IMAGINE All the Weekend Economists October 8-10, 2010

[Demeter]

Well, if John Lennon had been given the opportunity, he would be 70 years old this Saturday...he only lived half a lifetime, but what a life it was. He enriched our culture for all time.

Meanwhile, back at the bourses, the fat cats are trying to impoverish us. Keep their feet to the fire, and post them if you've got them.

I'm very late, due to the confluence of too much stuff in too little time. This will continue to be a problem this weekend, so I'm looking for vigorous aid in covering the topics. Including the Immortal John Lennon, of course.

http://www.youtube.com/watch?v=VM0Z75KEd_o

[Demeter]

1. NO BANK FAILURES THIS WEEKEND

Sheila must be going to the Michigan/Michigan State game...

[Po_d Mainiac]

7. I got to go back and read the moratorium on foreclosures

Didn't realize it pertained to Banks and Thrifts also? :shrug:

[Demeter]

58. Oh! I Get It!

Sorry, I plead exhaustion and distraction (and consternation over the recent events).

If they were honest about it, the TBTF would all have shut down this weekend.

Perhaps that's what the FDIC is working overtime on...

[Po_d Mainiac]

85. word on the street is that the FDIC can't find solvent institutions to

partner with the closures already in the pipeline

Bank BOD's don't believe that the FDIC will be able to meet the stop loss guarantees

And YES, this is a really big deal

[Demeter]

88. The Foreclosure Scam Has Put Everything Into Orbit

and it's about time. Finally, everybody has to act legit or get out of the line of prosecution fast.

[Po_d Mainiac]

91. Finding takeover partners to transfer assets of closed

banks to, has been an ongoing problem. The current flap will not make the task easier.

If the FDIC closes a bank, but is able to get another entity to acquire the accounts, the FDIC isn't necessarily forced to cut a check to insured account holders.

If a bank gets paddocked without another party to service the accounts, each and every insured account holder is entitled to full compensation up to the max on demand.($250K/acct in interest bearing accounts, and the full amount in non-interest bearing accts) The bottom line may be the same, but the up-front cash drain to the trust fund is dramatically different.

[CatholicEdHead]

84. Actually they went to the Minnesota-Wisconson game

for Paul Bunyan's Axe at Camp Randall. ;)

[Demeter]

2. Obama Must Reject The Foreclosure Fraud Bailout

http://blogs.alternet.org/speakeasy/2010/10/07/obama-must-reject-the-foreclosure-fraud-bailout/

UPDATE: President Obama vetoed the foreclosure fraud bailout October 7, but plenty of other battles are already raging. Rep. Alan Grayson, D-Fla., is calling for Treasury Secretary Timothy Geithner and the newly-established Financial Stability Oversight Council to investigate the foreclosure fraud scandal as a systemic risk to the U.S. economy.

That’s a major step. Thus far, Geithner has been hostile to efforts that would provide foreclosure relief to troubled borrowers. But given the fact that the current scandal involves straightforward fraud, the absolutely massive scope of this fraud, and the potential havoc it stands to wreak on banks’ bottom lines, the government may finally step in to help homeowners. Obama made clear today that he will not support a stealth bailout for foreclosure fraud. With the right pressure, the administration may very well act to help borrowers, not bankers.

Meanwhile, state attorneys general are filing lawsuits against big banks left and right, and calling for a major moratorium on foreclosures.

ORIGINAL POST:

...Banks are running into big trouble in foreclosure courts right now because they have kept shoddy mortgage records for years in order to cut costs and boost bonuses. Those records are so bad that banks routinely cannot prove that they have the legal right to foreclose on the homes they attempt to foreclose on. That’s a major problem, because banks have repeatedly demonstrated that they cannot be trusted to figure out their own foreclosures for themselves. They’ve foreclosed on people who haven’t missed any mortgage payments, and even on borrowers who have fully paid off their loans.

So banks and their lawyers have been fabricating documents, forging signatures, and lying to judges in order to go through with foreclosures. All of this is fraud– especially when committed systematically, en masse by large corporations and their clients. It gets even worse when banks try to use fraudulent documents to slap borrowers with thousands of dollars in illegal fees...the major foreclosure fraud scandal at bailout behemoth GMAC that ignited the current furor involved what appear to be totally bogus notaries. One GMAC employee, Jeffrey Stephan, signed thousands of affidavits and had them all notarized in Pennsylvania, even though they were being used in foreclosure cases in many different states. Since different states have different standards for notary approval, these documents should have been unacceptable in the vast majority of state courts...

[Demeter]

6. Foreclosuregate and Obama's "Pocket Veto"

http://www.truth-out.org/foreclosuregate63953

....The White House issued a statement regarding the veto, citing the need for "further deliberations on the intended and unintended impact of bill on consumer protections, including mortgages, before this bill can be finalized."

The swift passage and the president's subsequent veto of this bill come on the heels of an announcement that Wall Street banks are voluntarily suspending foreclosure proceedings in 23 states.

By most reports, it would appear that the voluntary suspension of foreclosures is underway to review simple, careless, procedural errors - errors which the conscientious banks are hastening to correct. Even Gretchen Morgenson in The New York Times characterizes the problem as "flawed paperwork."

However, those errors go far deeper than mere sloppiness; they are concealing a massive fraud. They cannot be corrected with legitimate paperwork, and that was the reason the servicers had to hire "foreclosure mills" to fabricate the documents. These errors involve perjury and forgery - fabricating documents that never existed and swearing to the accuracy of facts not known...

[Demeter]

3. Make Wall Street Risk It All By WILLIAM D. COHAN

http://opinionator.blogs.nytimes.com/2010/10/07/make-wall-street-risk-it-all/

Two years after the near collapse of capitalism, we certainly have our fill of financial reforms. The 2,200-page Dodd-Frank Act, which President Obama signed this summer, creates an Orwellian alphabet soup of new agencies, oversight boards and offices intended to protect us from ourselves.

The problem is that since the incentives on Wall Street have not been changed one iota by the new laws — nor are they likely to be changed by any of the soon-to-be-written regulations of federal agencies — we’re no better protected from bankers’ potentially reckless behavior than we were before the latest round of reforms.

It’s not that Dodd-Frank ignored Wall Street’s past excesses. The law will ensure that some, but not all, derivatives will have to be traded on exchanges and that some, but not all, of the banks’ proprietary trading will be curbed and that some, but not all, of their private-equity and hedge funds will be shuttered or spun off. Dodd-Frank is also supposed to curtail Wall Street’s penchant for creating conflicts of interest, although how the law is going to do that is far from clear.

“In the end, our financial system only works — our market is only free — when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system,” President Obama said when he signed the bill into law. That rhetoric is fine, but unfortunately Dodd-Frank will do nothing to change the rules on Wall Street.

Nor, frankly, will the expected coming into force, in a couple of years, of the new Basel III capital rules, which will likely require banks to have common equity equal to 7 percent of the value of their assets...

[Po_d Mainiac]

20. For the "Masters of the Universe" Rich Man Lyrics

How does it feel to be
One of the beautiful people?
Now that you know who you are
What do you want to be?
And have you travelled very far?
Far as the eye can see.
How does it feel to be
One of the beautiful people?
How often have you been there?
Often enough to know.
What did you see, when you were there?
Nothing that doesn't show.
Baby you're a rich man,
Baby you're a rich man,
Baby you're a rich man too.
You keep all your money in a big brown bag inside a zoo.
What a thing to do.
Baby you're a rich man,
Baby you're a rich man,
Baby you're a rich man too.
How does it feel to be
One of the beautiful people?
Tuned to A natural E
Happy to be that way.
Now that you've found another key
What are you going to play?
Baby you're a rich man,
Baby you're a rich man,
Baby you're a rich man too.
You keep all your money in a big brown bag inside a zoo.
What a thing to do.
Baby you're a rich man...

[Demeter]

21. Original release!

http://www.youtube.com/watch?v=-4wIUr7tLt0

[Demeter]

4. Unemployment Dilemma Goes Beyond Supply and Demand

http://www.truth-out.org/unemployment-dilemma-goes-beyond-supply-and-demand63954

...Mike Konczal, a fellow at the Roosevelt Institute, recently posted an excellent piece on his blog in which he examined why unemployment remains so high. He points out: “There are two theories at work. The first is a story of aggregate demand. The second theory is one of a mismatch in skills.”

What he doesn’t say explicitly — although it’s clearly implied — is that these two theories have very different policy implications. If the issue is aggregate demand (which is the total amount of goods and services that will be purchased in a given time frame) we should be doing everything we can to raise demand, including embarking on fiscal expansion and unconventional monetary policy. If it’s a mismatch in skills in the labor market, we should do nothing, because any effort to create jobs leaves part of the work of depressions undone. In this case, an economic slump actually serves a useful purpose, by ushering in economic change — which would mean that stimulating the economy, even through monetary policy, would be a mistake. So how do we decide which theory applies?

The answer is to look at the evidence — specifically, to ask whether what we see bears the signature of one story or the other. The aggregate demand story suggests that we should see depressed employment in all industries as workers of every skill type face a poor job market. The mismatch story says that we should see surpluses of labor in some places and shortages in others.

And Mr. Konczal shows that the data overwhelmingly fits the demand story, not the mismatch story. Every major industry in the United States has seen a rise in involuntary part-time work; so has every key occupation. There is no hint that labor in any sector is in short supply...

[ozymandius]

5. Wow. The unreccing trolls must be out in force.

My +1 and the count is still zero.

Good evening. :hi:

[DemReadingDU]

11. ah, I think my rec finally allowed the count greater than 0!

Good evening all
:hi:

[mbperrin]

24. #7 - get those trolls on the run!

"Watching the Wheels" is a perfect shot of where I was when we exited the banking economy in 1978. Few years later, this tune came out, and it was perfect!

People say I'm crazy doing what I'm doing,
Well they give me all kinds of warnings to save me from ruin,
When I say that I'm o.k. they look at me kind of strange,
Surely your not happy now you no longer play the game,

People say I'm lazy dreaming my life away,
Well they give me all kinds of advice designed to enlighten me,
When I tell that I'm doing Fine watching shadows on the wall,
Don't you miss the big time boy you're no longer on the ball?

I'm just sitting here watching the wheels go round and round,
I really love to watch them roll,
No longer riding on the merry-go-round,
I just had to let it go,

People asking questions lost in confusion,
Well I tell them there's no problem,
Only solutions,
Well they shake their heads and they look at me as if I've lost my mind,
I tell them there's no hurry...
I'm just sitting here doing time,

I'm just sitting here watching the wheels go round and round,
I really love to watch them roll,
No longer riding on the merry-go-round,
I just had to let it go.

