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Links 9/8/11

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Country Diary: Dalmigavie Guardian (hat tip Buzz Potamkin). Buzz is on a roll with animal stories.

Beloved Brooklyn Cow Dies of Natural Causes New York Times (hat tip Buzz Potamkin)

TSA Agent Threatens Woman With Defamation, Demands $500k For Calling Intrusive Search ‘Rape’ TechDirt (hat tip Lambert Strether)

San Francisco May Make Nudists Cover Their Seats NPR (hat tip Buzz Potamkin)

A Taste Of Their Own Medicine Org Prep Daily. Lambert Strether notes: “Revenge is a dish best served cold.”

Germany’s Top Court Rejects Constitutional Challenges to Euro Rescue Fund Bloomberg

An End to Empire Andrew Bacevich, American Conservative (hat tip reader Externality)

Scrambling for cancer drugs Boston Globe (hat tip reader Chris M). I hate to sound paranoid, but this reminds me all too much of how power companies operate in Alabama. They are extremely slow to restore power after a storm, and then use that to argue that they need rate increases. Is this part of an effort to forestall pushback on BigPharma prices?

Top of Chinese wealthy’s wish list? To leave China Associated Press (hat tip Buzz Potamkin)

China’s migrant workers expect more John Gapper, Financial Times

MA-Sen: Elizabeth Warren within nine of Brown Daily Kos

Audio: Chris Christie Lets Loose at Secret Koch Brothers Confab Mother Jones (hat tip reader Paul T)

WHEN IT COMES TO KOCH APOLOGISTS, SLATE’S DAVID WEIGEL IS “CHAIRMAN OF THE BORED” Mark Ames, Exiled

Let’s Just Raid Social Security Testosterone PIt (hat tip reader Carol B)

Businesses post most job openings in 3 years Associated Press

Translating the WaPo’s Bank-Talking-Point Editorial Abigail Field. A good takedown.

Moynihan Tries to Keep Bank of America Intact as Mortgage Loans Fall Apart Bloomberg. A PR plant.

How Moynihan Forced Sallie Krawcheck Out CNBC (hat tip reader Crocodile Chuck).

FHFA Lawsuits: Price Tag Could Reach as High as $60 Billion Dave Dayen, FireDogLake

Analysis: Mortgage cases target people, not just banks Reuters (hat tip Buzz Potamkin)

Suing Banks Is Next Best to Letting Them Fail Jonathan Weil. Bloomberg

Libor inquiry looks at criminal angle Financial Times. So the only activities that get prosecuted are crimes against other financial players?

NewPage files for Chapter 11 Escanaba Daily Press

Antidote du jour:

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58 comments

  1. bmeisen

    Thanks for the link to the MoJo piece on Christie. It clarifies his positions for me. I think his avoidance of bible rhetoric, his cute obesity, and the way he wraps himself in the flag while hacking away at the constitution’s “material expression” (see Lofgren’s Truthout piece) will appeal to low-information voters. If someone respectable like Schneiderman runs as an independent and challenges Obama he’d get my vote and Christie, Bachmann or Perry would win. First thing on their desk in January 2013 would be a bill to raise the debt ceiling and let’s say they don’t sign it.

    1. Glenn Condell

      I wonder how Mish Shedlock is taking the news that yet another of his golden boy GOP governors has been caught in creepy old Mr Koch’s bed. It’s getting mighty crowded in there. He’ll probably tear into Trichet or bash Bernanke again rather than face up to the nature of the grifters and opportunists he supports. A wild guess. Perhaps that bed is where his sympathies truly lie. Don’t give up Mish, I hear there’s plenty of room.

  2. attempter

    Re patent case “taste of own medicine”:

    That was fun to read, an antidote indeed.

    This highlights one of the three ways in which the current IP regime has nothing to do with productivity or morality and is in fact unconstitutional (article 1 section 8):

    It doesn’t confer the benefit on the “Authors and Inventors”, but on corporate parasites.

    The other two are: It’s not meant “to promote the Progress of Science and useful Arts” (but instead is meant to suppress it), and IP monopolies don’t run for reasonable “limited Times”.

    We need to reject the existing IP regime at the very least. (And indeed IP as such, but that’s another subject beyond the scope of this comment.)

    1. aet

      Nonsense.

