Weekend Economists' Autumnal Equinox September 23-25, 2011

[Demeter]

The season changed in a week. Last Friday there was sunlight when I went to breakfast, today there was pitch blackness and drizzle. It's too abrupt...and we haven't even had the clocks fall back yet!

And in the markets, a similar black curtain accompanied by drizzle has fallen. Don't look too closely: that might be yellow rain, or maybe blood. And the curtain is dusty and heavy and the drapery pull has frayed and broken, and it's smothering us all...

Oh, yes, Autumn. Poets and composers and the like have expressed the many faces of autumn....

"It was one of those perfect English autumnal days which occur more frequently in memory than in life."

- P. D. James, murder mystery writer

"Delicious autumn! My very soul is wedded to it, and if I were a bird I would fly about the earth
seeking the successive autumns."

- George Eliot, another English novelist


"Once more the liberal year laughs out
O'er richer stores than gems or gold:
Once more with harvest song and shout
Is nature's boldest triumph told."

- John Greenleaf Whittier, an influential American Quaker poet and ardent advocate of the abolition of slavery

Autumn is a second spring where every leaf is a flower.
- Albert Camus, French novelist


"The Indian Summer, the dead Summer's soul."
- Mary Clemmer, Presence


And of course: Vivaldi Four Seasons Autumn w/ Sand Animation by Ferenc Cakó

http://www.youtube.com/watch?v=fCEB4v3o-50



To see colors like this, you must go to New England. Here in Michigan, we haven't enough sugar maples to do autumn justice. Before the Dutch elm disease wiped out the street trees in Detroit, each road looked like a golden cathedral:



This picture is from Winnipeg--but the Detroit elms were twice as old and 60 ft. tall...

[Demeter]

1. AND WE HAVE A BANK FAILURE

Bank of the Commonwealth, Norfolk, Virginia, was closed today by the Virginia State Corporation Commission. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Southern Bank and Trust Company, Mount Olive, North Carolina, to assume all of the deposits of Bank of the Commonwealth.

The 21 branches of Bank of the Commonwealth will reopen during their current business hours beginning Saturday as branches of Southern Bank and Trust Company...As of June 30, 2011, Bank of the Commonwealth had approximately $985.1 million in total assets and $901.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Southern Bank and Trust Company agreed to purchase approximately $924.3 million of the failed bank's assets. The FDIC will retain the balance of the assets for later disposition.

The FDIC and Southern Bank and Trust Company entered into a loss-share transaction on $798.2 million of Bank of the Commonwealth's assets....The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $268.3 million. Compared to other alternatives, Southern Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Bank of the Commonwealth is the 72nd FDIC-insured institution to fail in the nation this year, and the second in Virginia. The last FDIC-insured institution closed in the state was Virginia Business Bank, Richmond, on July 29, 2011.

[DemReadingDU]

22. also Citizens Bank of Northern California, Nevada City, CA

Citizens Bank of Northern California, Nevada City, CA
http://www.fdic.gov/bank/individual/failed/cbnc.html

[Demeter]

23. SO IT DID

Citizens Bank of Northern California, Nevada City, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Tri Counties Bank, Chico, California, to assume all of the deposits of Citizens Bank of Northern California.

The seven branches of Citizens Bank of Northern California will reopen on Monday as branches of Tri Counties Bank...As of June 30, 2011, Citizens Bank of Northern California had approximately $288.8 million in total assets and $253.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, Tri Counties Bank agreed to purchase essentially all of the assets...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $37.2 million. Compared to other alternatives, Tri Counties Bank's acquisition was the least costly resolution for the FDIC's DIF. Citizens Bank of Northern California is the 73rd FDIC-insured institution to fail in the nation this year, and the fourth in California. The last FDIC-insured institution closed in the state was San Luis Trust Bank, FSB, San Luis Obispo, on February 18, 2011.

[bread_and_roses]

2. "Season of mists and mellow fruitfulness!"

From "To Autumn" John Keats. 1795–1821 http://www.bartleby.com/101/627.html

Not my favorite of his poems, but I have always loved the first line.

It has been truly fascinating, even with my feeble understanding, watching the Market this week - which has been not mellow, and which is almost never (probably never never, not "almost") in my memory "fruitful" - more like death gussied up with bling. Or, that awkward - sure has been fruitful for the upper 1%, but somehow I think that Keats had a broader scope.

More later, I hope - for now, first time 1st Rec!

[Demeter]

4. Congrats!

[Demeter]

3. Poverty isn’t just a game: Online game depicts life without good options

http://www.marketwatch.com/story/poverty-isnt-just-a-game-2011-09-23?siteid=YAHOOB

You’ve lost your job. You’ve lost your house. You’re down to your last $1,000. Can you make it through the month? Jenny Nicholson is tired of hearing how the poor are poor because they make poor choices. Let’s see what kind of choices you make when it’s your turn to be flattened by the economy.
That’s the idea behind Spent, an online game Nicholson created to challenge popular misconceptions about poverty...Nicholson said her inspiration for Spent came from the social-networking game FarmVille, in which players run virtual farms, often scrapping around for farm supplies. It made her wonder: What if there were a game where people had to instead figure out how they could live on frighteningly limited resources?

Nicholson, 32, is a copywriter for McKinney, a national advertising agency in Durham, N.C., whose clients include Nationwide Insurance, Sherwin-Williams, Gold’s Gym, Coldwell Banker and the phone company CenturyLink. Another client is Urban Ministries of Durham, which advertises “food, clothing and a future.” Nicholson created Spent to raise donations for Urban Ministries, and she based it on the limited options she’s faced in her own life. She grew up the daughter of a single mother who struggled to find work as a waitress and often collected welfare in a rural part of California’s San Diego County. Her mom couldn’t afford a monthly gas bill, which meant no heat, cold showers, and learning to cook ramen noodles in a coffeepot because the gas stove didn’t work. “My mom always went through the grocery store with a calculator,” Nicholson recalls. “We didn’t have a checking account. She had $50 in her pocket, and if the food was $51 we were screwed. Sometimes my mom wouldn’t calculate the tax right and … we’d have to decide what we were going to put back.” Economic Report: Record poverty last year as household income dips .They lived in a tiny rural town because they couldn’t afford the sprawling city. That meant more driving, but her mom could never quite seem to scratch together more than $500 to buy a car, sometimes taping plastic over broken windows and frequently replacing the leaking oil. And when the car broke down, she missed work. “I’m sure if you added up all those $500 cars she bought in her lifetime, she probably could have bought one new car that would have lasted a really long time,” Nicholson said. “But when you’re poor, you’ve got $500. You’re not stupid. You’re not like, ‘Wow this $500 car is a great deal.’ ”...Nicholson’s mother died at age 46 from her third heart attack. She never got proper care. She didn’t have health insurance, and California’s Medicaid program, Medi-Cal, denied her for years, Nicholson said. “Her approval letter came three weeks after she died,” Nicholson said. “That was a huge lesson for me. Even as a poor kid, I had always thought, when you live in America, you’re going to be taken care of....”

Landing odd jobs, and applying for loans, grants and scholarships, Nicholson earned a bachelor’s degree in writing from the University of California, San Diego, and a master’s in social work from the University of North Carolina in Chapel Hill. She’s proof that you can pull yourself up by those proverbial bootstraps, but she says she would not have been able to do it without government assistance. “I was the first person in my family to go to college,” she said. “The day I stepped onto campus, my life was completely different.” Today, she’s a gainfully employed taxpayer. She has a house, a car and a life of relative comfort. She recalls someone once even accused her of being a dumb little rich girl.

“We have two countries that exist side-by-side,” Nicholson said. “Even having grown up in poverty, it feels really far away. And if it feels far away to me, and I lived it for 17 years, it must be completely unimaginable for somebody who has never lived it.”

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

Play THE GAME SPENT at www.playspent.org. So far, it’s been played more than a million times by people from around the world. And Nicholson is challenging every member of Congress to play it, too. She’s got a petition going at www.petition2congress.com/5008 .

[Demeter]

6. Papantonio: America's Income Disparity Explained

http://www.youtube.com/watch?v=ciGKW3oRJmI&feature=player_embedded

[Demeter]

5. Keiser Report: Euro Banks, Tick, Tick, Tick… Boom Bust

http://www.youtube.com/watch?v=ciGKW3oRJmI&feature=player_embedded

[Demeter]

7. MSNBC ON WALL STREET PROTEST

http://www.msnbc.msn.com/id/21134540/vp/44600241#44600241

OccupyWallStreet: Life at Liberty Plaza / DAY 5

http://www.youtube.com/watch?v=myLHPvd8wyM&feature=player_embedded

This is the fifth communiqué from the 99 percent. We are occupying Wall Street.

On September 21st, 2011, Troy Davis, an innocent man, was murdered by the state of Georgia. Troy Davis was one of the 99 percent.

Ending capital punishment is our one demand.

On September 21st, 2011, the richest 400 Americans owned more wealth than half of the country's population.

Ending wealth inequality is our one demand.

On September 21st, 2011, four of our members were arrested on baseless charges.

Ending police intimidation is our one demand.

On September 21st, 2011, we determined that Yahoo lied about occupywallst.org being in spam filters.

Ending corporate censorship is our one demand.

On September 21st, 2011, roughly eighty percent of Americans thought the country was on the wrong track.

Ending the modern gilded age is our one demand.

On September 21st, 2011, roughly 15% of Americans approved of the job Congress was doing.

Ending political corruption is our one demand.

On September 21st, 2011, roughly one sixth of Americans did not have work.

Ending joblessness is our one demand.

On September 21st, 2011, roughly one sixth of America lived in poverty.

Ending poverty is our one demand.

On September 21st, 2011, roughly fifty million Americans were without health insurance.

Ending health-profiteering is our one demand.

On September 21st, 2011, America had military bases in around one hundred and thirty out of one hundred and sixty-five countries.

Ending American imperialism is our one demand.

On September 21st, 2011, America was at war with the world.

Ending war is our one demand.

On September 21st, 2011, we stood in solidarity with Madrid, San Francisco, Los Angeles, Madison, Toronto, London, Athens, Sydney, Stuttgart, Tokyo, Milan, Amsterdam, Algiers, Tel Aviv, Portland and Chicago. Soon we will stand with Phoenix, Montreal, Cleveland and Atlanta. We're still here. We are growing. We intend to stay until we see movements toward real change in our country and the world.

You have fought all the wars. You have worked for all the bosses. You have wandered over all the countries. Have you harvested the fruits of your labors, the price of your victories? Does the past comfort you? Does the present smile on you? Does the future promise you anything? Have you found a piece of land where you can live like a human being and die like a human being? On these questions, on this argument, and on this theme, the struggle for existence, the people will speak. Join us.

We speak as one. All of our decisions, from our choice to march on Wall Street to our decision to continue occupying Liberty Square, were decided through a consensus based process by the group, for the group.

https://occupywallst.org/

[Demeter]

8. Russian Ripoff FROM Michael Hudson

http://michael-hudson.com/2011/09/russian-ripoff/

Michael was recently interviewed on the Renegade Economists following his visit to Medvedev’s Global Policy Forum.

PODCAST AND TRANSCRIPT AT LINK

[Demeter]

9. US Housing Hangover Or 20-Year Japanese Nightmare

http://www.testosteronepit.com/home/2011/9/20/us-housing-hangover-or-20-year-japanese-nightmare.html

In its schizophrenic manner, the media across the country lamented the housing-starts numbers, which were ugly: 571,000 annualized in August, down 5% from July, down 5.8% from August 2010, and down 75% from its peak of 2.3 million in January 2006 (Census Bureau, PDF). But for the housing market to heal, that number should be near zero for years...19 million vacant units, that's the problem (Census Bureau, PDF). While some people dispute that number, everyone agrees that the inventory of vacant units is huge. Whether it's 19 million or 12 million doesn't change the problem. It only changes the duration of the healing process. This is the hangover from the housing bubble when the industry built millions of units for speculators who never had any intention of living there. And now, no one lives there.

Housing is mostly zero sum: If I rent or buy something and move into that property, I also have to move out of the property I'm in. Hence, no net impact on the inventory of vacant homes. When people die, it increases the inventory of vacant homes. Household creation has the opposite effect. Yet, household creation has declined over the last few years and was even negative for a while, a new phenomenon in the U.S. that sociologists and economists are still wringing their hands over.

An optimistic scenario: Say, the industry is building 600,000 homes a year, household creation perks up to 1,000,000 a year, while 400,000 homes become vacant due to death, then things are in balance, and the inventory of maybe 10 - 18 million vacant homes will stay with us until termites eat it up. Which, come to think of it.... But if household creation doesn't reach those levels, or if home construction ticks up, well then, good luck.

Stop building—that's the solution to the housing market, other than termites and fires. But that's not going to happen. Instead, home construction will remain in the doldrums, with irrelevant ups and downs, where each new home being built will extend the suffering of current homeowners as home prices will drift lower for years to come...Housing bubbles cause decades of pain. In Japan, it burst in 1990, and land prices are still declining—though, like in the US, they've had minor and temporary upticks that gave everyone a lot of false hope. Culturally, the Japanese are attached to land, not houses. The building is usually a "one-generation house," designed to last 30 years and be torn down by the next generation. Hence, when the Ministry of Land, Infrastructure, Transport, and Tourism released its numbers on September 20, it reported on land prices (Nikkei, article in English). Nationwide, year over year, they were down 3.4%, the 20th year of straight declines, with residential land prices down 3.2% and commercial land prices down 4%. In 2010, land prices were down 3.7%...The earthquake and tsunami added downward pressure in areas it affected, and in the most devastated regions, sales simply stopped. But even in western Japan, which was not affected by the disaster, the declines continued, despite additional tax breaks put in place last year and despite super-low mortgage rates. And even Yakuza, who're heavily invested in the construction trade, are complaining.

[Demeter]

12. Joseph Stiglitz: Government Must Play a Role in the Housing Market to Fix It

http://www.alternet.org/newsandviews/article/668682/joseph_stiglitz%3A_government_must_play_a_role_in_the_housing_market_to_fix_it/#paragraph2

Housing policy is central to our economy and the Great Recession, and Roosevelt Institute Senior Fellow Joseph Stiglitz made that abundantly clear in his remarks at a recent event, “The Government’s Role in Housing.” Americans spend so much of their income on housing that “when we’re talking about housing, we’re talking about standards of living,” he said. Meanwhile, “How we solve our housing market problems will have a lot to do with the recovery.” But while hardline Republicans think there is no role for government in practically anything, Stiglitz contended, “If the government now just walked out of housing, the market would collapse and our economic downturn would be worse.”

