Links 3/8/10

Apologies for thin links. I need to get on a different schedule, something that is less out of whack with normalcy, and this is going to necessitate a cutback in posts over the next few days.

Bonobos opt to share their food BBC

Defenders and Demonizers of Credit Default Swaps Rajiv Sethi (hat tip reader Sundog)

The WP: Obama close to reversing Holder on civilian trials Glenn Greenwald, Salon. More evidence of the “Obama as wuss” theory.

Eurozone Eyes IMF-Style Fund Financial Times and Germany Backs European Version of IMF Wall Street Journal

Real Personal Income Less Transfer Payments Tim Duy

Iceland Voters Reject Bank Bailouts in Crushing Electoral Defeat; Neo-Liberalism In Context Jesse

The Euro Has Been a Smashing Success George Melloan Wall Street Journal (hat tip reader Swedish Lex)

Trading Away Productivity Alan Tolenson and Kevin Kearns. New York Times

Antidote du jour:

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20 comments

  1. attempter

    Jesse on resistance:

    Although Europeans and the markets are looking at the ‘PIGS’ for the next serious default as the economic hitmen are moving from Iceland to Greece, the real test of globalization in financial markets and the dominant control of the private banks will come in the UK, a sovereign people too proud and strong to go down into feudal servitude and the rule of tyrants easily. Or at least one would hope.

    I hope so too, but their slave consciousness toward surveillance tech isn’t a good omen.

    The vote in Iceland was a great moment, but they have lots of hard work ahead of them if they’re serious about regaining their freedom. They obviously have another rogue government to oust.

    Meanwhile, even though there’s been such protest in Greece as to put America to shame, still according to the polls I’ve seen a majority there still supports their own immolation in the flames of “austerity.”

    I haven’t seen polls on how the British man on the street views Iceland. Does he correctly see this as the gangs of Britain and Iceland conspiring against both peoples, or has he fallen for the same old divide-and-conquer crap, the way the criminal elites in Germany and Greece are trying to gull those peoples?

    Here’s some more of my thoughts on the vote:

    http://attempter.wordpress.com/2010/03/07/new-icelandic-sagas/

    1. Jim in MN

      Attempter,

      Try a search on “poll tax”, riots, “no bloody f’king poll tax” and the near-complete destruction of Thatcherism, albeit under John Major.

      In the UK, they act very nice, until the red line is crossed. Afterwards, cleaning up the debris, they are very nice again. But the target is destroyed.

      Personally I have been in French riots once, in the mid 1980s. This was a right wing riot against Mitterand’s Socialists using the pretext of new limitations on university entrance. The sophistication and experience of Europeans when it comes to rioting is so far beyond what we in the US have seen as to defy comprehension. I saw Molotov cocktails, rocks, bottles and slingshot marbles against tear gas, water cannons, concussion grenades and rubber bullets. The law and medical students wore professional garb (lab whites, surgical masks). Many used scooters, helmets, gas masks and leather jackets as defensive measures. Every afternoon for a week, they rioted. Every evening, they went home to the French quarter and partied. I saw riot police surrounded, tactical withdrawals from position to position in the narrow Parisian streets using construction materials as barricades every block….

      My favorite touch–old ladies leaning out of windows, throwing lemons to the students (it cuts the tear gas when squeezed into bandanas) and screaming “Gestapo, Gestapo” at the riot police.

      Well-worn traditions. They are so good at it that all the violence leads to minimal casualties. In the US people would get severely hurt or killed very fast as neither the police nor the protesters know what the heck they are doing.

      The Poll Tax Riots that brought down the UK government were much much worse than anything I saw in France.

      1. attempter

        Well-worn traditions. They are so good at it that all the violence leads to minimal casualties. In the US people would get severely hurt or killed very fast as neither the police nor the protesters know what the heck they are doing.

        Sounds like ritual combat.

        Though when the police kill people in America, I’m not sure it’s because the police don’t know what they’re doing.

  2. LeeAnne

    Welcome to the Dictatorship of the FED. What a joke, that Chris Dodd ‘gave up the fight … .’

    Announced the night of the Oscars. Could the timing be any more cynical?

    “Fed To Keep Bank Oversight” http://www.huffingtonpost.com/2010/03/07/fed-to-keep-bank-oversigh_n_489477.html
    First Posted: 03- 7-10 11:50 PM | Updated: 03- 8-10 12:23 AM

    “The Federal Reserve has won its battle to maintain singular regulatory oversight of America’s major financial institutions, the Financial Times reported Sunday night.

    Senate Banking Committee Chairman Chris Dodd (D-Conn.) gave up the fight for a new super-regulator over the weekend, and will propose financial reforms this week that leave the Fed in control of big banks and the rest of the major Wall Street players, sources told the FT. “

    1. DR

      “At its most fundamental level, this is a great arrangement for us. We get 5% or our GDP handed to us for free.”

      You call the interest on national debt “free”?

  3. ds

    Interesting NYT piece on trade and productivity, but I think the authors fail to see the whole picture.

    Our trade deficit represents a gain in real terms. For this we should be happy. China sends more containers filled with goods our way than we send China’s way. In real terms, we Americans can satisfy a given level of demand for goods and services with less work.

    China is happy with this situation — they are not so much concerned with equal terms of trade or with currency reserves as they are with making sure their population is fully employed at all times. China is more than willing to give up a certain material level of wealth in exchange for the social stability full employment provides.

    At its most fundamental level, this is a great arrangement for us. We get 5% or our GDP handed to us for free. The problem is that, as a result, the effective demand for our own output is less. This lack of demand for our own labor has held wages in check, and is the source of the dramatic gap between wage and productivity growth since the 1980s. That part is not so good for us, and it is a very real problem for those in industries exposed to competition from China.

