to go to the U.S. permanently, preferring to remain in Toronto. (They did co-star in a CBS-TV sitcom, Holiday Lodge, which aired as a summer replacement for Jack Benny in 1961.)

In 1965 The Wayne & Shuster Hour won the Silver Rose at the Rose d'Or Television Festival.

In 1965, the duo made a series of six short documentaries about comedians such as W. C. Fields and the Marx Brothers, titled Wayne and Shuster Take an Affectionate Look At..., which were telecast on CBS in the summer of 1966. (This, incidentally, was the last US network prime time series to premiere in black and white). The programs were scored by the young composer "Johnny Williams".

Later career

After having a weekly television series in the 1950s, they began a series of long-running, monthly Wayne & Shuster comedy specials on CBC Television in the early 1960s which continued into the 1980s by which time their comedy was regarded as old-fashioned. They were an influence for later Canadian comedians, such as Lorne Michaels (Shuster's son-in-law), the Royal Canadian Air Farce and The Kids in the Hall. In the late 1980s, many of their comedy skits were repackaged in half-hour chunks and syndicated around the world under the title Wayne & Shuster; the comedians filmed new introductions for the series.

Supporting players in Wayne & Shuster's television sketches included Don Cullen, Jack Duffy, Tom Harvey, Bill Kemp, Paul Kligman, Ben Lennick, Sylvia Lennick, Peggi Loder, Les Rubie, Eric Christmas, Joe Austin, Larry D. Mann, Paul Soles, Marilyn Stuart, Roy Wordsworth, John Davies, Carol Robinson, Lou Pitoscia, Peggy Mahon, Don Ewer and Keith Hampshire.

[Demeter]

4. A Comedy of Errors, Hits and Runs by Wayne and Shuster

http://www.youtube.com/watch?v=mhQ9aeCE8Oo

[Demeter]

6. The humour of Wayne and Shuster

They performed "literate" comedy, combined with slapstick. They often used classical or Shakespearean settings and characters; on their first Ed Sullivan appearance, for example, they performed a modern murder investigation using Shakespeare's Julius Caesar in a sketch called Rinse the Blood off My Toga, which spawned the popular catch phrase, "Julie, don't go!" After the opening of the Stratford Festival of Canada in 1958 they created a baseball-themed skit involving characters from Hamlet and Macbeth. The duo treated these sketches the way singers treat their most popular songs by performing new renditions many times over the years.

Some of Wayne's characters were scientific in nature, and used Waynegartner, a derivation of his birth name. The duo often based their sketches on contemporary events, trends and television programs.

They spoofed All in the Family as "All in the Royal Family", with the king calling Hamlet, "Meathead", and his queen "Dingbat". As Paramount was about to release Star Trek: The Motion Picture, the duo spoofed it with "Star Schtick". When The Equalizer went on the air, they responded with "The Tranquilizer", dealing with mysterious deaths on a game show that was a cross between The Price Is Right and the $64,000 Question. Similarly, The Six Million Dollar Man became "The Six Hundred Dollar Man", assembled with body parts such as "rump: $6 at Loblaws". When Dallas was popular, it was spoofed with a character determined to corner the fertilizer market, and featured a cameo by Barbara Frum. Fantasy Island was spoofed with "Fantasy Motel".

The duo spoofed the commercials "we love to hate" with their own versions: Crazar TVs spoofed the "Quasar" TV brand with the high pitched overture; Oil of Oyvay spoofed the de-aging Oil of Olay; Macedonian Formula spoofed Grecian Formula, and questioned why a man would say he used it and thus reveal he has grey hair; Russian Express spoofed American Express, with a muscular KGB agent saying "Don't leave home!"

They spoofed accents and dialogue. After Wayne brought down an escaping felon with a gunshot (off screen), Shuster would say, "You got him in the rotunda/cloisters/etc.", with Wayne looking wryly at Shuster. "Srightry ahead of Panasonic!" "Srightry?" (Later...) "I go plug it in." "Don't you mean, 'prug it in'?" "No. One ethnic joke per sketch is plenty... or prenty if that's the way you like it." In another sketch, Shuster was calling on the phone for "Inspector Slattery." Wayne said, "Slattery will get you nowhere."
Late-career and posthumous awards

Wayne died in 1990. After his death the group received a special Gemini Award for their outstanding contribution to Canadian television. In 1996 Frank accepted the Margaret Collier Award for the duo comedy writing and was later named to the Order of Canada. Shuster, who died in 2002, attempted some solo work after Wayne died, but was mostly seen during his last decade hosting Wayne and Shuster retrospectives, including Wayne and Shuster in Black and White, a CBC series that aired in prime time during the early-1990s.

Shuster was a cousin of comic book artist Joe Shuster, who co-created Superman with writer Jerry Siegel, and in this context is referenced in one of the Government of Canada-sponsored Heritage Minute short films broadcast on television in the 1990s.

As of 2005, the only Wayne and Shuster material available on DVD is the 1991 special Wayne and Shuster: 50 Years of Comedy which Shuster hosted.

[ozymandius]

5. Second time in my life - First Rec!

Good evening Demeter and all. Glad to see you made it this evening. :hi:

[Demeter]

7. I got a bit sidetracked, sorry

I am amazed that the FDIC is working tonight! Florida got a hard hit tonight.

[ozymandius]

9. Well they deserved it, no doubt.

Bad banks get no pizza.

[ozymandius]

8. We had comfort food for dinner.

My wife's purse was stolen today.

So I made egg noodles with shrimp in a lemon, olive oil and garlic sauce, smothered in parmesan cheese and garnished with a sprinkling of capers.

Only $45 were taken. The pain-in-the-ass part is getting a new driver's license and insurance cards, etc. My vindictive spirit hopes the thief was mugged.

[Demeter]

13. I had that happen in California

One of the fixable aggravations....

[DemReadingDU]

16. Oh my

That would be a disaster to have purse stolen. I don't carry much money either, but my purse is like a mini-filing cabinet where I carry lots of articles to read, and lists of things to do. If I ever lost my lists, I wouldn't know what to do.

[ozymandius]

10. and a cartoon

[DemReadingDU]

12. Great toon, Thanks!

Good evening!

[ozymandius]

15. Good evening!

How does it feel to be on ignore after Thursday's food fight?

Personally, I am amused.

[DemReadingDU]

18. Somebody has me on ignore?

How can you tell?
I usually try to exit before the fight begins, fighting is not something I like to get in the middle of.

[ozymandius]

20. I am too lazy to search it out right now.

But it was a response to something you posted.

[DemReadingDU]

28. That is too funny

:rofl:

Whoever it was, won't be missing much. I only post on 1 or 2 threads a day, rarely in GD. It's their loss.

[MattSh]

42. Wouldn't it be funny...

when the next market meltdown hits, these "ignore"ant people come running to SMW and WEE to find out what's going on, and can't see anything because they have every one of us on ignore?

OK, well not ha ha funny, but still...

Of course, I'd have to post something worth ignoring first.

[Demeter]

45. Hi Matt! Long Time No See!

Everything you post is worth seeing. How is the weather on the Continent?

[MattSh]

59. Things are looking up...

The winters around here can be dreadful. Cold as hell, as befitting a place this far north. (Farther north than anywhere in the US except Alaska). Cold, dank, and raw. Clouds for weeks at a time. But damn, it gives way to some of the nicest summer days one could ever hope for. Today it's around 75 in USA degrees. It's usually warm, sometimes hot, but rarely much humidity. Especially compared to NJ, my former home. Since schools have just finished up, we're about to transition to our summer place, right on the river. (Well, it's actually a canal, but it's looks and acts more like a river, with the pleasure boats and the jet-skis and all the rest).

The main downsides to the summer place (dacha) is slow internet, minimal indoor plumbing, and fewer photographic opportunities. And sadly this summer, likely more bugs than normal.

[ozymandius]

48. I love the Rowan Atkinson 'father of the bride speech' and, thus, dedicate it

to those thin-skinned and increasingly lonely individuals who will never see it from one of my posts. But you, dear reader, can see it here.

[Demeter]

52. That Was Precious--Post more!

[ozymandius]

53. The Good Loser

This shows the perils of someone accepting an award on the other's behalf.

[Hugin]

60. Here's one for you, Ozy.

A Retrospective.

[fasttense]

67. Good laugh Matt. Thanks I needed that this morning.

But of course, I'll have to put you on ignore now because I can't type when I'm laughing. :)

[Demeter]

11. Mr. Market Beats the Bailouts from Daily Reckoning.com

http://dailyreckoning.com/mr-market-beats-the-bailouts/


Well, the fans are getting their money's worth. After staggering through the last four or five rounds, the Dow suddenly came back to life yesterday.

It got up off the mat. Straightened its shorts. Did a little dance. And then wham... By the time the bell sounded, it was up 284 points.

Gold ended the session almost unchanged.

So what do you think? Who's gonna win this match? Mr. Market? Or the fixers?

We'll tell you: Mr. Market.

We don't know how. We don't know when. But we know two important things:

First, the fixers don't know what they're doing.

Second, what MUST happen WILL happen.

Bernanke and Geithner tried to fix this fight. But the fix wouldn't stay fixed. Each time they proclaimed victory, along came new evidence that Mr. Market wasn't giving up. And for the last couple of weeks, Mr. Market seemed to have the fixers on the ropes.

The fixers tried all the usual tricks - cheap money, bailouts, and boondoggles. In fact, they used more tricks and fancy footwork than anyone ever had before. Still, the economy barely responded.

And now, the latest figures show that the 'recovery' isn't developing as it was supposed to. Trillions of dollars' worth of stimulus and there are still 11 million unemployed and 40 million people on food stamps.

An IMF economist says he thinks real estate prices are headed lower. Inventories of unsold houses remain extremely high. Foreclosure rates are at record levels.

The job picture is disappointing too. With the government spending so much money, you'd think we would see a big improvement. But, by and large, people who lost their jobs in the crisis of '07-'09 are still out of work. Many of their jobs were not merely put on hold - they were eliminated forever. And the economy is not creating many new ones.

Economists believed that a falling dollar would help US exports...increasing employment in the US. But when Europe got into trouble, the dollar went up! Americans felt the warm glow of schadenfreude. But the falling euro is great for Europe and a disaster for the US. Germany was already one of the top exporters in the world. Now, Germany is exporting even more. And US employment is still sinking.

Consumers are ready to spend. They're willing. But they don't have any money. We reported yesterday that people are earning less of their money from the private sector than ever before. The rest of their spending money comes from the government. They're called 'transfer payments' - money that is transferred from one person to another. You see the trouble right there. If you have to transfer the money from one citizen to another, there is no net gain...

[Demeter]

17. Beauty is Truth, Part II by Eric J. Fry, for The Daily Reckoning

http://dailyreckoning.com/beauty-is-truth-part-ii/

Simplicity and honesty are essential investment attributes. Complexity and deception are fatal.

Most publicly traded financial firms, for example, reside at the complex and deceptive end of the investment spectrum. They are complicated and highly leveraged...which means the chances of a costly deception (whether intentional or accidental) are very high. The corporate histories of Countrywide Financial, Washington Mutual, Lehman Bros. and Bear Stearns illustrate the point.

But we do not gather here today to mourn the dead; rather to scorn the living. In this case, Goldman Sachs.

Once upon a time, Goldman Sachs was a revered moneymaker - the can-do golden child of Wall Street. During the 1990s, Goldman was the American financial firm nonpareil. Its over-the-top success epitomized the feel- good vibe of the market. Accordingly, Robert Rubin, the former CEO of Goldman Sachs joined the Clinton Administration to become one of the most admired Treasury Secretaries of all time.

But then things changed. The stock market slumped, the housing market tanked and the economy stumbled. Through it all, Goldman Sachs made money. Lots of it.

This one fact angered politicians and average Americans alike. "How dare Goldman Sachs make so much money by betting against the housing market, while so many average Americans were losing their homes!" the hoi polloi exclaimed.

But making money is no crime...unless you are committing crimes to make money, which is exactly what the SEC's suit against Goldman Sachs alleges. According to the SEC's complaint, Goldman failed to disclose material information about a security it sold to clients. The SEC calls that "fraud" - always has, always will.

Berkshire Hathaway's Warren Buffett, along with other Goldman cheerleaders, assert that the company did no wrong. "Goldman is in the business of buying and selling securities for profit," the cheerleaders declare. "It has a duty to its shareholders."

This argument misses the point. The only point that matters is this: Beauty is truth; truth beauty. It's true that Goldman Sachs not only possesses the right, but the obligation, to make money for its shareholders. But it's also true that this obligation is subordinate to Goldman's fiduciary obligation to its clients. In other words, clients first; shareholders (and options-laden management) second.

As one of America's largest purveyors of toxic collateralized debt obligations (CDOs), Golden played the role of financial cigarette salesman. Nothing wrong with that...so far. But this particular cigarette salesman took out insurance policies on its biggest customers. Okay, so maybe that's a bit morally ambiguous, but it is still perfectly legal...as long as the cigarette salesman didn't lie to his customers about the potential consequences of smoking cigarettes.

But Goldman did lie. To continue our metaphor, Goldman not only "whited out" the Surgeon General's warning on every pack it sold, it also substituted its own warning that read something like: "These cigarettes are full of sugar and spice and everything nice, just like little girls."

Goldman informed its clients that John Paulson - the guy who secretly helped construct the Abacus CDO that is at the heart of the SEC's complaint - was a large buyer of this security, when in fact he was a large short-seller of the security. That was a lie. Importantly therefore, Paulson did not utilize his legendary expertise of the CDO market to select the securities that would succeed, he used his expertise to select the securities that would fail.

Goldman's failure to disclose this very material fact was a fraud...big time. If Goldman had merely informed its customers that the "cigarettes" it sold were full of "frogs and snails and puppy dog tails" and/or that the guy who helped select the securities comprising this particular CBO was selling it short, Goldman could have purchased life insurance on its customers all day long in full compliance with every applicable securities law.

Every seasoned investment advisor and securities lawyer - or investment bank - understands that the SEC's Everest of regulations and no-action letters would boil down to three words: "Disclose, disclose, disclose."

Disclosure is the key component of almost every statute. And it would be impossible to be in a position of power and influence on Wall Street without understanding this fact.

A failure to disclose is the essence of the SEC's complaint against Goldman Sachs. And if, as your editor suspects, additional SEC charges emerge, "Failure to disclose" will likely play a key role in those as well. No one is exempt from this obligation - least of all the only financial firm that is a major market maker in all of America's largest financial markets.

The "remedy" to this problem is not complex. Enforce the laws that exist. Insist on disclosure. Prosecute those who don't disclose. The financial markets do not need "more regulation," they need the same old regulation they've already got...rigorously and blindly enforced.

Justice possesses too much eyesight. She needs to put her blindfold back on - and ditch her "Goldman" golf cap - and let a dispassionate analysis of the facts lead wherever it may.

Whatever the outcome of the Goldman prosecution/inquisition, we investors must insist on truth or stay away. The best investments are those that are easy to understand...and trustworthy. Both Goldman and Greece would fail this simple test. Our advice: stay away from both of them.

"Sell risk, buy caution. Sell complexity, buy simplicity," your editor advised in a July 2008 presentation to the Vancouver Investment Symposium. "The Era of Peak Greed is over; the Era of Caution is upon us. That's not such a bad thing. Caution sounds boring, but it's not nearly as boring as it sounds. In fact, I think being cautious is kind of an uncelebrated virtue. It's a little bit like being free of venereal disease. You can't really brag about it at a cocktail party, but it's still a pretty darn good thing at the end of the day."

Two months after this presentation, Lehman Brothers came crashing down, and the entire investment world learned to its chagrin about all the mortgage-backed detritus the nation's banks had been squirreling away on their balance sheets. Lots of risk; lots of complexity...amplified by lots of leverage.

Share prices have improved dramatically since the lows of one year ago, but many of the deceptive structures that created the financial crisis remain in place. The financial sector remains a minefield of complexity, leverage and questionable pricing of balance sheet assets. In other words, the risks remain because the deceptions remain.

Therefore, sell risk, buy caution. Sell complexity, buy simplicity. Place your hard-earned investment capital in the hands of individuals who will respect and reward it; not in the hands of individuals who will abuse it.

[Demeter]

19. The Trouble With Understanding Geopolitics By Bill Bonner

http://dailyreckoning.com/the-trouble-with-understanding-geopolitics/


05/27/10 Paris, France – Oil is still spilling into the Gulf of Mexico at an unknown rate.

“Plug the damn hole,” says the nation’s chief executive to his aides. Why does he bother? His aides don’t know anything about plugging oil leaks under the ocean. And those people who do know something about it have been unable to fix the leak.

Mr. Obama is not only America’s president. He also presides over the biggest single user of oil in the world – the US military. The pentagon uses twice as much oil as the entire nation of Ireland. It sends soldiers in oil-burning airplanes to places of no apparent importance where they drive around in oil-burning machines for no apparent reason.

Naturally, oil becomes not just another commodity, but a strategic commodity…worth fighting for. Then, foreign wars use up the oil they were expected to protect.

But geopolitics is far beyond our understanding…and even farther out of our range of interest. We will just observe that the law of diminishing returns applies to just about everything. The farther offshore the roughnecks go…the deeper the sea and the higher the waves…the more the costs, the greater the risks and the lower the marginal returns. The return from Deepwater Horizon must be starkly negative…

The farther afield US armies go, too, the greater the costs, the higher the risks, and the lower the marginal returns.

“Why not just buy oil on the open market?”