The government got involved in the mortgage market in the first place because it wasn’t working. “We didn’t have a good mortgage market… we had discrimination,” Stiglitz pointed out. Plus it had to address “continuing market failures.” As a country, we used to understand that markets aren’t perfect and that there is a role for government. “There was in the past a view that yes, we understand that markets sometime behave badly, they make shoddy products, they don’t live up to what they’re supposed to do,” he said. “That’s why we have regulation.”

No time like the present, and no place like the housing market. “The market failures in this market are pervasive,” Stiglitz said. “There will need to be government intervention in one form or another.” So what should it look like? He outlined seven key areas that need to be addressed:

1. Reform the bankruptcy code: We’ve made it more difficult for borrowers to discharge debts, but “we have to solve the problems of the past,” he said, including the heaping pile of underwater mortgages.
   
   
2. Make financial markets more competitive, including the payments mechanism.
   
   
3. Deal with TBTF institutions: It’s not just banks that are too large, but even without government involved, Fannie Mae as an institution “was too big to fail,” he said.
   
   
4. Re-focus the banking system: Get it “back to doing what it should be doing, and that is lending,” not speculating or pushing paper around to make a profit.
   
   
5. “We need strong consumer protection.” End of story.
   
   
6. Deal with the structure of the mortgage market: “We have a whole system of conflicts of interest and an intstiontal structure of the market is one that makes it not work in the way that it should,” he said.
   
   
7. Understand the fundamental flaws of securitization: “The benefits have been overestimated and the cost underestimated.”

Just a few small suggestions, right? But without addressing these issues, we’ll continue to have a housing market that fails the American people and creates a huge drag on our stagnant recovery.

[Demeter]

10. Focus on Goldman Ex-Director

http://online.wsj.com/article/SB10001424053111903374004576583161254237844.html?mod=WSJ_hp_LEFTTopStories

Federal prosecutors are moving closer toward bringing criminal charges against Rajat Gupta, a former Goldman Sachs Group Inc. director who allegedly leaked inside information about the Wall Street giant at the height of the financial crisis, according to people familiar with the situation.

The Manhattan U.S. attorney's office and the Securities and Exchange Commission have maneuvered for months to determine whether and how to proceed against Mr. Gupta, who has denied any wrongdoing. The SEC dropped a civil administrative proceeding against Mr. Gupta last month but said it was "fully committed" to refiling the charges in federal court....

[Demeter]

11. Bill Black: Why do Banking Regulators bother to Conduct Faux Stress Tests?

http://www.nakedcapitalism.com/2011/09/bill-black-why-do-banking-regulators-bother-to-conduct-faux-stress-tests.html


...The EU’s stress tests have excluded the banks’ exposure to sovereign debt risk despite the rise of sovereign risk so severe that it could render a number of banks insolvent. German Prime Minister Merkel’s coalition has just lost its sixth regional election (out of the seven most recent elections). Germany’s economic “success” is mixed. It has reduced unemployment, but its middle and working classes have seen flat or even declining incomes. This economic record is one of the reasons why Merkel’s coalition has been losing elections. Merkel’s most acute political problem, however, is that the purported bailout of the periphery is profoundly unpopular in Germany.

The obvious question is why Merkel (eventually) supports the bailouts. The answer is that German banks are the largest single beneficiaries of the bailouts – and much of Europe subsidizes the bailout of German banks by the EU. The German government claims that German banks are sound, but their actions constant betray these claims. The Germans have insisted that any increase in capital requirements in Basel III be phased-in slowly over roughly a decade. The sole reason for the German position is the fear that several large German banks are so insolvent that they would not be able to meet the Basel III requirements. The German banks’ imprudent loans caused great harm in the periphery. (“German Banks Gone Wild!”) Their inadequate capital poses a severe danger to Europe and the U.S. The German regulators have insisted that their banks’ exposure to sovereign risk be excluded from the stress tests. (The European stress tests mirror the U.S. stress tests in largely excluding losses from fraudulent loans.) The Germans have, after allowing the periphery to twist slowly in the wind for months, ultimately favored bailouts of the periphery because they fear that allowing a sovereign default would make obvious the German banks’ large losses and reignite the financial crisis.

Which brings me back to my original question – why are so many banking regulators insisting on conducting faux stress test when everyone knows they are rigged? One need not believe in the efficient markets hypothesis to believe that anyone sentient in the markets must know that the stress tests are shams. The public doesn’t believe, and doesn’t need to believe, that the largest banks (the systemically dangerous institutions (SDIs)) are financially sound. The public believes that the government will bail out the SDIs and protect their depositors from losses. So please join me in urging an end to the farcically faux stress tests.

[Demeter]

13. Bill Maher, Keith Olbermann Desperately Try to Get Through to GOP Voter "In a Bubble"

http://www.alternet.org/newsandviews/article/667754/watch_bill_maher%2C_keith_olbermann_desperately_try_to_get_through_to_gop_voter_%22in_a_bubble%22/#paragraph3

[Demeter]

14. The Social Contract By PAUL KRUGMAN

http://www.nytimes.com/2011/09/23/opinion/krugman-the-social-contract.html?_r=2

This week President Obama said the obvious: that wealthy Americans, many of whom pay remarkably little in taxes, should bear part of the cost of reducing the long-run budget deficit. And Republicans like Representative Paul Ryan responded with shrieks of “class warfare.” It was, of course, nothing of the sort. On the contrary, it’s people like Mr. Ryan, who want to exempt the very rich from bearing any of the burden of making our finances sustainable, who are waging class war. As background, it helps to know what has been happening to incomes over the past three decades. Detailed estimates from the Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.

Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million. So, do the wealthy look to you like the victims of class warfare?

To be fair, there is argument about the extent to which government policy was responsible for the spectacular disparity in income growth. What we know for sure, however, is that policy has consistently tilted to the advantage of the wealthy as opposed to the middle class. Some of the most important aspects of that tilt involved such things as the sustained attack on organized labor and financial deregulation, which created huge fortunes even as it paved the way for economic disaster. For today, however, let’s focus just on taxes. The budget office’s numbers show that the federal tax burden has fallen for all income classes, which itself runs counter to the rhetoric you hear from the usual suspects. But that burden has fallen much more, as a percentage of income, for the wealthy. Partly this reflects big cuts in top income tax rates, but, beyond that, there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax — the main tax paid by most workers — has gone up.

And one consequence of the shift of taxation away from wealth and toward work is the creation of many situations in which — just as Warren Buffett and Mr. Obama say — people with multimillion-dollar incomes, who typically derive much of that income from capital gains and other sources that face low taxes, end up paying a lower overall tax rate than middle-class workers. And we’re not talking about a few exceptional cases. According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class...Well, that amounts to ... a small number of very lucky people... exempted from the social contract that applies to everyone else. And that, in case you’re wondering, is what real class warfare looks like.

[Demeter]

15. Stewart to "Confidence Men" Author: Larry Summers is, By Unanimous Consent An "Asshole"

http://www.alternet.org/newsandviews/article/667754/watch_bill_maher%2C_keith_olbermann_desperately_try_to_get_through_to_gop_voter_%22in_a_bubble%22/#paragraph3

[Demeter]

16. View of Auroras From the Space Station

http://spaceweather.com/swpod2011/22sep11/media.mp4

Autumn is a prime time for auroras....

[Demeter]

17. The Song "Autumn Leaves"

http://www.squidoo.com/autumnleaves-song

[Demeter]

18. Feral Cities-Pirate Havens

http://www.usni.org/magazines/proceedings/2008-12/feral-cities-pirate-havens

Throughout history, support systems in place on land have been lifelines for pirates.

For modern seafarers, the names Strait of Malacca, Horn of Africa, or Caribbean Sea provoke a sense of fear in some, caution in others, and concern in all. The reason for these reactions is piracy. From coastal fishing vessels and tug boats to plush cruise liners, virtually every sector of maritime trade and commerce has been affected by pirates to some extent.

Pirates, however, do not commit piracy for piracy's sake. Whether looking to collect a ransom for a captured vessel and crew, instilling fear in others to protect local fishing grounds, or merely robbing the ship's purser, pirates always return to dry land to enjoy the spoils of their efforts: a "feral city." As defined by Dr. Richard J. Norton in the Naval War College Review, a feral city is one in which the state government "has lost the ability to maintain the rule of law within the city's boundaries yet remains a functioning actor in the greater international system."1 The typical city itself, while marked by a lack of any real social services, heightened levels of disease and pollution, and little to no individual security, is not a bastion of complete anarchy. In fact, some semblance of hierarchical order governs the city and international economic activity, despite the varying degrees of corruption and oppression that may be present.

While the emergence of a feral city with a population that exceeds one million, according to Dr. Norton, may seem far-fetched in today's modern age of globalization, reality begs to differ.2 Mogadishu, the capital of Somalia, is a prime example. And places like Mexico City, Johannesburg, and Sao Paulo are either well on their way to becoming feral cities, or they already exhibit pockets of feral characteristics. The near-autonomous nature of a feral city, when coupled with a geographic position accessible to the world's oceans, makes for a perfect sanctuary from which to conduct acts of piracy.

The concept of a pirate haven is not new. Mogadishu and Aceh in Sumatra are merely the latest examples in a history of feral places turned pirate bases that spans both the globe and the ages. A brief look back in time offers several examples of locales where piracy has flourished. Common to nearly all of them is the existence of a city beyond the control of any legitimate, recognized government where pirates called the shots and business was conducted on their terms. New Providence, Port Royal, Canton, Petit Goave, Madagascar, and Barataria were merely precursors to the lawless pirate strongholds of today and provide a glimpse into what may be in store for the future...

SO NOW WE HAVE PIRATE CITIES LIKE LONDON, NEW YORK, WASHINGTON, DC, BONN, PARIS...FOR OUR LAND-BASED PIRATE HORDES.

[Demeter]

19. Pirate Utopias: Under the Banner of King Death

http://www.eco-action.org/dod/no8/pirate.html

....During the 'Golden Age' of piracy in the 17th and 18th centuries, crews of early proletarian rebels, dropouts from civilization, plundered the lucrative shipping lanes between Europe and America. They operated from land enclaves, free ports; 'pirate utopias' located on islands and coastlines as yet beyond the reach of civilization. From these mini-anarchies - 'temporary autonomous zones' - they launched raiding parties so successful that they created an imperial crisis, attacking British trade with the colonies, and crippling the emerging system of global exploitation, slavery and colonialism.

We can easily imagine the attraction of life as a sea-rover, answerable to no-one. Euro-American society of the 17th and 18th centuries was one of emergent capitalism, war, slavery, land enclosures and clearances; starvation and poverty side-by-side with unimaginable wealth. The Church dominated all aspects of life and women had few options beyond marital slavery. You could be press-ganged into the navy and endure conditions far worse than those experienced on board a pirate ship: "Conditions for ordinary seamen were both harsh and dangerous - and the pay was poor. Punishments available to the ship's officers included manacling, flogging and keel-hauling - the victim being pulled by means of a rope under the hull of the ship from one side to the other. Keel-hauling was a punishment which often proved fatal." As Dr. Johnson famously observed: "no man will be a sailor who has contrivance enough to get himself into a jail; for being in a ship is being in jail with the chance of being drowned... A man in jail has more room, better food, and commonly better company."

In opposition to this, pirates created a world of their own making, where they had "the choice in themselves" - a world of solidarity and fraternity, where they shared the risks and the gains of life at sea, made decisions collectively and seized their life for themselves in the present, denying its use to the merchants as a tool for the accumulation of dead property. Indeed, Lord Vaughan, Governor of Jamaica, wrote: "These Indyes are so Vast and Rich, And this kind of rapine so sweet, that it is one of the hardest things in the World to draw those from it which have used it for so long." ...


AND NOW, THE SHOE IS ON THE OTHER FOOT, AND MODERN PIRATES SEEK TO CRUSH GOOD GOVERNMENT WITH GLOBAL EXPLOITATION, SLAVERY AND COLONIALISM...

[Demeter]

20. AUTUMNAL MUSIC FROM CHOPIN

AUTUMN RAIN - Chopin

http://www.youtube.com/watch?v=f8Q386zP9kg&feature=related

Chopin - Songs - 1. "Spiew z mogily" - Sobieska, Stec, Biernacki

http://www.youtube.com/watch?v=ygv0-rDDYtI

(Hymn from the Tomb) op. 74 no. 17.

The leaves fall from the tree
that had grown yet unopressed.

High above a grave,
a songbird warbles.
O Poland, all is but illusions.
Your children buried...
Villages burned, cities demolished,
empty are the fields.
All have left, sickles in hand,
while the crops wither away.

When your children had gathered
around Warsaw, it seemed
as if Poland would emerge proud,
whole, and free.
For you, they had fought
winter and summer, but by autumn...
the battled faded away,
and none returned home.
Dead, or held hostage, or wandering
the lonely earth...
They know not kindness from God nor man.
And the Polish soil blooms in vain.
From the tree, the leaves fall.
O Poland, if your countrymen,
rather than die for you,
could each take a handful of soil,
you would be by now rebuilt.
But we cannot even imagine
the glory of rising again.
Too many traitors take advantage
of your kind heart.

[Demeter]

21. AUTUMN IN GERMANY?

Autumn in Beerschoten, Bilthoven TO MUSIC OF CHOPIN "AUTUMN LEAVES"?

http://www.youtube.com/watch?v=72gWFY9TfUQ

[Demeter]

24. Time to Call It a Day

See you all in the morning!

[DemReadingDU]

25. CEO Gruebel Resigns From UBS Following Trading Scandal

9/24/11 Gruebel Resigns From UBS Following Trading Scandal

Oswald Gruebel, chief executive officer of UBS AG (UBSN) since February 2009, resigned his post at Switzerland’s largest bank after a $2.3 billion loss from unauthorized trading.

He will be replaced on an interim basis by Sergio P. Ermotti, the bank’s CEO for Europe, the Middle East and Africa, UBS said in a statement today. Gruebel, 67, leaves after the Zurich-based bank’s board of directors met in Singapore.

Gruebel joined UBS after about 37 years at rival Credit Suisse Group AG and is the only person to have served as CEO of both of the biggest Swiss banks. He returned UBS to profit about six months after arriving, resolved a dispute with the U.S. over banking secrecy that threatened the firm’s existence and stemmed nine straight quarters of client defections at the private bank.

“Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident,” Chairman Kaspar Villiger said in the statement. “During his tenure, he achieved an impressive turnaround and strengthened UBS fundamentally.”

more...
http://www.bloomberg.com/news/2011-09-24/gruebel-quits-as-ubs-chief-ermotti-interim-successor-bank-to-reduce-risk.html

[DemReadingDU]

26. ZeroHedge: UBS' CEO Booted

9/24/11 UBS' CEO Booted

Things for UBS are just getting from bad to worse. The UBS "Rogue Trader" incident which was anything but rogue and certainly involved far more than just a trader, has struck at the very top and just claimed the scalp of the top man at the organization, forcing many to ask: just what is really going on behind the scenes at the embattled Swiss bank? Alas, this latest development means that life for the bank's other employees is about to become a (bonus free) living hell, as a complete overhaul of the employee base is imminent.

From Reuters: "The board of UBS accepted on Saturday the resignation of Chief Executive Oswald Gruebel after the Swiss bank lost $2.3 billion in alleged rogue trading and said it had appointed Sergio Ermotti to replace him for now. Ermotti, a 51 year-old from Switzerland's Italian-speaking region of Ticino, joined UBS in April from UniCredit as head of Europe, Middle East and Africa. Before joining UniCredit in 2005, he worked at Merrill Lynch for 18 years.

The board said in a statement it had asked management to accelerate an overhaul of the investment bank already under way "concentrating on advisory, capital markets, and client flow and solutions businesses". UBS's board meeting, one of four regular meetings per year, had originally been due to end on Friday ahead of the UBS-sponsored Singapore Formula One motor racing Grand Prix on Sunday, when executives will be trying to reassure big clients. But deliberations continued on Saturday by conference call after the board left Singapore on Friday with some members headed back to Switzerland, sources told Reuters. "

http://www.zerohedge.com/news/ubs-ceo-booted

[Demeter]

31. Because the shit hit UBS's fan First

If they survive the turmoil, they will be the first to recover--provided they clean up the act.

I'd give them 1 in 3 odds. Tops.

[Demeter]

53. Adoboli ‘sorry beyond words’ after UBS trading loss

UBS trader appears in London court to face four charges of fraud and false accounting

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/YBO6UA/36/t?a1=2011&a2=9&a3=23

[DemReadingDU]

27. Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure

9/24/11 Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb?

The latest quarterly report from the Office Of the Currency Comptroller is out and as usual it presents in a crisp, clear and very much glaring format the fact that the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system.

Specifically, of the $250 trillion in gross notional amount of derivative contracts outstanding (consisting of Interest Rate, FX, Equity Contracts, Commodity and CDS) among the Top 25 commercial banks (a number that swells to $333 trillion when looking at the Top 25 Bank Holding Companies), a mere 5 banks (and really 4) account for 95.9% of all derivative exposure (HSBC replaced Wells as the Top 5th bank, which at $3.9 trillion in derivative exposure is a distant place from #4 Goldman with $47.7 trillion).

The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure. As historically has been the case, the bulk of consolidated exposure is in Interest Rate swaps ($204.6 trillion), followed by FX ($26.5TR), CDS ($15.2 trillion), and Equity and Commodity with $1.6 and $1.4 trillion, respectively.

And that's your definition of Too Big To Fail right there: the biggest banks are not only getting bigger, but their risk exposure is now at a new all time high and up $5.3 trillion from Q1 as they have to risk ever more in the derivatives market to generate that incremental penny of return.

lots more...
http://www.zerohedge.com/news/five-banks-account-96-250-trillion-outstanding-derivative-exposure-morgan-stanley-sitting-fx-de

OCC report, 36 pages
http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq211.pdf


Lastly, and tangentially on a topic that recently has gotten much prominent attention in the media, we present the exposure by product for the biggest commercial banks. Of particular note is that while virtually every single bank has a preponderance of its derivative exposure in the form of plain vanilla IR swaps (on average accounting for more than 80% of total), Morgan Stanley, and specifically its Utah-based commercial bank Morgan Stanley Bank NA, has almost exclusively all of its exposure tied in with the far riskier FX contracts, or 98.3% of the total $1.793 trillion. For a bank with no deposit buffer, and which has massive exposure to European banks regardless of how hard management and various other banks scramble to defend Morgan Stanley, the fact that it has such an abnormal amount of exposure (but, but, it is "bilaterally netted" we can just hear Dick Bove screaming on Monday) to the ridiculously volatile FX space should perhaps raise some further eyebrows...

[Demeter]

33. Well, this calls for serious medicine

the stuff for nausea, vomiting, diarrhea, high blood pressure, and the like.

I know, if I didn't want to know, I shouldn't have asked the question...but it was such a nice, idyllic Equinox...not even raining again, and sunny..

[Demeter]

36. 8 Things About the New Lawsuit Against the Banks That Torpedoed the Economy

http://www.alternet.org/story/152312/8_things_you_should_know_about_the_new_lawsuit_against_the_banks_that_torpedoed_the_economy?page=entire

The FHFA filed lawsuits last Friday alleging nearly $200 billion in fraud by the nation's biggest banks...The suits accuse the banks of fraud, of lying to the federal government and to investors about the quality of the securities they were making by cranking out more and more subprime loans. The charge allows the FHFA to ask for punitive damages as well as actual damages. The amount of the suits is not yet known, but they allege nearly $200 billion in fraudulent securities were sold just to Fannie Mae and Freddie Mac, the government-backed (and now, post-bailout, basically government-owned) mortgage lenders...The suits were filed in advance of a September 8 deadline—the statute of limitations on claims over subprime mortgage-backed securities sold to Fannie and Freddie. The FHFA was created in 2008 as conservator for the two lenders, which have been given $170 billion in government cash in order to keep them afloat.

So the government, representing the taxpayers (you and me) who own Fannie and Freddie, is filing suit against 17 of the world's biggest banks, including our old friends Bank of America (and its subsidiaries Merrill Lynch and Countrywide, named separately), Goldman Sachs, and JP Morgan Chase as well as Deutsche Bank, the Royal Bank of Scotland (RBS), and, surprisingly, General Electric....While this story will keep developing, we break down eight things you should know about the suits, the banks involved, and the potential political and economic consequences.

1. Accelerating the Bank of America death spiral

Felix Salmon broke down the lawsuits into a table and pointed out that since Bank of America's two subsidiaries, Countrywide and Merrill Lynch, are named separately from B of A itself, the wobbly bank is by far the biggest loser in the lawsuit. Rep. Miller noted that nearly one quarter of the mortgage-backed securities in these lawsuits come from Bank of America...B of A stocks are down almost to where they were before Warren Buffett put $5 billion into the bank, and it's got more layoffs coming—up to 30,000 jobs might be shed, which would be about 10 percent of the company's total employees....The New York Times pointed out that while the total damages in the suit have yet to be determined, a similar lawsuit brought in July by the FHFA against UBS seeks to recover $900 million in losses on $4.5 billion in securities—or 20 percent. “A similar 20 percent claim against Bank of America could equal a $10 billion hit.”

And “Tyler Durden” at Zero Hedge thinks it could be even bigger:

“Alternatively, using generic cumulative loss thresholds of around 45% based on Fitch estimates for 2005-2007 vintages, and applying a conservative 60% loss severity to defective loans, implies $25.8 billion loans are defective, with total Bank of America umbrella losses of $15.5 billion.

This is virtually the entire worth of the company's stake in the China Construction bank. And this is to settle just with the FHFA alone!”

In other words: this is a big mess for all of the banks named, a potential long-lasting expensive legal battle, but for Bank of America, teetering on the edge of disaster already, it could wind up pushing them over. Rep. Miller argued that the potential collapse of Bank of America, though, was not a good reason to stop the lawsuit going forward. “I know that there would be a great sense of injustice if they were given a pass on their legal liabilities on that basis,” he said. “Every small business in America knows if they have harmed someone they'll get sued for it and they'll have to pay.”...And Forbes noted, “An analyst from the other side of the Hudson River said that Bank of America may very well prove that no bank is too big to fail.”

2. Opening door for more lawsuits

Whatever happens with the FHFA's lawsuits—whether they're settled or litigated—there's every potential here for private lawsuits against the same banks to follow. The FHFA snuck in right under the deadline for the statute of limitations, and this could spur other investors to try to recoup losses. For troubled banks like Bank of America or RBS, this could be a chain reaction difficult to recover from.

3. Banks declare total war...against Democrats

Which leads us to point number three: who's going to be the target of the banksters' ire at finding themselves the target of government lawsuits? You guessed it: Democrats....Ben White at Politico's Morning Money column wrote that banks are considering “Total War,” saying:

“M.M. hears that instead of contemplating settlements of the FHFA mortgage-backed securities lawsuits, big banks and their attorneys are more likely to pursue what insiders describe as an all out war strategy in which they go after Fannie Mae and Freddie Mac (and by default their Democratic supporters) in a scorched earth strategy to show the GSE’s took an active role in creating the very securities they are now suing the banks over.”

You can see the talking points already in several of the business press pieces on this story, which blame the subprime mortgage mess on lawsuits to prevent discrimination against poor people (usually people of color, who faced housing discrimination for oh, most of US history) or on Fannie and Freddie's lending itself. Never mind that those arguments leave out the responsibility of the big banks to, you know, not commit fraud. Bad mortgages on their own would not have caused the current economic crisis. The securitization of that mortgage debt combined with speculation drove up the price of housing; the decline in real wages led more and more people to borrow against the value of their homes. Systematic attacks on the little wealth that most working people had by a small handful of ultra-wealthy suits on Wall Street and around the world created the crisis, not the desire of low-income folks to maybe have a nice house to pass on to their kids.

But as we see so often, the argument from the banksters and their apologists in politics will be that we all should have known better, that Fannie and Freddie were “sophisticated investors” and should have been able to foresee that bankers were lying to them. Rep. Miller shrugged off this argument. “I would like to see the cases, the legal authority that makes that a defense to this lawsuit. The argument that he's a bad guy too doesn't strike me as a very strong legal defense...There has been precious little interest on the part of Republicans to pursue any claims or to allow private litigants to pursue any claims,” he continued....Of course, there's been precious little interest from many Democrats as well, as the Obama administration has joined in pressing for a sweetheart-deal settlement for the banks. The question then becomes, will lawsuits like this lead to the end of the romance between finance and at least certain parts of the Democratic party?

BIG CUT SEE LINK

Several executives are named in the lawsuit, but most prominently Daniel Sparks, former head of Goldman's mortgage department. Courtney Comstock at Business Insider noted, “Dan Sparks is full-on attacked in the lawsuit. The FHFA basically blames the rot of Goldman's mortgage business on him and his team's 'traveling the world' to 'make some lemonade from some big old lemons' (his words).” Those big old lemons, of course, were mortgages that were not created by Goldman; they were simply repackaged and resold by the finance giant, preferably as quickly as possible, the lawsuit argues, to keep them off its own books because it knew they were likely to fail.

ANOTHER BIG CUT

8. More bailouts coming?

This seems fairly unlikely, but one extremely cynical take on the situation is that the suit is actually meant to be lost, providing a back-door bailout for the big banks by giving them legal precedent that can then be applied in all cases (including the 50-state settlement and Eric Schneiderman's investigation into Bank of America). This comes from Zero Hedge—or rather, one of Zero Hedge's readers, who suggests that this suit is to make Obama look like a crusader against the banks while making the case for more quantitative easing (printing money, the thing that got Ben Bernanke threatened by Rick Perry).

It's complicated, it's unlikely, and we should all really, really hope it's not what's happening. However, it's worth remembering that the “too big to fail” institutions that were bailed out the first time around have mostly, like Bank of America, only gotten bigger by purchasing other too-big-to-fail institutions with government cash. So if B of A or any of the others do fail, what happens?

Jeffrey Sica, who contributes to Forbes and runs a wealth management firm—no socialist, he—argued that the banks should be allowed to fail, pointing out their responsibility for the ongoing miserable economy:

“Banks used tax payer dollars given to them through government bailouts to shore up their balance sheets and have not contributed 1 penny to helping small businesses get on their feet and start hiring again. They have, however, contributed to our incredibly high unemployment rates since small businesses will not hire if they can’t borrow to grow.”

And Rep. Brad Miller argued, “The rule of law really does require that we pursue those claims, that people be able to pursue claims that they are harmed. To say that those claims should not be pursued or should be obstructed I think undermines the rule of law, which is more damaging to our economy than the solvency of any given bank. Our economy depends on people being able to contract and enforce their contractual rights in legal actions.”

[Demeter]

37. Bank of America Death Watch: 600 Branches to Close?

http://www.alternet.org/newsandviews/article/663043/bank_of_america_death_watch%3A_600_branches_to_close/#paragraph4

The latest in the "streamlining" of Bank of America (which seems to mean selling off bits, firing high-up executives and laying off lots of working people) is that, according to a Charlotte, NC TV station, up to 600 branches of the country's largest bank will be closed.

The Street reports:

Following a significant trimming of senior executive ranks as part of his "Project New BAC" program to streamline operations and drastically cut expenses, Bank of America (BAC_) CEO Brian Moynihan has plans to split the company's banking operations into consumer and commercial units, which will include up to 600 branch closings, according to Charlotte, N.C.-based WCNC News Channel 36.

According to the article, Bank of America has 5,900 banking centers--so closing 600 would be nearly ten percent. That's a lot of jobs, and even if the company's shedding executives as well, including its former head of "global wealth management" and consumer banking, it's working people who are going to take the brunt of B of A's "cost-cutting."

In other words, we pay twice: once with bailout tax dollars, and once with a continued hit to the economy as bank tellers and branch managers are laid off.

[xchrom]

28. a Mabon prayer

http://paganwiccan.about.com/od/mabonprayers/qt/AbundancePrayer.htm

We have so much before us
on for this we are thankful.
We have so many blessings,
and for this we are thankful.
There are others not so fortunate,
and by this we are humbled.
We shall make an offering in their name
to the gods who watch over us,
that those in need are someday
as blessed as we are this day.

[Tansy_Gold]

79. Thank you, xchrom

for posting this. I really enjoyed it, even as a non-believer.

Deep poverty is afflicting more and more of our fellow creatures, inside the imaginary lines that are our "borders" and more generally around the planet that was born without borders. Those of us who have some abundance should indeed be grateful.