[Hugin]

53. One of my all time favorite songs.

It's been running in my mind lately.

Especially, this:

"I'm just sitting here watching the wheels go round and round,
I really love to watch them roll,
No longer riding on the merry-go-round,
I just had to let it go."

[Demeter]

12. Let Them Do Their Worst

The steadfast seekers of truth and knowledge will prevail. I have faith in all of us. Our numbers are growing, and will be legion very soon.

[jotsy]

57. Good Morning Ms. Demeter.

Be it curse or blessing to wish one to live in interesting times. John Lennon spoke to how we react to such a vivid bearing out of the sentiment.

<http://www.youtube.com/watch?v=WGiV7mxzdGQ&ob=av2e>

Raise up your glass, to good King John

From Steely Dan's Can't Buy a Thrill, recorded eight years before his untimely passing in 1980.
<http://www.youtube.com/watch?v=it1krjmG-aI&feature=related>

And on another note..."I'll be your savior steadfast and true...I'll come to your emotional rescue." ~Mick Jagger.

Rec'd.

edited to close quote.

[Demeter]

59. Good Morning, Jotsy

The demons of irregular sleeping habits and overworked muscles...thanks for the soothing music.

[DemReadingDU]

8. Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets"

10/8/10 Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets"

In the following interview with the WaPo's Ezra Klein, Janet Tavakoli shares some more information on why every bank is about to shut down all foreclosures, in what she calls the "biggest fraud in the history of capital markets. Not very surprisingly, we are, so far, spot on in our 29th September projected timeline at this point: "We predict that within a week, all banks will halt every foreclosure currently in process. Within a month, all foreclosures executed within the past 2-3 years will be retried, and millions of existing home sales will be put in jeopardy."

Ezra Klein: What’s happening here? Why are we suddenly faced with a crisis that wasn’t apparent two weeks ago?

Janet Tavakoli: This is the biggest fraud in the history of the capital markets. And it’s not something that happened last week. It happened when these loans were originated, in some cases years ago. Loans have representations and warranties that have to be met. In the past, you had a certain period of time, 60 to 90 days, where you sort through these loans and, if they’re bad, you kick them back. If the documentation wasn’t correct, you’d kick it back. If you found the incomes of the buyers had been overstated, or the houses had been appraised at twice their worth, you’d kick it back. But that didn’t happen here. And it turned out there were loan files that were missing required documentation. Part of putting the deal together is that the securitization professional, and in this case that’s banks like Goldman Sachs and JP Morgan, has to watch for this stuff. It’s called perfecting the security interest, and it’s not optional.

more...
http://www.zerohedge.com/article/janet-tavakoli-biggest-fraud-history-capital-markets
or
http://voices.washingtonpost.com/ezra-klein/2010/10/this_is_the_biggest_fraud_in_t.html


Karl Denninger's response

Now you getting it folks?

This is NOT a "minor clerical error."

It is NOT correctable at this point in time.

These securities are FATALLY DEFECTIVE. The parties with the legal duty to check these facts did not do so.

It gets worse.

more...
http://market-ticker.org/akcs-www?post=168629

[JNelson6563]

16. The era of the Biggest Scams of All Time.

Seems this era of massive scams and their eventual exposure (aka The Bush II Years) kicked off with what....Enron, right? And apparently the closing act (hopefully we're there) is the Grand Mortgage Scheme. The sad part is way too many people got completely screwed before this was brought to light. Wouldn't it be great if there could be some redress to them?


Julie--who occasionally indulges in unrealistic notions

[Demeter]

18. Those Frauds Started under Reagan

It's just taken this long to reach the last straw to break the camel's back.

[AnneD]

55. Ok, I loved John...

and he had a lot to say, but I would be remiss if I didn't find a way to work in this song by George. I am sure John would agree with the sentiments.


Brainwashed...
http://www.youtube.com/watch?v=ZSB4gtFFwy8

[JNelson6563]

61. Well played Anne!

As usual. :toast:

[Demeter]

17. More from Janet And Ezra

EK: Given that our financial system is still fragile, isn’t that a disaster for the economy? Will credit freeze again?

JT: I disagree. In order to make the financial system healthy, we need to recognize the extent of our losses and begin facing the fraud. Then the market will be trustworthy again and people will start to participate.

EK: It sounds almost like you’re saying we still need to go through the end of our financial crisis.

JT: Yes, but I wouldn’t say crisis. This can be done with a resolution trust corporation, the way we cleaned up the S&Ls. The system got back on its feet faster because we grappled with the problems. The shareholders would be wiped out and the debt holders would have to take a discount on their debt and they’d get a debt-for-equity swap. Instead we poured TARP money into a pit and meanwhile the banks are paying huge bonuses to some people who should be made accountable for fraud. The financial crisis was a product of our irrational reaction, which protected crony capitalism rather than capitalism. In capitalism, the shareholders who took the risk would be wiped out and the debt holders would take a discount but banking would go on.

[Demeter]

19. Subprime Pipeline (a simple visual aid) JUST FOR YOU,. PO!

http://www.zerohedge.com/article/subprime-pipeline-simple-visual-aid

http://4.bp.blogspot.com/_wkgIzuqJM0w/TK9z4h0tfwI/AAAAAAAAGo4/QRltjz8Ovxs/s1600/SUBPRIME+PIPELINE.jpg

[DemReadingDU]

22. Holy Shit!

lol, clever diagram!

[Po_d Mainiac]

27. Looks like the schematic of a colonic irrigator n/t

[Po_d Mainiac]

56. Pour Moi?

Pourquoi Madame?

[Demeter]

60. For Your Visual Orientation, of Course!

[Demeter]

25. There is Only One Way Out of the Foreclosure Crisis

We're the fish.

The giant "too big to fail" banks are the bird. They've got their talons in the American consumer and the economy.

The only way out for us - the fish - is if someone "shoots" the bird ... or at least captures it and removes its talons from our hide.

In other words: Unless the mega-banks are broken up and reined in, we're in quite a pickle.

As I've previously noted, virtually all leading independent economists have said that the too big to fails must be broken up, or the economy won't be able to recover, and that smaller banks actually lend more into the economy than the mega-banks (and see this).

http://www.zerohedge.com/article/there-only-one-way-out-foreclosure-crisis

http://www.washingtonsblog.com/2010/03/federal-reserve-bank-of-dallas.html

[Po_d Mainiac]

30. Interesting choice of an image

The Goldfish is a member of the Carp family, and not a native species of North America.

Although they are pretty, when released into the wild, they can devastate stocks of indigenous species. Some members of the carp family are so damaging they are illegal to even own in many jurisdictions.

Serious money has been spent by various State and Federal wildlife agencies eradicating invasive/exotics.

Owning Koi in the State of Maine can (and has) damage balance sheets

[Robbien]

108. I still don't understand

Why is it happening now? Why are the banksters stopping the foreclosures now?

The entire problem has been around for a long long time.

Ezra mentioned fighting amongst the primary and secondary debt holders is the trigger. But over the last year or two, investors have been suing Goldman etal for these securities so that reason cannot be the trigger for all the banksters all at once to suddenly stop foreclosing.

I still don't get it. What was the trigger?

[Demeter]

110. Fannie and Freddie, I think

They started to push back, making people buy back their fraudulently issued securities. The idea snowballed from there. China did this two years ago, made the Fed buy them out of Fannie and Freddie. China has no love of Goldman, either.
And of course, India said they didn't buy anything they didn't understand and so they missed the big one. That's half the world right there. It's not as if Africans are going to buy our paper.

[JNelson6563]

9. To the Greatest page for you!

Thanks for posting all the info and I stand with you in observing the anniversary of John Lennon's death. :toast:

Julie

[Po_d Mainiac]

10. Taxman! Tough to call which is the best line

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

[Demeter]

13. No Youtube?

http://www.youtube.com/watch?v=Maz9ddxEQnM

[Po_d Mainiac]

14. I'm a visual type

And my hearing sucks

[Demeter]

15. John Lennon's Wiki

John Winston Ono Lennon, MBE (9 October 1940 – 8 December 1980) was an English singer-songwriter who rose to worldwide fame as one of the founding members of The Beatles and, with Paul McCartney, formed one of the most successful songwriting partnerships of the 20th century.

Born and raised in Liverpool, Lennon became involved in the skiffle craze as a teenager, his first band, The Quarrymen, evolving into The Beatles in 1960. As the group began to undergo the disintegration that led to their break-up towards the end of that decade, Lennon launched a solo career that would span the next, punctuated by critically acclaimed albums, including John Lennon/Plastic Ono Band and Imagine, and iconic songs such as "Give Peace a Chance" and "Imagine".

Lennon revealed a rebellious nature and acerbic wit in his music, his writing, on film, and in interviews, and became controversial through his work as a peace activist. He moved to New York City in 1971, where his criticism of the Vietnam War resulted in a lengthy attempt by Richard Nixon's administration to deport him, while his songs were adapted as anthems by the anti-war movement. Disengaging himself from the music business in 1975 to devote time to his family, Lennon reemerged in 1980 with a comeback album, Double Fantasy, but was murdered three weeks after its release.

Lennon's solo album sales in the United States alone stand at 14 million units,<1> and as performer, writer, or co-writer he is responsible for 27 number one singles on the US Hot 100 chart.a In 2002, a BBC poll on the 100 Greatest Britons voted him eighth, and in 2008, Rolling Stone ranked him the fifth greatest singer of all time. He was posthumously inducted into the Songwriters Hall of Fame in 1987 and into the Rock and Roll Hall of Fame in 1994.

[Po_d Mainiac]

23. Banksters, CIA, Terrorists, Death and Lots and lots of money

Warning: This is a book, not a brief essay
Part #1
http://ampedstatus.com/the-road-to-world-war-iii-the-gl...
Part#2
http://ampedstatus.com/inside-the-global-banking-intell...

[Demeter]

26. FedRes Bank/Dallas Pres. Richard Fisher Joins List Calling for Giant Banks to Be Broken Up

http://www.washingtonsblog.com/2010/03/federal-reserve-bank-of-dallas.html

As Bloomberg notes:

Federal Reserve Bank of Dallas President Richard Fisher called for an international pact to break up banks whose collapse would threaten the financial system, a position that goes beyond other Fed officials.