Well, it’s clear you don’t know anything about geopolitics either, dear reader…don’t you know that our enemies might try to cut us off from vital oil supplies? That’s why Germany and Japan lost WWII! We were able to cut of their fuel…

“But weren’t Germany and Japan fighting for access to oil? Didn’t their politicians say they had to invade Poland…and the Philippines…to protect their vital supplies?”

No…they were aggressors. They were bad people…

“But if they hadn’t been the aggressors they wouldn’t have been bad people, right?”

That’s right…

“Then, we wouldn’t have cut off their access to oil!”

Oh, never mind. You’ll never understand geopolitics, will you?

[ozymandius]

14. Stocks Tumble, Dow Ends Worst May Since 1940

U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.

The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273.

Equities and commodities extended losses after Fitch Ratings stripped Spain of the AAA rating it’s held since 2003, saying the nation’s economic growth will slow as it attempts to cut its debts. Earlier losses followed disappointing U.S. economic data and a North Korean general’s warning of “all-out war” if any accidental clashes with South Korea break out.

Benchmark indexes pared declines late in the day after Goldman Sachs Group Inc. strategist David Kostin raised his estimates for S&P 500 earnings to $78 a share for this year and $93 a share for 2011, up from $76 and $90, to reflect “strong” first quarter earnings and better-than-estimated profit margins.

http://preview.bloomberg.com/news/2010-05-28/stocks-extend-rebound-from-nine-month-low-u-s-futures-advance-oil-gains.html

[Demeter]

21. Rinse the Blood Off My Toga!

http://www.youtube.com/watch?v=rR_5h8CzRcI&feature=related

[Demeter]

22. Obama orders halt to all Gulf drilling

The US president ordered all 33 deepwater oil rigs in the Gulf of Mexico to halt drilling and extended a moratorium on new deepwater wells, as BP temporarily suspended its latest effort to contain the US’s biggest oil spill
Read more >>
http://link.ft.com/r/XYEWFF/JI3E6Q/XBAN6/40X85F/LQR6SV/6C/t


NOW WE WILL SEE IF ANYONE LISTENS....

[Demeter]

27. Mark Fiore Writes BP Poetry

http://www.markfiore.com/political-cartoons/watch-bp-oil-spill-clean-up-gulf-coast-disaster-animated-video-mark-fiore-animation-political-cartoons

[Demeter]

46. BP and Executive Arrogance

http://www.nakedcapitalism.com/2010/05/bp-and-executive-arrogance.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


The geyser of oil and less than cheery news on the Gulf oil spill continues unabated. The news updates of the day include:

Reports from a Congressional briefing that suggest, as many have speculated, that the mud was removed despite heavy gas output, a warning sign, with BP admitting its workers may have made a “fundamental mistake”

More discussion of BP’s next line of attack, the “top kill” (Economic Populist has a good compilation of charts and related videos)

Stories that suggest that BP could be liable for as much as $60 billion in fines (Reuters comes in at a mere $10 billion, hat tip Clusterstock)

But the one that got my attention was the exclusive interview of BP Chairman Carl-Henric Svanberg in the Financial Times, in which he remarked:

The US is a big and important market for BP, and BP is also a big and important company for the US, with its contribution to drilling and oil and gas production. So the position goes both ways.

This is not the first time something has gone wrong in this industry, but the industry has moved on.

Yves here. This is simply stunning. First, the BP chairman essentially puts his company on an equal footing as the United States, implying their relation is not merely reciprocal, but equal. BP doesn’t even approach the importance of Microsoft in its heyday, a-not-very-tamed provider of a near monopoly service. And his posture “this is just one problem like others, no biggie” is an offense to common sense and decency.

Many readers have pointed to signs that BP’s order of battle in combatting the leak is seeking to maximize recovery rather than minimize damage, again a sign of backwards priorities. The widely cited gold standard for crisis management, Johnson & Johnson’s 1982 Tylenol tamperings, had the company immediately doing whatever it took, no matter how uneconomical it seemed, to protect the public. BP instead has been engaging in old school conduct: keep a wrap on information as long as possible, minimize outside input, and (presumably) contain costs.

What is worse is the complete lack of any apology or sign of remorse. Even if BP engaged in more or less the same conduct, it would be far more canny for its top officials to make great shows of empathy for all the people who are suffering as a result of the disaster, remind the public that they lost their own men too, and make great speeches about not resting until the leak is plugged, and then add the caveat” “but we have to proceed in a deliberate manner, rushing could make matters worse. We know this is frustrating, and we wish we could hurry the pace.”

The inability to perceive the need to fake remorse shows how wildly out of touch many corporate leaders are with reality. Let’s face it, they are surrounded by sycophants and image-burnishers, they get paid beyond the dreams of mere avarice whether they perform well or abjectly screw up. Unless one happens to be an exception that proves the rule like Jeff Skilling, the worst that might happen to them is a little ritual hazing by Congress for an hour or two and being the subject of the occasional unflattering news story. Real aristocrats, by contrast, at least recognized the importance of noblesse oblige, even if they didn’t always live up to it.

And BP’s outsized institutional ego is making mincemeat of Obama. It is clear that the Administration has NO Plan B if BP continues to get nowhere. And it has tolerated less than comprehensive disaster responses. Why hasn’t BP been asked to do more to contain the oil spill? Given the magnitude of the outflow, even limited success would make a difference. Why hasn’t the Navy been brought in? Trust me, if Al Qaeda had somehow gotten a missile cruise ship with a nuke or two into the Deepwater Horizon location, I’m sure all sorts of military hardware would be dispatched. If the leak turns out to be as bad an many fear, this disaster will be far worse than any readily imaginable terrorist incident, yet our response is sorely wanting.

Why is Team Obama treating BP as its only recourse? It should have contacted every major oil company to see if they had experts and equipment they could deploy. Or if that was dismissed as operationally too complex, why didn’t the US consider the option reportedly used by the Russians, of sealing the leak with a nuclear weapon (presumably a missile)? The Administration’s response seems extraordinarily passive, as if it is cowed. As Bloomberg reports:

“It’s inexplicable,” Louisiana native James Carville, a Democratic consultant who moved to New Orleans after Hurricane Katrina in 2005, said today in an interview. “Why do we still not know how much oil has been pumped out? Why did it take us over 30 days to get the pictures? Who’s running this show?”…

The administration says it’s taking a tough line toward BP and won’t rest until the well is capped and the mess cleaned up.

Yves here. This is a hard line? It looks like rolling over and playing dead, with some grandstanding to try to hide that sorry fact. Back to the story:

Administration officials have emphasized both that they are pressing BP to perform and that they are depending on the company because only it has the equipment, expertise and legal responsibility to stop the leak and repair the damage.

Yves here. Last I checked, BP was far from the only major oil company that does deep water drilling. It does in theory have a situational advantage via this being their site but it is not unique. I wonder whether the “legal responsibility” part is being weighed far too heavily in this calculus. The US is already mounting a massive response effort (and is BP gonna be sent the bill for that?). While it may indeed be correct that ultimately there is not much in the way of better alternatives, Team Obama does not appear to have gone into high alert and made an exhaustive examination of its options. Moreover, it appears to have believed the initial BP BS, which that the leak was only 5000 barrels a days, which meant that even if the leak persisted a few months, the damage would be meaningful but not horrific. Now that it is clear that matters are much worse, the Administration appears unwilling or unable to switch gears, even as this leak increasingly looks like an environmental disaster:

The dependence on BP has raised the ire of Democrats such as Donna Brazile, a political consultant and commentator.

“The Obama administration is following BP’s lead and not pressing them harder on contingency plans that should have already been in place,” she said in an interview. “It’s past time the Obama administration put all hands on deck in helping BP cut off the massive oil spill, contain what is gushing to our shoreline, clean up the mess and compensate those impacted immediately.”…

Louisiana’s Republican Governor Bobby Jindal, standing alongside Salazar and Napolitano yesterday in Louisiana, described the federal government’s response as a “disjointed effort” providing “too little, too late to stop the oil from hitting our coast.”

Andy Borowitz offers an appealing solution: “Experts Propose Plugging Oil Leak With BP Executives.”

[Tansy_Gold]

56. BP not the only company doing major underwater drilling

I think this is one of the most important points Yves makes and one that is totally ignored by the government, the public, and most important the media.

Why aren't the media out there talking to other companies -- other oil companies and, if there are any, other drilling companies? There are, after all, three major companies involved in this clusterfuck -- BP, Transocean, and Halliburton. Are there no other oil companies around to be interviewed, no retired executives and engineers to be consulted, no former employees to blow whistles???

I get in trouble on a routine basis -- I had a couple posts pulled yesterday for daring to challenge the prevailing opinion of the greatest president since George W. Bush -- but there comes a time when you have to wonder just what is the administration doing? Accepting responsibility in a pretty speech in front of the cameras is NOT enough, even though some people take comfort in the appearance of presidentiality. Why aren't there hordes of "experts" being called in, instead of just three or four thinkers in semi-related fields?

Where are all the petroleum engineers? Where are they? Is there just one petroleum engineer in the whole world who knows anything about deepwater drilling and he works for BP???

Where are the reports on just how much crude is being vacuumed from the Gulf by BP skimmers/tankers? If BP has commandeered the Coast Guard and isn't letting anyone get into the Gulf to report on this, then Obama is no longer in charge of anything. He's as AWOL as booooosh was on 9/11/01 or 8/31/05, and worse than booooosh, Obama has ceded control of the United States effectively to a multinational corporation. This is unforgivable. Period.

The US has seized and/or frozen the assets of foreign countries for various reasons at various times. There does not appear, therefore, to be any reason why Obama can't seize the assets of BP and take control of their operations. It's not a matter of controling the production of the oil; it's a matter of taking back control of the country.

Sadly, most Americans are going to go about their holiday week-end paying little attention to the catastrophe in the Gulf of Mexico. Gas prices are down, the weather is lookin' good, school is out or soon will be, and it's time to kick back. Most of us aren't being faced with the loss of our livelihood, the loss of our way of life, the loss of our world. Most of us aren't -- but many of us are. The oil "leak" in the Gulf is not a storm or a flood that will pass and leave behind little but reparable damage and bad memories. This is a catastrophe that will be with us -- mostly the people of the Gulf coast but also with all of us in lesser form -- for generations. Mr. Obama should no more be picnicking with old friends in Hyde Park this Memorial Day week-end than boooooosh should have been partying with John McCain while New Orleans drowned. The Gulf's ecosytems are at risk, and that is enough of an emergency to command the President's full attention. The fact that he is picnicking while BP runs the country is the stuff of nightmares.



Tansy Gold

[fasttense]

68. I've heard some people say that most corporations and drilling engineers

wouldn't want to piss off BP. It is a small world oil after all. So the administration can't find anyone to hire.

I don't believe this illogical explanation because if we can manage to throw billions of dollars at Halliburton and Blackwater through no bid contracts, why can't we manage to throw a few million at someone or some corporation (through no bid contracts) to clean up BP's mess or at least to ride heard on them. You know the old saying where there is a will there is a way. I think Obama does not have the will to hold any corporations accountable.

I suspect the administration thinks the Coast Guard Admiral they put in charge is riding heard on BP but mostly he's kissing up to BP trying to get a job after he retires.

If The Obama administration were seriously concerned about this spill, they would find a way to mitigate the damage and keep the public informed of exactly what is going on. Instead he goes on a picnic. There isn't any will.

[Tansy_Gold]

69. "There isn't any will." Nail, meet hammer

Let's see, now. If *I* were President and faced with this situation, what would I do, or at least try to do?

1. First thing I'd do is get out my copy of the Patriot Act. After all, Obama supported it so he might as well use it.

2. I'd call in ALL the companies drilling in the Gulf -- oil companies, drilling rig operators, equipment manufacturers, etc. -- and find out who knows the most.

3. Lay down the law regarding law enforcement access, media access, health and safety.

4. Meet with environmental NGOs and agencies to find out what's at stake. Meet separately with state and local officials. Find someone to coordinate containment/clean-up.

5. Put BP on notice: If your people get in out way, they are out. You are operating in US territorial waters, and you are operating only with the permission of the US government. Your permits can be pulled at any time. And then make good on the threats.

6. Keep the media and public informed on a regular -- meaning daily -- basis.

And that's for starters.


This is not a science experiment in class. This is not a mock trial. THIS IS NOT A DRILL.




Tansy Gold

[Demeter]

23. French minister says bail-out alters EU treaty

In an interview with the Financial Times, Pierre Lellouche laid bare the French government’s conviction that the emergency stabilisation scheme agreed earlier this month amounted to a fundamental revision of the European Union’s rules
Read more >>
http://link.ft.com/r/XYEWFF/JI3E6Q/XBAN6/40X85F/5CZ92R/6C/t


THE DEATH OF A THOUSAND BILLION CUTS...

[Demeter]

24. AIG looks to offload struggling unit

AIG is eyeing a sale of its consumer finance unit American General Finance in an effort to raise funds to repay the US government and divest a non-core business that suffered badly during
Read more >>
http://link.ft.com/r/ZE9K33/KE3KGW/K91WR/C5S2YS/HDQ1A8/ZH/t

[Demeter]

25. Qatar eyes Treasury’s Citi stock

The Qatar Investment Authority, a sovereign wealth fund, has expressed interest in buying part of the US Treasury’s stake in Citigroup, potentially boosting efforts to sell the shares amid the global rout in banking stocks, people familiar with the matter said.
Read more >>
http://link.ft.com/r/NA70KK/C5E0SZ/CWSVD/TP0QTL/NSNB3C/QR/t

[Po_d Mainiac]

30. Should read "Qatar eyes Treasury’s Shiti stock" n/t

[Demeter]

26. Wayne & Shuster - The Musical House of Commons

http://www.youtube.com/watch?v=9OwUW5_7N94&feature=related

[Demeter]

29. Warren Buffett to testify under FCIC subpoena after resisting commission's request

Yves Smith comments: It’s well known that the author of this piece, Carol Loomis, has a long standing friendship with Buffett. Even so, this piece is pure PR placement “oh the Sage of Omaha really doesn’t belong before the FCIC. Pretty much only the bad guys are asked to testify.”

http://money.cnn.com/2010/05/27/news/companies/buffett_fcic_subpoena.fortune/index.htm

When Warren Buffett testifies before the Financial Crisis Inquiry Commission next Wednesday, it will be because he was subpoenaed. If you don't know how a subpoena works, this one begins with capital letters, "YOU ARE HEREBY COMMANDED to appear and give testimony."

As Buffett characterizes it, "This is an offer you can't refuse."

And to all that there's naturally a backstory -- a very interesting one at that.

On May 12, Buffett, the CEO of Berkshire Hathaway (BRKA, Fortune 500), received a letter from the FCIC's executive director, Wendy Edelberg, saying that his views on a variety of subjects would be of "great value" to the Commission. The subjects, the letter said, would range from (but not be limited to) "the use and misuse of derivatives instruments, regulatory shortcomings, too big to fail, rating agencies and the shadow banking system."

To start the process, the letter said, the commission would like first to arrange a "private interview" where Buffett's views could be explored. And then, it continued, "we may request that you appear before the Commission at a hearing."

The letter said that arrangements for all this could be worked out with the general counsel of the commission, Gary Cohen.

Buffett had by that time watched some of the Commission's hearings and knew that the witnesses had mainly been people implicated in the crisis -- bankers, notably -- or charged with regulating it out of existence.

Knowing that he was in neither camp and doubtful that his testimony would indeed be of "great value," he decided to say no to this surprising invitation.

So, at his request, his assistant, Debbie Bosanek, called Cohen and said -- as she paraphrases it -- that "Mr. Buffett appreciates the invitation and is flattered by it, but he has a full plate with Berkshire and just can't do it."

Cohen was not pleased, to put it mildly. Ignoring the word "request" in the first letter, he told Bosanek sternly that "this was not an invitation but more of a command performance." He said that another letter -- "worded differently" -- would be coming.

There followed two more rounds of letters from Cohen. The first, on May 17, was indeed worded differently but signaled its general conciliatory tone by a heading that said, "Re: Renewed Request of the Financial Crisis Inquiry Commission."

Only at the letter's end did the threat come through: "We would prefer not to use compulsory process to secure your cooperation, and are sure that it will not be necessary."

But ah, it was. Buffett could by then see the likely end of this argument. But he was also determined to stick to his belief that the "private interview," followed by hearings, would neither be beneficial to anyone nor a good use of his time. So Buffett told Cohen in a phone call that he would not be volunteering to testify -- and if that meant a subpoena was in the cards, let it happen.

The subpoena -- that command in capital letters -- came on May 25. But the continuing, urgent wish of the commission to avoid coercion was contained in an accompanying letter, also dated May 25, that "respectfully" requested Buffett's testimony at a hearing on June 2 in New York City.

Had Buffett accepted the respectful request, the subpoena would have become irrelevant. But he did not accept, and the subpoena was therefore automatically served....MORE AT LINK

[Demeter]

31. Good Government vs. Less Government

http://baselinescenario.com/2010/05/27/heritage-index-good-government-vs-less-government/

Or: Why the Heritage Freedom Index is a Damned Statistical Lie

This guest post was contributed by StatsGuy, a frequent commenter and occasional guest on this blog. It shows how quickly the headline interpretation of statistical measures breaks down once you start peeking under the covers.

Recently, a controversy raged in the blogosphere about whether neo-liberalism has been a bane or a boon for the world economy. The argument is rather coarse, in that it fails to distinguish between the various elements of neo-liberalism, or moderate deregulation vs. extreme deregulation. But if we take the argument at face value, one of the major claims of neoliberals is that countries in the world which are more neoliberal are more successful (because they are more neoliberal). I disagree.

