Links 10/16/11

‘Rapture’ Prophet Camping: World Will ‘Probably’ End Quietly Next Friday NPR. I can tell you with great confidence we don’t get out of life on this plane of existence that easily.

Fertile Frontiers ScienceNews

In California, Going All Out to Bid Adieu to Foie Gras New York Times. Noodling geese (the term of art for force feeding them to make their livers large) really is pretty cruel.

Doctor group calls for pot legalization Los Angeles Times

Liam Fox resignation exposes Tory links to US radical right Guardian (hat tip Buzz Potamkin)

So, how many times have banks had people arrested who tried to close their accounts? Lambert Strether. You must watch the video.

Meet the Guy Who Snitched on Occupy Wall Street to the FBI and NYPD Gawker

Wall Street Protests Spread Globally, With Rome Violence, Calm Elsewhere Bloomberg. Not a bad headline.

Meet the New Faces of Wall Street New York Times. Quelle surprise! A little slide show reveals OccupyWallStreet to be a cross section of New Yorkers.

America’s ‘Primal Scream’ Nicholas Kristof, New York Times. Kristof gets it.

The Fantastic Success of Occupy Wall Street Immanuel Wallerstein, Binghampton University (hat tip reader Pau Tioxon)

Fannie and Freddie, Still the Socialites Gretchen Morgenson, New York Times

Online Banking Keeps Customers on Hook for Fees New York Times

Did Speculation Drive Oil Prices? Mark Thoma. This Dallas Fed paper is an embarrassment. First, it ignores the fact that even theory says inventories should increase with a lag (this is in the academic literature, if they’d bother to read it). Second, it ignores the fact that oil can be and is stored in the ground (!) and that some inventories (namely, the Strategic Petroleum Reserve, which weirdly is not included in official inventories) were increasing. Third, it ALSO ignores that futures, not spot, are where prices are set for oil sold by OPEC. So they rely on a “futures converges to cash” assumption which is not true for the marginal producers of oil. But the Fed is determined not to see speculation, so they managed not to see it.

Antidote du jour:

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84 comments

  1. MyLessThanPrimeBeef

    Today #OccupyWallStreet, tomorrow #OccupyThePlanet.

    I am trying to figure this out.

    Is our country the richest 1% to the 99% of the rest of the world?

    Are humans the richest 1% to the 99% of the rest of nature?

    Is it about time we listen to vegetables and animals?

    1. Glen

      If you watch enough MSM cable news (I had to give up – it was getting so damn dumb) you will find that vegetables are generally well represented.

  2. Typing Monkey

    The most recurring thought that runs through my mind when I read about the OWS movement is that, from the banks’ perspective, there damned well better not be any major crashes any time soon, ’cause it’s pretty obvious that there aren’t going to be any more $700bn blank checks passing Congress for a F!@#ing long time, and I don’t think any cops are paid well enough to want to step between an increasingly vocal crowd and another bailout bill.

    Given that the banks are all basically insolvent and that Europe is on the brink, I wouldn’t be sleeping too soundly right now if I were a banker.

    JMO

    1. Typing Monkey

      Incidentally, a lot of things about the entire financial industry has amazed me, dating at least back to 2001 or so (about the time I started realizing that Fannie and Citi were goners).

      One of the most astounding recent realizations, though, is how incredibly inept it’s been with its PR. Surely a corporation with a trillion dollar balance sheet should be able to make enough gestures and spin something–anything–to placate the public? Even if the industry hopes to generally get its way via legislation, how could it possibly remain so flat footed after almost a month of protests?

      And speaking of banking embarrassments, I wonder what Bubbles (Bernanke) is going to say on Nov 2? I imagine OWS will come up in some form…

          1. Typing Monkey

            I read the piece. I thought it was bogus. If you ask enough people, you can cherry pick your data and quotes. I think that’s what the authors of the story did here.

            The fact that most didn’t want to be identified, btw, suggests that they do care about the public’s opinion to some degree.

            As for why they should care–well, firstly, it’s generally not a good idea to have a mob actively dislike you. Secondly (and somewhere lost in all of this) is that banks don’t vote. All they can do is give money to politicians who hope to use that money to buy your vote (or their committee chairmanship or whatever). The banks are rapidly reaching a point where politicians are going to have to publicly refuse their money so as to not be tainted by association. At that point, they have little influence on the process or their destinies.

            As I originally pointed out, for example, it doesn’t matter how much lobbying money the banks shell out right now–if they need a government bailout anytime soon, they simply aren’t going to get it. They can scream and cry that the stupid public doesn’t understand them and threaten tanks in the streets if they are allowed to fail, but it won’t matter–at least a couple of them are going to have to go under before anybody acts in their defense. Given the amount of complete crap they are holding on their balance sheets, that should probably worry them quite a bit.