      But, IF you do REALLY wish to help improve the internet in respect of its technical underpinnings, why do you not participate – if you are capable and sufficiently knowledgeable of it (as your call for the abolition of Internet protocol (IP) would seem to indicate – in the Request For Comments which the electrical engineers engage in to design and improve the system’s workings?

      If by “IP” you meant to refer to “intellectual property”, then you should stop using meaningless phrases (such as “intellectual property”) which assumes its own conclusion and that non-substantial things ARE property (rather than such things being merely TREATED as property – such work itself is of the imagination!).

      “Intellectual property’? That’s a misleading way of referring to the sundry Government grants to named individuals of certain defined-and-created-by-statute monopoly rights of production (and re-production) of physical goods and processes.

      NOT “intellectual property”, but rather “trade, copyright and patent rights granted by the Government”, is the way to refer to it. To use the former instead of the latter to refer to it is intellectual laziness, that immediately adds to confusion.

      This species of legal right, wrongly called “intellectual property”, has nothing to do with nature or property as we have known it in the previous thousands of years of human existence.

      Instead, it’s all about how the powerful want things to be now.

      In other words: pay up, and keep paying up.

      It now appears that the only “works of the imagination” which become public domain in the USA do so by accident. I’m sure that Congress will close that “loophole” quickly enough!

      1. wunsacon

        C’mon. Attempter was *clearly* referring to “intellectual property” when using the acronym “IP”. Before you shred a comment and claim its author was “lazy”, could you try a little harder to make sense of the comment?

        1. attempter

          Thanks. I think aet’s drivel speaks for itself. He just lives to use the sentence fragment “nonsense”. The quality of the allegation is really incidental.

          Anyone with a passing familiarity with my many comments on the subject knows that my two-level attack is on

          1. IP as such, invalid and abominable in principle.

          2. The current IP regime as unconstitutional, and therefore illegitimate even according to the proclaimed premises of almost all who agree with IP in principle.

          1. aet

            There is nothing wrong with US copyright, patent and trademark law that a Congressional Act could not fix with the stroke of a pen.

            Yet you would burn the entire house down, because of your observation that a door doesn’t close properly without being forced. And apparently because you don’t approve of the way people attempt to enforce those rights that they argue have been given to them by the law as passed.

            You should focus on getting a specific amendment addressing a specific problem with the law passed by the House – rather than simply rail against the entire scheme and structure of the law.

            That might actually do some good, instead of simply seeking to engage people’s emotions, like the fascists do, and continue to do.

          2. aet

            yeah, I’ve seen sarcasm used often to successfully convince people of the errors of their ways of thinking.

            Especially by stormtroopers, cops, killers and ka jail guards.

            The use of sarcasm in argument is simply trying to poison the spirit of your interlocutor with insult: try rational argument ,if you s really wish to convince others of your views: otherwise, the use of sarcasm is a marker of a person who would secretly rather you support the opposite of what they are claiming to support with their sarcasm.

            For sarcasm is a species of cruelty; and operates only prescisely as cruelty operates.

            Looking for a political circus? Then look for sarcasm used publicly, for that is its marker – a complete lack of respect for the opponent.

            A sarcastic comment, before they put a bullet in your head.

            Oh yeah, a wonderful thing in political debate, sarcasm is.

            Sarcasm is simply cruelty mixed with a vocal contempt: if you can’t say something nice about others, say nothing at all.

            Sarcasm has no place in serious policy debates: it is something suitable for the proscenium arch or peanut gallery – as entertainment only.
            And IMHO politics presented as entertainment, as the US media has done for some time now, leads to rotten policies.

            And when people who are affected badly by the law complain, they get met with – sarcasm.

            You are right: keep sarcasm away from me – for I have seen how it is actually used on the street.

            Cruelty and dis-respect for others, disguised by another name.

    2. Jessica

      As knowledge production has become more and more central to the economy, everyone’s inability to handle it has become a major bottleneck for development. But this is so fundamental and so woven into everything that we do not see it.
      Handling knowledge production requires doing two things at once: turning the knowledge loose completely and fairly motivating/rewarding those who create, distribute, and maintain knowledge. “Piracy” attempts the first, but neglects the second. “IP” attempts the second, but works against the first. Also, because most economies were dominated by monopolies even before knowledge production became so crucial, much of “IP” centers on the attempt to create opportunities for extracting rents.
      Among the results of this unseen cul-de-sac are massive under-investment in education, over-investment in war and real estate, intense mis-direction of knowledge production, lack of jobs especially good ones, and lack of investment opportunities that contribute to society rather than harm it. This has been the core fact about the leading economies for decades and is the underlying source of the degeneration that has now become so obvious in our politics.