While the international aspect of Fisher's proposal may be unusual, other Fed officials have also called for breaking up the TBTFs, including:

* Former chairman of the Federal Reserve, Alan Greenspan

* Former chairman of the Federal Reserve, Paul Volcker

* President of the Federal Reserve Bank of Kansas City, Thomas Hoenig (and see this)

As I noted in October, many others have also called for breaking up the banking giants:

The following top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashio

* Nobel prize-winning economist, Joseph Stiglitz

* Nobel prize-winning economist, Ed Prescott

***

* Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard

* Simon Johnson (and see this)

***

* Deputy Treasury Secretary, Neal S. Wolin

* The President of the Independent Community Bankers of America, a Washington-based trade group with about 5,000 members, Camden R. Fine

* The Congressional panel overseeing the bailout (and see this)

* The head of the FDIC, Sheila Bair

* The head of the Bank of England, Mervyn King

* The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz

* Economics professor and senior regulator during the S & L crisis, William K. Black

* Economics professor, Nouriel Roubini

* Economist, Marc Faber

* Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales

* Economics professor, Thomas F. Cooley

* Former investment banker, Philip Augar

* Chairman of the Commons Treasury, John McFall

Others, like Nobel prize-winning economist Paul Krugman, think that the giant insolvent banks may need to be temporarily nationalized.

In addition, many top economists and financial experts, including Bank of Israel Governor Stanley Fischer - who was Ben Bernanke’s thesis adviser at MIT - say that - at the very least - the size of the financial giants should be limited...

[Po_d Mainiac]

28. Fisher don't get to vote

* Members
o Ben S. Bernanke, Board of Governors, Chairman
o William C. Dudley, New York, Vice Chairman
o James Bullard, St. Louis
o Elizabeth A. Duke, Board of Governors
o Thomas M. Hoenig, Kansas City
o Sandra Pianalto, Cleveland
o Sarah Bloom Raskin, Board of Governors
o Eric S. Rosengren, Boston
o Daniel K. Tarullo, Board of Governors
o Kevin M. Warsh, Board of Governors
o Janet L. Yellen, Board of Governors

* Alternate Members
o Charles L. Evans, Chicago
o Richard W. Fisher, Dallas
o Narayana Kocherlakota, Minneapolis
o Charles I. Plosser, Philadelphia
o Christine M. Cumming, First Vice President, New York

Next years rotation
New York
Chicago
Philadelphia
Dallas
Minneapolis

[Demeter]

31. The Beatles - "Hey Jude" / "Revolution" - Original Mono Single

http://www.youtube.com/watch?v=gR25C7E2_VE&feature=related

Credited to Lennon/McCartney, the ballad evolved from "Hey Jules," a song Paul McCartney wrote to comfort John Lennon's son Julian during his parents' divorce. "Hey Jude" begins with a verse-bridge structure based around McCartney's vocal performance and piano accompaniment; further instrumentation is added as the song progresses to distinguish sections. After the fourth verse, the song shifts to a fade-out coda that lasts for more than four minutes.

"Hey Jude" was released in August 1968 as the first single from the Beatles' record label Apple Records. More than seven minutes in length, "Hey Jude" was, at the time, the longest single ever to top the British charts.<2> It also spent nine weeks as number one in the United States—the longest run at the top of the American charts for a Beatles single, and broke the record for longest stay at #1 (until the record was beaten by "You Light Up My Life"). The single has sold approximately eight million copies and is frequently included on professional lists of the all-time best songs.

In 1968, John Lennon and his wife Cynthia Lennon separated due to John's affair with Yoko Ono. Soon afterwards, Paul McCartney drove out to visit Cynthia and Julian, her son with Lennon. "We'd been very good friends for millions of years and I thought it was a bit much for them suddenly to be personae non gratae and out of my life," McCartney said.<3> Cynthia Lennon recalled, "I was truly surprised when, one afternoon, Paul arrived on his own. I was touched by his obvious concern for our welfare.... On the journey down he composed 'Hey Jude' in the car. I will never forget Paul's gesture of care and concern in coming to see us."<4>

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

"Revolution" was inspired by political protests in early 1968. Lennon's lyrics expressed doubt about some of the tactics. When the single version was released in August, the political left viewed it as betraying their cause. The release of the album version in November indicated Lennon's uncertainty about destructive change, with the phrase "count me out" modified to "count me out, in". In 1987, the song became the first Beatles recording to be licensed for a television commercial, which prompted a lawsuit from the surviving members of the group.

Background and composition

In early 1968, media coverage in the aftermath of the Tet Offensive spurred increased protests in opposition to the Vietnam War, especially among university students.<1> The protests were most prevalent in the US, but on 17 March several thousand demonstrators marched to the American embassy in London's Grosvenor Square and violently clashed with police.<2> Major protests concerning other political issues made international news, such as the March 1968 protests in Poland against their communist government, and the campus uprisings of May 1968 in France.<3>

The Beatles had avoided expressing political viewpoints, with "Taxman" being their only prior song with an overt political topic. During his time in Rishikesh, Lennon decided to write a song about the recent wave of social upheaval. He recalled, "I thought it was about time we spoke about it , the same as I thought it was about time we stopped not answering about the Vietnamese war. I had been thinking about it up in the hills in India."<4>

Despite Lennon's antiwar feelings, he had yet to become anti-establishment, and expressed in "Revolution" that he wanted "to see the plan" from those advocating toppling the system.<5> The repeated phrase "it's gonna be alright" in "Revolution" came directly from Lennon's Transcendental Meditation experiences in India, conveying the idea that God would take care of the human race no matter what happened politically.<6> Another influence on Lennon was his burgeoning relationship with avant-garde artist Yoko Ono; Ono attended the recording sessions, and participated in the unused portion of "Revolution 1" which evolved into "Revolution 9".

Around the fourth week of May 1968, The Beatles met at Kinfauns (George Harrison's home in Esher) to demonstrate their compositions to each other in preparation for recording their next studio album. A bootleg recording from that informal session shows that "Revolution" had two of its three verses intact.<5> The line referencing Mao Zedong was added to the lyrics in the studio. During filming of a promotional clip later that year, Lennon told the director that it was the most important lyric of the song.<7> Lennon had changed his mind by 1972, saying "I should have never put that in about Chairman Mao".<8>

http://en.wikipedia.org/wiki/Revolution_%28song%29

[Demeter]

29. Misplaced enthusiasm: The Dow breaks 11,000

http://www.salon.com/technology/how_the_world_works/2010/10/08/why_did_the_dow_break_11000/index.html

Hold off on those cheers. Investors believe the economy is so bad, the Fed will be forced to do something...

The consensus explanation mooted by the econoblogosphere does little to build confidence: The theory is that investors believe the latest data is incontrovertibly bad enough to convince the Fed to attempt to juice the economy with a second round of "quantitative easing."

Quantitative easing is basically a fancy way to describe a pretty simple strategy. The Fed will use its powers to create money that it will use to buy Treasuries and securities. The hope is that banks and other financial institutions will then turn around and deploy the cash generated from selling their Treasuries at work in the real economy -- as loans or investment capital. NPR's "Planet Money" offers a simple explanation here:

http://www.npr.org/blogs/money/2010/10/07/130408926/quantitative-easing-explained

How the World Works commented on a previous round of QE here:

http://www.salon.com/technology/how_the_world_works/2009/03/20/economists_unite

[Demeter]

36. Investors price in US inflation fears

Investors are betting that an aggressive push by the Federal Reserve to revive the US economy could drive up inflation, with Treasury bond markets pricing in the effects of a return to emergency monetary easing next month.

Read more >>
http://link.ft.com/r/S4XZQQ/0GYG4I/B49CK/KE66O9/V1CKPF/PJ/t?a1=2010&a2=10&a3=7

[Name removed]

46. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bread_and_roses]

62. However.... Corn rallies to two-year high after crop forecast

Stolen from LBN:

http://www.marketwatch.com/story/corn-at-two-year-high-after-crop-forecast-cut-2010-10-08

Corn rallies to two-year high after crop forecast
Soybeans, wheat prices also rise after report shows tight supply

SAN FRANCISCO (MarketWatch) — Corn and other grains futures shot up Friday after a U.S. Department of Agriculture report pointed to the tightest supply and demand balance for corn in 14 years.

The Agriculture Department on Friday forecast a 2010-11 corn crop 3.8% smaller than government expectations just a month ago, as a hot Midwest summer preceded by floods in June takes its toll.

... The rally in corn, widely used as feed and biofuel, also pushed up prices for soybeans and wheat and drove up shares of fertilizer and agricultural-equipment companies. Livestock producer shares fell.

... Shares of food producers and manufacturers, which could suffer from rising production costs, tumbled.

So how's that going to play out for folks on fixed incomes?

edit to fix text box

[Po_d Mainiac]

81. Not just corn

almost all food grains hit their lock-limit ups

If you are unaware--commodities have a maximum daily price move structure, when hit it's over.

For fixed incomes, it really is about getting cornholed..If you have savings, interest is lagging behind inflation. Food and fuels are going to be priced to the trashed U$D.

THIS WILL CAUSE REAL PAIN!

[bread_and_roses]

82. Thanks - that' what my surmise was

I didn't know about the max price move, and am too great an ignoramus to know how it relates. But I figured this could not be good for fixed incomes. We've had relatively low food prices in this country for much of the last 30 years or so at least (one reason that the "poverty threshold got so out of date is that was figured on household budgets for which food was about 1/3 of the monthly expense, but energy and some other expenses that have risen drastically were much lower) - part of the reason, I think, that people are so supine. They can still eat, feed their families (although of course even that has always been problematic for large numbers of people, but not for a "critical mass"). If that changes too much, attitudes could change in a hurry.

[Demeter]

32. Toyota to roll out 2 new Prius cars

http://www.salon.com/news/feature/2010/10/08/new_prius_toyota/index.html

...The Japanese automaker will begin selling a Prius station wagon starting next summer as either a 2011 or 2012 model, said Adam Lee, president of the Lee Auto Malls chain of dealerships in Maine. It will sell a plug-in version of the Prius that can get 30 miles on a charge starting later in the year, he said.

Toyota unveiled the new vehicles at its annual dealer meeting in Los Vegas this week. Lee was briefed on the new models by the manager of his Toyota dealership, who was in attendance.

Toyota spokesman Sam Butto declined to comment on any specific product plans,

"We will be coming out with some additional Prius products, but that's really all I can say at this time," Butto said.

Toyota has said in the past it hopes to expand the Prius name to a family of vehicles. The Prius is the best-selling hybrid in the U.S., but sales have been flat this year as the automaker continues to suffer from the fallout from huge recalls....