My disagreement is not with the raw correlation between the Heritage Index and Per Capita GDP. A number is a number. My disagreement is with the composition of the index itself, and interpreting this correlation as causation between neo-liberalism and ‘good things.’

My primary contention below is that many of these measures used in the composite Heritage Index have nothing to do with less government, and a lot more to do with good government. It is these measures of good government that correlate to economic growth and drive the overall correlation between the “Freedom Index” and positive outcomes. Secondarily, I will argue that many of the other items in the index (like investment freedom) are not causes of growth, but rather outcomes of growth.

The Heritage Index weighs ten items equally, and these items are derived using very different mechanisms (many subjective):

* Business Freedom
* Trade Freedom
* Fiscal Freedom
* Government Freedom
* Monetary Freedom
* Investment Freedom
* Financial Freedom
* Property Freedom
* Freedom from Corruption
* Labor Freedom

Here are the top twenty countries on the index, and their overall scores.
Hong Kong 89.7
Singapore 86.1
Australia 82.6
New Zealand 82.1
Ireland 81.3
Switzerland 81.1
Canada 80.4
United States 78
Denmark 77.9
Chile 77.2
United Kingdom 76.5
Bahrain 76.3
Mauritius 76.3
Luxembourg 75.4
The Netherlands 75
Estonia 74.7
Finland 73.8
Iceland 73.7
Japan 72.9
Macau 72.5

It strikes many that some countries we do not normally consider very libertarian rank quite high – Singapore (with the government actively manipulating the property market through its monopoly on land sales, or deploying investments through its massive sovereign wealth fund, etc.), Canada (with its state run health system), and others.

Likewise, on the negative side of the equation, we can observe several countries that score in the upper third on the Heritage Index that strike us as weak states. It turns out that Jamaica scores a rank of #58, and Colombia a #57. This is well above a lot of other countries like Argentina (#135), and even slightly above relatively successful nations like France (#63), Poland (#70), and Italy (#73). These types of scores tend to raise questions.

If we look under the hood, it turns out that Jamaica would score even better on the Heritage Index if it weren’t for two components on which it scores miserably. Here are Jamaica’s scores:
Overall Score 65.5
Business Freedom 87
Trade Freedom 72.2
Fiscal Freedom 74.8
Government Spending 61.8
Monetary Freedom 68.4
Investment Freedom 85
Financial Freedom 60
Property Rights 45
Freedom From Corruption 31
Labor Freedom 70

Those two scores are massively dragging down the average. This immediately makes one wonder how the various components relate to each other. Let’s take a look at the simple correlations: SEE AT LINK

[Demeter]

32. For some people, CDOs aren't a four-letter word

http://www.reuters.com/article/idUSTRE64Q2ZC20100527?feedType=RSS&feedName=businessNews

NEWARK Delaware (Reuters) - Collateralized debt obligations are as hard to love as they are to fathom. The scourge of the financial world, these complex subprime mortgage-linked securities caused hundreds of billions of dollars in losses for banks, hedge funds and insurers.

But CDOs have been very good to Donald Puglisi, a retired University of Delaware finance professor who remains fond of them. In fact, he and others are still making decent money from the bundled securities, even though Wall Street long ago stopped churning out new ones and most of the existing 2,000 odd deals have lost half their value.

Some financial experts chalk it up as just one more only-on-Wall Street absurdity of the worst financial crisis since the Great Depression.

Puglisi, a 64-year-old grandfather who left teaching a decade ago, serves as the sole independent director on the Delaware-based corporations behind more than 200 mostly subprime-backed CDOs. And for every deal, Puglisi still collects a modest annual fee of several thousand dollars for reviewing and signing the initial transaction documents and continuing to handle mostly routine clerical matters.

He pockets those annual fees -- which structured finance experts say can range from as little as $2,000 to as much as $10,000 -- as long as a CDO hasn't been dissolved and is still generating cash flows from the underlying mortgage-related assets. And fortunately for Puglisi, most of the deals he's been involved in are still ticking, although some are on life support.

Puglisi won't discuss his CDO earning power. But using the most conservative back of envelope calculation he is taking in at least $400,000 in director's fees. And that doesn't include any fees he's collecting on the more than 100 CLOs -- collateralized loan obligations -- he services in a similar capacity.

In the United States, Puglisi just may be the dean of CDOs -- he figures he has served as an independent director on more of these mortgage-linked securities than any other person and most in the industry don't dispute the claim.

But as jobs go it is not nearly as taxing or time-consuming as the title might imply. That's because in the world of structured finance, independent directors are like the Wall Street equivalent of a notary public, with no real power or authority over deals they get involved in.

In light of that limited role, independent directors like Puglisi have managed to walk away largely unscathed by the damage unleashed by collapse of the CDO market on the world financial system. And they continue to draw their fees.

In all, with some 2,300 CDOs issued during the height of the subprime lending craze, independent directors as a group have raked in millions of dollars in fees, said several people familiar with the structured finance industry. To make a killing, these experts said, volume is the name of the game for anyone working as an independent director.

That's why you'll find Puglisi's name on so many CDO prospectuses, including ones underwritten by Goldman Sachs Group and Morgan Stanley, including a Goldman deal U.S. securities regulators have filed a civil fraud suit over.

It's this potential for independent directors to keep collecting fees on deals that have seriously soured that is prompting some to question whether the position ultimately serves any real purpose. One U.S. judge has even raised questions about the credentials of some of the people who serve as independent directors.

"Currently independent directors do not seem to have a meaningful role as a gatekeeper," and they do not serve as a "fiduciary with respect to the underlying quality of the investment," said Jill Fisch, a University of Pennsylvania Law School professor, who specializes in corporations.

In light of those limitations, she said one could rightly ask, "Why not just get rid of them?"

IN THE DEAN'S OFFICE

On a recent warm day in May, Puglisi, dressed casually in shorts, sneakers and a short-sleeve shirt, made no apologies for making money off badly tarnished securities that have become synonymous with big bank write-downs.

Seated in a chair in his small office in Newark, Delaware, a lively college town, Puglisi still sounds a little bit like a believer in the financial alchemy that Wall Street banks used to turn subprime mortgages into supposedly Triple A-rated securities.

"I don't think the CDO market caused the crash in housing prices or the mortgage market," said Puglisi, whose four-person shop, Puglisi and Associates, serves as an independent director to roughly 500 Delaware-based structured finance companies. "The deterioration in the housing and mortgage markets would have happened even if there had never been a CDO market."

In light of the meltdown in the CDO market, there's been some talk in the structured finance world of giving independent directors the authority to keep check on the bankers that construct these complex transactions. But experts say any move to empower independent directors is probably easier said than done.

"If you require independent directors to take on more responsibility or make them liable for the performance of a security, you may have a hard time getting anyone to take the job," said Kingman Penniman, president of KDP Asset Management, a bond manager and research firm.

Wall Street bankers and other structured finance proponents maintain that if independent directors were permitted to second-guess deals, it would only further delay a rebound in securitization, making it harder for companies and consumers to obtain credit.

In a typical securitization, a company, or special purpose entity, is set-up by a bank as the legal issuer of bonds backed by a pool of mortgages, credit card loans and other assets. The independent director's main job is to make sure the SPE issuing the bonds operates within its narrow legal charter and determine when it is appropriate for a company to be placed into bankruptcy.

But independent directors play no role in picking the underlying assets that back the bonds, nor do the directors have any authority over the firms hired to manage the portfolio.

"Independent directors are basically there just as a rubber stamp," said Janet Tavakoli, a Chicago-based structured finance consultant.

Puglisi, for instance, was the independent director on the U.S. based entity involved in the 2007 Abacus CDO deal that has become the focal point of a U.S. Securities and Exchange Commission civil fraud lawsuit against Goldman Sachs. He also was the independent director on a CDO called Timberwolf, another Goldman-managed CDO that a former Wall Street executive famously described as "one shitty deal" in a private email.

In the Goldman lawsuit, there's nothing to indicate the SEC ever focused on Puglisi's role in the transaction. And structured finance experts said that's not surprising given the largely administrative role independent directors play.

"They are basically paper pushers," said Arturo Cifuentes, a former CDO analyst, now teaching finance at the University of Chile.

CDO CRED

Of course, Puglisi is by no means the only one to reap the benefits of the structured finance gravy train.

Giant corporate registration firms Corporation Service Company Inc. and CT Corp, a division of Wolters Kluwer, also have a lot at stake in preserving the largely passive role of the independent director.

CSC and CT long have dominated the business of helping businesses incorporate in Delaware in order to take advantage of the state's management-friendly laws and courts. In recent years, the two companies have moved aggressively to provide independent directors to serve on hundreds of specialized trusts and other SPEs.

On its website, CSC describes itself as "a national leader in Independent Director Services." Yet last year U.S. Bankruptcy Judge Allan Gropper voiced some concern about the credentials and background of some of the people CSC uses as independent directors.

Gropper, who is presiding over the General Growth Properties Inc (GGP.N) bankruptcy case, caused a bit of stir in the structured finance world when he upheld a decision by the operators of the bankrupt real estate investment trust to oust dozens of independent directors that CSC had tapped to sit on around 150 real estate-related special trusts. The operators of the regional shopping mall company wanted to replace the CSC managers because they wanted SPE directors with more expertise in preparation for General Growth's eventual bankruptcy filing.

In siding with General Growth, the judge wrote: "It does not appear these managers had any expertise in the real estate business ... CSC supplies these directors in the same fashion as it provides filing and other ministerial services for corporations."

A CSC lawyer disputes the notion that its directors are any less qualified than those working for other firms.

"We take our fiduciary duties very seriously. We don't just roll over," said CSC assistant general counsel Andrea Unterberger. "We serve the needs of our clients and pick the appropriate individual to meet their needs."

Meanwhile, in the Cayman Islands, where the vast majority of CDOs originated in order to take advantage of the Caribbean nation's favorable tax laws, an affiliate of the law firm Maples and Calder serves as an independent director on hundreds of mortgage-linked securities. The law firm said most of the independent directors it appoints are lawyers and accountants.

In fact, there's been a good deal of overlap on CDO deals between the Maples firm and Puglisi. On many deals that Puglisi is serving as an independent director for a Delaware-based CDO company, representatives from Maples are the independent directors for a closely-related Cayman's based company.

The dual CDO structure was used by many banks to make it easier for U.S. institutions to invest in nominally offshore deals.

"Ultimately it is up to the investors to decide if they want directors to do more and that will come at a cost to the deal," said Alasdair Robertson, a Maples and Calder partner. "If you want more oversight from independent directors, it will cost more in fees."

For his part, Puglisi said he would welcome any move to give independent directors more authority. Puglisi said his more than three decades of teaching finance at the university level and over 25 years experience of work on structured finance deals puts him in good stead to take on any added responsibility.

"This is what I've been doing most of my adult life," he said.

[Demeter]

33. Wray: The Great Depression and the Revolution of 2017

http://www.nakedcapitalism.com/2010/05/wray-the-great-depression-and-the-revolution-of-2017.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


By L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City who writes at New Economic Perspectives

WASHINGTON, 7 NOVEMBER 2017*. Yesterday Speaker of the House Dennis Kucinich was sworn in as President, replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his father’s well guarded compound on the grounds of the Bin Laden family’s palace. Vice President Dick Cheney, who has been in a coma since August after suffering his fifteenth heart attack, was declared incompetent. President Kucinich immediately announced a wide-ranging package of policies designed to bring an end to the Great Depression, which began with the global financial crisis of 2007. He called for calm and pleaded with leaders of the Revolutionary Tea Party Army that has encircled Washington to call off the attack that had been planned for today, the 100th anniversary of the Bolshevik revolution. Commandant Dick Armey said he is willing to meet for a discussion of a ceasefire so long as his militia can take their weapons home.

President Kucinich apparently ordered the Marines to invade Goldman Sachs headquarters in Manhattan early this morning. While there were some reports of small arms fire, most of the 6000 employees were reportedly removed without struggle and are on their way to various jails and prisons in the greater New York area. CEO Timothy Geithner was captured at La Guardia, attempting to board a private jet said to be headed for Riyadh. An anonymous source claimed that Geithner complained that President Bush had left him behind after promising protection. President Kucinich announced that Geithner would be charged with fraud, racketeering, and tax evasion. The case dates back to 2012 but had been put on hold when former President Sarah Palin ordered the attorney general’s office to stop its investigation of the Treasury Secretary. President Kucinich said that Goldman, the last remaining bank in America, would be nationalized. He assured depositors that the bank would reopen next Monday under management of a team of presidential appointees led by William Black. All insured deposits will be protected, but it is believed that other claims will not be honored. FBI agents have reportedly moved to seize all assets of current and former Goldman employees. Warrants for the arrest of former Treasury Secretaries Paulson, Rubin, and Summers were also issued.

President Kucinich’s package of policies includes universal and comprehensive debt cancellation. Under the plan, all private debts will be declared null and void. The implications are not immediately clear since delinquency rates have already reached 95% on most categories of debt. Several economists said that the new President was only validating reality, but others argued that it gave legal protection to squatters who have refused to leave their foreclosed homes over the past decade. The global movement for the “Year of Jubilee” had been pushing for such debt relief since the crisis began.

The policy proposals, which have been dubbed “New Deal 2.0″, also include a universal job guarantee that would provide work and wages for the nation’s estimated 75 million unemployed. The plan seems to follow a proposal that then-Representative Kucinich had introduced into the House in 2011. Funding for the program would be provided by Washington, but projects would be created and managed at the local level. At the time, Kucinich had argued that the program would “take workers as they are and where they are”, providing a living wage to participants and useful public services and infrastructure to their communities. When asked how the government would pay for the program, Representative Kucinich had said at the time “by crediting bank accounts, of course—that’s the only way a sovereign government ever spends.” However, his bill had failed to get out of committee; it was revealed that large campaign contributions were subsequently made by hedge fund manager Pete Peterson to all committee members who had opposed the legislation—and although he was never accused of wrong-doing, it was long suspected that there might have been a connection.

President Kucinich also announced a new “Marshall Plan” for war-ravaged Europe, which has descended into near anarchy since the EU collapsed in late 2010. He called on the Italian Red Brigade army to end its siege of Berlin. He promised to begin an airlift of food for Europe’s starving millions, to be followed by industrial products to help European nations to begin to produce for domestic consumption. He called for an end to fiscal austerity and argued that since each nation had adopted its own currency with the collapse of the euro, each now had the ability to “spend by crediting bank accounts.” Hence, “whatever is technologically feasible is financially feasible.”

Wall Street rallied on the news, with Nasdaq reaching a new high of nearly 250 and the Dow hitting 1150—the highest levels seen since the Great Crash of October 2011. The dollar also rose on the news, to $52 per Chinese RMB. Optimism spread to Japanese markets, with the yen remaining close to 132 per dollar.

In his statement, President Kucinich said that the long “nightmare” was coming to an end. He struck a conciliatory tone when he responded to a question about the actions of the administration of President Obama in the early years of the Great Depression, which many believe to have set the stage for the Great Crash. “Look, President Obama as well as his successors followed the advice of economists—who continually called for more fiscal austerity, much like the misguided physicians used to bleed patients to death. They were, and still are, clueless. I promise you that I will ban all economists from my administration. I will not seek, nor will I follow, advice from economists.” After a decade of suffering over the course of the second Great Depression, the nation breathed a collective sigh of relief.

The President pointed to the experiences of China, India and Botswana, the only nations to escape the Great Depression. He recalled that just a decade ago, US GDP and the standard of living of the average American were many times higher than those in any of these nations. Indeed, Botswana was widely derided for its policies, which had generated hyperinflation. Yet, each of these countries had adopted a job guarantee and had developed programs that achieved full employment with wage and price stability. And while unemployment rose dramatically all around the globe, these three nations enjoyed full employment and rising living standards—indeed, all three have surpassed the US median real household income level. President Kucinich said that Botswana has offered to send advisors to help get America’s fiscal and monetary policy back on track. He proclaimed that the days of misguided fiscal austerity are over, and promised to “spend whatever it takes to get our nation’s workers and factories operating at full capacity.”

In related news, a handful of economists have declared their support for President Kucinich’s policies. Among them is former Fed Chairman Alan Greenspan, who had recanted his belief in free market economics early in the depression. Over the years he has moved ever further to the left as he embraced reforms ranging from socialized medicine to abolition of private ownership of the means of production. While some economists have dismissed Greenspan’s public statements as the rants of “a senile old man” others have noted that the statements have become remarkably cogent in contrast to the testimonies he used to provide as Chairman. An early disciple of Ayn Rand, Greenspan’s recent testimonies now include obscure quotes from Marx, Lenin, and Rosa Luxemburg. He has also been calling for the elimination of the Fed, arguing that monetary policy and fiscal policy should be consolidated in the Treasury Department.

*Disclaimer: Some of the events reported here have not been fact-checked**.

**Disclaimer: Actually, none of the events reported here has yet occurred, although some are quite likely.

[proudohioan]

37. Thank you for posting this....

Very enjoyable reading!

Sigh....

If only...

T.

[Demeter]

39. Where There's Life and an Itch, There's Hope

that the couch potatoes will get up and scratch it.

[DemReadingDU]

54. nah, they can scratch staying on the couch

BTW, good article by Wray, if only that could be become true.

[proudohioan]

63. That may be too much to hope for!

Damn! Maybe we should take away the fingernails and give 'em a poke with a fork instead!