  3. Jim Haygood

    From thelocal.se:

    When Per Johansson of Särö, south of Gothenburg, returned home from work on Tuesday it was dark outside and the rain was coming down hard. Suddenly Johansson heard a bellowing noise from the garden next door.

    “I thought at first that someone was having a laugh. Then I went over to take a look and spotted an elk stuck in an apple tree with only one leg left on the ground,” Johansson told The Local.

    The unfortunate elk was desperately entangled in the tree’s branches and was kicking ferociously as Johansson approached.

    According to Johansson, it looked very much like the elk was severely drunk after eating too many fermenting apples.

    http://www.thelocal.se/36002/20110907/

    No one dares call the inebriated quadruped’s plight by its true name: QE [Quantitative Eating].

    1. aet

      Fighting a recession with monetary policy is like puhing on a string.

      People need incomes, not low-interest loans or a break on their taxes.

      Where’s the fiscal policies to complement the monetary policies? Well?

    1. aet

      And how should the boomers who actually built up savings to pay for their retirements feel about this lack of paid interest?

    2. MyLessThanPrimeBeef

      If you make $50,000/yr before retirement and wish to have 60% of that after retirement, how much do you have to save in order to earn that much in your 0.5% bank account?

      Let’s see, $50,000 x 0.6 = $30,000

      @ 0.5% interest:

      $30,000/0.005 = 6,000,000.

      If you didn’t have to split it, throught out your working career, with the government and if you didn’t have to eat or support a family, it would only take you 120 years to save up $6,000,000.

      Assuming you started working @ age 12, it would mean you can comfortably retire when you’re 132 yr. old.

      Plan accordingly (for those without defined benefit plans)!

      1. aet

        So you think interest rates will pay a real 0.5% for the next few decades?

        That ever happened before? When?

        I think people ought to keep saving, if they wish to retire from active life in the future and still have money to spend.

        I also think that there is a good possibility that real interest payable will increase in the future, as it has in the past. Unlikely for it to go lower, as it is tough to go lower than .5%, and that’s why fiscal policy – spending by the State – is now needed.

        Monetary policy has shot its bolt.

        1. aet

          As an aside, I’ve always found it interestong that people say that the “the Fed keeps rates low”….could the Fed also “keep rates high” if they so wished?

          Are the interest rates payable wholly within the command of the Fed?

          If not, what limits the power to do so, up or down? (They can’t go below zero – confiscation is NOT interest -a a problem for economic guidance-or-control-by-monetarism-only theorists!)

          In this – the power to set general rates of money interest – is the Fed limited by ideology, or by empirical fact? Or is its powers in this regard limited only by the fear of its own ignorance, as to what would happen in the productive economy, if they were to too aggressively use their power to set the rates, up or down?

          And what is the effect of interest rates on the production of goods and services? Or is the effect of interest rates limited only to price levels, rather than the actual amounts of production of goods and services?

  4. Jim3981

    “Scrambling for cancer drugs”

    It’s going to sound outrageous to those who haven’t followed the medical history in the USA over the years. But these guys want to make you sick and keep you sick. You can go to http://www.canaryparty.org/ or add Canaryparty to your facebook and find out how your health is being affected by these Big Pharma criminals.

    Big Pharma controls everything related to your health. From the medical journals, the CDC/FDA, universities, the drugs, and to the research. They fund and control everybody and anything to do with it. They do this by controlling the money.

    Big Pharma funds the polticians, funds the research, funds the universities, and funds the advertising? It is ALL controlled by big pharma.

    The FDA has a rule that requires a $300,000,000 application fee for new drugs and certain supplements!! Who else but big pharma can afford that much money for an application? Forget Dr Burzynski’s life saving non-toxic cancer treatment coming to market. Dr Burzynski created an excellent movie about his battles with the FDA. He is the real deal.(contrary to the propaganda suggesting otherwise)

    It gets much worse when you understand how much life saving research is simply buried by the FDA and CDC. Take Lyme disease for example. The CDC has known this has been an epidemic for decades, yet your doctor will never rule it out when you come in with symptoms. Your doctor is going to give you a antidepressant and something else, because that is what Big Pharma wants.