    This is where fiscal policy should come into play. The federal government needs to create the demand for our national output which our foreign trade balance is draining. At the very least, our government should aim to run fiscal deficits equal in magnitude to our trade deficits. This additional federal stimulus should furthermore be directed towards those sectors in our economy which suffer from slack demand due to the trade imbalance. That way, we can enjoy the real benefits of trade — more containers of goods thanks to the mercantilist policies of China — while at the same time utilizing our own productive resources to their fullest extent.

    If China decides to change their trade posture then we can back off the stimulus as, at that point, our economy will naturally gravitate towards full utilization. But so long as China is willing to run export surpluses, we should be happy to oblige.

  4. Jim in MN

    Yves, what is the FDIC up to? Do they aspire to pull off great feats of financial derring-do like the mighty Fed?

    I think these two Bloomberg articles from this morning, taken together, point to a puzzle. In one, FDIC moves to sell assets which will presumably impair assets at yet-to-be-seized banks; in the other they ask pension funds to invest in said banks.

    ‘On the Edge’ Banks Facing Writedowns After FDIC Loan Auctions

    http://www.bloomberg.com/apps/news?pid=20601109&sid=axnpzq.OM0BY

    FDIC Said to Encourage Pension Funds to Invest in Failed Banks

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aaBSS5oKjb80

    1. anon

      From reading the articles, it sounds like the FDIC is asking the pension funds to invest directly in the failed banks, not the in the yet-to-fail-or-be-seized banks. The yet-to-fail banks are rightly concerned about having to mark the assets related to the failed banks to market (after the FDIC auction of the already-failed banks) rather than to make-believe as they are doing now. I don’t see how that’s a risk for someone who purchases the already-failed banks. (But I’m not an expert so I easily could be missing something.)

      And, although it was not entirely clear, it sounded like Bair wasn’t proposing that the pension funds invest more money in the banks than they are currently investing. It sounds like she wants to cut out the private equity firms so that the FDIC would get a bigger cut of the funds currently invested.

      E.g., Say CALPERS is investing $1B in the banks via private equity managers. Say 10% of that $1B goes to the private equity firm (for management fees, etc.). So $900M is going to invest in banks. Bair is proposing that instead of paying the private equity manager $100M, the pension funds use the full $1B to invest directly in banks. (This is oversimplified but I think that’s the gist of it.)

      [quote]”Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets, the people said.”[/quote]

  5. MyLessThanPrimeBeef

    Instead of defenders and demonizers of CDS, I like to think of them as the Brahmas, Vishnus and Shivas of CDS.

  6. EmilianoZ

    After the Vanity Fair piece, Geithner now has another article defending him in The New Yorker.

    Felix Salmon is apparently at some meeting at the Treasury. He tweeted he was handed the New Yorker piece. He’ll probably be asked to preach the good word.

    Looks like the PR offensive is now in full swing.

    1. CrocodileChuck

      emiliano

      there’s a v mediocre ‘puff piece’ in the Atlantic on him as well

      his press agent must be gaining traction…..

      1. EmilianoZ

        Yeah, this media blitz is pretty striking. Makes one wonder.

        Why are the banksters so keen on keeping Geithner at the Treasury?

        If he were to resign they could easily show him their gratitude for past services by procuring him a high-paying job at some bank or other. There must be a reason why they want him at the treasury now. Maybe he’s in the process of preparing some kinda very lucrative and stealthy looting for them and can’t leave before it’s done.

  7. anon

    “One of our closest primate relatives, the bonobo, has been shown to voluntarily share food, scientists report.
    This sort of generous behaviour was previously thought by some to be an exclusively human trait.”

    Whoever thought that this sort of generous behavior is an exclusively human trait has not spent much time with animals. I rescue feral cats. They regularly form friendships in which at least one of the group (even if very hungry) will not eat until the others have either started eating or have finished. When I feed in the morning, few of the indoor cats will eat until they see that the outdoor cats are eating. (I feed the outdoor cats near a large window and glass door.) Sometimes my dog won’t eat until he sees that the cats have been fed (and vice-versa with some of the cats who like my dog).

    My largest cat always waits until the other cats have finished eating before starting to eat even if it means he won’t get a treat like moist food. As a result, the only way he gets treats is if I put him in a room by himself. He is not a submissive cat (he’s probably the most dominant) so he’s not waiting out of fear. I know this is anthropomorphizing but it seems as if he’s thinking “they seem really hungry and I’m not that hungry so I’ll wait until they finish.”

      1. anon

        Thanks for the link. They’re adorable!

        My “inside” and “outside” cats are equals. All of them are adults and only one (an indoor cat) was a kitten when any of the other cats here were adults or teens. (One group grew up together as kittens, the rest were acquired as adults.) Many of the “indoor” cats spend the daylight hours outdoors and most of the “outdoor” cats will come in to eat or visit the other cats or my dog. Many of the “indoor” cats were “outdoor” cats for most of their lives (but I tamed them enough for them to be comfortable living indoors).

        It seems to me that their behavior is almost the same as the bonobos. I feed the cats in the morning. I feed the indoor cats and the dog first. Then I feed the outdoor cats. Many of the indoor cats will wait to eat until I feed the outdoor cats (or until the outdoor cats start eating). If the weather is nice (and especially if I’m having difficulty physically), I often do this by opening the door and letting the outdoor cats come in to eat the “indoor” cats’ food. The indoor cats will start eating after the outdoor cats get fed, whether that’s by the outdoor cats’ coming in to share the indoor cats’ food or by my giving the outdoor cats their own food.

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