[Demeter]

33. U.S. Economy Lost 95,000 Jobs in September

http://online.wsj.com/article/SB10001424052748704657304575539760708117610.html?mod=WSJ_myyahoo_module

America's job machine continued to sputter in September as a wave of government layoffs, including a move by cash-strapped localities to shed teachers, overwhelmed modest gains in the private sector.

The disappointing jobs report makes it almost certain the Federal Reserve will restart a bond-buying program aimed at stimulating the economy when it meets next month, and ensures job worries will remain issue No. 1 heading into the elections.

U.S. payrolls dropped by 95,000 in September as private employers added 64,000 workers, while governments shed 159,000, half of them temporary Census workers, the Labor Department said Friday. State and local governments shed 83,000 workers. The unemployment rate was unchanged at 9.6%...

[Demeter]

34. EUROPA!

http://www.youtube.com/watch?v=kHD5nd3QLTg&feature=related

[Demeter]

35. EU bank pay rules threaten bonus chaos

European bankers could face heavy unfunded tax bills on their bonuses, under the terms of new EU pay rules published on Friday by the Committee of European Banking Supervisors.

As well as confirming that up to 60% of top bankers’ bonuses should be deferred for as much as three to five years – with half of upfront and deferred portions paid in shares – CEBS said there should be a “minimum retention period” for share awards beyond the deferral period.

Read more >>
http://link.ft.com/r/8P1R88/NSCN3E/FDFZE/GKHBBV/ZBZN08/4O/t?a1=2010&a2=10&a3=8

[Demeter]

38. EU set to clamp down on bankers’ pay

European regulators are poised to impose much tougher-than-expected restrictions on banker pay, in spite of concerns raised by French, UK and Spanish officials that the rules could make the European Union uncompetitive, people familiar with the talks said.

The Committee of European Banking Supervisors, made up of representatives of all 27 EU countries, has been meeting in London on Wednesday and Thursday to draft regulations to implement the tough pay rules agreed by the EU over the summer.

Read more >>
http://link.ft.com/r/8P1R88/IYGD7T/MJTKN/JI8B58/A7E10P/1G/t?a1=2010&a2=10&a3=7

[Demeter]

37. Investors seek $12bn to grab private equity assets

Three of Europe’s biggest investors in second-hand buy-out and venture capital assets are raising almost $12bn to scoop up a flood of private equity interests being sold at a discount by banks and financial institutions.

Read more >>
http://link.ft.com/r/TWK799/ZBDBZV/XBAN6/9ZNNTA/9ZIU25/82/t?a1=2010&a2=10&a3=7

[Demeter]

41. Signs of French shift on EU hedge fund rules

France appears to have dropped its outright opposition to current European Union proposals for regulating hedge funds and private equity funds, meaning that a deal on the controversial regulations may finally be in sight.

The French move, at a meeting of ambassadors in Brussels on Wednesday morning, came just 24 hours after Tim Geithner, US Treasury secretary, sent a letter to Christine Lagarde, French finance minister, protesting at the French position.

Read more >>
http://link.ft.com/r/4RNQTT/D4UZI9/B49CK/RNZVME/3O4YHI/HK/t?a1=2010&a2=10&a3=6

[Demeter]

39. ECB leaves rates unchanged for 17th month

The European Central Bank has left its main interest rate unchanged at the record low of 1 per cent for the 17th consecutive month as it attempts to keep the eurozone on a recovery path.

The decision, taken at a meeting in Frankfurt of the ECB’s 22-strong governing council, was expected but came at a crucial moment for the euro’s monetary guardian. With the US and UK central banks mulling further “quantitative easing” steps to boost economic growth, the ECB’s more optimistic stance has pushed the euro sharply higher.

Read more >>
http://link.ft.com/r/KC2844/QFARMZ/204L2/GKHLWS/XT2YF2/T3/t?a1=2010&a2=10&a3=7

[Demeter]

40. Bank of England holds rates at 0.5%

The Bank of England’s monetary policy committee voted to hold rates steady at 0.5 per cent and retain its quantitative easing programme to the £200bn already committed, as was widely expected.

The MPC’s decision, announced on Thursday, comes amid conflicting evidence that suggests that after a burst of activity, the nation’s growth rate may be sputtering. Recent private sector surveys of manufacturing – and to a lesser extent, services – imply that demand is now growing more slowly than earlier in the year.

Read more >>
http://link.ft.com/r/OZMCDD/409ODM/YGZ3O/YHKWN6/8AYPTB/OS/t?a1=2010&a2=10&a3=7

[Demeter]

93. Trichet `Trapped' by Banks' Addiction to ECB Cash: Euro Credit

http://www.bloomberg.com/news/2010-10-06/trichet-exit-path-blocked-as-banks-stay-hooked-on-ecb-funds-euro-credit.html

European Central Bank President Jean- Claude Trichet staked his reputation on propping up banks with cheap cash during the financial crisis. Now credit markets won’t let him take away that support.

Near-record borrowing costs for nations across the euro region’s periphery are making it harder for the ECB to wean commercial banks off the lifeline it introduced two years ago. The extra yield that investors demand to hold Irish and Portuguese debt over Germany’s rose last week to 454 basis points and 441 basis points respectively. Spain’s spread hit a two-month high.

The risk for the ECB is that it gets pulled deeper into helping the banking systems of the most indebted nations in the 16-member euro bloc. Governing Council member Ewald Nowotny said Sept. 6 that addiction to ECB liquidity is “a problem” that “needs to be tackled.” Complicating the ECB’s task is that interbank lending rates have risen, tightening credit conditions and making access to market funding more expensive for banks.

“The ECB is trapped and the exit door is blocked,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London. “The state of credit markets is going to force them to stay in crisis mode for longer than some of them would like.”

[Demeter]

42. IMF chief warns on exchange rate wars

Governments are risking a currency war if they try to use exchange rates to solve domestic problems, the head of the International Monetary Fund has warned.

Read more >>
http://link.ft.com/r/M2ZOXX/ZBKNQB/K91WR/S37CWP/YHAAS5/6C/t?a1=2010&a2=10&a3=5

[Demeter]

43. IMF says sovereign risk a threat to recovery

The rising threat of instability from sovereign debt problems has worsened conditions in the global financial system over the past six months despite a reduction in writedowns of assets, according to the International Monetary Fund.

In its twice-yearly global financial stability report, the fund on Tuesday reduced slightly its estimate of crisis-related bank writedowns between 2007 and 2010, cutting it to $2,200bn from the previous estimate of $2,300bn made in April.

Read more >>
http://link.ft.com/r/73UJGG/26IU0V/204L2/72RIJL/EWJJT8/9A/t?a1=2010&a2=10&a3=5

[Demeter]

44. THE ORIENT

http://www.youtube.com/watch?v=PiT3BsK3JHA

[Demeter]

45. George Soros - China must fix the global currency crisis

Whether it realises it or not, China has emerged as a leader of the world. If it fails to live up to the responsibilities of leadership, the global currency system is liable to break down and take the global economy with it.

Read more >>
http://link.ft.com/r/BLH300/3OQCBB/WH2F8/18IIHJ/A7E8GQ/W1/t?a1=2010&a2=10&a3=8

[Demeter]

47. Japan faces an uphill struggle to weaken yen

Japan’s aim should not be to stop yen appreciation, but to adapt to a stronger yen by accelerating structural reform by shifting from exports to domestic consumption, writes Tadashi Nakamae

Read more >>
http://link.ft.com/r/G8OTZZ/WL4NYV/PNGIU/KE6H8G/FXRUCI/B7/t?a1=2010&a2=10&a3=6

[Po_d Mainiac]

54. a couple strong passages from the article

More importantly, the Federal Reserve should stop talking about another round of quantitative easing, as this is a de facto dollar-devaluation policy. Whether the Federal Reserve actually implements more quantitative easing is not significant, since hints, leaks and signals are enough to weaken the dollar.

There are two problems. As the dollar weakens, the renminbi also weakens against the yen, euro and other currencies, giving China, their biggest competitor, an added advantage. Thus the Federal Reserve has created an unintended but very real de facto China export-support policy. Second, the weaker dollar and renminbi is forcing the Bank of Japan to further ease monetary policy, which poses many dangers for the Japanese banking system. This will push down long-term interest rates (short-term interest-rates are already at zero), narrowing the yield spread, which constitutes most of the banks’ profit margin (their main business of lending is losing money).

[Demeter]

102. Property Trusts, Developers Gain on Central Bank Fund to Buy Debt, REITs

http://www.bloomberg.com/news/2010-10-06/property-trusts-developers-gain-on-central-bank-fund-to-buy-debt-reits.html

Japanese real estate investment trusts and developers rose for a second day after the Bank of Japan said it will set up a fund to buy government debt and other assets including REITs to boost the economy.

The 36-member Tokyo Stock Exchange REIT Index advanced 1.2 percent to 977.17 at the 3 p.m. close of trading in Tokyo. The 44-member Topix Real Estate Index was the third best performer among the Topix index’s 33 industry groups, rising 4.2 percent.

The Bank of Japan said yesterday it will form a 5 trillion yen ($60 billion) fund to buy government debt, commercial paper, exchanged traded funds and REITs. The plan to inject liquidity into the market may benefit Japanese REITs which have lost two- thirds of their value since May 2007 as the global financial crisis unfolded.

“The Bank of Japan’s plan to support J-REITs is very positive news,” said Hideyuki Shinkai, a Tokyo-based fund manager for Norinchukin Trust & Banking Co. “I expect the REIT index to reach 1,000 points before the end of the year.”

[Demeter]

48. COMIC RELIEF (AND INSTANT KARMA)

http://www.youtube.com/watch?v=2opHHNFd0Mg

[Demeter]

49. DILBERT

[Demeter]

51. DILBERT REDUX

[Demeter]

50. MARK FIORE

http://www.markfiore.com/political-cartoons/watch-snuggly-the-security-bear-internet-privacy-civil-liberties-domestic-spying-animated-video-mark-fiore-an

[Demeter]

65. 2010 American Economic Association humor session

http://www.youtube.com/watch?v=zkUzU1Ce7rQ

The world's ONLY Stand-Up Economist!

http://www.standupeconomist.com/blog/books/cartoon-introduction-to-economics/

Yoram Bauman PhD, "the world's first and only stand-up economist", HAS MANY MORE YOUTUBE OFFERINGS! ENJOY.