TG

[DemReadingDU]

81. very nice!

thanks for sharing

[DemReadingDU]

29. Joe Saluzzi on the risks of High Frequency Trading

9/21/11 High Frequency Trading: A Runaway Freight Train Heading for a Crash Landing

Joe Saluzzi, co-founder of Themis Trading LLC, joins Jim Puplava this week to discuss High Frequency Trading and the inherent volatility and risks it brings to the financial system.

http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/09/21/high-frequency-trading-a-runaway-freight-train-heading-for-a-crash-landing

direct link to audio
http://www.netcastdaily.com/broadcast/fsn2011-0921-1.mp3 appx 30 minutes

[bread_and_roses]

30. For the fruitfulness of future autumns, SAVE Landreth Seed Co!

Well, here's a first - me (more radical than a communist - anarcho-syndicalism probably closest description), of all people, touting a private company. However, I heard about the Landreth Heirloom Seed Company yesterday on NPR http://www.loe.org/shows/segments.html?programID=11-P13-00038&segmentID=8 , and I think this is worth passing on.

It is the oldest seed company in America, and sold seeds to the "founding fathers." Sells heirloom seeds (and I am all for preserving old, un-genetically modified seeds - goddess knows, I think we are going to need them). The catalog looks absolutely gorgeous, and IT IS PRINTED IN THE US. Because it is printed in US, it is expensive to produce, so they are selling it for $5 rather than giving it away free, in an attempt to raise enough money to keep the company in business. Supposedly, it is chock full of features about things like the horticultural history ...

Anyway, here's the site - worth a look for the old-timey beautiful graphics.

http://www.landrethseeds.com/

[DemReadingDU]

32. Seeds are important

I've been trying to save seeds from whatever I grow. I've sown flower seeds for several years which usually do well, but I haven't tried growing vegetable plants from seeds. That will be next year.

Thanks for the link, I will check out the catalog!

Edit to add Facebook link...
http://www.facebook.com/LandrethSeedCo

[DemReadingDU]

34. Who Buys from Amazon?

9/24/11 The Fraying of a Nation's Decency

CAMBRIDGE, MASSACHUSETTS — Amazon.com, the books-to-diapers-to-machetes Internet superstore, is a perfect snapshot of the American Dream, circa 2011.

It grows by the hour, fueled by a relentless optimism that has made America America. First it sold books. Then it realized that buying printed words in bulk, sorting and shipping them was a transferable skill. It has since applied it to anything you could want.
.
.
Thanks to a methodical and haunting piece of journalism in The Morning Call, a newspaper published in Allentown, Pennsylvania, I now know why the boxes reach me so fast and the prices are so low. And what the story revealed about Amazon could be said of the country, too: that on the road to high and glorious things, it somehow let go of decency. (article is linked below)

The newspaper interviewed 20 people who worked in an Amazon warehouse in the Lehigh Valley in Pennsylvania. They described, and the newspaper verified, temperatures of more than 100 degrees Fahrenheit, or 37 degrees Celsius, in the warehouse, causing several employees to faint and fall ill and the company to maintain ambulances outside. Employees were hounded to “make rate,” meaning to pick or pack 120, 125, 150 pieces an hour, the rates rising with tenure. Tenure, though, wasn’t long, because the work force was largely temps from an agency. Permanent jobs were a mirage that seldom came. And so workers toiled even when injured to avoid being fired. A woman who left to have breast cancer surgery returned a week later to find that her job had been “terminated.”
.
.
What is creeping into the culture is simple dehumanization, a failure to imagine the lives others lead. Fellow citizens become caricatures. People retreat into their own safe realms. And decency, that great American virtue, falls away.

http://www.nytimes.com/2011/09/24/us/24iht-currents24.html?_r=1


9/17/11 Inside Amazon's warehouse
Lehigh Valley workers tell of brutal heat, dizzying pace at online retailer.
http://www.mcall.com/news/local/mc-allentown-amazon-complaints-20110917,0,7937001,full.story



This is America, how utterly sad
;(

[Demeter]

35. I've been spreading the word about this worker abuse.

There are items they list on their website that they don't sell--they act as a referral to someone else who has the item for sale. This would be a reasonable compromise, using Amazon's website as a Classified Ad Section.

[Demeter]

38. Forbes: Koch Brothers Now Worth $50 Billion

http://www.truth-out.org/forbes-koch-brothers-now-worth-50-billion/1316699020

Forbes estimates that Tea Party petrochemical scions Charles and David Koch have a fortune of $25 billion each, making them the fourth richest Americans, behind only Bill Gates, Warren Buffet, and Larry Ellison. Their combined wealth of $50 billion is exceeded only by the Microsoft founder’s $59 billion fortune. Buoyed by aggressive speculative trading on volatile energy markets, the Koch brothers accumulated $15 billion in wealth since March 2010, a 43 percent increase.

[Demeter]

39. Obama to EU: Get Your S__t Together; Got An Election Next Year

http://www.testosteronepit.com/home/2011/9/23/obama-to-eu-get-your-s__t-together-got-an-election-next-year.html

The Obama administration has been fiercely lobbying European governments and central banks to shut up and do something. No more disagreements in public, Timothy Geithner told them in Poland. No more disputes over fundamental issues. To heck with democratic problem resolution. The world is collapsing, and it's time to act boldly and decisively. Hank Paulson's extortion racket is back. This time, it isn't Congress and American taxpayers that are targeted, but the Europeans, or rather a select few, in particular certain recalcitrant elements in the German government and in the Bundesbank. The White House brandishes the big fix of 2008 and 2009. That's how we fixed our crisis, that's how you should fix yours, they say.

Alas, the big fix of 2008 and 2009 today: Withered green shoots, high unemployment, annual budget deficits near 10% of GDP, and a gargantuan pile of debt. The Fed printed trillions. Inflation in goods and services is getting ugly. Real wages and purchasing power continue their long decline. Negative real yields on treasuries, high-rated bonds, and CDs are guaranteeing their owners insidious losses, while income streams are drying up. Lower real wages and disappearing income streams are a powerful drag on the economy. And despite all this, the financial sector is tottering again.
The big fix did buy a couple of years of hope. And that's the lesson Obama wants these recalcitrant elements in Germany to learn: One year and two months is all he needs. Till the election.

28 times, that's how often he has spoken recently with the German Chancellor, Angela Merkel, the New York Times reported. The goal: persuade Merkel to act forcefully—rather than democratically. But Merkel is zigzagging through a minefield between battle lines...On one side are German banks and corporations. For years, they have been the primary beneficiaries of the euro, which gave their Eurozone trading partners a strong currency and easy access to cheap loans with which to buy German goods and services. Now, that gravy train is slowing down, and they're panicking. Very loudly. They remember how exports collapsed during the last crisis. GDP collapsed as well. The numbers were stunning. The worst quarterly GDP declines ever in the Federal Republic of Germany, down 2.1% in the fourth quarter of 2008, and down a horrid 3.8% in the first quarter of 2009. Annualized, those two quarters printed a double-digit decline. The German economy lives and dies by its exports.(Ironically, it got pulled out of its funk by bailout moneys the Fed and Treasury handed out, a good chunk of which went directly to German banks, and indirectly to German exporters. Yet, I've never heard them thank American taxpayers and wage earners who are footing the bill).

On the other side of Merkel's minefield are various politicians, the Bundesbank, and the vast majority of the population. 89% oppose the expansion of the bailout mechanisms. Ominously, 60% don't want to be part of the Eurozone anymore. They oppose the bond-buying spree the European Central Bank has embarked on. They don't want inflation as a solution. They don't want to be burdened by southern Europe's sovereign debt (for gory details: Bailout Rebellion In Germany Heats Up).

Obama is also talking intensely with French President, Nicolas Sarkozy, former bosom buddy of George W. Bush. France being the second largest economy in Europe, it must figure into the equation. Sarkozy too faces a difficult election in 2012 and wants something done to paper over the debt crisis. In contrast to Germany, the French political establishment isn't engaged in public soul searching about the bailouts and seems to support whatever measures of borrowing, printing, and guaranteeing are proposed. But what is on the front pages every day? The reeking corruption scandals Sarkozy and his people are embroiled in. Lurid stories about briefcases filled with cash have replaced reports about the current run on French banks. It keeps the people distracted...

[Demeter]

43. Populist for a Day by ALEXANDER COCKBURN

http://www.counterpunch.org/2011/09/23/populist-for-a-day/

Did you catch Obama’s populist twitch? The moment when he tossed aside the stifling cloak of compromise, and like Joshua before the walls of Jericho issued the trumpet call to the disheartened Democratic base that henceforth it will be the battlements guarding the untaxed rich that would tumble under his assault, while the “entitlements” would be zealously guarded.

September 17: lead paragraph of the NYT’s story:

“President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials…

Mr. Obama’s proposal is certain to draw opposition from Republicans, who have staunchly opposed raising taxes on the affluent because, they say, it would discourage investment.”

It only took 24 hours for President Blinker to re-shuffle the pack.

A day later, the New York Times lead, after Boehner has emphasized that meeting the deficit-reduction target should come largely from overhauling benefit programs like Medicare, Medicaid and Social Security:

“President Obama will unveil a plan on Monday that uses entitlement cuts, tax increases and war savings to reduce the federal deficit by more than $3 trillion over the next 10 years, administration officials said.”

Suddenly we have “entitlement cuts” leading the charge.

The following day’s NYT lead:

“Faced with falling poll numbers for his leadership and an anxious party base, Mr. Obama did not just propose but insisted that any long-term debt-reduction plan must not shave future Medicare benefits without also raising taxes on the wealthiest taxpayers and corporations.

“He uncharacteristically backed up that stand with a veto threat, setting up a politically charged choice for anti-tax Republicans — protect the most affluent or compromise to attack deficits. Confident in the answers most voters would make, Mr. Obama plans to hammer on that choice through 2012…

‘The president laid down a marker today that is true to his beliefs,” said Jacob J. Lew, director of Mr. Obama’s Office of Management and Budget.’”

In other words it’s now promoted by the White House that cuts in Medicare and Social Security are axiomatic, while Obama plans to make hay on the tax-the-rich campaign plank until the time comes to hunker down with Boehner and face the Republicans in all their righteous fury, just as he did with a winning hand on the debt ceiling fight at the start of August, and… blink. He always does, seemingly drawing perverse strength from polling data insistently disclosing that support for “entitlement” cuts commands a scrawny base of support of about 15 per cent among the voters Obama needs.

Meanwhile the liberals, doing their best to put a positive spin on the Jobs bill proposed by Obama in his speech to a joint session of Congress on September 8, are slow to appreciate – protectively reluctant to point out — the fact that his proposed tax break for the masses and the employers, lowering the 6.2 per cent tax on Social Security – welcomed rapturously by the Republicans — is a carefully planted depth charge. It lowers revenues into the Social Security fund, thus giving ammo to the saboteurs across the spectrum from Obama to Perry who say Social Security is in crisis.

Dean Baker described the bait-and-switch very well on this site last week:

“Under President Obama’s proposal, the Social Security trust fund would be credited with the same amount of revenue as if the tax cut were not in place, just as is happening in 2011.

While there is nothing in principle wrong with financing Social Security in part out of general revenue for two or three years in the middle of a severe economic downturn, the question is what will happen when the economy recovers enough that we no longer need this tax cut as stimulus. In principle the Social Security tax should simply revert to its normal level.

“As the Congressional Budget Office recently projected, this would be sufficient to keep the program fully funded through the year 2038 and more than 80 percent funded through the rest of the century. Those familiar with arithmetic know that the program as currently structured is essentially fine long into the future.

However, it is not clear that Congress will allow the tax to revert to its normal level of 6.2 percent on both the employer and employee. Democrats in Congress have already been railing against Republicans who appear reluctant to extend the payroll tax cut. They have complained that Republicans, who support tax cuts for billionaires, are willing to raise taxes on ordinary workers.

“Of course Republicans are much better at this anti-tax rhetoric. And they will be able to remember what the Democrats said this fall when it’s time to restore the tax to its normal level in 2012, 2013, or 2015. They will not be shy to attack the Democrats for wanting to raise taxes on Joe the Plumber and friends. Would anyone bet on the Democrats standing up to these attacks?

“Since its inception, Social Security has been financed from the designated payroll tax. This tax has been used to sustain the trust fund, which is in principle separate from the rest of the budget.This arrangement is not written in stone. However, without a clear commitment to support Social Security from general revenue, there is little reason to expect that Republicans, and even many Democrats who are openly hostile to Social Security, will suddenly turn around and agree to establish a whole new funding source for Social Security. More likely they will note the worsened financing of the program and insist on the urgent need for cuts in benefits.

“There is a very simple way around this potential problem. If we want to give a tax cut to workers equal to 3.1 percent of wages, as President Obama has proposed, along with a similar cut to some employers, we can just write that into the law without any reference to Social Security.”

Amid these shenanigans, Obama travelled to the UN General Assembly and blinked so hard on the Israel/Palestine issue that surgeons had use surgery to get his eyes open again.

Was there ever a more preposterous spectacle than the U.S. president solemnly admonishing the Palestinians that “There is no shortcut to the end of a conflict that has endured for decades…Peace is hard work. Peace will not come through statements and resolutions at the United Nations.” To which of course every Palestinian crushed under the piled up wreckage of the “peace process,” and the “bilateral” diplomacy with Israel urged by the United States across the past twenty years – can tell Obama the numbers, as cited by Esam al-Amin on this weekend’s site:

“Almost 6500 Palestinian civilians have been killed since September 2000, including over 1500 children. Of that figure, two-thirds (over 4400) have been killed since the Roadmap in 2003. During the same period, over 45,000 Palestinians were injured, some maimed for life, 24,000 since 2003.

“There are over 6,000 Palestinian prisoners in Israeli jails, including over 250 females and children under the age of 16. Half of them were arrested after 2003, many with no charges and held under administrative detention. (Since 1967, over 650,000 Palestinians have been detained and imprisoned – a staggering 20 per cent of the total population or about 1 out of every 2 men has been detained at one point in his life under the occupation.)”

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

A Must-Must-Read: Our latest newsletter

Mostly it’s been below the radar, amid recitations of Obama’s innumerable betrayals, but none have been so absolute, so diametrically in contradiction of the dreamy assertions of Obama’s Campaign 2008 than nuclear weapons policy. Continuing our series on the real Obama record, 2009 to today, Darwin Bond-Graham gives us an absolutely stunning essay. Here’s his opening bill of indictment:

“As with many aspects of the Obama presidency, expectations for drastic changes in nuclear weapons policy were high among liberals and the Left. Many wanted to believe that a program, however modest, of scaling back the military-industrial complex was commencing. Obama stoked these impressions on the campaign trail and earliest days of his presidency, proclaiming things like: ‘a world without nuclear weapons is profoundly in America’s interest and the world’s interest. It is our responsibility to make the commitment, and to do the hard work to make this vision a reality.’