[Demeter]

34. Obama Skips Presidential Visit to Arlington National Cemetery on Memorial Day

YVE'S COMMENT: I assume the logic is that dead soldiers don’t vote.

http://jessescrossroadscafe.blogspot.com/2010/05/obama-skips-presidential-visit-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29&utm_content=Google+Reader

JESSE'S COMMENTS: At first I was just puzzled. Not only for Obama's disregard for one of the great American traditions, but even more, that I cared so much about it. I have visited Arlington cemetery several times, and each time the experience was moving. I especially like to visit the Tomb of the Unknown Soldier, and the humble grave of Robert Kennedy, and the more famous of his brother Jack.

But the more I thought about it, it seems like a shocking breach of protocol for a war-time President, the Commander-in-Chief, to skip such a high profile responsibility while brave men bleed for him overseas in his wars. For at this point in his term of office, they are undeniably his wars.

I think it speaks volumes about Obama's tin ear for the common American's sensibilities, another data point for his profile, and how he views things and his relationship to them.

I am sure there are many, many people who would like to be able to have family vacations this weekend as well, who will not be able to, because they have lost their homes, their jobs, their loved ones, and their lives, in the service of a small and increasingly out of touch clique of powerful elitists and oligarchs.

"As flies to wanton boys are we to the gods..."

King Lear Act 4, scene 1, 32–37

Postscript: After thinking about this further, I realized why it bothered me so much. My godson is visiting us, taking a little vacation after his high school graduation, and getting into shape, waiting for his 18th birthday in July so he can return home to Florida and enlist in the US Marine Corps. His obvious desire to serve his country, his knowledge of the Corps, and his devotion to his preparations is touching. With so many good people to choose from, why can't America seem to obtain better leaders?

[Demeter]

103. FOLLOWUP: Biden honors fallen troops; Obama talk rained out

THERE IS A GOD, AFTER ALL, AND SHE IS PISSED.

http://news.yahoo.com/s/ap/20100531/ap_on_re_us/us_obama_memorial_day

Vice President Joe Biden hailed America's fighting men and women Monday as the "spine of this nation," while President Barack Obama's Land of Lincoln tribute in Illinois got washed out by a severe thunderstorm and high winds.

The president was expected to deliver the speech Monday evening after he lands at Andrews Air Force Base outside Washington.

Biden made the more traditional appearance at Arlington National Cemetery on Obama's behalf, saying the country has "a sacred obligation" to make sure its servicemen and women are the best equipped and best-supported troops in the world.

"As a nation, we pause to remember them," Biden said. "They gave their lives fulfilling their oath to this nation and to us."

Obama had readied a similar message of gratitude for his appearance at the Abraham Lincoln National Cemetery in Illinois, and actually had taken the podium to give the address when the skies opened up with a quintessentially midwestern late-spring downpour — thunder, lightning and high winds.

Under the cover of a large umbrella, he told thousands gathered before him that "a little bit of rain doesn't hurt anybody, but we don't want anybody being struck by lightning." He asked people to return to their cars for their safety, and he retreated briefly to an administration building on the cemetery's grounds. A few minutes later Obama boarded a pair of buses to greet military families that came for the event.

Within the hour, reporters who accompanied Obama to the cemetery in Elwood, Ill., were told the speech had been called off. The White House had released copies of Obama's prepared remarks in advance of his talk, but they were pulled back when the event had to be canceled.

Before the storm hit, and in advance of his appearance at the podium, Obama had visited a section of headstones where two Marines awaited him. After laying a wreath, he bowed his head in a moment of silence, his hands tightly clasped. Then a lone bugler played Taps.

After leaving the cemetery, Obama met privately with families of veterans and service members currently living at the Fisher House in Hines, Ill. It serves as a home away from home for family members whose loved ones are getting treatment at the Veterans Affairs hospital in Hines, which is about 12 miles west of downtown Chicago.

At Arlington, Biden carried out the traditional wreath-laying at the Tomb of the Unknowns under a brilliant sunshine.

The vice president, accompanied by Adm. Mike Mullen, chairman of the military's Joint Chiefs of Staff, said the country's service members are "the heart and soul and, I would say, spine of this nation." He said taking part in the annual ceremony was "the greatest honor of my public life."

Obama's decision to appear in Illinois, rather than at the national burial grounds at Arlington, had been controversial, and some veterans groups criticized him for it, although he was not the first president to bypass the annual outing.

Paul Rieckhoff, founder and executive director of the group Iraq and Afghanistan Veterans of America, said Arlington is the focal point of the nation's and military's attention on Memorial Day. "When he's not here, it doesn't look like he's on the same page," Rieckhoff said.

Rieckhoff said U.S. service men and women need Obama to use the bully pulpit to remind people that the holiday is not about going to the beach or barbecuing. "We think that he has an obligation to really bridge the divide between the military and the rest of the population."

"We appreciate that the vice president is going to be here, but it's not the same," Rieckhoff said.

Jay Agg, a spokesman for the veterans group AMVETS, said the annual ceremony at Arlington is "the ideal place for the president to observe Memorial Day. However, his choice to honor our fallen at another national cemetery as other presidents have done is entirely appropriate."

In an e-mail, Agg accused some people of using the day "as an opportunity to score cheap political points on the backs of our veterans and in doing so dishonor them and distract from the true meaning and purpose of Memorial Day."

[Demeter]

35. Wayne & Shuster - Communication

http://www.youtube.com/watch?v=ncvwaAJc8II&feature=related

[Dr.Phool]

36. Recipe Section

Dr. Phools Doomsday Lemonade.

One can Frozen Lemonade that calls for 4 cans of water.
2 cans water
2 cans vodka as substitute for other 2 cans of water.
Lots of ice cubes.


notes
1) Use a decent cheap vodka, such as Mr.Boston. Save the Stoli and Grey Goose for sipping, and you'll save a lot of money.

2) Enjoy in the presence of a designated driver or bail bondsman. You'll never know what hit ya, because you can't taste the vodka.

[DemReadingDU]

55. That sounds refreshing!

I like my drinks topped with fruit, umbrella optional


:)

[Dr.Phool]

57. I keep a bag of frozen strawberries in the freezer.

They make a tasty substitute for ice cubes. The flavor leaches into the drink as they thaw.

[AnneD]

61. Speaking of cooked books and the Depression....

This is one of my fav websites, the recipes are great and Clara is a dear sweet lady. I love to hear her reminisce.

www.youtube.com/watch?v=3OPQqH3YlHA

I am a real cook book junkie. I think some times cook books are better than history books giving us a better look into peoples lives. On of my most cherished books is an old pioneer book with recipes for jerky and hard tack. It also tells about preserving ice and fresh eggs.

[bread_and_roses]

95. Ways to use sour milk and cream - for all us sour pusses over here in SMW/WE - Fannie Farmer 1934

We are kindred spirits on the subject of old cookbooks. I have a 1934 Fannie Farmer - not a collectible copy - I picked it up at a garage sale, the spine is broken, etc. But what a treasure trove of information about the era! Starting with the first page - before the title page! - being an index of recipes on how to use sour milk and cream.

Among the recipes I found most interesting were the 30+ for croquettes and about as many for fritters - I can't recall last time I saw either on a menu or in a magazine recipe - including fritters made from "beans" - basically fried lumps of flour, if you can imagine. One would have to be pretty damn hungry, I imagine, to even contemplate such a dish.

And the luxury of time - the recipe for french fries has fourteen steps and must have taken half the day (I've always been tempted to try it, though haven't yet - no time, lol - because I bet they'd be the best FF ever) - involving soaking, parboiling, drying the cut potatoes with a towel, and a double-frying!

Time, fats, and starches seem to have been pretty cheap - meat, dairy, and fruit dear. This accords fairly well with my mother's memories of her depression-childhood meals, which seem to have been composed largely of potatoes and lard.

Our vaunted cheap food and access to strawberries year-round may be a wonderful thing, but the environmental cost is way too dear, and being old and sour, seems to me to also have come at the cost of de-sensitizing our tastes to really awful food. Chicken that has a faintly rotten taste - I am sure is a result of the over-load of antibiotics/steroids/hormones whatever they stuff the poor creatures in their filthy, cruel conditions with. So-called "strawberries" (and tomatoes of course) that have no taste at all. Etc etc - all comes down to our food supply being largely composed of salt and petroleum (from pesticide to herbicide to tractor to truck to factory to truck again to car it home to refrigerator).

[AnneD]

97. I'll take......

Farmer's market and road side vendors over supermarkets any day of the week. I must be getting sensitive in my old age. I was shopping with hubby and we came to the egg section. He reached for the regular eggs and I reached for the cage free. But those are $3 dollars more he exclaimed. I looked at him and said-chickens have a short life span and they work hard laying eggs for us. Is it too much to pay so they have have a little sunshine and be happy. By God I want happy chickens to lay my eggs-they taste better. He was as shocked by my out bust as I was and put back the eggs. We eat things in their season.....they taste better. And I don't mind paying for organic and self sustaining. Life is to short for cheap food. Pay for the best organics you can afford.

[Demeter]

38. Alford: Why We Need a New Macroeconomics

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side.

We are in the midst of severe economic and financial crises. These crises have led to reappraisals of received economic and financial doctrines. The Institute for New Economic Thinking was established to challenge recent conventional (economic and financial) wisdom. Lord Turner did just that in a speech to the Institute’s inaugural conference. Even as I find myself in general agreement with Turner, I think that there are two areas in this speech where Lord Turner’s criticism is either too narrow in scope or overemphasizes one factor at the expense of others.

Perhaps it reflects Turner’s current position as a regulator, but in his speech he focused almost exclusively on the (micro) economics of markets and by implication suggests that the conventional macro wisdom is not in need of as rigorous a re-think.

Turner also describes a process by which economic and financial policymakers became prisoners of an ideology. I do not doubt that ideology has affected the evolution of economics and policy. However, I believe that Mr. Turner has underestimated the importance that macro economists attached to the elegance of their models and their failure to continuously verify the models’ accuracy and usefulness.

Turner On Economics

Turner attributes the crises to “..bad economics – or rather over-simplistic and overconfident economics–” I would have preferred he reversed the order, i.e., overconfident before over-simplistic. Simplicity is required in economic model building. Economic models, like maps, are useful because they are simpler than the reality that they represent. (Have you ever seen a map with a scale of “1 mile=1 mile”?) However, it is impossible to ex ante know with certainty if a model remains useful despite abstractions or is overly simplistic.

Given the dynamic and stochastic world in which we live, policymakers, traders and investors and other users of models face a sad truth: their models will not always be appropriate. The resulting forecasts, decisions and policies will produce results that would have best been avoided.

While macro-policy decision makers must be confident enough to make a decision, they must also be open minded enough to admit a mistake and correct it. They must trust their models, but they must also continuously verify their accuracy and usefulness. Much as the safety and effectiveness of drugs and medical devices are monitored even after they pass tests and are approved, macroeconomic policy makers should have actively explored the possibility that policies were producing unexpected and unintended consequences.


THERE'S MUCH MORE, BUT IT'S TWADDLE--IT IS THE CLOSE-MINDED, UNVERIFYING GS BOYS FROM CHICAGO THAT ARE DRIVING THIS TRAIN RIGHT OFF THE CLIFF, WITH OBAMA HAPPILY BLOWING THE WHISTLE....

[Demeter]

41. Chocolate Recipes!

Chocolate waffles

This recipe came with my mother's waffle iron 55 years ago. We wore out the waffle iron making it, even though I replaced the heating element once. I can't remember if my father had to replace it, also, before me.

1/2 c. shortening
1/2 c. sugar

Cream together until fluffy with electric mixer

Blend in 1.5 oz melted unsweetened baking chocolate

Blend in 3 eggs until creamy

Blend in 1 T. baking powder, 1/4 t. salt, 1/2 c. all-purpose four

blend in 1/2 t. vanilla extract, 3/4 c. milk

add 1/2 c. flour

add 1/2 c. milk

add 1/2 c. flour; when thoroughly mixed, cook in waffle iron until the chocolate smell turns to smelling hot and on verge of burning.

sprinkle with powdered sugar and eat with bacon or sausage.

Can be frozen and rewarmed in toaster or microwave. I used to know this by heart--had to look it up for you. That's how badly out of whack my life has been for a decade now...and how much I hate my inadequate kitchen.

Fannie Farmer's Fudge Brownies as Augmented by Demeter

Melt in the double boiler (or microwave, I suppose--I haven't tried it and just thought of it, but you better have a lid on the microwaveable container and only zap for 1-2 minutes at a time, stirring to blend in between zaps)

4 oz. unsweetened baking chocolate
1/2 c. butter (1/4 lb)

When liquefied, remove from heat. Stir in by hand (in order)

2 c. sugar

4 eggs

2 t. vanilla extract

1 c. all-purpose flour

1 c. semi-sweet chocolate chips

spread in buttered or greased 9x12 pan. Top with walnut or pecan nutmeats if you like; bake 30 minutes or so at 350F. Don't let it get too dry! Wetter is better, to a certain extent. Let cool; it's terribly hot when pulled from oven.


Chocolate Chip Meringue Kisses

whip together until foamy

2 egg whites
1/8 t. salt
1/8 . cream of tartar

Add gradually as the mixer runs

2/3 c. sugar
1/2 t. vanilla

whip until stiff peaks form

gently stir in 1 c. semisweet chocolate chips, 1 c. walnut bits

Drop spoonfuls on brown paper or baking parchment-lined cookie sheets--cookies will not spread, so they can be rather close together, but not touching.

Bake at 300F for 30 minutes until lightly brown. let cool on paper and then pop off gently. store in air-tight containers, or they will absorb humidity and get soggy.

[Demeter]

47. We are mostly wards of the State

http://guambatstew.blogspot.com/2010/05/we-are-mostly-wards-of-state.html


Assuming "we" are Americans, more of us are now wards of the State than not, and that isn't even taking into account the banks and auto companies.

Private pay shrinks to historic lows as gov't payouts rise

A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says.

Sounds to Guambat like a slippery slope. Indeed, Greecy.

posted by Guambat Stew at Wednesday, May 26, 2010

[Demeter]

49. Obama Is From Mars, Wall Street Is From Venus

http://nymag.com/news/politics/66188/

Psychoanalyzing one of America’s most dysfunctional relationships By John Heilemann

Thirty-eight hours after Scott Brown’s smack-upside-the-head victory in the race for Ted Kennedy’s former Senate seat, Barack Obama took the podium in the Diplomatic Reception Room at the White House. Hovering behind him was Paul Volcker, the former Fed chair and (for months, largely ignored) Obama economic adviser; far off to the side stood Treasury Secretary Tim Geithner. In the wake of Brown’s win, the prospect of passing health-care reform—and the rest of Obama’s first-term agenda—suddenly seemed dim. So the president had decided to pursue the obvious, logical course: He had decided to change the subject.

The topic to which Obama now shifted was financial reform, in particular to the matter of speculative, big-casino activity by the nation’s banks. “I’m proposing a simple and common-sense reform, which we’re calling the Volcker Rule—after this tall guy behind me,” Obama declared. “Banks will no longer be allowed to own, invest, or sponsor hedge funds, private-equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so—responsibly—is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private-equities funds while running a bank backed by the American people.”

As Obama spoke, Volcker, whose jowly countenance usually runs the full spectrum from mournful to hangdog, beamed like a 3-year-old who’d just been handed a brand-new toy firetruck; Geithner wore the expression of a kid whose puppy had been run over by a real one. Kremlinologists instantly deconstructed the tableau, speculating that Geithner, long leery of the premise of the Volcker Rule, had lost an internal power struggle. That he’d fallen out of favor with Obama. That, as an A-list economics writer put it, “His days must now be numbered.”

In fact, Geithner had, by then, made his peace with the Volcker Rule. After being overruled by his boss, he had been tasked with designing the proposal so it would be sound policy—and though Geithner still doubted it would do much good, he was now convinced it wouldn’t do much damage, either. He also saw the political upside to endorsing the idea. For months, Volcker had been waging a public campaign on behalf of his scheme, suggesting that the administration was being too soft on Wall Street, lending ammunition to those on the left who felt the same. At least now, the secretary reasoned, the old man would pipe down.

But Geithner considered the timing of the announcement miserable, on the grounds that it would be perceived by the media and Wall Street as a clumsy bid by Obama to gin up some man-of-the-people juju in reaction to the Brown debacle. When Treasury aides voiced this concern, however, it was dismissed by the White House’s political operation. “After Massachusetts,” replied communications director Dan Pfeiffer on a staff conference call, “if Gibbs and I wear purple ties, that will be seen as political, too.”

Wall Street’s reaction to the unveiling of the Volcker Rule came swiftly and was even harsher than Geithner had feared. The Dow promptly plunged 213 points, with bank stocks leading the way down. “It was like the White House said, ‘Okay, we lost Massachusetts, health care is screwed, so let’s go after Wall Street,’ ” says the CEO of one of the nation’s biggest banks. “And for a lot of Wall Street people, it was like, ‘Okay, first you slap us in the face, now you kick us in the balls. Enough is enough. I mean, we’re done.’ ”

On May 20, the Senate passed its bill to reregulate Wall Street by a vote of 59-39, complete with a (watery) version of the Volcker Rule. The story of the legislation’s passage can be told in a number of ways: a tale of conflict or compromise, triumph or capitulation. But on any reading, that story is only the climactic chapter in a larger narrative: how the masters of the money game fell out of love with—and into a state of bitter, seething, hysterical fury toward—Obama.

The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicans—after witnessing the horror show that constituted John McCain’s response to the financial crisis—quietly admitted relief that the other guy had prevailed.

Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.” A few days later, I recounted this experience to the same Wall Street CEO who’d called the Volcker Rule a testicular blow, and mentioned I’d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a “Chicago mob guy.” Do all your brethren feel this way? I asked. “Oh, not everybody—just most of them,” he replied. “Jamie ? Lloyd ? They might not say Obama’s a socialist, but they come pretty close.”