[DemReadingDU]

66. Foreclosure fraud parody

This Hitler movie clip has been used in other parodies. Now being used to highlight the seriousness of the foreclosure crisis.

http://www.youtube.com/watch?v=9kPCYcBm-C8

[Demeter]

78. Now THAT'S Schaudenfreude!

http://www.youtube.com/watch?v=3kVRBJ0gPRg

Unfortunately, every bit of it is true--except that little mustache.

[Demeter]

52. THE SANDMAN COMETH

http://www.youtube.com/watch?v=A_l6XK4mHho&feature=fvsr

Gotta get some shut eye. G'night folks!

[Demeter]

63. Investing in the World of the New Normal

http://dailyreckoning.com/investing-in-the-world-of-the-new-normal/

...“The New Normal has a new set of rules,” Gross cautions. “What once pumped asset prices and favored the production of paper, as opposed to things, is now in retrograde. Leverage and deregulation are fading from the horizon and their polar opposites are in the ascendant. Some characterize it in biblical terms – seven fat years to be followed by seven years of lean. Others like Michael Moore and Oliver Stone describe it in terms of social justice – greed no longer is good. And the hedge fund guys – well, they just take their ball and go home…“The unmistakable fact is that future investment returns will be far lower than historical averages,” Gross predicts. “There are all sizes and shapes of ‘investors’ out there who have not correctly visualized the lower return world of the New Normal.”...Despite the fact that median annualized pension plan returns for the past 10 years have averaged 3%, most pension plan managers and consultants continue to assume 8% annualized returns in perpetuity. “Best of luck,” Gross scoffs. “The last time I checked, the investment grade bond market yielded only 2.5%,” which means that a 60/40 allocation of stocks and bonds “would require 12% from stocks to hit the magical 8% pool ball.”

Gross is skeptical…and so are the insiders of America’s largest public corporations. The latest ratio of insider selling to insider buying was 1,413 to 1. That’s not a typo. During the week ending September 24, insiders sold a whopping $417 million worth of company stock, while insiders purchased only $295 thousand worth of stock...Interestingly, finance company executives are conspicuously frequent members of the “Insider Selling” list. More than one year has passed since an insider purchased a single share of Citigroup or J.P. Morgan in the open market. More than 18 months have passed since an insider purchased a single share of Wells Fargo or Goldman Sachs in the open market. Meanwhile, dozens of insiders at these firms have sold shares during the last 18 months – raising billions of dollars in the process.

These remarkably large and lopsided insider transactions suggest that the Great Unwinding of the credit bubble may still have some unwinding left to do. Notwithstanding yesterday’s hoopla on Capitol Hill that Treasury’s Troubled Asset Relief Program (TARP) would lose “only” $30 billion – and the knock-on inference that the credit crisis has ended – the insiders at most of the largest TARP recipients are selling their stocks, not buying them. The TARP owes its “success” to a flukey combination of dumb luck and large-scale market manipulation. That’s the “why” of the story. But the “what” of the story is that the TARP bought low and sold high. The insiders at most of the largest TARP-recipient firms have done, and are doing, the exact same thing...

“Stocks are staring straight into new normal real growth rates of 2% or less,” Gross warns. “There is no 8% there for pension funds. There are no stocks for the long run at 12% returns. And the most likely consequence of stimulative government policies that strain to get us there will be a declining dollar and a lower standard of living. Stan Druckenmiller is leaving, and with good reason. A future of low investment returns, and a heap of trouble for those expecting more, is what lies ahead.”

[Demeter]

64. After China, the Fed’s Now the Largest Owner of US Treasuries By Rocky Vega

http://dailyreckoning.com/after-china-the-feds-now-the-largest-owner-of-us-treasuries/

Just this week an inevitable milestone came to pass, the Federal Reserve surged ahead of Japan as the second largest owner in the world of US debt… second only to China. Of course, the funds used to generate that massive debt position have only been made possible through the smoke and mirrors of quantitative easing. Zero Hedge notes this, and two other generally under-reported US debt facts, in a recent post.

Here’s the short version:

“#1: The US Fed is now the second largest owner of US Treasuries… Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago…

“#2: ‘There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.’ <...> the US has entered a debt spiral: a time in which fewer and fewer investors are willing to lend to us for any long period of time… at the exact same time that we must roll over trillions in old debt and issue an additional $100-150 billion in NEW debt per month in order to finance our massive deficit… So we’re talking about TRILLIONS of old debt coming due in the next decade…

“#3: The US will Default on its Debt… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years… Obviously that ain’t going to happen…”

The last point should be no surprise to any regular Daily Reckoning reader… but the extent to which the Fed has been purchasing Treasuries is appalling, as is the maturity of the Treasuries. You can read a more detailed description of these three issues in Zero Hedge’s coverage of three horrifying facts about US debt:

http://www.zerohedge.com/article/three-horrifying-facts-about-us-debt-%E2%80%9Csituation%E2%80%9D

[Demeter]

67. Thoughts on the Greater Depression By Doug Casey

AN INTERESTING DISCUSSION--BUT HOW CREDIBLE IS IT?


http://dailyreckoning.com/thoughts-on-the-greater-depression/

The Gold Report: Doug, at a recent conference you said that the US ought to default on its national debt now. Why that rather than letting it play out?

Doug Casey: Several other things almost equally radical should be done besides defaulting on the debt. I recognize that an outright default is most unlikely, but the national debt should be defaulted on for several reasons. To start with, once the US government defaults on its debt, people will think twice before lending it any more money; giving politicians the ability to borrow is like giving a teenager a bottle of whisky and the keys to a Corvette. A second reason is that the debt is an albatross around the necks of the next several generations; it’s criminal to make indentured servants out of people who aren’t even born yet. A third reason would be to overtly punish those who have been lending money to the government, enabling it to do all the stupid and destructive things that the government does with that money.

The debt will be defaulted on one way or another. The trouble is they’re almost certainly going to default on it through inflation, by destroying the currency, which is much worse than defaulting on it overtly. That’s because inflation will wipe out the relatively few people who are prudent in this country, those who are actually saving money. Because they generally save in the form of dollars, they’re going to wipe them out financially.

It’s just horrible. Runaway inflation will reward the profligates who are in debt – people who’ve been living above their means. And punish the producers who’ve been saving and trying to build capital. That’s in addition to the fact it will destroy millions of productive enterprises. A runaway inflation is the worst thing that can happen to a society, short of a major war. They just should default on it honestly, as it were.

TGR: But your belief is we’ll try to inflate our way out of it to pay for it.

DC: Don’t say “we.” Say the US government. I don’t consider myself part of the problem. Americans have to learn that the government isn’t “us.” It’s an entity that has its own interests, its own life, its own agenda. It views citizens as milk cows – or perhaps even beef cows – strictly as a means to its ends....

TGR: ...Do you see a point in time where the United States or even other governments will go back to the gold standard?

DC: It’s both essential, and inevitable. That’s because they have no reason to trust one another. They need a medium of exchange and a store of value that’s not faith-based.

All the other governments of the world know that the US is bankrupt and the dollar is nothing but a floating abstraction. Why should they hold billions or in some cases trillions of these things on their balance sheets? They’re going to go back to gold because it’s the only financial asset that’s not simultaneously somebody else’s liability.

It’s not because gold is magic in any way. It’s just because it has characteristics that among the 92 naturally occurring elements make it uniquely well suited for use as money. It’s durable. It’s divisible. It’s convenient. It’s consistent. It has use value in and of itself. And it can’t be created out of thin air by some government. It’s a better combination of those things than any of the 92 elements. It’s infinitely better than paper. So yes, I think they’ll go back to gold within this generation.

[Demeter]

68. I DON'T KNOW WHERE ALL YOU PEOPLE CAME FROM

but thanks for joining our intrepid little band on this weekly weekend thread. Times are perilous and rapidly changing...I hope you find something here to explain, ease, or at least amuse you in the daily economic game.

And anybody can play!

[Demeter]

69. HIGH TECH!

http://www.youtube.com/watch?v=qp9dc9im3-M

[Demeter]

71. A farmer's field of dreams buries climate change war

http://www.theage.com.au/national/a-farmers-field-of-dreams-buries-climate-change-war-20091031-hqty.html


....International debate rages over the cost and plausibility of reducing greenhouse gas emissions from coal-fired power stations by pumping carbon underground.

But Mr Linklater is literally ploughing ahead, injecting his tractor's fossil fuel exhaust fumes directly into the ground, where they enhance the biochemical interaction between plants and soil microbes. And it seems his home-grown version of carbon sequestration, introduced in 2007, is getting results, with this year's crop, aided by better rainfall, his best since 2001.

"It might not seem that emissions from one tractor could do a lot, but per hectare it emits 1100 kilos of carbon," Mr Linklater says.

Adapting methods developed by Canadian farmer Gary Lewis, of BioAgtive Technologies, Mr Linklater spent $20,000 customising equipment that cools the tractor's fumes to 30 degrees then expels them into the soil as gas fertiliser when he sows his crop....

[Po_d Mainiac]

90. The carbon and nitrates might be beneficial ...the other components in

The other elements and compounds in Diesel exhaust, the soil could do without. Since there was no mention of the fuel being vegetable based, the following would also be "fertilizing" his ground.

arsenic - formaldehyde - inorganic lead - manganese compounds - mercury compounds - cyanide compounds

Granted, this shit falls to the ground as everyday pollutants, but before this gets labeled as 'beneficial' more data is called for. At first blush, one could see how the process he's using is actually concentrating some of the toxins in a manor that could be a serious health hazard

lead and mercury are elements that create havoc in ecosystems. They cause serious health issues when they are part of the food chain.

[Demeter]

107. Biodiesel would be the way to go

I'm thinking of a scheme to get our community to generate it, at least for our trucks...

[Po_d Mainiac]

109. I can get away with about 40%

vegetable:diesel mix in the summer months...Gelling is a problem the rest of the year.

[bread_and_roses]

70. "Just gimme some truth" - "our entire global economy pose[s] a mortal threat"

lyrics: http://www.elyrics.net/read/j/john-lennon-lyrics/give-me-some-truth-lyrics.html
(I admit I'm not a big Lennon fan and had to go searching for a lyric - I mean, I freely acknowledge all his accomplishments, influence, etc. - not disparaging, I just never particularly enjoyed him.)

http://www.commondreams.org/view/2010/10/07-9

Industrial Agriculture and Human Survival: The Road Beyond 10/10/10

Despite decades of deception and mystification, a critical mass at the grassroots is waking up. A new generation of food and climate activists understands that greenhouse gas-belching fossil fuels, industrial food and farming, and our entire global economy pose a mortal threat, not just to our present health and well being, but also to human survival. Given the severity of the Crisis, we have little choice but to step up our efforts. As 35,000 climate activists at the historic global climate summit in April of 2010 in Cochabamba, Bolivia shouted, “We must change the System, not the climate.”