“Obama’s first term will go down in history, however, as containing one of the single largest spending increases on nuclear weapons ever. His administration has worked vigorously to commit the nation to a multi-hundred-billion-dollar reinvestment in nuclear weapons, mapped out over the next three plus decades.

“At the center of Obama’s ambitious nuclear agenda is the expansion of the U.S. nuclear weapons complex via a multibillion-dollar construction program. Also, at the center of Obama’s nuclear agenda is a commitment of tens of billions of dollars to designing and building the next generation of nuclear submarines, ballistic missiles, and heavy bombers. Stockpiled nuclear warheads will receive billions more in refurbishment and new components. All of this is underway now. Completion dates for various pieces of this puzzle span the next half-century. Finally, Obama’s nuclear policies have been designed to leave the door open to new weapons at some future date.”

Bond-Graham dissects in compelling detail the counter-attack of the nuclear weapons’ complex after the menace of cut-backs following the collapse of the Soviet Union, when “the first president Bush actually oversaw a large disarmament program and defunding of nuclear weapons. Nukes truly receded in importance in U.S. foreign policy. An important measure of this was the declining budget for nuclear weapons in the early 1990s.”

Clinton and Bush II began the counter-attack, but as Bond-Graham compellingly describes it:

“Obama has achieved what Bush II could not. His reinvestments in nuclear weapons are not just a matter of dollar amounts. The significance of what Obama is achieving, when put in the context of the mismanagement and declining morale of the past two decades, is that Obama is literally saving the nuclear weapons complex, reinvigorating it with legitimacy, and outflanking any who would dare to elevate a debate over military vs. social investments.”

This piece is truly a keeper. Subscribe NOW to be sure of getting it, along with another powerful update from Richard Wilcox in Tokyo on the lies of Tepco and the ongoing crisis of Fukushima.

[bread_and_roses]

44. Amen (n/t)

[Demeter]

46. Obama’s Work for Almost Free, Maybe You Get Hired Program

http://www.nakedcapitalism.com/2011/09/obamas-work-for-almost-free-maybe-you-get-hired-program.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...a Georgia “tryout” program in which workers still on unemployment get to work for free for prospective employers for a maximum of 24 weeks. The employer is under no obligation to hire anyone. Needless to say, this program is more than a tad skewed in favor of companies. But it costs no money and creates the impression the government is Doing Something. So since no one in DC wants the government to spend more money, particularly on little people, this gimmick is perfect fit with the “let them eat cake” zeitgeist.

Key sections of the Times piece:

….economists say there is little evidence that participants find work faster. And a lack of promotion, limited oversight and budget constraints have limited the program, Georgia Works, to a tiny portion of the state’s nearly half a million unemployed workers. Only about 120 people have been hired because of it this year…

Since the program began in 2003, only 18 percent of those who completed the training have been hired by the employer that trained them, according to data released this week by the state labor department. More recently, job placement has declined to about 10 percent. New Hampshire, North Carolina and Missouri report far better results from their programs, though they are still quite small. The Obama administration estimates that if every state opted in, the program would cost $1 billion to $1.5 billion.

Supporters of the effort say that hirings are not the only measure of success. The program keeps the unemployed tethered to a workplace environment. It can provide training — under federal labor laws that forbid unpaid labor, it is required to, though the state labor department’s literature refers to it as a “free trial” for employers.

The part I find sus is the “training” claim. While the article does provide an example of a worker who learned how to write smartphone apps, a lot of “training” new workers get is “how we do stuff around here.” Learning the ropes is important to becoming productive in any company, but a lot of it is not transferrable to other employers. The story confirms my suspicions:

Georgia State has hired 37 workers through the program, out of 54 who have begun trial periods. But the overseers of the program there acknowledged that for many, the program was more valuable as a foot in the door than as a learning experience.

The Obama Administration is going to sweeten the pot a bit, but minimum wage pay is well below a living wage in most of the US:

Unions and labor advocates like the National Employment Law Project have criticized the program as free labor for employers rather than training. The White House has tried to neutralize that complaint by ensuring that under its proposal, called Bridge to Work, the worker would receive the equivalent of minimum wage. States may apply for money to bolster unemployment benefits and to provide stipends for travel and child care, which would come out of a $4 billion federal fund meant to cover that and other re-employment programs in the jobs bill.

I suspect that the efforts to tweak the program will reduce what little impact it might have. The whole premise was to give employers a free look at workers. Even then, the results were underwhelming. The Administration claims it will monitor whether employers actually hire people and will kick out employers who take too many look-sees, but that still does not mean employers won’t intentionally or unwittingly abuse the initiative.

And who are we kidding? A program that does not create new jobs, and allows workers to be paid less than they might otherwise be if a company had to hire them, actually had the net effect of REDUCING income paid to workers. The only impact may be changing who gets hired (program participants v. others) and perhaps the company saving some money by not having to run ads that might be plowed back into wages. But the latter effect is likely to be trivial.

This program is further proof of why Obama deserves to lose in 2012. As our Richard Kline said:

To me, the best possible outcome of the present market trauma would be for a spectacular implosion between now and November, 2011 turning Barack Obama into a certifiable carbon shadow on a blast wall such that the Democratic Party has to abandon him on the lip of the primary season, leading to a wild scramble for the Democratic candidacy.

[Demeter]

47. From His Lips to God's Ears

I'm not Jewish, I don't think, but Poles and Jews had a common culture and shared a lot of the phrases...

[Demeter]

61. Matt Stoller: Did Geithner Really Undermine Obama on Nationalizing Citigroup?

http://www.nakedcapitalism.com/2011/09/matt-stoller-did-geithner-really-undermine-obama-on-nationalizing-citigroup.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The fight over the future, in the form of the fight over who writes the history of the Obama years, has begun in earnest. Ron Suskind’s book on the early years of the Obama White House is the first salvo in the question of “what went wrong”. Suskind’s book has sparked enormous controversy, thanks to its claims of gender bias and weakness on the part of the executive. Interestingly, Suskind’s underlying assumption, that the policy framework pursued by Bush and then Obama failed to deliver broad prosperity, is not disputed by anyone. So this book, and the ensuing controversy and pushback, is entirely about blame. Is our current policy framework due to management choices or intellectual choices? Answering this question is important, because it indicts different groups of people for how the crisis has been handled.

Suskind’s most significant claim is that Geithner undermined Obama’s order to consider nationalizing Citigroup. In the passage in which Suskind makes this claim, Obama is speaking in a bit of code, using the precedent of the Swedish nationalization of their banking system when it went insolvent, versus the Japanese plan to retain their existing banking structure. Here is Suskind’s passage on how Obama, though boxed in by advisors, was leaning towards the nationalization plan: "Obama’s response to this cul-de-sac: outside readings. Rather than “first, do no harm,” by the first week in February his preferred phrase was “Sweden not Japan.”"

Yet, here’s a Nightline interview of Obama from Feb 10, 2009: "So you’d think looking at it, Sweden looks like a good model. Here’s the problem; Sweden had like five banks. We’ve got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would — our assessment was that it wouldn’t make sense. And we also have different traditions in this country."

These claims are tough to reconcile. Obama was publicly saying that nationalization wouldn’t work. Suskind has him privately saying “Sweden not Japan.” So either Obama was lying publicly, Obama was changing his mind, or Suskind got it wrong. Which one is it? I don’t know, but in some sense, it doesn’t really matter. One fairly simple narrative is that Obama executes the policies he believes in. He thought the bank bailouts would work. He whipped for TARP, he hired people who believed in them, and he has presided over a government that is still putting pressure on state AGs to drop investigations of banks. He is a Third Way-style New Democrat, and Third Way-style New Democrats have certain ideas that translate into policy, and these ideas either do or do not translate into broad prosperity. He was speaking honestly in public...Suskind takes issue with this theory. His ultimate point is that Obama’s Presidency is affected by management problems instead of ideological problems. And sure, one could make credible arguments about management. To make this claim, however, requires a concession that Barack Obama was explicitly lying in that interview. It requires believing that he was not a naif, that he was a politically cynical liberal playing 11 dimensional chess, outfoxed by an even more cynical Treasury Secretary who is somehow still employed as Treasury Secretary....Could this be true? When combined with the consistent pro-foreclosure/anti-prosecution policy axis of the entire government under Obama, well, I find it very hard to believe. In fact, it’s very similar to making the argument that the war in Iraq was prosecuted incompetently, not that its very design was problematic. In saying that it’s not the king’s advisors, it’s letting all the media boosters and center-left validators of Obama in 2008 let themselves off the hook for mistakes. Instead, they ask, “where did our inspiring Obama go?” And again, it’s fascinating to note that no one is arguing that the policy framework worked, which is an ominous dynamic for his reelect team, considering that it’s 2011...

[xchrom]

40. Citi’s Pandit: High capital can up systemic risk

http://www.marketwatch.com/story/citis-pandit-high-capital-can-up-systemic-risk-2011-09-23

WASHINGTON (MarketWatch) -- The more capital governments require for banks to hold as a buffer against collapse, the more money that flows into unregulated sectors with systemic consequences, Citigroup Inc. CEO Vikram Pandit said Friday.

“Paradoxically, the higher we set capital requirements for banks, the more money flows into unregulated or less regulated sectors of the system, thereby increasing systemic risk,” said Pandit said at a Bretton Woods Committee International Council meeting in Washington.

At issue, in part, is a deal international regulators reached in July that would require the biggest and most important global banks to hold a capital surcharge of an additional 2.5% of common equity on their balance sheets, by 2019. That agreement supplemented an accord known as Basel III that requires global banks to hold the strictest form of common equity capital of 7% of their assets, also by 2019.

Regulators are seeking to have banks such as Citigroup /quotes/zigman/5065548/quotes/nls/c C +4.26% hold more capital as a buffer to reduce the likelihood that they would collapse and unsettle the markets in a future financial crisis.





*** mr pandit is part of the problem -- not a part of the solution.
he should shut up, maybe?

[Demeter]

42. The point of having capital is to pay off the debts

He just wants to socialize them...

[xchrom]

45. indeed. -- he just made me angry -- they shouldn't get to be risky

w/ all that money -- especially other people's money.

period.

i don't mind banks making profit -- or some profit, rather -- but the point to having the cash sit there is because you may very well have losses to cover -- and all it SHOULD do is sit there.

[Demeter]

41. Pensions, what pensions? by digby

http://digbysblog.blogspot.com/2011/09/pensions-what-pensions.html


In case you aren't depressed enough today, I thought I'd share this with you so you can go into the week-end in full despair:

America is in the midst of a retirement crisis. Over the last decade, we've witnessed the wholesale gutting of pension and retiree healthcare in this country. Hundreds of companies have slashed and burned their way through their employees' benefits, leaving former workers either on Social Security or destitute -- and taxpayers with a huge burden that, as the baby boomer generation edges towards retirement, is likely to grow. It's a problem that is already affecting over a million people -- and the most shocking part is, none of this needed to happen.

As Ellen E. Schultz, an investigative reporter for the Wall Street Journal, reveals in her new book, "Retirement Heist," it wasn't the dire economy that led these companies to plunder their own employees' earnings, it was greed. Over the last decade, some of the biggest companies -- including Bank of America, IBM, General Motors, GE and even the NFL -- found loopholes, abused ambiguous regulations and used litigation to turn their employees' hard-earned retirement funds into profits, and in some cases, executive compensation. Schultz's book offers a relentlessly infuriating look at the mechanisms they used to get away with it.

And not to make matters even worse, get a load of this:

The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations. Subject to other statutory limitations, the PBGC insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at age 65 ($54,000 a year as of 2011). The benefits payable to insured retirees who start their benefits at ages other than 65, or who elect survivor coverage, are adjusted to be equivalent in value.

During fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of failed pension plans. That year, 147 pension plans failed, and the PBGC's deficit increased 4.5 percent to $23 billion. The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets.

Corporations are the ones who pay into this insurance fund. Does anyone feel confident that the federal government is going to be able to get them to pony up to fix that deficit, even though they are swimming in cash? I didn't think so.

If you need any more bad news on this front, just google "pension funds" to see what's happening to state and local retirees all over the country. To call it a mess is an understatement.

And it's a perfect time to talk about cutting social security.

[Demeter]

48. China's chance to be our economic saviour

Chapter 13 of Peter Pan: DO YOU BELIEVE IN FAIRIES?

...He raised the cup. No time for words now; time for deeds; and with one of her lightning movements Tink got between his lips and the draught, and drained it to the dregs.

"Why, Tink, how dare you drink my medicine?"

But she did not answer. Already she was reeling in the air.

"What is the matter with you?" cried Peter, suddenly afraid.

"It was poisoned, Peter," she told him softly; "and now I am going to be dead."

"O Tink, did you drink it to save me?"

"Yes."

"But why, Tink?"

Her wings would scarcely carry her now, but in reply she alighted on his shoulder and gave his nose a loving bite. She whispered in his ear "You silly ass," and then, tottering to her chamber, lay down on the bed.

His head almost filled the fourth wall of her little room as he knelt near her in distress. Every moment her light was growing fainter; and he knew that if it went out she would be no more. She liked his tears so much that she put out her beautiful finger and let them run over it. Her voice was so low that at first he could not make out what she said. Then he made it out. She was saying that she thought she could get well again if children believed in fairies.

Peter flung out his arms. There were no children there, and it was night time; but he addressed all who might be dreaming of the Neverland, and who were therefore nearer to him than you think: boys and girls in their nighties, and naked papooses in their baskets hung from trees.

"Do you believe?" he cried.

Tink sat up in bed almost briskly to listen to her fate.

She fancied she heard answers in the affirmative, and then again she wasn't sure.

"What do you think?" she asked Peter.

"If you believe," he shouted to them, "clap your hands; don't let Tink die."

Many clapped. Some didn't. A few beasts hissed.

The clapping stopped suddenly; as if countless mothers had rushed to their nurseries to see what on earth was happening; but already Tink was saved. First her voice grew strong, then she popped out of bed, then she was flashing through the room more merry and impudent than ever. She never thought of thanking those who believed, but she would have like to get at the ones who had hissed.