          2. F. Beard

            But….but…but….John Paulson created 100 jobs!! MontanaMaven

            Who needs a job? The rich get by with only money.

            If jobs are hard to create, money isn’t. Most of us can find worthwhile things to do even if money is not a concern.

            So. If jobs are too hard to create then money will do.

      1. jyoung

        just saw the new tv commercial for Bank of America. 1995 is on the phone and they want the Jack Bauer voiceover back.

      2. Jim

        I think The Ben Bernanke already mentioned OWS, not long ago in Congress… something along the lines of “I can see their point”. That one slipped through the net…

      3. Maximilien

        @Typing Monkey: “One of the most astounding recent realizations, though, is how incredibly inept [the financial industry’s] been with its PR.”

        Call it arrogance or call it complacency. Call it a sense of entitlement or callous disregard for the feelings of others. Whatever you call it, it is the usual answer for the seemingly inexplicable (and sometimes suicidal) blindness of the privileged classes.

        Marie Antionette is a famous example of the attitude. In the autumn of 1789, she hosted a lavish banquet for thousands at the Palace of Versailles. France was broke, but impoverished taxpayers were still expected to pay for her extravagance. And get this: This queenly self-indulgence happened AFTER mobs had rioted in the streets of Paris, AFTER they had seized the Bastille and torn it down, stone by stone. AFTER Marie had received reports of the fury of her citizens. And yet she went ahead with her party anyway.

        She eventually paid the ultimate price for her hubris. But to this day, people in power fail to heed the lessons of history.

    2. Economics Considered

      You are likely quite correct that a congressional bailout is unlikely.

      But – you might reflect that the 2008/2009 congressional bailout was the tip of the iceberg. The figures that I think I have seen mentioned by Yves (apologies if I do not have the correct attribution) is that the actual magnitude of the bailout was somewhere in the 12 trillion range to the financials. And that was all without legislation. Do you think that the Fed (/treasury) won’t simply double down in a similar fashion shortly when the balloon goes up ???

      By the way, I believe there has been mention of a web site that is tracking the actual magnitude of the bailout (my recollection is that this is where the amount of the 12 trillion came from). Does anybody have a link to that since I failed to keep record it ?

      1. Typing Monkey

        I’ll probably revise my view after Bernanke’s November press conference, but I (tentatively) believe that

        (1) the Fed is probably getting increasingly nervous about becoming a well deserved Congressional (and public) punching bag, and is therefore unlikely to do much unless legislated to do so

        (2) the Fed has probably realized by now that it can’t solve any problems by simply printing more money or buying the banks’ garbage (it’s always difficult to figure out what the Central Banks have actually realized, though–they generally seem to be particularly dim-witted as far as people go…). They don’t have too many options left to them

        As for Treasury–what can it do, really, without Congressional approval? It struggles to even get its debt ceiling increased! Moreover, Treasury represents the Administration. If Congress doesn’t want to touch this hot potato, why would the president? In fact, Obama seems to have figured out that, at least rhetorically (I doubt he will act on any of that rhetoric), his best bet for reelection lies in painting the Republicans as pro Wall Street while he is against Wall Street. I doubt he’ll be going on a limb for the financial sector anytime before November.

        Moreover, if Obama gets kicked out of office due (partly) to lack of financial contributions from the banking sector, why would he help them out between November and January?

        Maybe he’d try to help out if he gets re-elected, but I don’t think the markets are going to hold together that long (of course, I didn’t think that Europe would hold past last week, so what do I know?)

        1. Economics Considered

          T.M. – I hear your thought that the Fed may be constrained. However, who would have thought that they would pump 12 trillion in liquidity (‘printed money’) the last time without any legislative accession. And remember that they basically hid it all in the shadows until forced to reveal ‘some’ of their balance sheet machinations. And in a new bigger crisis is congress even likely to pry open the Fed secrecy ?? I am somewhat more pessimistic than you that they will not try to monetize the next crisis. The only limit I see is when they run into some enormous manipulation that majorly disrupts the operation of the economy – but I see them going to that kind of limit. After all, Greenspan essentially did that with the enormous build up of private debt and asset bubble – and those were HUGE numbers.

          Re: The Treasury. I suspect you are right that Treasury will not get any money directly to play with. But their even more major role has been and will be to run cover for the Fed – influencing the regulators to keep the banks afloat no matter what, etc.

          Obama and Wall Street. It may surprise you to learn that Obama has more campaign inflow from the financials than he did last time – both in terms of absolute dollars and percentage of his war chest. It is too far past the wee-hours for me to did out links, but a google might turn up some info.