I'm not so sure about that "critical mass" part...alas. But I am quite sure that "our entire global economy pose a mortal threat, not just to our present health and well being, but also to human survival."

“Changing the System,” means defending our selves, the future generations, and the biological carrying capacity of the planet from the ravages of “profit at any cost” capitalism. “Changing the System,” means safeguarding our delicately balanced climate, soils, oceans, and atmosphere from the fatal consequences of fossil fuel-induced climate change. “Changing the System” means exposing, dismantling, and replacing, not just individual out-of-control corporations like Monsanto, Halliburton, and British Petroleum, and out-of-control technologies like gene-altered crops and mountaintop removal; but our entire chemical and energy-intensive industrial economy, starting, at least for many of us, with Food Inc.’s destructive system of industrial food and farming. “Changing the system,” means going on the offensive and dismantling the most controversial and vulnerable flanks of our suicide economy: coal plants, gas guzzlers, the military-industrial complex, and industrial agriculture’s Genetically Modified Organisms (GMOs) and factory farms.

more on this later, i hope - gotta run

[Demeter]

72. BOOK REVIEWS

http://www.youtube.com/watch?v=bS-SKwutP_g

[Demeter]

73. An Old Master, Back in Fashion

http://www.nytimes.com/2009/11/01/business/economy/01shelf.html?_r=1&ref=business



BY the time he died in 1946, the economist John Maynard Keynes had become that rarest of creatures in his profession: a celebrity. The most powerful leaders in the free world subscribed to his theory that markets were driven by emotions and that in moments of crisis, governments could calm investors by doling out stimulus money.

When Keynes and his wife, Lydia, arrived in New York aboard the Queen Mary in 1943, they were mobbed by photographers. Even the paparazzi seemed to understand that his prescription had helped countries on both sides of the Atlantic recover from the Depression.

Three decades later, though, the same ideas were consigned to the dustbin when world leaders swooned over Milton Friedman and his disciples at the University of Chicago. They preached that markets were inherently self-regulating and that government intervention would only muck things up. Their laissez-faire views were more suitable for the rise of Ronald Reagan and Margaret Thatcher.

Now the old master is once again in vogue. After the financial markets blew up last year, governments around the world swiftly enacted Keynesian stimulus packages. Almost as rapidly, three longtime Keynes chroniclers have produced books that try to explain who he was and what he believed...

[Po_d Mainiac]

87. Keynes advocated building a surplus when times were good

Since we failed to do that, IMHO his model has lost much of it's relevancy.

Had we stayed in track, the point would be moot....We wouldn't be in this friggin swamp.

We are way too far down multiple lanes to try and turn back and follow the map he laid out.

[Demeter]

74. WAYBACK MACHINE

Yes, I'm STILL trying to scan and post whatever came out in the last 12 months that is still relevant to today's conditions; or provides a little irony or at least, schadenfreude. My inbox overfloweth..

http://www.youtube.com/watch?v=6tIpjPPiVzg

http://www.youtube.com/watch?v=1P7P728pjLA

[Demeter]

75. Band of Dems Blasts Geithner Plan

http://washingtonindependent.com/65794/band-of-dems-blast-geithner-plan

OCTOBER 30, 2009

Appearing before a House panel on Thursday, Treasury Secretary Tim Geithner made his best pitch for legislation granting the White House broad new powers to seize Wall Street firms when their collapse might torpedo others in the industry.

It didn’t go so well.

A number of Democrats on the House Financial Services Committee unfurled a laundry list of charges against the proposal, including the prominent concern that the bill would empower the president — and future presidents — with unlimited bailout authority to prop up “too-big-to-fail” institutions at the expense of taxpayers.

“Mr. Secretary, I’m not a man that fears this administration or you,” Rep. Paul Kanjorski (D-Pa.) told Geithner. “But I do fear the accumulation of power exercised by someone in the future that can be extraordinary.”

Rep. Brad Sherman (D-Calif.) echoed those concerns, arguing that the bill represents “the most unprecedented transfer of power to the executive branch to make decisions about both spending and taxes in history — all without congressional approval.”

The tone of the comments could foreshadow a tough road ahead, not only for the White House, but for Financial Services Chairman Barney Frank (D-Mass.), who introduced legislation this week that grants the Treasury’s request to broaden the president’s “resolution authority.” The bill is one of the final pieces of the finance-reform puzzle that Frank has been putting together all year. But by conceding most of the administration’s requests, the Massachusetts Democrat — who asked no questions of Geithner Thursday — has riled others on his panel, who want to see more taxpayer protections in the bill.

Frank’s proposal would create an oversight commission to monitor and regulate Wall Street’s investment houses and other non-bank institutions to ensure that they’re on solid footing. Federal regulators could, for example, force companies to increase capital reserves or decrease the amount of debt they’re holding, if the scenario was deemed a threat to topple the firm.

The bill would also empower the White House to swoop in and dismantle failing Wall Street institutions in order to minimize the impact on the finance system as a whole — a strategy modeled on the authority of the Federal Deposit Insurance Corporation to intervene when commercial banks are threatening to fall.

To protect taxpayers, Frank’s bill aims to have failed-company shareholders and creditors cover the cost of the government help. If more money is needed, taxpayers would initially pick up the tab, to be reimbursed later by an after-the-fact tax levied against other large Wall Street institutions that would presumably benefit from the stabilizing effects of the government intervention.

Supporters maintain that the proposal does not empower bailouts at all, but would simply allow the government to manage the deaths of failed companies so they don’t drag down the financial system with them — a kind-of controlled euthanasia designed to protect consumers from the hubris of the finance industry.

“If we do have to step in, it will be very painful for those companies” Frank told MSNBC Thursday. “They will be put out of business. The CEOs will be fired. Shareholders will be wiped out. We are not going to have a situation where people can expect to be bailed out and live happily ever after.”

Geithner, for his part, denied that the proposal authorizes the White House to tap federal coffers at all. Asked by Rep. Maxine Waters (D-Calif.) if the bill grants “the authority to spend the taxpayers’ money to bail them out if you deem that to be a good way of handling that situation,” the Treasury secretary answered with one word: “No.”

Yet the House bill empowers the administration to make loans, buy assets, and invest in failing institutions if regulators determine those steps are required to prevent “serious adverse effects on financial stability or economic conditions in the United States.” To do so, of course, the White House would use taxpayer funds. And no monetary limits are specified.

And while the bill aims to recover the taxpayer dollars within 60 months of the bailout, Sherman notes that the White House would also have the authority to extend that deadline indefinitely.

“It could be 60 years,” he said.

That these bailout protections are limited only to those institutions whose failure is deemed a system-wide threat is another source of criticism on Capitol Hill. Many lawmakers and finance experts contend that that stipulation creates an unfair advantage for big firms over their smaller competitors. For example, they could get capital at lower rates if lenders know they have access to some level of federal lifeline. That dynamic, critics argue, would act to promote “too-big-to-fail” institutions, rather than reining them in.

“Why should the American people have to sit out there and see us creating mammoth organizations that nobody says we have the authority to control or limit, but we have the authority to help them when they get into trouble?” asked Kanjorski.

There are still other concerns. For example, some lawmakers are attacking the proposed bailout tax on large institutions, arguing that it should be collected beforehand as a type of insurance fund, rather than imposed after a competitor goes under.

“No more TARP. No more bailouts,” said Rep. Luis Gutierrez (D-Ill.). “Let them create the fund, the systemic risk fund, that will guarantee that the American taxpayer will no longer have to be involved should they cause such a crisis ever again.”

Geithner responded that such a system would encourage even more risky behavior from the largest companies. “If you create a fund in advance, there’s a risk you’re going to create more moral hazard,” Geithner said. “People will live the expectation where the government will come in and protect them. We don’t want to create that expectation. That’s why we think it’s better to do it after the fact.”

Meanwhile, conservatives and representatives in the finance industry are blasting the notion that solvent companies should be forced to pay to bail out the mistakes of competitors. “Should Ford bear the costs of compensating the taxpayer for what happened to G.M. and Chrysler?” asked Rep. Jeb Hensarling (R-Texas.).

Gutierrez pointed out yet another concern: Placing such broad new powers in the hands of Treasury leaders – who often arrive directly to the job from previous positions of power on Wall Street – creates the impression of the fox guarding the hen house.

“How do we know the next secretary of the Treasury won’t be the former CEO of Goldman Sachs as they have been in the past?” he asked. “They seem to be interwoven, and that’s what the American public sees.

“They see the interconnectedness in terms of their power, their influence and always to their benefit.”

[Demeter]

76. “How Goldman secretly bet on the U.S. housing crash” (AIG as Bagholder Watch)

http://www.nakedcapitalism.com/2009/11/how-goldman-secretly-bet-on-the-u-s-housing-crash-aig-as-bagholder-watch.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...I am keenly interested, because my understanding is that any simple subprime index short would have blown out spreads and thus been very costly to execute.

Goldman used another route….and the road, not surprisingly, was through AIG. From an e-mail over the summer:

This also points out a *VERY* good nugget re: banks who used CDOs/AIG offensively as opposed to as a hedge. This is likely what bothered me most about the AIG debacle. The trades GS had on with AIG were generally *not* super senior CDOs GS was long simply because they had underwritten CDOs and were “stuck” with the AAA risk as a result. Rather, GS had a whole program of issuance — something they called “Abacus” — which were deals they put together with the sole purpose of getting short subprime/CDO risk. Their sole purpose in doing the deals was to get long protection/short risk on the underlying collateral. AIG was simply the vehicle they chose to moneitze that PnL. Call me crazy, but I put the AIG counterparties in two different camps: guys like SocGen, who bought bonds in good faith and then hedged the credit risk by buying CDS from AIG, and guys like GS, who used AIG as their lottery ticket for offensively constructed trades to capitalize on mispriced subprime risk. The former, to me, seem much more deserving of a bailout than the latter…

DeutscheBank had a broadly similar program called Start.

This of course makes complete sense. There simply was not enough insurance capacity (the monolines plus the volume on the Markit indexes) to account for the big names that went short (Paulson, Goldman, one other large but secretive player we are aware of). That road had to go through AIG as well...