THERE IS MUCH, MUCH MORE AT THE LINK

[Demeter]

50. New Obama Administration Propaganda Tactic: Revisionist History

http://www.nakedcapitalism.com/2010/05/new-obama-administration-propaganda-tactic-revisionist-history.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Wow, the Obama Administration is less than a year and a half old, and it’s already twiddling with the record. I was gobsmacked to see this section in a post by Felix Salmon today, on a new book by Jonathan Alter and a New York Magazine cover story by John Heilemann:

Both Alter and Heilemann trace the decision not to nationalize to a dinner at the White House in April 2009, attended by Paul Krugman, Joe Stiglitz, Alan Blinder, Ken Rogoff, and, at least according to Heilemann, Jeff Sachs as well. Krugman and Stiglitz were in favor of nationalization, but we open about the fact that it would be an expensive and fraught course of action; Obama, faced with an alternative, sensibly took it.

Huh? This is a complete and utter fabrication. And Felix gives Alter and Heilemann a free pass for deciding to take dictation from Team Obama rather than do basic reality-checking?

It was obvious LONG before April that the Administration had NO interest in nationalizing financial firms; Geithner made that clear as of his very first policy statement on the financial services industry as new Treasury Secretary. Merely searching my archives, I find:

“Geithner Plan Smackdown Wrap.” February 10, 2009:

As we, and increasingly others, have said, the Obama economic team is every bit as captive to Wall Street’s interests as the Bushies were. The differences increasingly look stylistic, not substantive…

Thus Geithner’s belief that government can’t manage assets is sheer projection of his own inability to deliver. The FDIC winds up banks all the time. During the S&L crisis, as William Black reminds us, FSLIC appointed receivership managers that later research determined did reduce losses. Sweden, Norway, and Chile all nationalized (and relatively quickly reprivatized) dud banks during their financial crises. This isn’t like trying to go the moon (which was a government initiative, lest we forget). There are plenty of models and lots of good proposals. What is lacking is will. History says that an aggressive, take-out-the-dead-banks program is the fastest and all-in cheapest way out of a financial crisis. But if you believe that something will not work, as Geithner does, it isn’t at all hard to produce that outcome.

The Administration’s full bore effort to talk up confidence in general and banks in particular as of March made it impossible.

“White House Says Banks Should Stay Private,” February 20, 2009:

Amid fears that Citigroup Inc. and Bank of America Corp. could be on the verge of being nationalized, the White House gave assurances that it prefers banks to remain out of the government’s hands.

“This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government,” White House spokesman Robert Gibbs said Friday. “That’s been our belief for quite some time, and we continue to have that.”

We provided a longer-form analysis this year, in “The Empire Continues to Strike Back: Team Obama Propaganda Campaign Reaches Fever Pitch.” Some extracts:

The widespread, vocal opposition to the TARP was evidence that a once complacent populace had been roused. Reform, if proposed with energy and confidence, wasn’t a risk; not only was it badly needed, it was just what voters wanted.

But incoming president Obama failed to act. Whether he failed to see the opportunity, didn’t understand it, or was simply not interested is moot. Rather than bring vested banking interests to heel, the Obama administration instead chose to reconstitute, as much as possible, the very same industry whose reckless pursuit of profit had thrown the world economy off the cliff. There would be no Nixon goes to China moment from the architects of the policies that created the crisis, namely Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Director of the National Economic Council Larry Summers….

Obama’s repudiation of his campaign promise of change, by turning his back on meaningful reform of the financial services industry, in turn locked his Administration into a course of action. The new administration would have no choice other that working fist in glove with the banksters, supporting and amplifying their own, well established, propaganda efforts.

Thus Obama’s incentives are to come up with “solutions” that paper over problems, avoid meaningful conflict with the industry, minimize complaints, and restore the old practice of using leverage and investment gains to cover up stagnation in worker incomes. Potemkin reforms dovetail with the financial service industry’s goal of forestalling any measures that would interfere with its looting. So the only problem with this picture was how to fool the now-impoverished public into thinking a program of Mussolini-style corporatism represented progress.

How did the Administration and financial services message control teams work together?

The first was the refusal to consider investigations of any kind. Obama is widely reported to have studied the early days of Franklin Delano Roosevelt’s administration for inspiration; it would be impossible for him to miss the dramatic steps FDR took, including supporting the continuation of a Senate Banking Committee investigation into the misdeeds of the Roaring Twenties, the Pecora Commission….

More compelling evidence of the Administration’s lack of interest in reining in the money-changers came via Treasury Secretary Timothy Geithner’s first presentation on his reform plan, which was more accurately a plan to have a plan. It was widely criticized for its sketchiness, but most observers missed the true significance. Had the Obama transition team done any serious thinking about the financial crisis? Obviously not, because you don’t need to think too hard if the game plan is to go back to business as usual to the extent possible. Geither’s presentation came nearly three weeks after Obama was sworn in, and all its initiatives were Bush/Paulson wine in new bottles: a new go at the failed idea of having the government overpay for bad bank assets; “stress tests” to put more discipline around the process of handing out TARP funds to the needy; and a mortgage modification program which pretended to be able to square the circle of saving borrowers without taking on investors in mortgage securitizations.

Geithner’s not-much-of-a-plan exemplified the second tool in the Obama campaign to sell doing as little as possible to the financiers: the Theory of Positive Thinking….

Back to our current post. I also checked my assessment with Newsweek’s Washington DC based commentator Michael Hirsh, who confirms that the decisions not to nationalize banks had been taken long before April, and the dinner with Stiglitz, Krugman, et al was “pro forma and largely meaningless.” Hirsh, by the way, broke the story of that dinner.

Separately, it is also utterly implausible that Obama would place much weight on a decision of this magnitude on a single session with individuals outside his team. Large and at least adequately managed organizations (and the Obama crew prides itself on being buttoned down) aspire to have a deliberate, analytical approach to Big Decisions. And given how high profile this issue was, having a solid, defensible-sounding rationale would be even more important.

So why would Team Obama go to the lengths of telling a verifiably false account to at least two reporters? Perhaps events in due course will reveal why they are so eager to revise the timeline, but all I can fathom now is that for some reason the Administration is trying to make it appear that the decision not to nationalize (or to use our current Newspeak, resolve) the really sick banks was:

a. Made by Obama, as opposed a matter that either didn’t interest him or one in which he deferred to Summers, Geithner & Co.

b. One that a majority of famous economists endorsed.

I’m open to other theories as to why Team Obama is going to such extremes to change the record.

[Demeter]

51. How to cure the euro’s ills

http://www.ft.com/cms/s/0/5adc64f6-676b-11df-a932-00144feab49a.html

Binding former enemies together in a common currency was Europe’s historic political achievement. Today those ties are being tested as never before. The euro is not yet on the verge of disintegration. But greater statesmanship is needed to stem the erosion of political support.

Monetary union was always as much a political as an economic project. So it is today. If the euro is under threat, it is not from economic challenges, whether sovereign defaults or a plummeting exchange rate. The euro has successfully buttressed the single market by eliminating currency volatility and competitive devaluations. The risks to its survival are political – and even those risks can be overstated. There are powerful forces holding the eurozone together: there is no way to expel a member; political leaders are still committed to staying in; and even if they wanted to, leaving would be costly.

But the strains on the single currency are severe. If its leaders want the euro to survive, they must forge a new political bargain in place of the one that made its birth possible. Germany gave up the Deutschmark in return for the rest of Europe pursuing more German-style discipline. This understanding was to be safeguarded by three pillars: an independent, inflation-busting European Central Bank; a stability and growth pact mandating fiscal prudence; and a ban on bail-outs. Of these only the first is still standing, and even ECB independence is wobbling.

States, including France and Germany, wriggled out of the pact’s strictures. Governments recoiled from punishing one of their own. The pressure for restraint when times were good was lost. Excessive public borrowing was not the only cause of the debt crisis: Spain is under siege despite its surpluses before the crisis and lower public debt than Germany. But the failure of discipline delayed reforms needed for sustainable growth. Huge capital flows across the continent could have eased such changes; instead they financed consumption binges and wasted investment.

While the boom lasted, the rules could be broken, seemingly with impunity. But now collective support for Europe’s southern rim is increasingly seen as ushering in a “bail-out union” where the virtuous pay for the profligate. The flames are fanned by leaders’ conceit that eurozone defaults are intolerable. The no bail-out clause has now turned into a no-default clause – reinforcing German taxpayers’ feeling of being duped.

A new political bargain must be forged to maintain support for the monetary union. This requires a level of statecraft not yet seen from EU leaders. Their management of the crisis has been faltering; their understanding of its nature inadequate. Visceral opposition to International Monetary Fund involvement hindered decisive action on Greece....

[Dr.Phool]

58. Kick and Rec.

[DemReadingDU]

62. I found a good posting in GD

by William Z. Foster, about propaganda and ignoring the political left
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8442633

[proudohioan]

64. Oh ,Yes!

I read that one!

I am really enjoying his posts.

Thanks for the recommendation!

T.

[Tansy_Gold]

71. Here's another, from videos, appropriate to our ongoing discussions

with/about those who are on some of our "ignored" lists. Offered in all seriousness, no snark intented.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x470041

It's an interview between Dylan Ratigan, subbing on Young Turks, and Carol Tavris, author of "Mistakes Were Made, but not by Me," about dealing with the disconnect between admiring/liking Obama and NOT admiring/liking the things he does.

Sometimes understanding how the mental processes work can help in establishing or re-establishing the dialogue and then going forward to make the changes we all wanted.



Tansy Gold

[bread_and_roses]

65. A depression era almost no fuel sort of crock-pot - and other Crocks

Sorry I'm just getting here - had to work today and and had g'dtr last night.

Here, for the coming bad times, is a low-energy cooking method. I read about this in a compilation of MFK Fisher's writings called "The Art of Eating." I believe it was in "How to Cook a Wolf," but it could be in one of the other sections.

First, the device, then some thoughts on MFK and various other sorts of crocks.

It was called a "Hay Box" and essentially, was two nested wooden boxes - but with a goodly space between the sides of box 1 and box 2. Fill that space with hay (on edit - tightly packed hay - it's insulation). Then take the item to be cooked - say a soup - bring it to a boil, cover tightly, place in the hay box, and cover it tightly. Leave for I forget how long but a goodly while. Voila, cooked soup - using next to no (or at least, very little) fossil fuel to generate the heat. This might be a useful trick to know when we're all cooking on our campfires as we try to evade the cannibal tribe over the hill.

Now, I am not a great fan of MFK Fisher; I think much of her writing in "Art" is pretentious and self-indulgent. Most of the recipes in "Wolf" are not particularly economical, and some are actively vile to this cook's eye, but I will say I read of polenta (which I loathe), Gazpacho, and eating pasta with just butter, salt, pepper and parmesan (which I love)in her books - wayyyy before they were trendy. And of the books, I like "Wolf" the best, because it does have some good simple recipes and emphasizes the virtues and pleasures of simple eating.

Now, for bigger than a soup pot (or even MFK's self-absorbtion) Crock, I'll give you this on the Obama Financial "Reform" - which I thought this article with the probably deliberately provocative title summed up pretty well in simple language:

Is The President The Kind of Leader Chairman Mao Warned Us About?

by Danny Schechter

We now know that it was the Obama Administration led by the President himself who used techniques well understood and denounced decades earlier by none other than Mao TseTung.

Mao had no use for those who talked left to move right.

In several high profile speeches, Obama lashed out at Wall Street for its greed and mendacity, proposing financial reforms that appeared to be hard hitting if only because of the way the lobbyists for the financial services industry squealed about them.

But even as he was feinting left, he and his main economic operative, Tim Geithner, were moving right to kill off amendments that the bankers hated like Senator Bernie Sanders's proposal for a deep audit of the Federal Reserve Bank and the Brown-Kaufman Amendment that would have broken up the six biggest banks in America."


As John Heilman explained in New York Magazine, "Geithner's team spent much of its time during the debate over the Senate bill helping Senate Banking Committee chair Chris Dodd kill off or modify amendments being offered by more-progressive Democrats."

He used an old trick: embracing reform publicly while modifying its toughest provisions privately.

Well, you guys know all that, and LOTS more, so I won't quote on. I am guessing that some bail-out of BP (not the Gulf, we can probably kiss it goodbye for a long time, along with a lot of wildlife and foodstock) is in the works that may even eclipse the cuddling and footsie with the financials.

Later, my famous potato salad for your holiday pleasure.

[Dr.Phool]

66. I watched a real crock of hooey on HBO last night. "The Special Relationship".

The whole thing was pretty much about how Bill Clinton helped elect Tony Blair, and Blair came to stab him in the back by publicly demanding ground troops in Bosnia, embarrassing Clinton.

The movie ends with Clinton having a talk with Blair in London, the night Al Gore conceded. Clinton is telling him to be wary of Bush, and lecturing him that, "You don't seem to be a center-left progressive anymore. In fact, I have doubts that you ever really were". :rofl: :rofl: :rofl:

Does anyone in their right mind consider either of those two, to be center-left or progressive?

What a crock of shit.

[Dr.Phool]

70. Demeter's Corporate Exec Weight Loss Clinic

http://news.yahoo.com/comics/non-sequitur

[Demeter]

73. Oh Doc, That's Amazing!

:rofl:

[Dr.Phool]

96. The link changed to todays toon.

Click it back a day to Sun. May 30.

FRSP's for all!

[AnneD]

98. Dr.Phool....

when you said exec weight loss clinic.....I envisioned the FRSP. How much does the head weigh-81/2 lbs. ? TALK ABOUT WEIGHT LOSS-81/2 LBS IN UNDER 30 SECONDS!!

I saw the mon toon before I posted. Just goes to show that like minds roll down the same gutter.:spray:

[Dr.Phool]

102. As our heads probably will!

[AnneD]

106. LOL LOL LOL....

touche.

[hay rick]

72. Casino capitalism. Literally.

"If someone's been successful at poker then there's a good chance they could be successful in this business," said Toro partner Danon Robinson. "If you have no interest, that's almost a red flag.... It's almost the equivalent of not reading the Wall Street Journal."

There's a part of Wall Street — investment banking in particular — that looks for recruits with sterling family connections and impeccable educations, and that favors sturdy young men and women who played college team sports such as lacrosse and rugby.

Toro Trading is not that Wall Street. Instead, it's one of the new breed of high-speed trading desks that are revolutionizing the financial markets, and making their money on the fractional gains from buying or selling a split-second ahead of their rivals.

They look for job candidates who are quick-thinking, have nerves of steel and a head for numbers — the very skills that lead to success in online poker.

http://articles.latimes.com/2010/may/16/business/la-fi-poker-traders-20100516

[Demeter]

74. And That's Just Sad. Thanks for Posting, Rick!

Drop in anytime!

[Demeter]

75. What is it really all about? (WHEN YOU FIND OUT, LET US ALL KNOW!)

http://bilbo.economicoutlook.net/blog/?p=9899

I trawl the financial and economics news from all and sundry, write and think economics all day most days, get embroiled in the technical and political arguments about monetary systems and labour market dynamics, and ideological battles and all this energy is constructed and conducted at the “level of the debate”. But the debate at that level is largely irrelevant and we get sidetracked by it. So can sovereign governments do this or that? But my interest in unemployment and inequality started when I was young and was particularly honed during my student days in the late 1970s in Melbourne when I realised that governments were deliberately imposing joblessness on my fellow citizens by retreating under pressure applied by the ideological attacks of the emerging neo-liberals. I realised then that underneath all this monetary talk are people who suffer and get left behind. And so we have to keep reminding ourselves – what the hell is all this really about?

This graphic is a capture of part of the front business page of the UK Times today (May 25, 2010). It sort of got me rolling very early today. I thought Who is in charge in these countries?. Since when does an unelected and unaccountable institution based in Washington D.C., which regularly makes errors of such a magnitude that people die from the poverty that result, have any right to order nations around that have open elections?

Well the answer is that: (a) financial matters now take priority over everything; and (b) these nations are vulnerable on those grounds because their politicians took them on a fraught journey into an economic and monetary system that would always deliver hardship the first time a serious negative aggregate demand shock hit that system. It was obvious from day 1 when the Maastricht Treaty was signed and then the Lisbon rules were consolidated that this would be the case.

They were living a fool’s dream to think that the short-term prosperity – is a debt-fuelled vulnerable asset boom prosperity? – would survive the next negative spending shock. It was obvious that the cycle would turn and that the nonsensical deregulation of banking and German-rated access to credit for the weaker economies would only create conditions that amplify the in-built design faults in the monetary system once things turned south.

What was going on? The answer is that we have completely lost our vision of what an economy should be about. That question should be the starting point of the debate rather than fudging along about whether the German ban on short selling was sensible or not.

But the fact that the IMF now struts centre stage again with its bailout cash (which comes from the governments anyway) and its “axe” – when its modelling and policy stances leading up to the crisis contributed to the meltdown in the first place – exemplifies the skewed nature of our priorities. Institutions like the IMF should be low profile and supportive of human accomplishment and security. A person is never made more secure by deliberately and unnecessarily making them insecure.

The IMF and the EMU and all governments who embrace austerity when they have more than enough capacity to deal with all the present economic problems that are bringing down employment are deliberately and unnecessarily making the citizens of the world insecure and pushing them towards poverty. They are thus all terrorists.