    Think about the mercury in your dental fillings, the fluoride in your drinking water, the fluoride in your medications, the extra high levels of Acetominophen(liver damaging) in your Vicodin, the aspartame in your chewing gum. Those are highly toxic chemicals that can lead to chemical injury, especially if one is already genetically predisposed.

    Big pharma is making you sick, and your highest level government officials have been helping them keep you sick for decades.

    By the way, when some big pharma/government employee comes by this blog later, and pretends to disagree with my post, just ignore him! It’s just his job to surf the web and leave pseudoscience type comments. After all how else would senators and congressman know how to vote if there wasn’t abundant propaganda in the media to convince them otherwise?

    Rotten to the core.

    1. Jeff

      Jim,

      Not just Big Pharma but also their garbed in goodness non profit front groups:

      Prevention of cancer means zero profits for the cancer industry. All the focus on cures for cancer means big bucks. What if pesticide makers made money off chemotherapy chemicals? They do.

      What if radiological machine makers caused cancer by x-ray exposure? They do.

      What if these companies formed a front company to stress cures and not prevention? They do. It’s called the American Cancer Society and they have over a billion dollars in the bank and keep getting people to volunteer to raise even more cash for them.

      The ACS was against banning DES, against any research into the link between cancer and pesticides, controls most research journals, bans researchers that do controlled studies on no-profit nutrition and in general is a front group for those that harvest profit from cancer.

      “Cancer is an economic disease.”

      1. TSC

        The problem is that the shortages mostly affect older, so-called generic drugs, which are no longer made by the Big Pharma.They are generally made by generic companies (Teva, Milan, Barr, Watson, etc) working on a small margin. To increase the margin, actual production is outsourced to India and China. Being cheap, those Chindian manufacturers are not very reliable. So one has to blame outsourcing for the drug shortages. They have nothing to do with either FDA or Big Pharma. Easiest way to fix it would be to make the drugs in the US. They would become more expensive, but only slightly, because actual drug manufacturing is pretty cheap even with the US workforce.

  5. CB

    If companies posted more jobs in July, I didn’t see the postings, and I’m always looking at jobs listings. I’ll take the story as another phony baloney attempt to make things seem better than they are. For a fact, September listings in my geo area are down, again.

    1. LeeAnne

      Top Stories
      New Jobless Claims Increase Unexpectedly- Reuters

      New U.S. jobless claims rose unexpectedly last week, further evidence of a weak labor market just hours before President Barack Obama delivers a major address to Congress on the issue.

      and

      <a href="http://www.nypost.com/p/news/business/job_data_won_tell_whole_story_m7JkPF46549SLYMwGhhC8L#ixzz1XNc2VA2m"New York Post -John Crudele

      And we can all be certain of this: the 827,000 jobs that Washington thinks were created this year — a figure President Obama will probably use in his speech on Thursday — will be corrected downward.
      By how much? Pick a number, but if the 827,000 figure is reduced by half I wouldn’t be surprised.
      To kick off the Lack of Labor Day Weekend, the government announced last Friday that no new jobs were created in August and that the unemployment rate stayed at an intolerable 9.1 percent.
      It also announced that 58,000 jobs it once believed were created in June and July really weren’t.
      These 58,000 missing jobs are a sign that the Labor Department is being overly optimistic with its counts. And that’s just what I’ve been saying for the past few years. The unusual nature of this recession (and the recovery afterwards, if there’s even been one) has made it impossible to figure out what’s going on in the month-by-month labor market.
      Only after a second look do the numbers become reliable. Take last Friday’s announcement as an example.
      Despite the fact that the Labor Department couldn’t find any sign of life in the job market in August, it still added 87,000 ….

  6. LeeAnne

    Choice words this morning on Bank of America from The Lex Column, FT

    Bank of America: musical chairs but pay’s the thing

    “Bankers are supposed to be handy with numbers. …Moynihan’s announcement on Wednesday said that the bank would now have three divisions. Then the next line said these three “customer groups” would be split between two co-heads. Huh?”

    ” …it does not matter much that Mr. Moynihan is running the show, or that David Darnell is now responsible for $640bn in consumer loans. Just as before the crisis, a booming economy and rising house prices could make these men heroes, equally, the meltdown was largely indiscriminate between well and badly run banks.”

    ” …Last year compensation accounted for half of BofA’s non-interest expenses. That is too high. …”

    What doesn’t need to be said, but I’ll say it anyway, is that this is typical for the entire multinational corporatocracy where two and two makes whatever they say it makes and the hell with clear communication. We’re not crooks, we’re innovators.