I'D CALL THIS THE SMOKING GUN POST

[Demeter]

77. The Empire Strikes Back By George Washington

http://www.nakedcapitalism.com/2009/10/guest-post-the-empire-strikes-back.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Ron Paul tells Bloomberg that Congressman Watt has just more or less killed the bill to audit the fed:

Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.

The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.

“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.”..

Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.

Congress is also suggesting that the Fed be given more powers, making it the chief risk regulator of the entire banking system.

Specifically, as summarized by Huffington Post, a new bill introduced by Democrats in Congress “gives the Federal Reserve the power to determine which firms are actually ‘too big to fail’ and pose systemic risk to the financial system.”

Given the Fed’s history (as discussed below), that is like appointing the head of the Medellin drug cartel as drug tzar.

A LENGTHY AND READ-WORTHY EXPOSITION FOLLOWS...SEE LINK

Conclusion

Given the above, isn’t it obvious that Congress is attempting to give the Fed more powers at a time when it should be audited, and then ended?

[Demeter]

79. Breaking Up The Too Big to Fails Will NOT Harm America’s Ability to Compete with Foreign Banks

http://www.nakedcapitalism.com/2009/10/guest-post-breaking-up-the-too-big-to-fails-will-not-harm-americas-ability-to-compete-with-foreign-banks.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A RIGHTEOUS SCREED

[Demeter]

80. You Cheat, I Cheat, as Wall Street Acts as Model

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.Zdl6qgOdV4

Trickle down really does work. Consider these inspired words, from an online reader of USA Today, reacting last week to news that Americans were lying, cheating and law-breaking to get their hands on an $8,000 tax credit for first-time homebuyers:

“The system is scamming you, so why not scam back a little,” wrote the reader, using the name “None in 08.” “You’ve seen what crooks in Washington and on Wall Street can get away with.” So “it’s time to get yours.”

Amen, brother. What are role models for, anyway?

People who make their livings studying the business world’s ethics -- and lack thereof -- say it doesn’t take a nutburger to sense there’s some systemic unfairness at work.

“The heavy hitters, the high-rollers and the powerful have been getting away with this type of thing, so people say, ‘Why shouldn’t I get my few cents?’” says Thomas Bausch, a professor of management who teaches business ethics at Marquette University in Milwaukee.

The public is onto the fact that the casino known as the stock market operates with one set of rules for the high rollers and another for the little people, says Barbara Porco, director of program development at Fordham University’s School of Business Administration, in New York City.

The truth is the public may have a better chance gambling at a casino than on Wall Street. At a casino, Porco said, “Whether it’s the five-dollar table or the thousand-dollar table, everyone plays by the same rules. That’s not how it works in the stock market, where you have different rules for different groups.” ...

[Demeter]

92. Should central banks be quasi-fiscal actors? (SHORT ANSWER: NO) Willem Buiter

http://blogs.ft.com/maverecon/2009/11/should-central-banks-be-quasi-fiscal-actors/

November 2, 2009

There are two reasons why the Fed, or any other central bank, should not act as a quasi-fiscal branch of the government, other than paying to the Treasury in taxes the profits it makes in the pursuit of its mandated macroeconomic stability objectives (maximum employment, stable prices and moderate long-term interest rates in the case of the Fed) and its appropriate financial stability objectives. The appropriate financial stability objectives of the central bank are those that involve providing liquidity, at a cost covering the central bank’s opportunity cost of non-monetary financing, to illiquid but solvent financial institutions.

Any action going beyond that, such as the recapitalisation of insolvent banks through quasi-fiscal subsidies, ought to be funded by the Treasury. The central bank should be involved only as an agent of the Treasury - an expert assistant. It should not put its own conventional or comprehensive balance sheet at risk.

The two arguments against the central bank acting as a quasi-fiscal agent are, first, that acting as a quasi-fiscal agent may impair the central bank’s ability to fulfil its macroeconomic stability mandate and, second, that it obscures responsibility and impedes accountability for what are in substance fiscal transfers. In the US such actions subvert the Constitution, which clearly states in Section 8, Clause 1, that the power to tax and spend rests with the Congress: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”.

If, as happened in the USA on a vast scale, the central bank allows itself to be used as an off-budget and off-balance-sheet special purpose vehicle of the Treasury, and refuses to provide to the Congress some of the information essential for the quantification of the fiscal transfers it has made, the central bank not only subverts the constitution. By attempting to hide contingent commitments and to disguise de-facto subsidies by not divulging relevant information on the terms on which the central bank has offered financial assistance, it undermines its own independence and legitimacy and impairs political accountability for the use of public funds - ‘tax payers’ money’. It is surprising that a country whose creation folklore attributes considerable significance to the principle of ‘no taxation without representation’ would have condoned without much outcry such a blatant violation of the equally important principle of ‘no use of public funds without accountability’. This indeed amounts to a quiet usurpation of the power of the legislature by the central bank.

When the crisis started in August 2007, the Fed’s conventional balance sheet was just under $ 1 trillion - about seven percent of annual US GDP. At its peak, towards the end of 2008, the Fed’s conventional balance sheet was just over $2 trillion, about fifteen percent of annual US GDP. The Bank of England tripled the size of its balance sheet (as a share of GDP) over the same period. I see no problem at all with the size of the balance sheet per se. It is the logical consequence of the central bank, in a liquidity crisis, providing funding liquidity to systemically important financial entities (the lender-of-last-resort function) and market liquidity to markets for systemically important financial instruments (the market-maker-of-last-resort function).

The problem is not the size of the balance sheet but the size of the quasi-fiscal transfers the Fed has made to some of its private counterparties in its myriad interventions since the crisis started...MORE AT LINK

[hamerfan]

83. Working Class Hero

Something we need more of:

http://www.youtube.com/watch?v=njG7p6CSbCU

Lyrics:


As soon as you're born they make you feel small
By giving you no time instead of it all
Till the pain is so big you feel nothing at all
A working class hero is something to be
A working class hero is something to be

They hurt you at home and they hit you at school
They hate you if you're clever and they despise a fool
Till you're so crazy you can't follow their rules
A working class hero is something to be
A working class hero is something to be

When they've tortured and scared you for twenty odd years
Then they expect you to pick a career
When you can't really function you're so full of fear
A working class hero is something to be
A working class hero is something to be

Keep you doped with religion and sex and TV
And you think you're so clever and classless and free
But you're still peasants as far as I can see
A working class hero is something to be
A working class hero is something to be

There's room at the top they are telling you still
But first you must learn how to smile as you kill
If you want to be like the folks on the hill
A working class hero is something to be
A working class hero is something to be

If you want to be a hero, well, just follow me
If you want to be a hero, well, just follow me

[AnneD]

86. Proof that John and George.....

came to the same conclusion but from different directions. What would they be saying today.

One thing I read and really loved. When John was kill, hundreds of flowers came in. Per Yoko Ono, they were distributed to area nursing homes-one in particular. It seems John and Yoko were frequent visitors and attended the dances and were know to dance with the residents.

I use to wonder if it were true but then I heard about the woman that was selling her scrap book of never before released photos she took when she was a smitten teen in London. The fact that she visited them regularly and took her younger brother with he was amazing. They would invite her in and chat with her. She had the paper that John scribbled George's address for her. It was a different time then. God, it is amazing they managed to stay so relatively normal and sane.

I also have a deep respect for John and Yoko's kicking their heroin habit. The way they did it took guts. My brother battled an alcohol problem for years. Anyone that can successfully kick those habits has my admiration.

[Demeter]

89. Well, Time to Start Dreaming of All the TBTF Doing Just That

Sweet rest and bright morning, all! Keep those songs and screeds posting.

[Demeter]

94. Could Republicans gut parts of Wall St reform law?

http://uk.reuters.com/article/idUKTRE6953NN20101006

Republicans want to roll back the landmark Wall Street reforms enacted in July but tinkering around the edges may be all they can manage, even if they do make gains in the U.S. congressional election in November.

Analysts see little to no chance of a full dismantling of the law meant to prevent a repeat of the 2007-2008 financial crisis that set off the worst U.S. recession in generations.

But Republicans are targeting specific provisions of the reforms, such as funding for the new consumer watchdog. On such narrow issues, they might get some traction, analysts said.

The congressional oversight process, about to get going as regulators gear up for implementation, may lead to substantive tweaks to the complicated Dodd-Frank financial regulation law. As ever, bank lobbyists will be busy behind the scenes.

Here is a question-and-answer discussion of the issue: SEE LINK

[Demeter]

95. World Bank and IMF at odds over hot money flows

http://www.reuters.com/article/idUSTRE69520P20101007

Emerging economies should consider steps to contain fund flows that could cause currency rallies and asset bubbles, the World Bank chief was quoted as saying, but the International Monetary Fund called such actions "undesirable."

The contrasting views over capital controls come amid rising tension between emerging and developed economies over exchange rates, which is expected to be a hot topic at Group of Seven and International Monetary Fund meeting starting on Friday.

Western leaders are worried efforts by emerging economies to weaken their currencies could derail the fragile economic recovery. Officials from developing markets say ultra-low interest rates in rich countries are fuelling massive fund flows into their markets, pushing up their currencies and inflating prices of stocks, property and other assets.

World Bank President Robert Zoellick said emerging nations should consider various measures to control short-term capital flows, according to the Nikkei newspaper.

But IMF deputy managing director, Naoyuki Shinohara, said it was natural and welcome for money to shift into economies with strong growth and policymakers should not try to curb such flows or use intervention to defend specific currency targets...

[Demeter]

96. IMF Cuts U.S. Growth Estimates on Weak Consumer Spending

http://www.bloomberg.com/news/2010-10-06/imf-cuts-u-s-growth-estimates-as-consumer-spending-languishes.html

The International Monetary Fund lowered its forecast for U.S. growth this year and 2011, predicting a “slow” rebound restrained by a lack of consumer spending.

The world’s largest economy will grow 2.6 percent this year, down from the 3.3 percent projected in July, the IMF said today in its World Economic Outlook report. Growth will slow to 2.3 percent in 2011, compared with a previous estimate of 2.9 percent, according to the Washington-based lender, which rescued economies from Iceland to Pakistan during the financial crisis.

“The most likely prospect for the U.S. economy is for a continued but slow recovery, with growth far weaker than in previous recoveries,” the IMF said in the report. “Much of the weakness of this recovery is due to sluggish personal consumption.”