Deficit terrorism

In this 1991 article, Noam Chomsky writes about terrorism. He quotes the official United States Code which says an:

… act of terrorism” means an activity that — (A) involves a violent act or an act dangerous to human life that is a violation of the criminal laws of the United States or any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State; and (B) appears to be intended (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by assassination or kidnapping.

While the intentions of the deficit terrorists fit the outcomes – “intimidate or coerce a civilian population”; “influence government by intimidation or coercion” – you might argue that they do not “violate criminal laws”.

But my take on it is this. The current institutional structure that mediates the relationship between the government and the non-government sectors and which, necessarily involves laws, rules and regulations about the conduct of the central bank and treasury and the way public spending and taxation is executed, and the way public debt is issued has been constructed in such a way that governments are forced (coerced) into intimidating their populations via economic threats.

In a capitalist society, where most of us have to work to make a material living, these economic threats impinge on our right to work. The neo-liberals deliberately undermine the right to work of millions and force them into a state of welfare dependence and then start hacking into the welfare system to deny them the pittance that that system delivers.

Do they want people to starve? What is this really all about?

I recall a story when I was a postgraduate student and tutor at Monash University in my hometown of Melbourne. It was the late 1970s and early 1980s and unemployment in Australia was very high after the fiscal retrenchment that followed the OPEC oil price hikes. These stupid governments attacked a supply-side price hike with a demand-side contraction and claimed it was sensible policy.

I know I have promised a dedicated blog to that era (the so-called stagflation era) and it will come in time. But hey, we have Europe on the brink of collapse and Financial Crisis Mark II – 2010 edition emerging and that needs analysis.

Anyway, we were sitting in the tea-room one day and one of the more obnoxious Monetarists (he was a senior staff member – highly paid and tenured and hadn’t published much at all in his “long” career – those were the days!) was waxing lyrical about market-based solutions to the unemployment crisis out in the real world.

His solution? He seriously explained how the unemployed could start gardening supply businesses. How? Well he got his idea from a visit to the municipal tip (garbage dump) at the previous weekend and noticed there were lots of prams abandoned. He mused that the unemployed could go to the tip and scrounge up some bits of wood, get a pram chassis with wheels and bolt the parts all together.

To do what? Well they could then get up early each morning and follow the milkman and his horse and cart (milko’s were male in those days!) around the streets and pick up the shit that the milko’s horses dropped and then package it and sell it as fertiliser.

Problem? Well he said the problem was that the unemployed were too lazy to get up that early to exercise entrepreneurship. He was dead serious.

I sat there bemused (you couldn’t get angry with this level of ignorance) and at that point said to the assembled group of staff.

Sorry, mate, milkos all use motorised vans these days. The horse and cart were replaced a few decades ago.

Response: Mitchell again! Always opposing market forces.

This character and others held centre-stage every morning tea-time and was typically surrounded by wannabee postgraduate student/tutors who were taking in all the neo-liberal/monetarist crap that the senior staff would serve up. They, of-course, then grow up, get academic gigs themselves, and perpetuate the insult to humanity.

Some, like myself, in a minority of about one, get through the system in a number of ways and take contrarian positions. My advice here to all those students around the world who I now know read my blog daily (including the groups at Harvard, Stanford and LSE) is that the mainstream stuff is so banal that you can learn it in a short-time and all the mindless academic staff are expecting is regurgitation to prove that you are fit to join them sometime to continue the game. But it leaves you with plenty of time to learn other things and develop broader skills of analysis.

Anyway, a digression.

So we first build this voluntary institutional structure that imposes “fiscal discipline” which really means it prevents the governments from actually doing what we elect them to do – that is, improve our welfare. We want them to manipulate the complex economy which mixes public and private spaces to make us all better off.

We want everyone in our community to gain access to the distribution system so that if they can work they can find a job and if they cannot they won’t feel under constant attack of having their pension entitlements taken off them or privatised.

We want to have first-class health care for when we need it – accessible to all.

We want a symbiosis established between the social, economic and natural spaces so that we sustain our prosperity.

So why would we create a set of institutions that by design undermine these genuine aspirations?

Think about what is happening in Europe at present. Cuts backs to child care, education, health, pension entitlements, wages – all the things that really matter to people and provide the support structure to pursue human enrichment. Are any public pensions going to be safe in Europe at the moment?

The question we have ask is whether the cut backs are necessary? How do we answer that? Well the neo-liberal bean counters answer it using their mindless pavlovian response functions to a couple of relatively meaningless financial ratios.

In the case of the EMU nations, these ratios are given meaning by the rules and structure the EMU bosses have imposed on the citizenry. So if you strip the national government of its capacity to spend freely to respond to private spending collapses and impose thresholds that have to be maintained then, of-course, a deficit or debt-ratio that breaks the threshold becomes a “problem”.

I realise that governments do break the Stability and Growth Pact thresholds and that France and Germany were the first some years ago to do so. But the signal that sends to the bond markets is the important point.

But the real way to answer the question about whether the cutbacks are necessary is to ask whether there are idle real resources that can be deployed to advance output and income. If there are then fiscal expansion is required. Cut backs just worsen the situation.

So the question must be contextualised by a debate about what really matters.

Summers says unemployment is the problem

This was done, in part, by Larry Summers, who gave a talk yesterday (May 24, 2010) at Johns Hopkins School of Advanced International Studies – Reflections on Fiscal Policy and Economic Strategy. Here is a shot of the audience and I guess the guy in the cowl was worried he might here some more deficit terrorism (Source).

But this is what Summers actually said (in part):

Yet the observation that the economy is again ascending does not mean that we are out of a very deep valley.

Far from it when we are nearly 8 million jobs short of normal employment and about $1 trillion – or $10,000 per family – short of the economy’s potential output and income and when recent events in Europe have introduced uncertainty into the prospects for global growth.

Shortfalls in output and employment stunt the economy’s future potential as investment projects are put off and as the skills and work habits of the unemployed atrophy.

This last point is especially important when for the first time since the Second World War the typical unemployed worker has already been out of work for more than six months.

And behind these statistics lie millions of stories of Americans who have seen the basic foundations of their economic security erode. Beyond the economic projections and equations we economists make lie the struggles of communities devastated by the impact of this recession.

Whatever the judgments of groups of economists about the official parameters of the recession and the growing signs of recovery, for millions of Americans the economic emergency grinds on.

The challenge we must thus confront is the imperative both to do everything in our power to accelerate the momentum behind recovery so that it addresses the imperative of job creation and also addressing the challenge to growth and prosperity of budget deficits in the medium to long term that cannot be ignored.

So these are the real values that should guide economic policy. Not the sham emphasis on financial ratios that just play into the hands of the financial sector and give the amorphous bond markets the imprimatur over government policy followed closely by the IMF when the bond markets get sick of pulling power trips.

The point that Summers didn’t follow up on is what are they going to do about it. It is very simple really. Unemployment is about a lack of jobs. If the private sector will not create enough jobs then there is only one sector left in town that can. Hellooooo! Its called the government sector.

They can do it directly (that is, hire the workers themselves and put them to work advancing public purpose – rebuilding community and environmental infrastructure; providing personal care services; etc). There is never a shortage of work – just a shortage of funding to pay the wages.

They can also do it indirectly by stimulating the private sector via tax cuts or targeted spending. Both approaches have advantages and disadvantages but the net effects are always overwhelmingly positive....

STILL MORE AT LINK

[Demeter]

76. Unwarrented: Does Buffett deserve his outsider rep?

http://nymag.com/news/intelligencer/66190/

As financial reform stumbles across the finish line in Washington, D.C., we can only hope that it will have some real, lasting effect—that it will somehow make those greedy investment bankers act a little more responsibly when they’re gambling with the global economy. As responsible and principled, say, as Warren Buffett, with his folksy, timeworn approach to putting money to work.

We might hope for that, but we might not want to. While the soon-to-be octogenarian still cracks a corny joke or two while running Berkshire Hathaway, out of far-off, unsullied Omaha, he’s a citizen of Wall Street at heart. In some ways, he might be even more extreme, because his outsize reputation means he often gets a free pass on behavior that others get called out on.

Consider Buffett’s $5 billion investment in Goldman Sachs in September 2008. On the surface, it made a lot of sense. First, the news of such an investment could help put an end to the post-Lehman carnage on Wall Street. It did. And second, he had the storied firm over a barrel, extracting a juicy 10 percent coupon on the preferred shares they created for him in their moment of need.

He’d made this play before: He invested in Salomon Brothers in 1987 when the firm was on the run from Ron Perelman (things later got so hairy that Buffett had to step in and run the Salomon temporarily, an experience he termed “far from fun”). But with Goldman, it’s pretty clear who got the better of whom. Buffett got his 10 percent, sure. But Goldman rented the credibility of the world’s most reputable investor for a relative song—what’s $500 million a year in exchange for one’s continued existence? He even defended of the firm’s practices earlier last month, when the Goldman pile-on was in full force. (Perhaps it was mere respect. They got him; therefore they must be good. If you can dunk on LeBron …) But let’s not get too complicated. Untie it all, and it’s pretty simple: As one of Goldman’s largest investors, Buffett is, de facto, Goldman.

The Wall Street Journal reported on April 26 that Buffett was lobbying Nebraska senator Ben Nelson to grandfather Berkshire and its $63 billion derivatives portfolio from any new rules, specifically those that might force the company to reserve collateral to cover potential losses. Recall that this is the guy who called derivatives “financial weapons of mass destruction.” But they’re only dangerous, apparently, in lesser people’s hands. (The great Buffett? Posting collateral? How dare they.) Some of Buffett’s derivatives positions are outright bets on the direction of the market, the kind that can suddenly be worth nothing if he’s wrong. In other words, gambling. With shareholder money. Now where have we heard of that before?

Perhaps most damning to his cultivated image of being above it all is the fact that until last year, Berkshire Hathaway was the largest shareholder of rating agency Moody’s Investors Service, with a full 20 percent stake. It’s hard to think of any market participant that fell down harder on the job during the late housing bubble than the rating agencies, all in pursuit of the growing stream of fees from investment banks demanding that they put lipstick on their subprime pigs. Moody’s surpassed $73 a share in early 2007; it’s around $21 now. And yet, Buffett’s reputation took no similar hit.

The question is if it should have. Look beyond Buffett’s old-timey outsider shtick, the circus of an annual meeting, the notion that all he does is drink Cherry Coke and play online bridge with Bill Gates, and he’s just another Wall Streeter. Like any rational being, Buffett went where the money was (Moody’s), bought on the cheap (Goldman), and tried to protect his own interests (lobbying against derivatives reform.) Just like the rest of them. Only he’s better at it than they are.

[bread_and_roses]

77. I am still among the missing - and the most recent "Regressive Antidote:

Spent all day in ER with a friend in bad straits - am totally wiped out. Hope to actually be able to read the rest of the thread tomorrow.

in the meantime, in case anyone missed it, here is David Michael Green's latest from "the Regressive Antidote"

http://www.regressiveantidote.net/

"I Can't Wait for Barack Obama to Become President"

I can't copy and paste from the page for some reason (it must be a scan?) - but it's an account of Admin actions in the Gulf with Obama's name replaced with Bush's - it's quite funny, in a dark, grim, tragic way.

I like his stuff enough that I actually signed up for his e-newsletter recently, so I wouldn't miss the articles.

[DemReadingDU]

78. Politics is politics

Doesn't matter which party, business is business.

You are a good friend to spend a day in the ER. Hope your friend is ok.

[Tansy_Gold]

80. copied and pasted

The Regressive Antidote - I Can't Wait For Barack Obama To Become President

Watching the latest tragedy unfold in the Gulf this last month, all I can say is: I can’t
wait for Barack Obama to become president.

This Bush guy is such a disaster, literally and figuratively. It just seems that
the destruction of America he presides over is all but endless. As if one Gulf
Coast disaster left to rot in the sun wasn’t enough for this president, now
comes a second. What did those folks in New Orleans ever do to him? Heck, what
did Americans ever do to him?

I just can’t wait any longer for the new administration to take office. They are
absolutely guaranteed to handle things so much differently than the Cheney Bots
in the White House who seem intent on wrecking the whole world, with their
charity beginning at home.

Look at this oil spill disaster, for example.

To start with, Barack Obama would never pick a guy like Ken Salazar for the
crucial environmental position of Secretary of the Interior. Of course Bush
would, though. Salazar has been deeply tied to mining and ranching industries
his entire career – just the kind of corporate hack Cheney would insist on for
the position. In fact, Salazar was even a big supporter of his predecessor, the
corrupt industry shill, Gale Norton. After all the work environmentalists put
into getting Obama elected, there’s no way he’d choose someone like Salazar for
this position, a guy so lame that mining association lobbyists welcomed the
appointment when Bush made it. What does that tell you? Of course, Salazar has
turned out – just as you’d expect – to be the “Heckuva Job, Kenny” of the oil
spill. This will never happen once Obama gets in and puts a real
environmentalist atop the Interior Department.

Nor would Obama ever adopt the “Drill, baby, drill” mentality that Bush did
earlier this year, when he opened up vast expanses of the Atlantic coastline,
the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas
drilling – much of it for the first time, ending a longstanding moratorium on
oil exploration along 167 million acres off the East Coast, from Delaware all
the way down to Florida. This travesty by the Bush administration – which
delighted oil companies and right-wing drilling advocates but angered
environmentalists and appalled residents of those states – would never happen
under an Obama administration. Unlike Bush, not only will Obama cease the
expansion of drilling in these sensitive areas, he’ll surely cut it back. And
not a moment to soon! Who knows where the next destructive spill will be.

We also wouldn’t be in this mess if federal regulators were doing their job,
instead of being emasculated by regressive Bush administration deregulatory
policies that turn industry loose to do whatever it wants. Regulators knew that
backup systems were required to control the blowout preventers that failed in
the Deepwater Horizon catastrophe, and they even told rig operators that in
2009. But they never did anything about, relying instead on promises from the
offshore drilling corporations that they were on top of it. Wait ‘til Obama gets
into office, man! He’ll clean up that nonsense in a hurry. Regulators will
actually regulate, and regulatees be whipped into shape, and forced to comply
with the government-enforced public interest, just like they should be.

I’ll tell ya another thing. When Obama is president, you won’t see reckless
companies like BP getting permission from the industry whores in the Minerals
Management Service to drill wells without obtaining the permits that they are
required by law to first receive from other government agencies. This is exactly
what happened with Deepwater Horizon. And since January 2009 alone, permission
to go forward for at least three huge lease sales, 103 seismic blasting projects
and 346 drilling plans has been granted by MMS without getting the environmental
protection permits required from other federal agencies, like the National
Oceanic and Atmospheric Administration (NOAA), to protect endangered species,
among other things. MMS staff scientists are also regularly pressured and
overruled by management whenever they raise concerns about the environmental
impacts of drilling projects. No way will these sort of destructive sell-outs
ever happen once Barack Obama is in the White House.

It’s bad enough that the United States government under George W. Bush has been
so culpable in so many ways for the wreckage that has come from the BP spill in
the Gulf, but even worse is how they are helping BP to lie about its magnitude.
First the administration said that the spill was pumping 1000 barrels of oil a
day into the Gulf. Then they increased that number to 5000 barrels. What we have
now learned is that the real figure must be several times larger than that.

Worse, we know that the administration is allowing BP to use a measuring
technique specifically not recommended for this sort of spill, and has actually
turned away a private team of scientists who were standing by ready to deploy
the proper measurement equipment. Ian MacDonald, a Florida State University
oceanographer who is expert in measuring oil flows, believes the amount must
“easily be four or five times” what the administration is saying. Indeed, he and
others have analyzed video imagery and estimated that the breach is spilling on
the order of 70,000 barrels of oil every day. He notes that, “The government has
a responsibility to get good numbers. If it's beyond their technical capability,
the whole world is ready to help them.”

But, of course, the Bush people absolutely don’t want help to accurately measure
the disaster their corporate patrons have created. In fact, because of their
ties to industry, they want to make sure it isn’t properly measured. The
situation is actually worse that, however. MacDonald and others believe that BP
is actively trying to “hide the body” in this crime, and that the administration
is assisting them in doing that by not collecting sufficient deep water samples
to map out the damage, and by torpedoing those few gathered by scientists on
their own. Over a month after the spill began there are still no deep water test
results released by the government and no pressure from the administration for
BP to collect this data. Worse, when independent oceanographers collected one
sample that confirmed their theory about deep water spills creating huge
underwater plumes of oil in the ocean, NOAA immediately criticized the results
of the study, even though they had previously pointed to their partial funding
of the effort as an example of the government’s attempts to stay on top of
measuring the impact of the spill.

Just as they did with the whole Iraq WMD scare, the congenital liars in the Bush
administration can’t seem to help themselves. They love the corporate class so
much – even foreign corporations – that they are willing to put big money
interests ahead of the American public who is their real constituency, and help
protect those corporations with official lies. Won’t it be great when Obama gets
in and puts the hammer down on this sort of disgusting treason in the White
House?

Another sickening aspect of this tragedy is the cover-up which is already
underway. As they did with 9/11 and Iraq, the Bush administration has again
appointed a Potemkin Panel to investigate this crisis. But, guess what? Its
six-member Board of Inquiry is made up of half Coast Guard staffers and half MMS
clowns. It obviously is going to be completely unable – by design – to tell the
truth about what has happened here, especially where the key government agencies
nominally in charge are concerned. This is a total white-wash. You can bet that
a guy like Obama would never countenance such behavior if he were president
today.

Bush is also playing deceitful games with policy on this issue, trying make the
public think that he’s environmentally friendly, even while he is taking
excellent care of his buddies in the oil industry. After the blow-out, the
president announced a moratorium on permits for drilling new offshore wells, and
promised to stop giving environmental waivers for offshore drilling projects.