    I really wish these people were not so contemptible.

    1. LeeAnne

      Just In HuffPo -the link to the article doesn’t work

      Bank Of America Splitting Into Two Units, Closing Up To 600 Branches

  7. Jeff

    Shortage of cancer drugs.
    Yet another reason why we
    need Medicare For All. Socialism. National Health Care. Whatever you want to call it. How about Congress’
    Health Care shall be available to every citizen?

    The V.A. was able to quickly and inexpensively
    create its own drugs for a rare
    disease in its own laboratories when Big Pharma
    refused to do it because there was too little
    profit in it.

    Cancer is an economic disease.
    It is caused by activities that create profits and
    there are huge profits to be made in its treatment.

  8. Jeff

    “Cancer is an economic disease.”

    At the same time that David Koch has been casting himself as a champion in the fight against cancer, Koch Industries has been lobbying to prevent the E.P.A. from classifying formaldehyde, which the company produces in great quantities, as a “known carcinogen” in humans.

    Scientists have long known that formaldehyde causes cancer in rats, and several major scientific studies have concluded that formaldehyde causes cancer in human beings—including one published last year by the National Cancer Institute, on whose advisory board Koch sits.

    The study tracked twenty-five thousand patients for an average of forty years; subjects exposed to higher amounts of formaldehyde had significantly higher rates of leukemia. These results helped lead an expert panel within the National Institutes of Health to conclude that formaldehyde should be categorized as a known carcinogen, and be strictly controlled by the government. Corporations have resisted regulations on formaldehyde for decades, however, and Koch Industries has been a large funder of members of Congress who have stymied the E.P.A., requiring it to defer new regulations until more studies are completed. Koch Industries became a major producer of the chemical in 2005, after it bought Georgia-Pacific, the paper and wood-products company, for twenty-one billion dollars. Georgia-Pacific manufactures formaldehyde in its chemical division, and uses it to produce various wood products, such as plywood and laminates. Its annual production capacity for formaldehyde is 2.2 billion pounds. Last December, Traylor Champion, Georgia-Pacific’s vice-president of environmental affairs, sent a formal letter of protest to federal health authorities. He wrote that the company “strongly disagrees” with the N.I.H. panel’s conclusion that formaldehyde should be treated as a known human carcinogen.

    David Koch did not recuse himself from the National Cancer Advisory Board, or divest himself of company stock, while his company was directly lobbying the government to keep formaldehyde on the market.

  9. Paul Tioxon

    Bracevich is repeating common theme for Cold Warriors, whose job used to be threat analysis, military risk, global inter state power plays. Since the Cold War ended, there is only what the US is doing to pay much attention to. And it is clear that global military system of 700 bases around the world are little more than an expensive protection racket. Expensive for Americans who foot the bill and pay with their lives, their minds and their shredded humanity.

    The War on Terror is ratcheting down, the winner of course is China, that spent the past decade building itself up while we have been bleeding ourselves dry. Fond hopes for invading Hugo Chavez are fading, even as he takes the petro dollars and begins the financialization of the emerging markets to ringfence the World Bank, the IMF and other predatory and now preoccupied multi national banks. South American nations are taking his money, on better terms than what the Davos crowd offers. And China offers bigger amounts for them and as well as African development.

    Along with the military, the financial empire is going down with the ship.

    1. aet

      Good catch.

      I’d like to ask: How come ‘austerity’ is the preachment for both those nations which did relatively well during the past three or four years, and those which have done badly?

      Don’t differing situations call for differing responses?

      If not, why not?

  10. lambert strether

    LIBOR: Fear meter or shock generator?

    * * *

    Prematurely correct post from 2008 when people like Krugman were treating the Ted spread as some sort of neutral reading.

    Nobody could have predicted that a gaggle of sherry-drinking banksters serving on a completely opaque committee created by Maggie Thatcher would turn out to be market manipulating fraudsters. Let’s be reasonable, here.

  11. MGK

    The cancer drug shortage has little to do wtih Big Pharma. The drugs in shortage are generics and Big Pharma is rapidly exiting the generic field as the competitive landscape is all based on cost.