"And now to rescue Wendy!"

http://www.online-literature.com/barrie/peterpan/13/

WE GET THE BEST FAIRY TALES OF OUT ENGLAND....HERE'S ANOTHER


http://www.guardian.co.uk/commentisfree/cifamerica/2011/sep/22/china-world-economic-saviour

The US is no longer capable of pulling the world out of economic crisis. Only China has the resources – if it chooses to use them...Can China save the world economy? That is a question that people should be asking as the other potential candidates withdraw from the race. At the moment, the economies of the United States, Europe and Japan are all suffering from weak growth or worse. The debt crisis of eurozone countries threatens another financial crisis that could lead to another plunge in output, not just in Europe but throughout the world.

Meanwhile, the actors who could, in principle, take steps to reverse this dismal course of events are largely paralysed. The eurozone countries are struggling with efforts to form the necessary fiscal union to support their currency. This requires creating a new legal structure, while also confronting intense political opposition in Germany and other better-off countries that will be asked support the debt of the Greece and other struggling economies.

Meanwhile, the European Central Bank (ECB) is finding it difficult to break with its cult of 2.0% inflation targeting – even after the economic disaster caused by this single-minded policy focus. It actually raised its overnight rate by 0.5 percentage points in the spring, slowing growth and increasing the cost of borrowing for debt-burdened governments....The United States does not face the same imminent crisis, but it is likely to see slow growth and rising unemployment as both fiscal and monetary policy are largely checkmated by politics. Furthermore, a eurozone financial freeze-up will almost certainly lead to a double-dip recession in the US, as well....And Japan has just seen another prime minister sent packing after failing to deal effectively with the aftermath of the earthquake and tsunami. The country now has its fourth prime minister in four years.

With the key actors in the wealthy countries either unwilling or unable to take the necessary steps to support the world economy, it is reasonable to ask whether China can fill the gap. Certainly, China has the ability to act as a backstop for the world economy, if it chooses to play this role...

ALL CHINA HAS IS OTHER PEOPLE'S DEBT AND 1.3 BILLION PEOPLE...

[Demeter]

49. How the Banks Take Down Politicians (Elizabeth Warren Edition)

http://www.nakedcapitalism.com/2011/09/how-the-banks-take-down-politicians-elizabeth-warren-edition.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Big banks are very powerful, and they destroy politicians they don’t like. Obviously, they don’t do it directly, but operate through front groups. Some of these organizations are known as “media outlets”, such as the New York Post, which outed one of Eric Schneiderman’s lawyers as a dominatrix to embarrass and intimidate his office.

On a Federal level, the most prominent front group through which bank-friendly and corporate-friendly smears happen is the Politico, a powerful establishment trade publication that caters primarily to media insiders and politicians, but gets nearly all of its substantial advertising revenue from lobbyists seeking legislative favors. As an example, almost every single print issue from 2009-2010 had a full-page back page ad from Goldman Sachs.

Today’s online advertisers in Politico include AT&T, Altria (ie. Phillip Morris), Boeing, Lockheed, Time Warner, and Verizon, all of whom are putting in money through yet another front group, RATE (Reduce America’s Taxes Equitably).

I’ve been hard on Elizabeth Warren for a lot of reasons, and I still don’t think she should be running for Senate. But if you want to understand how Wall Street exercises its political power, the Massachusetts race will be a great object lesson.

And lo and behold, the six most recent headlines in Politico about Elizabeth Warren are:

Elizabeth Warren’s campaign revises pay from TARP panel

Read more: http://www.politico.com/news/stories/0911/64306.html#ixzz1YqTixyKC

Warren faces surprising headwinds

Warren’s TARP panel under scrutiny

Will Warren have much Mass. appeal?

Passed over, Warren still ‘celebrating’

Warren unable to soothe Hill critics

Let’s look at a couple of the recent articles. You’d never know if you read the piece on the 23rd, “Warren faces surprising headwinds” that Warren had gone from being 20 points behind Scott Brown in Massachusetts polls to 2 points ahead. ...

MUCH MORE AT LINK

[Demeter]

50. EU looks to swift recapitalisation of 16 banks

European officials look set to speed up plans to recapitalise the 16 banks that came close to failing last summer’s pan-EU stress tests as part of a co-ordinated effort to reassure the markets about the strength of the 27-nation bloc’s banking sector.
A senior French official said the 16 banks regarded to be close to the threshold would now have to seek new funds immediately. Although there has been widespread speculation that French banks are seeking more capital, none is on the list. Other European officials said discussions were still under way.

Read more >>
http://link.ft.com/r/KC2844/QNLBXN/1O51V/GDKXTT/AMXWN1/VU/t?a1=2011&a2=9&a3=22

WHAT, AGAIN? GENTLEMEN, START YOUR PRESSES....




ADDENDUM: YVES SMITH NOTES THESE ARE ONLY THE BANKS THAT NEARLY FAILED THE STRESS TESTS...SO GOD HELP THOSE THAT "PASSED"

[Demeter]

54. BNP Paribas rules out need for fresh capital / Funding pressure on Italy’s banks heats up

Chief executive says French bank could finance itself and could absorb any additional writedowns on its Greek sovereign debt holdings

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/30A2B6/36/t?a1=2011&a2=9&a3=23

Funding pressure on Italy’s banks heats up
Struggles with liquidity and consolidation are on the cards as S&P cuts the credit ratings of seven lenders after downgrading the sovereign debt

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/2O2VHM/36/t?a1=2011&a2=9&a3=23

[Demeter]

71. Spain’s Banking Mess

http://www.nytimes.com/2011/09/23/business/spains-banking-mess.html?_r=1&ref=business

It’s not just sovereign debt.

Just when markets were focused on the risks of a Greek default and the possibility of contagion to other countries, Spain’s central bank reported this week that things were getting worse for that country’s banks — but not because they held a lot of Greek debt or bonds issued by other troubled European economies.

The problem, instead, is the same old one. With Spain’s economy weak and home prices falling, bad loans are growing. And the central bank thinks things are getting worse...

[Demeter]

73. German banks need 127 billion euros more capital

http://www.nakedcapitalism.com/2011/09/german-banks-need-127-billion-euros-more-capital-report.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Here’s what’s happened to bring about the European Bank Bailout:

The structural deficiencies of the eurozone have led to a panic that is similar to the liquidity crisis we witnessed after the subprime meltdown in the US, creating funding difficulties for European financial institutions.
European banks are particularly undercapitalised. It is worries about the solvency of these banks in the event of a sovereign debt default in the euro zone which has created what should be considered a bank run via the wholesale funding markets.
Banks are engaged in risky activity which makes their undercapitalisation that much more worrisome. The losses at UBS underscore this last point.

It was only when the US banks were partially recapitalised in 2009 after the stress tests that the panic ended. And even so, partial recapitalisation means nagging doubts about the health of some institutions like Bank of America persist. If the US economy double dips, you should expect those doubts to increase and the doubts to spread to other institutions. The right thing to do is to accept the bitter pill and make substantially all of the credit writedowns at financial institutions quickly and recapitalize and/or nationalize the weakest banks. That means default for Greece and likely for at least 1 or 2 other sovereign debtors accompanied by a simultaneous injection of capital. This prevents the nagging doubts about the solvency of financial institutions. Instead what politicians try to do is bail out the banks with liquidity and ride it out....

[Demeter]

78. The Pillaging of Latvia by JEFFREY SOMMERS and MICHAEL HUDSON

http://www.counterpunch.org/2011/09/19/the-pillaging-of-latvia/

This past month’s economic data show that the global economic crisis continues to worsen, and by its duration and severity threatens to become known as the Great Depression II. Yet, even though it is evident to most that our problems arose from finance run wild, commentators in several press outlets claim the fault lies with its victim, the public. Instead of curbing finance they advise governments impose radical austerity measures. In this economy such a course is tantamount to throwing the drowning victims an anchor, while tossing the perpetrators a life preserver in the form of cash. From Robert Samuelson at The Washington Post, to several journalists for The Economist, the declared answer to the world’s crisis, mystifyingly (until one asks “cui bono?”), is to be found in one of the European Union’s smallest (and poorest) nations, Latvia; a country that has imposed one of the world’s most brutal austerity regimes on its people and whose policies have pushed it to near demographic collapse.

Latvia has a highly literate people and is next to the world’s richest Scandinavia countries. It is also blessed with world-class transit ports. Yet, Latvia has the per capita purchasing power parity (PPP) of only half that of Greece and only marginally ahead of landlocked and politically isolated Belarus. Yet, this is the model bankers and their proxies in government and policymaking circles want other countries to emulate.

Commentators advancing the Latvian solution, however, neither understand (or choose not to) the country, nor the outcome of its austerity policies. Not only do they insist that Latvia’s austerity was necessary, but that it was the first place in which austerity policies were supported by a nation’s people. The presumption is that electorates can be “mature” and “wise,” thus politicians need not fear imposing austerity on a properly “educated” public. These assertions are both dangerous and false, yet are gaining currency nonetheless. The reality in Latvia is that after experiencing the world’s greatest economic contraction from the 2008 crisis, it has now observed a modest bounce of the dead cat after its freefall finally ended with it hitting the pavement. The modest uptick in growth is primarily a consequence of Swedish demand for Latvian timber; however, long-term economic prospects in the country remain poor.

Moreover, the airbrushing of Latvia’s recent history by Samuelson and other pundits claiming the population has supported austerity is contradicted by the massive protests early on in its crisis. When these protests failed to bring about change, the public’s response was to vote with their feet and exit the country. Indeed, when combined with its low-birth rate, this emigration from Latvia is creating a kind of demographic euthanasia that risks the very disappearance of this nation...

[Demeter]

51. US funds slash exposure to European banks

Biggest US money market funds have slashed their exposure to Europe’s embattled banking sector to the lowest level since at least 2006

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/XH68P0/36/t?a1=2011&a2=9&a3=23

[Demeter]

52. US banks hit by Fed and funding fears

Bank stocks were pummelled by a grim combination of funding fears, doubts over future profitability and concern that some groups may fall to a loss in the third quarter

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/XH68P7/36/t?a1=2011&a2=9&a3=23

[bread_and_roses]

55. In this, the spring/summer/autumn of our discontent....

.... the Regressive Antidote's David Michael Green is ON A ROLL ... I could scarcely quote a line without getting the post deleted - and maybe the entire thread shut down - which in deference to Demeter and company I won't do (ain't censorship grand? Or "why I don't donate to DU.")
edit for omitted parenthesis

http://www.regressiveantidote.net/Articles/All_The_Bad_News_Fit_To_Print.html

selections that are quotable:

Sometimes, when certain species (you know who you are) are too utterly daft to recognize the obvious, the Universe sees fit to scream it out in the form of big, bold block letters.

Such was the case just last week, when all of the following headlines were published, by one journal alone (the New York Times), and just in one 24-hour period. Read them and weep:

“Poverty Levels in 2010 Reach 52-Year Peak, US Says”

“Obama Looks For Big Health Cuts, Worrying Democrats”

“G.O.P. Scores Upset, Claims Win As Omen For Obama”

“Two-Tier Pay Now the Way Detroit Works”

“In Suburb, Battle Goes Public On Bullying of Gay Students”

“Student Loan Default Rates Rise Sharply In Past Year”

“What’s a Presidential Library to Do? An Admiring Approach at the Reagan. History, Warts and All, at the Nixon.”

“Obama Offers Jobs Bill, And the G.O.P. Balks”

“Government Pays More In Contracts, Study Finds”

“Ex-Senate Aide Will Be a Lobbyist”

“Fast-Track for Disaster Aid Is Blocked”

... the only thing that makes me feel better about the present is thinking about the future.

[Demeter]

60. You know, If the Thread Got Shut Down

I'd have to go out into the field and fight dragons...sigh.

[Hotler]

66. A must read.

Imagine if every Cheerio in your cereal spoon was a source of fresh wonder, as if you’d never seen one before.

I tell you, some days it just feels like you have fallen into an alternative universe where the laws of nature cease to apply...

hello, hello, hello, is there anybody in there?

[Demeter]

56. Venezuela ready to pay Exxon only $1bn

Indebted country balks at oil group’s $6bn compensation claim for assets nationalised in 2007

Read more >>
http://link.ft.com/r/J0VG55/97XEU6/GYN7Q/SP3NZR/KQRJK1/36/t?a1=2011&a2=9&a3=23

[Demeter]

57. WTO says trade growth has slowed sharply

Loss of economic confidence harms export prospects, while another estimate says goods trade ground to a halt over the summer

Read more >>
http://link.ft.com/r/R5WAEE/FKQRBW/JQU4J/PFRUWG/HY9Q51/QR/t?a1=2011&a2=9&a3=23

[Demeter]

58. Brazil attacks Fed’s ‘crippled duck’ policy

“Do-nothing” US fiscal policy is stoking international tension over exchange rates by forcing the Federal Reserve to run super-loose monetary policy, according to Guido Mantega, Brazil’s finance minister.

Mr Mantega, a critic of the Fed’s quantitative easing (QE) monetary policy who popularised the term “currency war” last year, said the US central bank was trying to boost demand – a job that fiscal policy should be doing.

Read more >>
http://link.ft.com/r/4RNQTT/MS31WU/IEP5S/ZGBHKD/DWYD1F/AZ/t?a1=2011&a2=9&a3=22

[Demeter]

59. MARK FIORE: SolyndraGatePocalypse

http://www.markfiore.com/political-cartoons/watch-solyndra-solar-green-tech-obama-stimulus-environment-animated-video-mark-fiore-animation

[DemReadingDU]

80. +++

[Demeter]

62. Music slideshow -古箏 Autumn meditation秋思 JAPAN, I THINK

http://www.youtube.com/watch?v=OuhkXxC4Ryg

LOVELY PHOTOS TO GO WITH THE CALMING MUSIC

[Demeter]

63. Max Richter - Autumn 1 & 2 (Songs from before)

http://www.youtube.com/watch?v=A0-5Rl4XykU

MORE SOMBER MUSIC, SILL LOVELY PICTURES

[Demeter]

64. Wells Fargo accused of forging loan documents

http://www.lvrj.com/business/wells-fargo-accused-of-forging-loan-documents-130337818.html?ref=818

A Las Vegas attorney who represents people facing foreclosure has accused Wells Fargo of forging loan documents. The allegation is the latest sign that efforts to hold mortgage lenders accountable are escalating in Nevada.

In court papers filed this month in Clark County District Court, attorney Dave Crosby alleged bank employees committed forgery and fraud in making a $350,000 loan to a father of four who was unemployed at the time.

"They forged signatures, they backdated documents," Crosby said. "We've got them cold."