Consumer spending, which accounts for about 70 percent of the U.S. economy, will be hampered by unemployment, a desire to save more, tight credit and the deterioration in household wealth following the plunge in home prices, according to the report. In contrast, the report said, business spending on equipment and software has “rebounded strongly.”

“In the near term, fixed investment is likely to be the principal driver of domestic demand as inventory accumulation slows,” the IMF said. Business investment rose at a 25 percent pace in April through June, the most since 1983, according to the U.S. Commerce Department....

[Demeter]

97. Dollar Reaches 15-Year Low Versus Yen on Expecation Fed to Bolster Economy

http://www.bloomberg.com/news/2010-10-06/dollar-trades-near-15-year-low-against-yen-on-u-s-yields-fed-speculation.html

The dollar dropped to a 15-year low against the yen and touched the weakest in more than eight months against the euro amid growing expectations the Federal Reserve will expand credit easing to sustain the U.S. recovery.

The Australian dollar surged to a record after a government report showed the nation added more jobs than economists forecast. The pound rose to $1.60 for the first time since February as data showed U.K. manufacturing expanded more than forecast and the Bank of England refrained from increasing a bond-buying program. The euro reached $1.40 for the first time since February as European Central Bank President Jean-Claude Trichet said exchange rates should reflect economic fundamentals.

“Expectations of lower U.S. rates are weighing on the dollar,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. “The Fed is moving down the line of quantitative easing, and money is clearly moving away from the dollar into credible alternatives.”

The dollar depreciated 0.7 percent to 82.32 yen at 10:18 a.m. in New York and weakened as far as 82.11 yen, a day after the Japanese currency gave up all the decline since the Asian nation’s intervention in foreign-exchange markets last month.

[Demeter]

98. Bondholders Assent To WaMu Settlement

http://online.wsj.com/article/SB10001424052748704689804575536581434312668.html?mod=dist_smartbrief



Bondholders dropped their opposition to a settlement of the Washington Mutual Inc. bankruptcy case in exchange for $335 million—a small fraction of the billions in bank debt wiped out when regulators seized the Seattle financial institution in 2008.

The collapse of WaMu was the largest bank failure in U.S. history, and J.P. Morgan Chase & Co.'s September 2008 purchase of the banking assets gave it $188 billion in deposits and a coast-to-coast presence—2,207 branches—for the first time. But bank bondholders had their holdings wiped out when J.P. Morgan and the Federal Deposit Insurance Corp. decided not to honor the debt. Senior holders had $6.2 billion when the bank was seized.

Since 2008, J.P. Morgan Chase, the FDIC and Washington Mutual's bankrupt holding company have been fighting over billions in assets. Until Wednesday, bondholders had refused to approve a settlement of those assets, unhappy with the proposed distribution of funds. A prior plan had these holders receiving $150 million.

The participation of the bank bondholders removes a major obstacle in the case and may end a two-year tussle over WaMu's remains.

A bankruptcy judge still needs to sign off on the new settlement. The bondholders agreed to the new terms Wednesday, said people familiar with the situation...

[Demeter]

99. U.S. jobs continue to flow overseas

http://www.latimes.com/business/la-fi-jobs-offshoring-20101006,0,1485516.story?page=1

Though some American firms are bringing overseas work back home, evidence is growing that companies are moving more jobs than ever to China and other countries — a trend that could exacerbate efforts to bring down the nation's stubbornly high unemployment rate.

One sign of increased offshoring is the rising number of applications for federal Trade Adjustment Assistance, which usually goes to factory workers who lost their jobs because their work was sent overseas or was undercut by cheaper imports.

For the six months that ended Sept. 30, workers at about 1,200 offices and plants nationwide were approved for federal Trade Adjustment Assistance. That's about 20% more approvals than in the same six-month period last year, according to the U.S. Labor Department.

In addition, the most recent Commerce Department data show that employment at the foreign subsidiaries and affiliates of U.S. multinational firms grew by 729,000 in two years, to 11.9 million in 2008 from 2006. Over that same period, domestic employment by such firms slipped by 500,000 jobs, to 21.1 million...That trend could further stall the recovery, which many economists believe will continue to lack vigor while unemployment remains at current levels — 9.6% nationally and 12.4% in California. The government is expected to report Friday that the economy added few if any jobs in September.

Among the companies that have recently sent jobs overseas are Hewlett-Packard Co. in Palo Alto, CKE Restaurants Inc. in Irvine and Hilton Worldwide, the McLean, Va., hotelier that maintained a reservations center in Hemet employing 295 people.

[Demeter]

100. U.S. companies buy back stock in droves as they hold record levels of cash

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100606772.html

For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they're starting to deploy some of that money - not to hire workers or build factories, but to prop up their share prices.

Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies are still hesitant to spend their cash on the job-generating activities that could produce economic growth.

Some companies are buying back shares partly because they don't want to invest in developing new products or services while consumer demand remains weak, analysts said.

"They don't know what they want to do with all the cash they're sitting on," said Zachary Karabell, president of RiverTwice Research.

Historically low interest rates are also prompting some companies to borrow to repurchase shares....

[Demeter]

101. Bond Distress Drops to 5-Month Low as Junk Rises Above Par

http://www.bloomberg.com/news/2010-10-07/bond-distress-drops-to-5-month-low-as-junk-rises-above-par-credit-markets.html

The percentage of corporate bonds considered in distress fell to a five-month low as record sales of high-yield debt and declining borrowing costs convince investors the riskiest companies can pay their lenders.

The number of speculative-grade companies worldwide with yields at least 10 percentage points more than government bonds declined to 290, or 12 percent of the total, the lowest share since April and down from 15.9 percent at the end of August, according to Bank of America Merrill Lynch index data.

Junk-rated borrowers globally sold a record $98.9 billion of bonds last quarter as investors sought higher relative yields, helping the weakest companies shore up their balance sheets. Defaults by high-yield issuers fell to 4 percent last month from 6.2 percent in June, Moody’s Investors Service said yesterday.

“There’s a tremendous yield hunger that isn’t satisfied and that’s pushing up the prices in all the bottom-tier names,” said Margaret Patel, who oversees about $1 billion of assets as a fund manager at Wells Fargo & Co. in Boston. “If you want capital appreciation, there’s only an ever shrinking universe to get that sort of yield.”

[Demeter]

103. Bailout Loss Estimated at $29 Billion

http://www.nytimes.com/2010/10/06/business/economy/06tarp.html?ref=business



The Treasury Department expects to lose $29 billion on the federal bailouts stemming from the financial crisis, with most of the losses in its housing finance program and the auto rescue.

In a report released on Tuesday, the administration said it expected a $17 billion loss from its investments in General Motors, Chrysler and the auto finance companies, as well as a $46 billion loss from housing programs like the mortgage modification program known as the Home Affordable Modification Program.

The new figures, which include profits that offset some of the losses, come just as the Obama administration tries to wind down the bailout program known as the Troubled Asset Relief Program, or TARP. Last week, the government announced a plan to exit its investment in the insurer the American International Group.

Treasury officials have declared the bailout a success, emphasizing that much of the program’s money has been returned and that losses are now likely to be less than once expected. The cost, the report says, is far below the $350 billion the Congressional Budget Office once estimated...

[Demeter]

104. Elizabeth Warren: TARP is not a victory yet

The Obama administration has been crowing lately about the repayments flowing into the Troubled Asset Relief Program, and the new plan to end the bailout of American International Group has been touted as the clearest sign yet that the controversial TARP has been a success.

But not everyone sees the AIG bailout that way.

“The rescue of AIG continues to have a poisonous effect on the marketplace,” said one critic recently. “By providing a complete rescue that called for no shared sacrifice on the part of AIG and its creditors, the government fundamentally changed the rules of the game on Wall Street. As long as the biggest companies in America believe that you and I will bail them out, the worst effects of the AIG rescue will linger.”

The critic was not a Republican politician or some conservative think tank. It was Elizabeth Warren, President Barack Obama’s choice to set up a new agency that will protect consumers from financial system abuses, and her blunt assessment is shared, to some extent, by critics on the left and the right. A separate report by TARP Special Inspector General Neil Barofsky raises similar questions, pointing out that TARP is only a small part of the financial rescue and that the government’s total debts for that effort have actually been growing sharply.

No part of that bailout caused more outrage than the $185 billion rescue of AIG, the Connecticut-based insurance giant that helped create a bubble in mortgage-backed securities that nearly wrecked the financial system when it burst. But Treasury Secretary Timothy Geithner, who was heavily criticized for failing to stop AIG executives from paying themselves more than $180 million in bonuses after the huge bailout, insisted Thursday, when the plan to end the AIG bailout was announced, that a happy ending was in sight for taxpayers.


Read more: http://www.politico.com/news/stories/1010/43064.html#ixzz11yckHKES

[Demeter]

105. Wall Street Sees World Economy Decoupling From U.S.

http://www.bloomberg.com/news/2010-10-03/world-economy-decoupling-from-u-s-in-slowdown-returns-as-wall-street-view.html

Wall Street economists are reviving a bet that the global economy will withstand the U.S. slowdown.

Just three years since America began dragging the world into its deepest recession in seven decades, Goldman Sachs Group Inc., Credit Suisse Holdings USA Inc. and BofA Merrill Lynch Global Research are forecasting that this time will be different. Goldman Sachs predicts worldwide growth will slow 0.2 percentage point to 4.6 percent in 2011, even as expansion in the U.S. falls to 1.8 percent from 2.6 percent.

Underpinning their analysis is the view that international reliance on U.S. trade has diminished and is too small to spread the lingering effects of America’s housing bust. Providing the U.S. pain doesn’t roil financial markets as it did in the credit crisis, Goldman Sachs expects a weakening dollar, higher bond yields outside the U.S. and stronger emerging-market equities.

“So long as it doesn’t turn to flu, the world can withstand a cold from the U.S.,” Ethan Harris, head of developed-markets economic research in New York at BofA Merrill Lynch, said in a telephone interview. He predicts the U.S. will expand 1.8 percent next year, compared with 3.9 percent globally...


SOUNDS LIKE A MIXTURE OF SPITE AND WISHFUL THINKING, TO ME!

[Demeter]

106. THAT'S ALL, FOLKS! Y'ALL CAN KEEP POSTING, BUT I'M DONE

Got a barbecue to run. It's actually Indian Summer this week, and we are taking advantage of it...

All I can say about this week's developments is: "Another fine mess you've gotten us into!"


Enjoy this classic comedy by the Fab Four:

http://www.youtube.com/watch?v=XkKra3_pfBY

and following parts.