But guess what? While we weren’t looking this last month, the administration
issued seven new permits and handed out five environmental waivers for just the
sort of projects like Deepwater Horizon that were supposed to be banned now
because of their potential to replicate the current destruction we’re
witnessing. In fact, many of these projects involve wells nearly twice as deep
in the ocean the one currently spewing oil, and are therefore even more
potentially dangerous.

The president himself said, “It seems as if permits were too often issued based
on little more than assurances of safety from the oil companies. That cannot and
will not happen anymore.” But it has. Seven times. The president also said,
“We're also closing the loophole that has allowed some oil companies to bypass
some critical environmental reviews.” But he hasn’t. Five times. Bush’s Interior
Secretary, Ken Salazar, explicitly testified that “there is no deep-water well
in the OCS that has been spudded – that means started
– after April 20”. But, in fact, Newfield Exploration Company confirmed that it
was issued a permit on May 11 to drill, and has been doing so. And they’re not
alone.

Meanwhile, back in the Gulf, the Bush administration seems completely intent on
letting its oil industry buddies do whatever they want, no matter the damage.
There are substantial concerns about the health and environmental impact of
Corexit (just the name freaks me out), the oil dispersant being used in
world-record amounts (over 700,000 gallons so far) to deal with the spill.

According to Representative Edward Markey, Chairman of the House Select
Committee on Energy Independence and Global Warming, “We know almost nothing
about the potential harm from the long-term use of any of these chemicals on the
marine environment in the Gulf of Mexico, and even less about their potential to
enter the food chain and ultimately harm humans”. Great.

So the Bush administration pretended to order BP to scale back the use of
Corexit, and pretended to give them a deadline by which to do so. But BP just
told the government where they could stick their deadline, and kept on deploying
the toxic chemicals. I doubt they’d dare to try that if a real environmentalist
who put the interests of the public ahead of oil company profits – someone like
Barack Obama – was in the Oval Office. You can bet the house on that.

The Bush Leaguers have also played silly games with public relations, like wimpy
babies trying to act tough, just as they did when the Vietnam-evader himself put
on a flight suit and landed on the USS Abraham Lincoln to declare “Mission
accomplished” in Iraq, before the real war even started. Now they talk about how
they’re gonna “keep the boot on the neck” of BP to clean up the spill. Tough
words, man. According to the New York Times, though, “Oil industry experts said
they did not take seriously the sporadic threats by the administration that the
federal government might have to wrest management of the effort to plug the well
from BP. The experts said that the Interior and Energy Departments do not have
engineers with more experience in deepwater drilling than those who work for BP
and the array of companies that have been brought into the effort to stem the
leak. ‘It's worse than politics,’ said Larry Goldstein, a director of the Energy
Policy Research Foundation, which is partly financed by the oil industry. ‘They
have had the authority from Day 1. If they could have handled this situation
better, they would have already.’”

Speaking of rank public relations maneuvers, Bush pretended to blow his top when
the three companies (including Halliburton, of course) all blamed each other for
the catastrophe, and called their antics a “ridiculous spectacle”, despite doing
little himself to deal with the issue for more than a month now. Then he
professed anger and astonishment at the “cozy relationship” between the oil
industry and the government. Imagine that! Putting on his tough guy face, Bush
waved his arms and said, “I will not tolerate any more finger-pointing or
irresponsibility”. Oh, that’s cute. What’s he gonna do, order BP to act
responsibly? Next year sometime? Over brandy and cigars in the Oval Office? I’ll
tell you one, thing, if Obama were in the White House you’d never see a
“ridiculous spectacle” like the one the president is putting on right now.

And, you know, you would also think that Bush learned his lesson from 9/11 and
Katrina about getting up off the couch and engaging himself when there is a
national crisis going on. Apparently not, however. Just like when Katrina hit,
he’s running around doing political fundraisers while the country scrambles to
deal with a crisis, and now he’s taking a vacation, as well, just like he did in
the month before 9/11, after being warned of an imminent attack. Unbelievable.
Speaking of vacation, I just can’t take it anymore. These Bush clowns and their
destructive antics are just killing me. It seems like it’s taking forever for
the Obama administration to start, and for these predators to go.

I just can’t deal with it anymore. I’m gonna go take a long nap
Someone wake me up, oh, say, about a year-and-a-half into the Obama
administration, wouldya?

By that time they should have really made their mark, and life will be so much
better in America.

One thing’s for sure, once Barack Obama comes to power you’ll never again see an
oil corporation-infested administration do nothing about a major crisis, lie
about it, and protect British Petroleum instead of the American public.

That’s change you can believe in.

Baby.

[Dr.Phool]

94. I'll be the first to say it.

IMPEACH. Better yet REVOLT.

We're getting DLCed to death. Sure, he's only been in office for a year and a half. That should have been exactly a year and a half longer than it should have taken to clean out the MMS. Since they were exposed 3 years ago.

Before some lurker comes in here and calls me a hater, no I'm not...yet. On Inauguration Day, I had tears in my eyes. I really believed that our nightmare was over. Even though I had some qualms when he started appointing his economic team before that. I thought, Hey, give the guy the benefit of the doubt, maybe Summers and Rubin, et al had changed. Well Duhhh.

He kept Gates as Defense Secretary. A guy just as dirty as Richard Helms at CIA, and big time tirs to Poppy.

He kept most of the crooked Bush US Attorneys, even the one in Pittsburgh who was caught red-handed making politically motivated prosecutions.

He's expanded the war, reneged on Iran, Ok'ed extrajudicial assassination of US citizens. I guess he learned a thing or two from the Czechago Police in the Fred Hampton case.

We've extended the Patriot Act. We haven't even attempted to prosecute torture. In fact, we just moved it to Afghanistan.

We got a fucked up healthcare shake-down bill, and watered down Wall Street reform.

I could really get revved up here, but I'd probably get tombstoned.

[Demeter]

81. I Can't Wait Until Barack Obama Gives Up Pretending to Be President

I am such a cynic--and I used to be a cock-eyed optimist!

[DemReadingDU]

79. irreverent yet striking poems

Broadcast on 16 May 2010 on The World Today on BBC World Service


BP

OMG

SOS, SOS
MIA, DOA

AM, FM
CNN, BBC

PR, PR
FAQ, Q&A
OK, OK
FYI, DIY
ASAP, ASAP

AM, PM
AM, PM

WWF
RSPA
RSPB

AM, PM
AM, PM

PR, PR
BS, BS

AM, PM
AM, PM

NB, VIP
CEO, USA
AF1

O

IOU, IOU

SOS, SOS

KO

PS
BP
RIP

http://www.adamtaylorpoetry.com/bp.php


It's even better when you hear it! Click here...
http://www.adamtaylorpoetry.com/media/bp.mp3

[Demeter]

82. The NYT Notices Provision of Health Care Bill It Previously Opted to Ignore

http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-notices-provision-of-health-care-bill-it-previously-opted-to-ignore/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29

I'll start with a cheap shot. The NYT just noticed that the pay or play provision in the health care bill makes no sense. The issue here is the extent to which larger employers will be obligated to pick up a portion of their workers' health care costs. The final bill included a provision that subjected employers of more than 50 workers to penalties if employees' health care costs exceeded a certain percent of family income.

The problem with this sort of penalty structure is that employers do not have control over workers family income and in general should not even know it. This sets up an absurd penalty structure where employers do not have the knowledge they need to act to avoid the penalty -- it's sort of like enforcing speed limits that randomly change and are never posted.

The problem with the NYT coverage is its description of this problem as: "a little-noticed provision of the law." Yes, it is true the provision got relatively little attention, but the NYT played a big role in this. Had the NYT opted to pick up on a problem that some people were trying to call attention to, notably Robert Reichsauer, the President of the Urban Insititute and also the former director of CBO (also CEPR), then maybe this ill-conceived penalty never would have made it into the final law.

[Demeter]

83. Trichet denies Anglo-Saxon attack on euro (THEREFORE, IT IS TRUE, OR THEY THINK IT IS)

http://www.marketwatch.com/story/trichet-denies-anglo-saxon-attack-on-euro-2010-05-31?siteid=YAHOOB

European Central Bank President Jean-Claude Trichet on Monday denied that an Anglo-Saxon conspiracy was to blame for the rapidly falling euro as he sidestepped questions over a clash with his potential successor and over Spanish bank health.

In an interview with Le Monde and translated into English on the ECB web site, Trichet said investors have a difficult time understanding European institutions, as the euro trades at the $1.23 level, from above $1.50 at the end of 2009.

"One should be wary of any conspiracy theories," Trichet said. "I simply believe that some international investors struggle to understand Europe and its decision-making mechanisms. They have difficulty in gauging the historical size of the European construction and in anticipating the capacity of Europeans to take decisions that are just as important as those taken a few days ago."

He said the markets will need time to adjust to the nearly $1 trillion European Union-International Monetary Fund support package reached earlier this month.

"The measures are so significant in terms of both their nature and their scale that there is no doubt that they will have a positive effect on the markets," the central bank chief asserted.

Trichet called the euro a "very credible currency" which keeps its value, noting that average consumer prices have been below its target during its 11-and-a-half year existence. "The issue is that of financial stability within the euro area on account of bad fiscal policy in certain countries, in particular Greece. It is imperative that this be corrected."

He also said there was no "plan B" for Greece and said he doesn't anticipate a restructuring of the troubled country's debts. "Greece must and will honor its commitments. The European Commission, together with the ECB on the one hand and the IMF on the other, is following developments in the recovery program very closely," he said.

Trichet said austerity packages -- announced throughout the euro zone, from Germany to Greece -- were needed in spite of the possibility they may derail growth.

"When a household systematically spends more than it earns, so that its debt rises exponentially, its situation is clearly untenable. Correcting this situation demonstrates both wise and sound judgment," he said.

Trichet also dodged a question on the clash with current Bundesbank president, and possible successor, Axel Weber over the purchase of government bonds, noting he doesn't comment on what ECB colleagues say. He reiterated that unlike similar programs of the U.S. Federal Reserve and the Bank of England, the ECB bond buys are not quantitative easing programs because they are sterilized.

The central bank chief added that he took a "very cautious view" on bank taxes that are being proposed across the globe, noting the lessons of the prudential regulation still need to be learned.

On Spanish banks -- one regional lender was rescued last week, and several others are now being pushed into merger talks -- Trichet said he had "no particular comments."

[Demeter]

84. Evans says Fed could delay ending low rates: reports

http://www.marketwatch.com/story/evans-fed-could-delay-ending-low-rates-2010-05-31-54300?siteid=YAHOOB

Federal Reserve Bank of Chicago President Charles Evans said Monday Europe's debt woes could prompt the U.S. central bank to delay raising interest rates, though he downplayed the impact of the crisis so far, according to published reports.

At a conference in Seoul hosted by the Bank of Korea, Evans told reporters that he "wouldn't be surprised" if the Fed's policy of keeping rates low "gets extended just a little bit," Bloomberg News reported.

"The situation in financial markets in Europe does add uncertainty, but at the moment I look for the recovery in the U.S. to continue to improve and I don't see any changes in my outlook at the moment," Evans told reporters, according to Reuters.

"Inflation is severely under-running price stability, so it's still appropriate to keep an accommodative policy," Evans told a news conference at the Seoul event, according to Dow Jones Newswires. "But if the situation turns rapidly, policy will need to respond more quickly."

Evans reportedly also said he believes U.S. inflation of about 3% is consistent with price stability. WHAT IS HE TALKING ABOUT?!!!


The London interbank offered rate, used by banks to lend to each other in dollars, is tied to variable-rate loans in the United States and is hitting 10-month highs.

Attending the same event, Philadelphia Fed President Charles Plosser also cited European risks.

"I don't anticipate at this point that the United States in particular will see a double-dip, but obviously the financial turmoil in Europe raises some clouds on the horizon that we need to be cautious about," Plosser said, according to Reuters. THE YOU KNOW WHAT MUST BE HITTING THE FAN NEXT MONTH...

Plosser and Evans are both non-voting members of the central bank's rate-setting Federal Open Market Committee.

The Fed has said in its policy statement that conditions are likely to necessitate extraordinarily low interest rates for an extended period. Only one Fed official, Kansas City Fed President Thomas Hoenig, has dissented publicly from this policy statement

But last week Richmond Fed President Jeffrey Lacker said that he was growing less comfortable with the central bank's "extended period" language in its policy statement, suggesting that he is leaning toward wanting to raise short-term interest rates. See full story on Fed's Lacker.

"I am marginally comfortable with that language at this point," Lacker said.

Lacker does not have a vote on policy until 2012, but can participate in all discussions at the Fed's policy meetings.

[Demeter]

85. India's economy grows at fastest pace in 2 years

http://news.yahoo.com/s/ap/20100531/ap_on_bi_ge/as_india_economy

A rebound in manufacturing and recovering farm output drove India's quarterly economic growth to 8.6 percent, the best in two years as Asia's third-largest economy returns to pre-crisis levels of expansion.

Growth for the financial year ended March was 7.4 percent, beating a government forecast of 7.2 percent, officials said Monday. The acceleration in the January-March quarter is likely to add to pressure on the central bank to raise interest rates to contain inflation.

India has rebounded from the global downturn faster than expected thanks to strong domestic consumption and investment, but two uncertainties loom: Rain and Europe.

As India's farmers wait for the monsoon, hoping last year's drought won't be repeated, the nation's business elite watches Europe — which accounts for a fifth of India's exports — hoping its sovereign debt crisis won't dampen the investment that's needed to drive growth.

Manufacturing surged an unsustainable 16.3 percent off a low base for the March quarter, up from 0.6 percent a year earlier and its strongest performance in at least two years. Agriculture — which remains an important source of employment — limped along at 0.7 percent, up from the prior quarter's contraction of 1.8 percent, but worse than a year earlier, when it grew 3.3 percent.

"We remain vulnerable to the monsoons, as ever," said Enam Securities economist Sachchidanand Shukla. "This is an annual uncertainty that can shave off 60 to 70 basis points (0.6 to 0.7 of a percentage point) from growth. If the monsoon were to fail again, growth will definitely slip below 8 percent."

He said an unusually bountiful winter crop boosted growth after the worst rainfall since 1972 diminished summer yields.

Monday's figures showed that investment is becoming a key driver of growth as private consumption falls as a share of overall economic activity.

"It's a sign of India moving on to a higher growth trajectory," said D.K. Joshi, chief economist at Crisil, an Indian research and ratings agency. "Investment has picked up really fast and is at par with other economies when they started lifting on a sustained basis."

Investment as a share of gross domestic product rose to 34.6 percent during the March quarter, government data showed. That's far higher than it was in the 1990s, when it hovered near 22 percent of GDP, and close to its peak of 37 percent not long before the global recession, Joshi said.

Europe, India's most important export market, could drag on India, especially if its debt crisis undermines global growth.

Joshi calculates that only about 7 percent of investment comes from abroad. Still, if foreign funding — which Indian companies have used to feed their growing appetite for overseas acquisitions — dries up, domestic sources will be stretched, he said.

"We are more connected to Europe than ever, but we have our own strengths," he said.

From 2003-2008, economic growth averaged 8.8 percent a year, before slumping to 6.7 percent last fiscal year as the Great Recession roiled India's economy.

India's prime minister Manmohan Singh says the billion-plus nation needs to grow at 10 percent a year to eradicate chronic poverty.

[Demeter]

86. WHILE THE US HAS A DAY OF REST: World stocks mostly higher despite Spain downgrade

http://news.yahoo.com/s/ap/20100531/ap_on_bi_ge/world_markets

World stock markets were mostly higher Monday as investors shrugged off more sobering news about Europe's shaky finances amid new signs Asia's economies are continuing to recover.

Despite the upswing in Europe and Asia, some analysts characterized the markets as volatile and saw investors holding back as doubts remain the European Union can contain a debt crisis that has sent the euro to four-year lows.

"They are still cautious at this point," said Mark Tan, who helps manage about $15 billion of equities and bonds at UOB Asset Management in Singapore. "Liquidity in the stock market is still pretty tight."

In early trading in Europe, Germany's Dax index rose 0.4 percent to 5,972.32, and France's CAC-40 rose 0.3 to 3,524.48. Markets in the U.S. and U.K. were closed for holidays. Oil, meanwhile, rose above $74 a barrel, and the dollar gained against the yen and weakened against the euro.

On Friday, the Dow Jones industrials shed 1.2 percent to 10,136.63 after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency's action gave investors another reminder of the long-term economic problems still facing debt-laden European countries.

The news, however, did not come as a shock to investors in Asia, where expectations of a downgrade of Spain had been circulating for some time. Markets in Asia were mixed in early trade and then mostly headed higher.

"Asians were prepared for the downgrade for Spain," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "So Asian markets are quite stable today. Even Bangkok is up."

Jackson Wong, vice president at Tanrich Securities in Hong Kong, also said he viewed Asia as stabilizing, despite some investor nervousness.

"The momentum is still on the positive side," Wong said.

Japan's Nikkei 225 stock average inched up 5.72 points, or 0.1 percent, to 9,768.7 amid news that industrial production in the world's No. 2 economy rose for a second straight month in April, propelled by robust growth in China and the rest of Asia.

Separately, India's economic growth accelerated to 8.6 percent in the January-March quarter, its best in two years as Asia's third-largest economy returns to pre-crisis levels of expansion.

South Korea's Kospi rose 1.1 percent to 1,641.25, Taiwan's benchmark added 1.1 percent while markets in Singapore, Malaysia and Thailand rose about 1 percent or more.