MORE AT LINK

[Demeter]

65. Herbert Hoover: 1931 Annual Message to the Congress on the State of the Union

http://www.creditwritedowns.com/2011/09/herbert-hoover-1931-annual-message-to-the-congress-on-the-state-of-the-union.html

Last week I excerpted from Herbert Hoover’s 1930 State of the Union address. This time I wanted to excerpt from the 1931 SOTU because the Credit Anstalt event had already happened, triggering retail deposit runs. Bank runs is something about which Mohamed El-Erian, the head of PIMCO, has recently expressed concerned because of the wholesale funding squeeze now ongoing in France.

What caught my eye was where Hoover says “The situation largely arises from an unjustified lack of confidence.” This seems to be an almost verbatim copy of the sentiments Federal Reserve Chairman Bernanke expressed in Minneapolis just two weeks ago....What Bernanke is saying is precisely what Herbert Hoover was saying. I'll paraphrase: 'I am a rational man and I simply fail to understand the irrationality of my countrymen. If you look at this scenario objectively as I have, you would see there is no reason for consumers to be as pessimistic as they are. It is this undue lack of confidence that has caused the economy to tank and fall into depression.'

This is the confidence fairy I was talking about in my Treason post. While Hoover was making his remarks even after the bank runs had begun, it is clear he still believed in the confidence fairy. So, alas, this confidence fairy idea is not new. It was the same justification policy makers used during the Great Depression to rationalise their failure to stop the untold misery which their policy failures caused...

[Demeter]

67. SLATE: Could Riots Happen Here?

It's been awhile since we've had a full-blown riot here in the United States...And I don't mean a single night of drunken mayhem. I'm talking about unrest that spreads, from downtown to neighborhood, city to city, night after night. These social disturbances can sometimes look necessary after the fact—a catharsis for an ailing social body or the antidote to a dictatorial regime—but they can also carry significant costs, including fatalities, loss of property, and damage to the social contract... Given the potential injuries to participants, bystanders, and property, this isn't a purely academic question. Anticipating the conditions that give rise to riots can help us identify hotspots and prepare for the worst. And conditions are not so great at the moment. Joblessness continues to rise, particularly among the youth, who typically makeup the majority in a riot. Overall, crime rates are at historic lows, but cities across the country are cutting basic services, like policing (New York, Camden), physical upkeep (Oakland), and public services (Madison, Milwaukee). We're likely to see frustrations increase among young people, at a moment when fewer social workers, school teachers, beat cops, and community leaders are at the ready to channel the energies into productive directions.(!!!--HE'S GOT TO BE KIDDING--DEMETER)

Before addressing the U.S. situation, it's worth pointing out a few common misperceptions about rioting:

1. If you have enough angry individuals, you'll likely end up with a riot—or at least some form of mass violence...

2. To stop a riot, you need sufficient numbers of well-armed police willing to open up with tear gas, gunfire, and the like...


3. Riots are spontaneous, chaotic, and hard to influence, whereas peaceful protests are organized, planned in advance, and easily to manipulate...



...the United States gets high marks; for over a century, local police forces have excelled in quelling mass unrest by strategically using force, closing off streets, and infiltrating the crowds. By contrast, European cops typically look like deer in the headlights when crowds gather. They are slow to act, they hesitate to use force, and they have poor leadership—Britain sill uses volunteer forces to respond to unrest....


Rioting is a highly specific and relatively rare form of collective unrest. It would be hard to convince most Americans that the country is anywhere near mass mayhem. And I share this view. But I also would have laughed a few weeks ago if you said that the Brits were about to unleash a prolonged period of looting, arson, and racial conflict.

THERE'S MUCH MORE AT LINK

I PROBABLY SHOULD HAVE PUT THIS IN THE HUMOR THREAD....

HAVING LIVED THROUGH A RIOT MYSELF, I'M NOT SO CONFIDENT ABOUT AMERICA'S ABILITY TO CHANNEL SOCIAL UNREST BY ANY MEANS, MOST OF WHICH HAVE BEEN SHUT DOWN BY THE "ELITES". IT'S BEGINNING TO LOOK A LOT LIKE 1968-69 AND SO FORTH...

[Demeter]

68. IT'S OFFICIAL & CERTIFIED BY THE M$M: The real recession never ended

http://money.msn.com/mutual-fund/the-real-recession-never-ended-mirhaydari.aspx

[Demeter]

69. The men who crashed the world FROM AL-JAZEERA

http://english.aljazeera.net/programmes/meltdown/2011/09/2011914105518615434.html

VIDEO DOCUMENTARY AT LINK

[Demeter]

70. Visa, MasterCard to Raise Small-Purchase Fees, Analyst Says

http://www.bloomberg.com/news/2011-09-22/visa-mastercard-to-raise-fees-on-small-purchases-analyst-says.html

Visa Inc. (V) and MasterCard Inc. (MA), the world’s largest consumer-payment networks, will raise debit-card fees charged for small-ticket purchases to the full amount allowed under new rules, according to an analyst...Visa, the world’s largest network, and No. 2 MasterCard may increase fees from 8 cents on a $2 purchase to 23 cents, Thomas McCrohan, an analyst at Janney Montgomery Scott LLC, wrote in a note. They will eliminate the so-called interchange portion of the fee, charging the highest amount allowed by rules announced in June, McCrohan said yesterday in an interview.

The change “will kill the economics for small-ticket debit purchases and influence a shift back to credit cards,” McCrohan wrote. “It will almost certainly lead to a merchant revolt against the card networks.”

The Federal Reserve said June 29 that U.S. debit-card transaction fees, mandated by the Dodd-Frank Act, can’t exceed 24 cents on an average transaction, replacing a formula that averages 1.14 percent of the purchase price, or about 44 cents. The limits, championed by U.S. Senator Richard Durbin, an Illinois Democrat, spurred banks to curtail debit-card rewards programs and add fees for checking accounts.

The fee increase could be an attempt by San Francisco-based Visa and MasterCard to recoup fees for banks, to affect consumer use of mobile payment services or to influence a pending lawsuit, McCrohan wrote. The caps may reduce revenue at U.S. banks by $8 billion, data compiled by Bloomberg Government show.

[Demeter]

72. Guest Post: Will Tokyo Be Evacuated Due to Fukushima Radiation?

YOU KNOW, I GET NO PLEASURE (AND NO PAY) FROM BEING RIGHT...JUST A REPUTATION THAT ISN'T FLATTERING....KASSANDRA KNOWS, BEING RIGHT IS NOT THE SAME AS BEING LOVED...OR VALUED

http://www.nakedcapitalism.com/2011/09/guest-post-will-tokyo-be-evacuated-due-to-fukushima-radiation.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Tokyo Radiation Exceeds Chernobyl In Some Places … Japanese Government and Experts Discuss Evacuation

As I noted last month, radiation in some parts of Tokyo is higher than in the Chernobyl exclusion zone.

Yesterday, Al Jazeera pointed out:

Experts estimate the radiation leaked from Fukushima nuclear plant will exceed that of Chernobyl.

***

The need to evacuate parts of the sprawling capital of 35 million may have once seemed an incredible prospect but some experts say the possibility can no longer be ignored.

VIDEO CLIP AT LINK


Indeed, as Japan Times reports today, the Japanese government started discussing the potential need to evacuate Japan soon after the quake hit:

In the days immediately after the crisis began at the Fukushima No. 1 nuclear power plant, the government received a report saying 30 million residents in the Tokyo metropolitan area would have to be evacuated in a worst-case scenario, former Prime Minister Naoto Kan revealed in a recent interview.

***

“It was a crucial moment when I wasn’t sure whether Japan could continue to function as a state,” he said.

After the March 11 earthquake and tsunami crippled the plant, Kan instructed several entities to simulate a worst-case scenario. One of those assessments said everyone residing within 200 to 250 km of the plant — an zone that would encompass half to all of Tokyo and cut clear across Honshu to the Sea of Japan — would have to be evacuated.

Things Are Getting Worse – Not Better – In Japan

While this is a worst-case scenario, things are getting worse – rather than better – at Fukushima. See this, this, this and this. LINKS AT SOURCE

[westerebus]

76. Avoid greek gods at all costs.

In the mean time, thank you for all the information, music, and wit.

It is small compensation, I know, but thank you just the same.

[Demeter]

77. You are welcome!

Misery loves company

[Demeter]

74. Hidden Cost of Greece, Euro Crisis: Suicides

http://www.nakedcapitalism.com/2011/09/hidden-cost-of-greece-euro-crisis-suicides.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The Wall Street Journal has a sobering but much needed piece on the recession-induced rise in suicides in Greece and the rest of the Eurozone.

The media typically presents the consequences of job and income loss in anodyne, depersonalized terms: unemployment, foreclosure, default, delinquency, bankruptcy. Yet the event fray personal relationships and batter one’s identity and sense of self worth. Sure, there might be a vignette depicting how an individual is affected by a particular type of bad event, but then the story (at least if it’s on the business pages) shifts to the statistics and quotes from various experts. And many people don’t witness this sort of stress first hand, since most victims are deeply ashamed and suffer in silence until their situation becomes untenable.

Key sections of the Journal account:

Two years into Greece’s debt crisis, its citizens are reeling from austerity measures imposed to prevent a government debt default that could cause havoc throughout Europe. The economic pain is the price Greece and Europe are paying to defend the euro, the center…

The most dramatic sign of Greece’s pain, however, is a surge in suicides.

Recorded suicides have roughly doubled since before the crisis to about six per 100,000 residents annually….About 40% more Greeks killed themselves in the first five months of this year than in the same period last year…

Suicide has also risen in much of the rest of Europe since the financial crisis began, according to a recent study published in the British medical journal The Lancet, which said Greece is among the hardest hit…

A suicide help line at Klimaka, the charitable group, used to get four to 10 calls a day, but “now there are days when we have up to 100,” says a psychologist there, Aris Violatzis.

The caller often fits a certain profile: male, age 35 to 60 and financially ruined. “He has also lost his core identity as a husband and provider, and he cannot be a man any more according to our cultural standards,” Mr. Violatzis says…

Victims once were typically adolescent males or old people facing severe illness, and in normal times suicide cases often involve a mixture of factors including mental illness, says local psychiatrist Eva Maria Tsapaki.

But the economic crash has created a “new phenomenon of entrepreneurs with no prior history of mental illness who are found dead every other week,” she says. “It’s very unusual.”..

“Our pride is as high as Psiloritis,” the island’s tallest mountain, says Yiannis Tsevabinas, a local lawyer. The culture breeds confident, extroverted and adventurous characters, he says, “but when pride is lost, it can also make you vulnerable.”

The story is anchored the sad account of how a man who operated a fruit and vegetable business, Vaggelis Petrakis, came to take his life. And although there are only 20 comments up so far at the Journal, it appears the story itself and perhaps the long grind of the post crisis downturn is leading to a more balanced discussion that I usually see there. Stories about Bad Shit Happening to Little People usually elicit a fair amount of moralizing and/or attributing the victim’s sorry fate to government interference. The shift in the mix of comments may be a sign that Americans are beginning to realize that only a very thin slice at the very top can shield themselves from the vagaries of the economy.

[Demeter]

75. Sorry, Have to Go Put Out a Fire or Two

[bread_and_roses]

82. Some comments from a yahoo linked CNBC article "...become a millionaire"

Interesting - while comments span the range, I would say there is a slight preponderance of reality-based comments among the first 100 I scanned (that is, if one subtracts the obvious spam comments)

http://finance.yahoo.com/retirement/article/113526/what-it-takes-become-millionaire-cnbc?mod=retire-planning#mwpphu-container

i have to save $4000/month? i dont even MAKE $4000/month......what a joke

So what have y'got with a million dollars, before long it'll take a bushel basketful to buy a loaf of bread.

Look like the author of this article is out of touch. He doesn"t know the life's reality of millions americans.

If only I had a job. :(

A millionair? HAH! I will be happy just to have a job when I retire! Who knows maybe one of NASA's satellites will fall in my backyard and I will just sell the gold off it and retire! : ) Yea thats my plan! Well its more realistic than this stupid article's plan!

a millionaire aye ... thats the new term for middle class if there is one

I don't know of anyone TODAY!! who can do this, what are they talking about!?!? $450 for age 25, $850 for age 35 & $1700 for age 45. Most of the people in this age bracket are either going to school, unemployed & or lost there homes or are just NOW getting back to work with a huge mound of bills under them.

1. Get elected to state senate
2. Get elected to US Senate
3. Get elected President

Steal from the poor.

Jump on Romney's "Jobs' Machine"----INHERIT!!

With today's economy how is someone supposed to save 1700 dollars a month. i am lucky if i can bring that home in a month with the way health care costs are and other necessities. The people writing most of these reports are like the politicians making close to 70,000 to politicians making upwards of 200,000 dollars a year . the average worker today just can't do this !!!!!

You 25-year-olds are being irresponsible spendthrifts if you're not socking away $400 EVERY MONTH. If you're 45, you'd better be putting away $1700 EVERY MONTH, or you're TOAST when it's time to retire. 55 years old, we know every few of you are making $4000 a month, so it's too late. Can we just euthanize you now?

Jeez laweez, what planet are these so-called financial experts living on?!

So live in a rat infested hovel, drive a beat up old car, live on kraft mac and cheese my whole life so I will retire with a million and be dead in 2 years....sounds like a plan to me

More media smokescreens. Let the poor suckers think they have a chance at wealth while the rich bleed them dry and their controlled media throw up the whole left vs. right, keep everyone at each other's throats campaign. A classic divide and conquer strategy to take out a larger foe. There are 99 of us for every 1 of these rich that are turning us all into slaves for their amusement. We have the masses, we have the power, if only we could organize and use it. Egypt did it. Libya is doing it. Take notes, we are next. "Occupy Wall Street" is the movement. Take back our country from the amoral rich who have been stealing it from us for over the last 30 years.

[Demeter]

83. Stupid stuff like that will bring the Revolution, and that much sooner

[Demeter]

84. The collapse of American justice

http://www.salon.com/news/feature/2011/09/24/collapse_of_american_justice_excerpt/index.html

BOOK EXCERPT ON THE ABANDONMENT OF THE RULE OF LAW, AND ALL THAT FOLLOWED FROM IT. MUST READ.

[Demeter]

85. The Very Important and of Course Blacklisted BIS Paper About the Crisis

http://www.nakedcapitalism.com/2011/09/the-very-important-and-of-course-blacklisted-bis-paper-about-the-crisis.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...an extremely important paper by Claudio Borio and Piti Disyatat of the BIS, “Global imbalances and the financial crisis: Link or no link?” has been relegated to the netherworld...Why would that be? One might surmise that this is a case of censorship. Borio has been a long-standing critic of the Greenspan and later Bernanke thesis that central banks should ignore asset and credit bubbles if prices are stable. He and William White went public (as public as you can go in the BIS) in 2003 with their contention that an international housing bubble was underway and action was warranted. Greenspan and virtually all other right-thinking economists ignored the bubble and other signs of trouble (like a sustained near zero consumer savings rate in the US) and drank the Great Moderation Kool-Aid instead...