    Unfortunately, the drugs in question are so cheap to make that the cost of regulatory compliance exceeds the cost of goods. As a result, these generics are supplied by overseas manfuacturers who have every incentive to cheat (on quality control, supply chain sourcing, etc.). At the same time, when a production interruption does occur (such as when the FDA finally gets around to inspecting these overseas facilities and determines there is a real quality issue), the wholesalers then have an incentive to hoard drug and jack up the price.

    This is one more example of driving prices so low that US and other reputable manufacturers leave the market.

    1. Jeff

      Fine, then they should be treated like a public good
      and be manufactured by the National Institute of Health.
      and distributed at cost.

    2. aet

      OH yeah, it’s all those non-Americans at faultn for problems in America, it always is.

      Oh wait, no it isn’t:

      http://www.cmaj.ca/content/175/9/1046.2.full

      US Pharma co fined an additional $425 MILLION dollars, making a total of $1.3 BILLION dollars in fines paid by that Company if a little over THREE YEARS.

      From the article:

      “Schering-Plough Corp., the US pharmaceutical manufacturer perhaps best known for its anti-allergy medication Claritin, has agreed to pay US$435 million in fines to settle criminal and civil charges that it illegally promoted several drugs. The agreement was reached in late summer with the US Justice Department, which also alleged the New Jersey–based company had defrauded Medicaid, the government health care program.

      The case marks the third time in the last 5 years that the company, which has annual sales of approximately US$10 billion, has reached a multi-million settlement with the government. One of the largest health care fines ever meted out by the Justice Department, it brings to US$1.3 billion the total paid by Schering-Plough as a result of the settlements. ”

      The sums from those fines alone could buy up a lot of “Chindian” drug manufacturing capacity, I’d bet!
      Why weren’t they used so?

      1. MGK

        Nobody’s claiming US drug manufacturers are lilly white and pure, but the article you link to has nothing to do with drug shortages which was the focus of my comments.

  12. justanotherobserver

    the worst thing about the Christie speech, is that if you forced every resident of NJ to listen to it, he’d still get at least 40% of the votes.

    most days I think Americans get what they deserve.

    1. aet

      Not only Americans. That goes for everybody.

      People pay for everything they get. And remember – people don’t only pay with money.

  13. scraping_by

    Prof. Bracevich’s article

    Just finished Tamim Ansary’s Destiny Disrupted: A History of the World Through Islamic Eyes and took away lots of reality, but these two points seemed relevant. The British, along with the rest of the Europeans, tore down and took over the Islamic gunpowder empires in Turkey and Iran not by main force, but by subverting and corrupting the local elites through the use of “technical experts” in military technology and financial advice. Our own dependence on foreign technology and capital seems to point us toward the fate of the Ottomans, even if we tell ourselves fairy tales about “globalization.”

    Second, none of the American Goliath ideological smoke and mirrors is going to change the way the way we’re received in the middle world. To them, we’re just the successors of the British & French imperialists of the last two centuries, who ruled by subverting, intimidating, and if need be, creating a ruling class from the local peoples. Indeed, most of the wealth and power transfers from Muslims to Europeans were accomplished though “legal” means rather than military. Nobody’s really interested in the multinationals’ window dressing, the people who live there can watch what happens to their nations and draw a reality-based conclusion.

    In the hands of good people, ideology can work for the good. Not all Christian missionaries were racist petty dictators or stalking horses for multinational corporations. A lot of them were, not all. But viewing the rest of the world as a blank slate just waiting for your mark is stupid, dangerous, and as we see day by day, just doesn’t work.

  14. chris m

    “…Association of Mortgage Investors, Chris Katopis stated, “[M]ortgage investors face enormous challenges in the capital markets due to opacity, an asymmetry of information, poor underwriting, conflicts-of -interests by key parties in the securitization process, as well as, the inability to enforce rights arising under contracts, securities and other laws.”

    http://www.linkedin.com/e/ufo4ns-gsbj0dax-4j/nab/757068794/0QejsUdz0TdjsIdjgMcj0UdjkTb3gSd3wOe3kRdOMMdzoUczkSdjsIc30TdzARdPkT/true/weekly/eml-tod-b-ttle-44/?hs=false&tok=15e4heDlHfyAU1

  15. barrisj

    Re: Moynihan and his TBTF BAC – after a spate of rumourology
    concerning a Fed-engineered takeover by JPM, I was wondering what indeed would be the outcome of the Buffett $5bil “investment” in BAC should it go the way of, e.g., Wachovia or WAMU. What happens to his 700mil warrants (at $7.14/share exercise price)? What of his 50K shares of (senior?) preferred shares? Buffett was given an apparent monster of a sweetheart deal, really Too Good To Fail…but, could it?