Australia's S&P/ASX 200 fell 0.6 percent to 4,429.7 and Hong Kong's Hang Seng was little changed at 19,765.19. China's Shanghai index slid 2.4 percent to 2,592.15 on jitters the government will impose new taxes.

In Seoul, Ssangyong Motor Co. surged by the daily limit of 15 percent after several companies, including India's Mahindra & Mahindra Ltd., expressed interest in buying the troubled SUV maker.

Still, concerns about a possible slowdown in global demand hit big commodity names. Japanese trading house Mitsubishi Corp. lost 1.1 percent and Australian miner BHP Billiton Ltd. fell 1.9 percent.

The S&P 500 index fell 1.2 percent in New York on Friday, while the Nasdaq composite index dropped 0.9 percent.

Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said Monday that the outlook for the United States was still good and that he does not expect a double dip recession.

"Our growth prospects remain positive," he told reporters in Seoul, where he was participating in a conference sponsored by South Korea's central bank. "But obviously, the financial turmoil in Europe raises some clouds on the horizon that we have to be cautious about."

U.S. financial markets will be closed Monday for Memorial Day.

In currencies, the dollar rose to 91.45 yen from 91.02 yen late Friday. The euro rose to $1.2309 from $1.2272, a bump upward that may stem from the overselling of euros last week.

Benchmark crude for July delivery was up 49 cents at $74.46 a barrel in electronic trading on the New York Mercantile Exchange.

[Demeter]

87. 63% Favor Repeal of National Health Care Plan

http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/march_2010/health_care_law

Support for repeal of the new national health care plan has jumped to its highest level ever. A new Rasmussen Reports national telephone survey finds that 63% of U.S. voters now favor repeal of the plan passed by congressional Democrats and signed into law by President Obama in March.

Prior to today, weekly polling had shown support for repeal ranging from 54% to 58%.

Currently, just 32% oppose repeal.

The new findings include 46% who Strongly Favor repeal of the health care bill and 25% who Strongly Oppose it.

While opposition to the bill has remained as consistent since its passage as it was beforehand, this marks the first time that support for repeal has climbed into the 60s. It will be interesting to see whether this marks a brief bounce or indicates a trend of growing opposition.

Thirty-three percent (33%) of voters now believe the health care plan will be good for the country, down six points from a week ago and the lowest level of confidence in the plan to date. Fifty-five percent (55%) say it will be bad for the nation. Only three percent (3%) think it will have no impact.

The Political Class continues to be a strong supporter of the plan, however. While 67% of Mainstream voters believe the plan will be bad for America, 77% of the Political Class disagree and think it be good for the country.

The survey of 1,000 Likely Voters was conducted on May 22-23, 2010 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Sixty-three percent (63%) of all voters expect the health care plan to increase the federal deficit. Just 12% expect the bill to push the deficit down, while 13% say it will have no impact.

Fifty-five percent (55%) say the plan will make the quality of health care in the country worse. Twenty percent (20%) expect it to improve the quality of health care, and 18% think quality will stay about the same.

Fifty-five percent (55%) also expect the health care plan to drive up the cost of health care rather than achieve its stated goal of causing those costs to go down. Only 18% believe health care costs will indeed go down because of the plan’s passage. Another 16% expect costs to stay about the same.

Male voters remain more critical of the health care plan than female voters.

While sizable majorities of Republicans and voters not affiliated with either major party continue to favor repeal of the plan, most Democrats remain supportive.

[Demeter]

88. Your Household's Share Of The September 2008 Economic Collapse: $104,350

http://consumerist.com/2010/05/your-households-share-of-the-september-2008-economic-collapse-104350.html

A recent report from the Pew Charitable Trusts tallies up each US household's share in the economic collapse. Your household's share? $104,350. That includes lost income, government bailouts, and both reduced home values and reduced stock values.

Pew says:

* Income - The financial crisis cost the U.S. an estimated $648 billion due to slower economic growth, as measured by the difference between the Congressional Budget Office (CBO) economic forecast made in September 2008 and the actual performance of the economy from September 2008 through the end of 2009. That equates to an average of approximately $5,800 in lost income for each U.S. household.

* Government Response - Federal government spending to mitigate the financial crisis through the Troubled Asset Relief Program (TARP) will result in a net cost to taxpayers of $73 billion according to the CBO. This is approximately $2,050 per U.S. household on average.

* Home Values - The U.S. lost $3.4 trillion in real estate wealth from July 2008 to March 2009 according to the Federal Reserve. This is roughly $30,300 per U.S. household. Further, 500,000 additional foreclosures began during the acute phase of the financial crisis than were expected, based on the September 2008 CBO forecast.

* Stock Values - The U.S. lost $7.4 trillion in stock wealth from July 2008 to March 2009, according to the Federal Reserve. This is roughly $66,200 on average per U.S. household.

* Jobs - 5.5 million more American jobs were lost due to slower economic growth during the financial crisis than what was predicted by the September 2008 CBO forecast.

[Demeter]

89. Senators Call on AG DOJ to Investigate Transocean Ltd. Money Transfers

http://wyden.senate.gov/newsroom/press/release/?id=ac62582e-dbb5-487e-bbe7-241abc42247e

Washington, D.C. – After reports that Transocean Ltd., the owner of the destroyed oil rig in the Gulf of Mexico, intends to distribute $1 billion to private shareholders, U.S. Senator Ron Wyden (D-Ore.) wrote a letter with 17 of his Senate colleagues to U.S. Attorney General Eric Holder asking that the Department of Justice look into the corporation’s financial transactions. The announcement came only hours after a closed-door meeting of company executives and weeks after the Transocean-owned Deepwater Horizon oil rig was destroyed, pumping massive amounts of oil into the Gulf of Mexico.

Senators Pat Leahy (D-Vt.), Charles Schumer (D-N.Y.), Tom Harkin (D-Iowa), Robert Menendez (D-N.J.), Mark Begich (D-Alaska), Byron Dorgan (D-N.D.), Patty Murray (D-Wash.), Jeanne Shaheen (D-N.H.), Bill Nelson (D-Fla.), Mark Pryor (D-Ark.), Mark Udall (D-Colo.), Jeff Merkley (D-Ore.), Max Baucus (D-Mont.), Amy Klobuchar (D-Minn.), Michael Bennet (D. Colo.), Blanche Lincoln (D-Ark.) and Robert Casey (D-Penn.) joined Wyden as co-signers.

In the letter, the Senators argued that the move by Transocean could further enhance the company’s protection from lawsuits and may make it harder for those negatively affected by the spill to seek claims against the company.

“We are concerned that such action to quickly move money out of corporate coffers to individual investors may make it more difficult to pursue liability claims against the company,” Wyden and his colleagues wrote. “Families of those who died in the disaster, the fishing industry that has been devastated by the oil spill and the governments that have worked full-time to clean up this spill deserve better.”

Transocean, in addition to limiting their liability for the oil spill, stands to make a $270 million profit from the insurance on Deepwater Horizon having insured it for more than it was worth.

“Transocean’s stockholders shouldn’t take huge profits from polluting our country’s Gulf Coast,” the letter says.

A copy of the letter follows:

May 24, 2010

The Honorable Eric Holder
Attorney General
Department of Justice
950 Pennsylvania Ave., NW
Washington, DC 20530

Dear Attorney General Holder,

We write to you today to ask you to investigate the recent announcement by Transocean Limited, the owner of the Deepwater Horizon oil rig, that it intends to distribute $1 billion to its share holders at a time when it may be responsible for financial damages related to the massive oil spill in the Gulf of Mexico.

Transocean’s previous statements about their liability for this tragedy have been troubling. Last week, during hearings in the Senate Energy and Natural Resources Committee, Transocean refused to accept any financial responsibility for the oil spill in the Gulf. Now, Transocean has confirmed its intent to pay out $1 billion in dividends to shareholders, an announcement first reported by the Associated Press after it was made during a closed door meeting in Switzerland. We are concerned that such action to quickly move money out of corporate coffers to individual investors may make it more difficult to pursue liability claims against the company. Families of those who died in the disaster, the fishing industry that has been devastated by the oil spill and the governments that have worked full-time to clean up this spill deserve better. Transocean has also reported that it expects to make a $270 million profit on its insurance policy for the Deepwater Horizon, since the rig was insured for more than it was worth.

Transocean’s stockholders should not take huge profits from polluting our country’s Gulf Coast. We urge you to investigate these corporate actions. We appreciate your prompt attention to our request and look forward to working with you in the future to ensure that companies that pollute our nation’s resources do not profit from such actions.

Sincerely,

[Demeter]

91. What spill? Rig owner approves $1 billion dividend to shareholders

http://rawstory.com/rs/2010/0517/spill-rig-owner-approves-1-billion-dividend-shareholders/

Five days after appearing before Congress to testify about its responsibility in one of the worst oil spills in US history, the Swiss company that owned and operated the oil rig that sunk into the Gulf of Mexico announced that it would shell out $1 billion in dividends to shareholders.

The revelation that Transocean is distributing a $1 billion profit to shareholders as one of its drill sites leaks millions of gallons of oil into the sea is sure to inflame an already smarting debate over offshore drilling and the company's role.

Transocean has passionately argued that they don't share financial responsibility for the disaster. A clause in a contract they had with BP says that the oil company is obligated to pay for any environmental damage, even though Transocean actually owned the rig. BP was leasing the rig from Transocean at the time of the accident.

Transocean's distribution to shareholders was done quietly on Friday at a "closed door meeting." The company had previously announced that they would vote on the dividend at the event.

To put the distribution in perspective, the amount of profit that Transocean plans to pay out in the next year is half of what Exxon ultimately paid for the Exxon Valdez disaster off the Alaska Coast.

It's also more than double what BP has said they've spent on the cleanup to date.

The company also made a paper gain from their insurance carrier after the Deepwater Horizon rig collapsed into the ocean aflame.

Transocean had insured the rig for $560 million, but apparently never spent that much money actually building it. The company's CEO told investors on a recent conference call that the firm had book a $270 million "accounting gain" on the difference between the real value of the rig and the amount that they'd insured it for.

Since the rig collapsed, the company said they've already received $401 million from their insurance policy.

The Associated Press also notes that "Transocean moved to Switzerland two years ago to protect its low corporate tax rate, and few in the city had heard of the company, even three weeks after the April 20 blast that resulted in more than 4 million gallons (15 million liters) of oil pouring into the Gulf of Mexico from the well drilled by the BP-leased rig. Eleven workers were killed in the explosion."

"Steven Newman ignored questions from reporters as he arrived and left the Park Hotel in the Swiss town of Zug, a few miles from the company's headquarters," AP added.

In a brief press release on their website, the firm noted the terms of the dividend, expected to be paid out to shareholders in four increments over the next year.

"Shareholders also authorized the Board of Directors to make a cash distribution to shareholders in the form of a par value reduction in the aggregate amount of 3.44 Swiss francs ("CHF") equal to approximately USD 3.11 per issued share to be calculated and paid in four quarterly installments," the release said. "Based on the total number of issued shares, including treasury shares, the distribution is approximately USD 1.0 billion."

It adds, "The Board of Directors expects to set the respective payment dates of the four installments in July 2010, October 2010, January 2011 and April 2011, or as soon after each of the four periods as is practicable. The actual installment payments will be subject to the satisfaction of applicable Swiss law requirements."

[Demeter]

92. Transocean’s Move to Switzerland Pays Off for Note Holders

http://247wallst.com/2008/11/18/transoceans-mov/

The world’s largest offshore drilling contractor, Transocean (NYSE:RIG) is moving its incorporation location from the Cayman Islands to Switzerland. Pending final approvals, the move will be effective on December 18th, 2008.

The move triggers an obligation for Transocean to convert three 30-yearsenior convertible notes issues into cash and shares. The notes wereissued in December 2007 for an aggregate amount of $6.6 billion, mostof which went to pay for the merger with GlobalSantaFe. The bookrunnersfor the notes issues were Goldman Sachs (NYSE:GS) and Lehman Brothers,along with a few other of the usual suspects.

According to the company’s press release, the conversion rate for noteholders is 5.931 shares of Transocean stock for each $1,000 ofprincipal held, about $168.61/share. Transocean’s total obligation foreach $1,000 in principal is around $440.

Transocean’s latest quarterly report shows long-term debt of nearly$13.9 billion and available cash and equivalents of about $1.2 billion.The stock is trading more than 55% below its 52-week high of$163/share. That number is not likely to improve today.

[Demeter]

93. Transocean dodges paying U.S. corporate taxes by locating its headquarters in Switzerland

http://climateprogress.org/2010/05/15/transocean-dodges-paying-u-s-corporate-taxes-by-locating-its-headquarters-in-switzerland/

Transocean, Ltd, the company that operates the Deepwater Horizon oil rig which recently exploded in the Gulf, is the “world’s biggest offshore drilling contractor.”

We’ve already seen that the Deepwater Horizon drill rig used the Marshall Islands’ flag as a “flag of convenience” so it “could comply with that country’s standards, and not the U.S. regulations” (see “Oil well’s blowout preventer had leaks, dead battery, design flaws“).

Now the AP reports today that Transocean, after moving its headquarters from the U.S. to Zug, Switzerland, two years ago, paid a paltry 16 percent on its corporate income last year, less than half of the current American corporate income tax rate of 35 percent:

In the foothills of the Swiss Alps four new steel-gray towers rise from what used to be a grassy field. One of them is home to Transocean Ltd., the world’s biggest offshore drilling contractor and owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico, leading to one of the worst oil spills in history.

Low taxes prompted the decision two years ago to move to landlocked Switzerland: The company paid 16 percent tax on its $4.4 billion global operating income last year. The regular corporate income tax in the United States stands at about 35 percent.

The company, once based in Delaware, shifted its head office from the Cayman Islands, where it has been since 1999, to the central Swiss canton (state) of Zug. It joined other international corporations flocking there in search of tax advantages.

Only a dozen of Transocean’s employees are physically located in Zug — more than 1,300 are based in Houston, Texas. A “2005 survey by research firm BAKBASEL found Zug had the lowest effective tax burden for companies and high earners of any Swiss canton, and far below that of other European countries or the United States.” Transocean is holding its shareholder meeting in Zug today, angering some residents. “We want them to stop deepwater drilling and to clean up the damage they caused in the Gulf of Mexico,” said Rupan Sivaganesan, a Green Party member of the cantonal parliament.

[Hugin]

99. BP's current plan to stop the Gulf's Gurgling Chest Wound? ... Drill it away.

I again use Einstein's logic when I say... "BP can't solve problems by using the same kind of thinking BP used when BP created them."

[Hugin]

101. Very nice sternly worded letter. n/t

[Demeter]

90. French farmers turn Champs-Elysees into huge farm

http://news.bbc.co.uk/2/hi/world/europe/10143393.stm

One of Paris's main thoroughfares, the Champs-Elysees, has been covered in earth and turned into a huge green space in an event staged by young French farmers.

They want to highlight their financial problems, caused by falling prices for agricultural produce.

Plants, trees and flowers were brought in by lorry overnight to transform the avenue into a long green strip.

More than a million people are expected to visit over the next two days.

The event, which cost 4.2m euros (£3.6m; $5.3m) to stage, has been organised by the French Young Farmers (Jeunes Agriculteurs) union over the holiday weekend in France.

It will serve as a showcase of farm production from sheep breeding to crop growing.

The union, which represents some 55,000 farmers under the age of 35, wants to impress on the public - and the government - the efforts required to produce what goes on the table.

"It's about re-establishing contact with the public about what our profession is and what they want from it," William Villeneuve, president of the Jeunes Agriculteurs, said on Friday.

"Do they want the cheapest products in the world or do they want products that pay producers?" he added.

Monumental

Only in France are you ever likely to see such a monumental mobilisation of creativity and resources, all in the cause of that beloved but beleaguered figure: the French farmer, says the BBC's Hugh Schofield in Paris.

Overnight, 8,000 plots of earth have been brought into central Paris, and on Sunday morning, from the Arc de Triomphe down, the Champs-Elysees is one vast green space.

Some 150,000 plants have been installed - including 650 fully grown trees - representing agricultural produce from the marshes of the Camargue to the plains of Picardy, our correspondent adds.

Visitors will be able to buy boxes of the earth for their own gardens.

[AnneD]

100. Talk about protesting with.....

dare I say....panache. Having been there on several occasions-I can envision it. I guess I must have gotten the French Gene for food and growing up on a farm for long periods just reinforced it. Good on 'em mates.

[Demeter]

104. I Hope You All Had a Lovely Weekend, and Learned Some Stuff, Too

We had our Barbecue at the condo association today. It was hot and sunny, and everyone ate, then it clouded up and rained, and the band played indoors instead of outdoors, then it cleared again and the band and some stragglers ate (including the Younger Kid with friends in tow) and then it clouded up and rained again while we cleaned up and went home.

In between storms, I got to go to the pool, get showered off and swim a little, get the grease off and relax the muscles. It was a truly good day, and involved minimal driving. Because I had help, I survived the 6 hours...otherwise, it would have come to an abrupt end sooner.

I did have to get gas, at 2.589/ gallon. Mobius, the Great White Whale, holds 50% more gas in its tank than the Saturn, what a shock. Tomorrow I should fill the Saturn, before somebody tries to raise the price of gas again.

So now it's June. Whatever will it bring? Two more months of death to the Gulf of Mexico, of illegal wars and suspended rights, of foreclosures, layoffs, expiring unemployment payments and despair. I see no blue sky on the horizon. Anybody got a better vision?

[DemReadingDU]

105. Appreciate the weekend themes

Another weekend I learned something that I never learned before. Thanks!