However, I (YVES SMITH) may simply not have been up to the task of making it accessible. Our Andrew Dittmer (a Harvard Phd in mathematics who among other things, has taught group theory to seventh graders) has converted the paper into Layspeak:

The May 2011 Bank of International Settlements paper by Claudio Borio and Piti Disyatat is quite important. It suffers, however, from one defect: it is not written in English, but in economese. I have therefore taken the liberty of poetically translating it into our language (and adding occasional remarks here and there). All numbers below are references to page numbers in the original paper.

* * * * *

The global financial crisis led to widespread dislocations and misery. However, another set of victims, hitherto overlooked, were central banking authorities and professors of economics who had staked their names on the thesis that the current configuration of the global financial system (which they had helped to engineer) was generally wonderful. These unfortunate souls were forced to come up with an explanation for the crisis on short notice, and it had to be an explanation in which they themselves played no role.

Ben Bernanke et al. rose brilliantly to the challenge. They remembered that many Asian countries had stocked up on foreign currency reserves in the hopes of never again being at the mercy of the IMF (26, note). Obviously, trying to resist the IMF was wrong and deserved criticism. Moreover, saying bad things about the Chinese would inevitably be welcomed in foreign policy circles eager to talk about the coming “bipolar confrontation” between America and China.

This “savings glut” theory argued that savings by Asian (and Middle Eastern) countries had washed like a tidal wave onto US financial markets, effectively forcing US money managers to invest imprudently in the course of their attempts to cope. For instance, these “excess savings” were widely assumed to have reduced long-term interest rates, thereby making credit cheaper.

There were some obvious problems with the global imbalances theory. Before the crisis exploded, many of the same economists had pointed to the same imbalances as a happy coincidence of needs, leading to better results for all (23). According to the sort of economic theory that was used in these explanations, if “global imbalances” were causing long-term interest rates to fall, that was simply a natural market outcome that should be contributing to equilibrium (23).

Consistency is the hobgoblin of little minds, and the “excess savings” theory was duly welcomed. It was even paid the supreme compliment of being accepted by Goldman Sachs’ lobbying division (see Effective Regulation, part 1, page 1).

Despite the consensus of these eminent authorities, we have decided to take a second look at the theory. Unfortunately, we have found further problems.

The idea of “national savings” or “current account surplus” refers to the total amount of exports sold minus the total amount of imports sold (more or less). The “excess savings” theory holds that this excess had to have been financed somehow, and so presumably by countries in surplus, like China.

However, for the US in 2010, the total amount of financial flows into the US was at least 60 times the current account deficit (9), counting only securities transactions. If this number were correct, then inflows would be 61 times the current account deficit, and outflows would be 60 times the current account deficit. The current account deficit is a drop in the bucket. Why would anyone assume it had anything to do with the picture at all?

Moreover, if the “savings glut” theory was correct, we would expect there to be certain historical correlations between the following variables: (a) current account deficits of the US, (b) US and world long-term interest rates, (c) value of the US dollar, (d) the global savings rate, (e) world GDP. There aren’t (4-6, see graphs).

You would also expect credit crises to occur mainly in countries with current account deficits. They don’t (6).

Suppose we look at a more reasonable variables: gross capital flows (13-14). What do we learn about the causes of the crisis?

Financial flows exploded from 1998 to 2007, expanding by a factor of four RELATIVE to world GDP (13), and then fell by 75% in 2008 (15). The most important source of financial flows was Europe, dwarfing the contributions of Asia and the Middle East (15). The bulk of inflows originated in the private sector (15).

If we look instead at foreign holdings of US securities (15-16), Europe is still dominant, but China and Japan are a little more prominent due to their large accumulations of foreign exchange reserves (15). Still, the Caribbean financial centers alone account for roughly the same proportion as either China or Japan (16). Other statistics provide a similar picture (17-19).

So what caused the crisis? Clearly, the shadow banking system (mainly based around US and European financial institutions) succeeding in generating huge amounts of leverage and financing all by itself (24, 28). Banks can expand credit independently of their reserve requirements (30) – the central bank’s role is limited to setting short-term interest rates (30). European banks deliberately levered themselves up so they could take advantage of opportunities to use ABS in strategies (11), many of which were ultimately aimed at looting these same banks for the benefit of bank employees. These activities pushed long-term interest rates down. Short-term rates remained low because the Fed didn’t raise them as long as inflation didn’t appear to be an issue (25, 27).

The Asian countries played a small role as well. They didn’t want US/European-driven asset price inflation to spill over into distortions in their economies, and so they protected themselves by accumulating foreign exchange reserves (26 and 26 note). That was mean of them. If they had allowed more spillover, then the costs of the shadow banking system would have been partly borne by them, and that would have made the credit crisis less severe in the advanced countries (26). As things stand, instead, the advanced countries are suffering, while Asian countries have bounced back strongly (26).

What should we do? Well, we have suggestions for theory and practice. Let’s start with the practical suggestions.

Countries should do a better job of restraining their financial sectors (24). However, that will probably not be enough (24). Countries should also work together to share the burden of consequences of further crises (27). Unfortunately, countries are irrational and political and so are often unwilling to cooperate in ways we consider wise (27).

Since we can’t count on other countries doing the right thing, we will have to count on the Fed instead. If there is another boom in asset prices, the Fed should cool it off by raising interest rates and so inducing deflation in the rest of the economy. The balance of views in the international community has been shifting in this direction (27).

As for the theory, maybe you are wondering what was wrong with economics that led people to believe in the “savings glut” theory. We have a few ideas.

First, most present day macroeconomic analysis proceeds by imagining that people only trade physical objects with each other. They don’t use money, and they certainly don’t make loans or go bankrupt. Even though the people that make these analyses know that in the real world money and loans and bankruptcy DO exist, they think that is useful to pretend that they don’t and then arrive at authoritative conclusions. We would like to beg them humbly to reconsider this blind spot (2, 12, 21, 27-31).

Second, current analyses of interest rates make a distinction between the “market” interest rate and the “natural” interest rate. The distinction between these two rates is very subtle, so we’ll explain it carefully.

The “market” interest rate refers to the interest rates people pay on various kinds of loans. The “natural” interest rates is an unobservable variable that is equal to whatever economists decide the interest rate really ought to be for the purpose of some model. Usually, this imaginary interest rate is calculated in such a way that whatever the Fed and banks and hedge funds do, it can never change. It only depends on what physical goods are bought and sold in the economy (1-2, 20-23, 29).

In the past, economists have decided to use the imaginary interest rate instead of the actual interest rate. We don’t want to be disrespectful, but is there any chance they might be willing to change their minds?

[Demeter]

86. Marriner Eccles on the Need to Save the Rich from Themselves

http://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A remarkable document has been placed today on the “London Banker” blogsite, the testimony of Marriner Eccles to the Senate Finance Committee in early 1933. His testimony later was rewarded by President Roosevelt by bringing Eccles to Washington to help write or draft several seminal laws that essentially saved US capitalism from itself. In fact, “London Banker” highlighted this particular passage from Eccles’ testimony:

It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.

Where are people such as Marriner Eccles today?

I strongly recommend reading the post in full. Eccles gave a eloquent diagnosis of how the Depression became so severe and intractable, and a cogent, layperson friendly set of recommendations. I have yet to see any similar length discussion of our current crisis that is as clear and compelling:

http://londonbanker.blogspot.com/2011/09/testimony-of-marriner-eccles-to.html

[Demeter]

87. Welcome to the Police State: NYC Cops Mace Peaceful Protestors Against Wall Street

http://www.nakedcapitalism.com/2011/09/welcome-to-the-police-state-nyc-cops-mace-peaceful-protestors-against-wall-street.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

I THINK THIS IS A PROBLEM THAT SHOWED UP IN THE 60'S AND NEVER GOT RESOLVED...THINK KENT STATE AND OTHER WAR PROTESTS.

I’m beginning to wonder whether the right to assemble is effectively dead in the US. No one who is a wage slave (which is the overwhelming majority of the population) can afford to have an arrest record, even a misdemeanor, in this age of short job tenures and rising use of background checks.

Now at least in New York (and I hope readers in other cities will chime in) the right to assemble seems to be pretty much a dead letter. I was in Sydney during the global protests against the Iraq War, and I was told that the New York demonstrations (which were already hindered by typically lousy winter weather) were pretty much blocked by the police. Protestors were tying to gather at the UN, and the cops put up a cordon at Second Avenue. The result was the turnout was far lower than the number who tried to show their opposition and were stopped.

The latest New York City protest is OccupyWallStreet. Even though its turnout last week fell well short of hopes (the estimates from the group were that 2000 participated; the New York Times suggests numbers more like “hundreds” but the photos from the 17th make larger figures seem plausible), making it a nuisance level demonstration rather than a major statement, the powers that be seem to be trying a bit too hard to prevent it from getting traction.

The organizers were using Twitter to promote participation and visibility. And so Twitter intervened. From AmpedStatus:

On at least two occasions, Saturday September 17th and again on Thursday night, Twitter blocked #OccupyWallStreet from being featured as a top trending topic on their homepage. On both occasions, #OccupyWallStreet tweets were coming in more frequently than other top trending topics that they were featuring on their homepage.

This is blatant political censorship on the part of a company that has recently received a $400 million investment from JP Morgan Chase.

The protestors were relegated to Zucotti Park, west of Liberty. If you know Lower Manhattan that is technically near Wall Street but well away from any offices buildings. It is on the periphery. The New York Times depicts the demonstrators as naive and ineffective, i.e, harmless:

Occupy Wall Street, a diffuse and leaderless convocation of activists against greed, corporate influence, gross social inequality and other nasty byproducts of wayward capitalism not easily extinguishable by street theater, had hoped to see many thousands join its protest and encampment, which began Sept. 17….

By Wednesday morning, 100 or so stalwarts were making the daily, peaceful trek through the financial district, where their movements were circumscribed by barricades and a heavy police presence. (Various arrests for disorderly conduct were made.) By Thursday, the number still sleeping in Zuccotti Park, the central base of operations, appeared to be dwindling further.

Members retained hope for an infusion of energy over the weekend, but as it approached, the issue was not that the Bastille hadn’t been stormed, but that its facade had suffered hardly a chip.

So the protest is only in the low hundreds. In a separate story, the Times reports that the police arrested 80 as they moved to Union Square (notice how high a percentage that is) and even the anodyne Times makes the policing sound heavy-handed:

The police made scores of arrests on Saturday as hundreds of people, many of whom had been encamped in the financial district as part of a lengthy protest, marched north to Union Square….

Protest organizers estimated that about 85 people were arrested and that about five were struck with pepper spray. Among those was Chelsea Elliott, 25, who said that she was sprayed after shouting “Why are you doing that?” as an officer arrested a protester at East 12th Street….

Nearby, two other protesters standing handcuffed on Fifth Avenue told a reporter that they had both been arrested on sidewalks and were not aware of having broken any law.

“They put up orange nets and tried to kettle us and we started running and they started tackling random people and handcuffing them,” said Kelly Brannon, 27, of Ridgewood, Queens. “They were herding us like cattle.”

Next to her, David Smith, from Maine, said that he had been chanting “Let them go” as people were handcuffed, and was then arrested by a senior officer who told him that he was being charged with obstructing governmental administration.

The article included this tweet:

@DustinSlaughter there’s 50+ of us arrested in a caravan, netted & maced by police after standing on sidewalk where they told us to.

...SEE LINK FOR A video showing police macing women who were already corralled and who made no aggressive or threatening moves...

[bread_and_roses]

88. We are so fucked (n/t)

[Demeter]

91. Time to do unto others as they have been doing unto innocents.

and re-establish the rule of law.

[Hotler]

95. Dear PTB,

"We know you can arrest us as you please. But you better expect us to fight back with all we have. And we have nothing to lose. You do." "With every day that passes, you will need to shut up hundreds of people. Soon thousands. Eventually all. Who you think will win?"

Anonymous has issued a series of messages warning the authorities that the violence will not go unpunished.

[DemReadingDU]

96. +++

[Demeter]

97. PTB Are Not Stopped By Any consideration

I expect they would even nuke unruly populations, if it came to that.

People are going to have to decide which side they are on, and then act.

[hamerfan]

94. +1! n/t

[DemReadingDU]

89. The WashingtonDC tent city begins 10/6/11

hope it is peaceful

http://october2011.org/

http://newsjunkiepost.com/2011/06/17/first-cairo-egypt-and-now-washington-dc-tent-city-occupation-begins-oct-6-2011/

[Demeter]

90. I am beginning to think that we the People must start from scratch

We must first build our neighborhoods into small functional democracies...I don't think a republic should be less than 100,000 members.

By functional, I mean clean and honest. There cannot be inequality of power. If that means people must petition for inclusion, and sign a contract, then the contract must be one of equality--no bias by age, race, sex, etc. I doubt that there would be much difference in class...the "elite" are not going to want to grub with the plebes...but there must be equality of opportunity. Everyone who wants a job must have a job, even if it's pulling weeds in a park. If a corporation wants to form for large projects, it must be worker-owned and operated.

We are going to have to push out the landlord, the banker, the rentier who doesn't live in the community proper and abide by its rules. If this is socialism, make the best of it.

Once enough neighborhoods have been formed to support their inhabitants, they can look into the option of becoming villages. The rules for villages must be similar to those for neighborhoods, but instead of democracies, they will have to go to republics, where one leader represents 100 people. So a village might make out at 1500. The villages might want to band together into a city, and the same scaling up would apply. A city would top out at 225,000 voters.

There would be rural districts, larger in land mass, but limited in membership, the political equivalent to villages.

It's not going to work, just randomly letting the population sort it out.
There have to be some guidelines, some rules.

[bread_and_roses]

92. Yes, we must start from scratch. But the earth will force us to anyway.

One way or another. Maybe your way, maybe another. Maybe not today or tomorrow, but soon. What cannot endure will not endure.

[DemReadingDU]

93. I read somewhere a tribal size of appx 200 to start

Then, as you say, tribes form a village, several villages would be a city.
But not going to happen in our lifetime, maybe the grandkids will see that. Or maybe not.
I have no idea how long it takes to form new guidelines and start over.