  16. Externality

    From Public Citizen:

    U.S. measures to reduce teenage smoking deemed WTO violation

    U.S. measures to reduce teenage smoking violate World Trade Organization (WTO) rules, according to a panel ruling released late last week. Indonesia successfully argued that the U.S. Family Smoking Prevention and Tobacco Control Act (FSPTCA) of 2009 violated WTO rules. The ruling opens the door to more teenage tobacco addiction, while further imperiling the legitimacy of a WTO that rules against environmental, health and other national policies 90 percent of the time.

    The FSPTCA took a series of unprecedented and bold measures to combat teenage smoking, including Warning the banning of many forms of flavored cigarettes. There is substantial evidence that tobacco companies produce and market these cigarettes as “starter” or “trainer” cigarettes in order to hook teenagers into a lifetime of nicotine addiction.

    However, as the U.S. noted in its defense in the WTO case, the U.S. did not ban all types of cigarettes. In particular, regular tobacco and menthol cigarettes were excluded from the ban. The justification for these exclusions was that, unlike candy flavored or clove cigarettes, large numbers of adults are also hooked on regular and menthol cigarettes. To abruptly pull these products out of the market could cause a strain on the U.S. healthcare system (as lifetime addicts would instantly seek medical treatment for wrenching withdrawal symptoms) and might lead to a rise in illicit black market sales and associated crime. Nonetheless, various studies were ordered on the feasibility of banning menthol cigarettes in the future.

    http://citizen.typepad.com/eyesontrade/2011/09/wto-opens-door-to-teen-tobacco-addiction.html

    Link to WTO opinion:
    http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds406_e.htm

    1. Externality

      Should be:

      “The FSPTCA took a series of unprecedented and bold measures to combat teenage smoking, including the banning of many forms of flavored cigarettes.”

  17. citalopram

    Interesting antidote, Yves. Hippos are one of the most dangerous mammals on earth, and will attack humans on sight without provocation.

  18. coward

    Re:cancer drugs. Its more complicated than evil. I am a process chemist that looked into making the damn things because big companies have completely ditched manufacturing drugs that make a lower profit margin than the blockbusters. The problem is the Prescription Drug User Fee Act – little guys that could make the drug substance and formulate it into a pill have to pay BIG up front fees (~$1.25 million) to the FDA to make dosage forms. You can buy the actual active ingredient all day long – hell I can make you a few kilos – its the DOSAGE form that’s being killed by regulation. In Europe similar fees are waived down to 90% for small business. This is indeed partly the end result of big pharma greed – the fees are a minor expense for big companies after all, and they are a good way to keep small companies out of retail.

    1. coward

      to clarify the fees in the EU for small business are 10% of the full amount. They are nearly all waived.

  19. Jim Haygood

    Greece’s canoe heads over the edge of Niagara Falls:

    Credit-default swaps on Greek government debt surged to a record, signaling a 91 percent chance the nation will fail to meet debt commitments, after its economy shrank more than previously reported.

    Five-year contracts on the country’s sovereign bonds jumped 196 basis points to 3,001 basis points, at 3:45 p.m. in London, according to CMA.

    The default probability, which is based on a standard pricing model, assumes investors would recover 40 percent of the bonds’ face value were Greece to fail to meet its obligations within five years.

    http://www.bloomberg.com/news/2011-09-08/greek-credit-swaps-surge-to-record-signal-91-chance-nation-will-default.html

    All well and good. But 40% recovery sounds optimistic to me. An Argentine-style 30 cents on the euro payout is probably what Greece will propose.

    Meanwhile, the official eurozone stance in the stillborn Greek Bailout II assumes a 79% recovery on a 21% haircut. As the saying goes, events have overtaken this baby-step plan.

  20. Glenn Condell

    NYT gives good graph:

    https://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html

    hat tip John Robb’s Global Guerillas, a very smart site which sometimes links here. I liked this post of his the other day, on hollow states and how to get there via financial collapse. Robb’s thinking is original but incorporates Taleb and Tainter with a dash of John Boyd. Basically, too few decision-makers, too much complexity equals potentially lethal fragility:

    http://globalguerrillas.typepad.com/globalguerrillas/2011/09/hollow-states-and-a-crisis-of-capitalism.html

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