          LOL. I also thought that the shoe(s) would drop in Europe by now. The road ahead for kicking the can appears to be close to vertical now, though. Just how vertical – there is a pretty good post with a view of what the market thinks (CDSs) here:
          http://www.creditwritedowns.com/2011/10/belgium-spanish-bank-cds.html

          “The idea that, over an even intermediate term, governments are going to destroy their own countries to ensure that (mostly foreign) banks and bondholders get funded is absurd. ”

          I’m afraid that I am nowhere near as sanguine as you that this administration and congress (and the European governments for that matter) are not so captured that they will not indeed actually break their countries before they will let the banks go under. Reinhart and Rogoff’s latest book would seem to say that history bears this out for countries that have gone as far as we have down the road to plutocratic and oligarchic control as we have. But then maybe that’s just my reading of it. If you wish to think that our administration won’t go over that brink, I’ll certainly add my fervent hopes to that. But I’m afraid I’m not counting on it.

          Fare thee well.

          1. Dave of Maryland

            I’m not so hopeful, either. Generals go on fighting the last war until they become POWs in the current one. Or until they suffer General Gordon’s fate, which was worse.

          2. Typing Monkey

            One of the interesting things about these conversations is that we get to have them while also watching things unfold. Let’s see what ends up occurring.

            T.M. – I hear your thought that the Fed may be constrained. However, who would have thought that they would pump 12 trillion in liquidity (‘printed money’) the last time without any legislative accession.

            True, but the public wasn’t in the streets over this, Congress wasn’t hounding them, and (perhaps most importantly) the Fed probably believed at the time that their actions would solve the fundamental problems (why they believed this is beyond me). I don’t think they have any such delusions anymore.

            Incidentally, I doubt there are any delusions about the legality of what they did, either. That is also likely constraining them going forward.

            And remember that they basically hid it all in the shadows until forced to reveal ‘some’ of their balance sheet machinations. And in a new bigger crisis is congress even likely to pry open the Fed secrecy ??

            IMO, this is one of the most fascinating parts of what’s going on. The government is really used to being able to control the media’s message, especially when it comes to complex (eg: finance) or “national security” type issues (eg: State Department or DoD policies). The emergence of high quality blogs is making this increasingly difficult, and at the same time the decentralized nature of blogging makes it basically impossible to subvert all the blogs. The blogs are, increasingly, dictating what the MSM is reporting, and I don’t see this going away.

            Generals always fight the last war. What will those generals do after OWS in order to retain control over the next inevitable crisis? I have no idea, but it’ll be interesting to watch…

            I am somewhat more pessimistic than you that they will not try to monetize the next crisis.

            LOL–oh, I agree that they’ll monetize. They’ll just make sure that their asses are covered before doing so. Since Congress wants to cover its own ass, there’ll probably have to be a lot of wrangling, and it’ll likely be time consuming.

            After all, Greenspan essentially did that with the enormous build up of private debt and asset bubble – and those were HUGE numbers.

            Yes, but Greenspan had basically complete support (largely due to comparatively good economic numbers and the lack of critical blogs at the time). There is no such support for Bernanke.

        2. ohmyheck

          But there will be bail-outs, if things crash again. Have you ever heard about “back-door bail-outs”? Geithner has been secretly getting taxpayer money to financial institutions in need, since the day he took office. Google the term-plenty of info there.

          There is so much anger for a multitude of of bad policies, yet they continue to implement them, unabated. TPTB do not care if we rage. They are going to do whatever they want, with impunity. Another bail-out may or may not be the tipping point, who knows, but Timmeh is quite good at stealth bailouts, wo why bother to inform the public of them?

          1. wunsacon

            >> Dave of Maryland says:
            >> October 16, 2011 at 10:11 am

            >> …suffer General Gordon’s fate.

            Never heard of him. His wikipedia page speaks surprisingly well of a man who zealously conquered and occupied foreign lands to expand/maintain the British empire.

          2. ambrit

            Gentlemen;
            Ah yes, the Sudan Expedition! General Gordon died for Victorias sins! Beside, who can’t like someone who was played on the screen by Charleton Heston? Moses came down the mountain, Gordon came down the stairs. Both served a “Higher Power.” What’s not to like about a fate like that?

      2. Economics Considered

        By the way, I tend to agree with Lucy. You may not be reflecting on the arrogant disregard that the bankers have for the citizenry. I suspect that their current thinking has been that it does not matter in the slightest what the general public thinks – it is of absolutely no consequence to or impact on them.

        However, that operative arrogance may be sitting a little uneasy right now. I would worry, however, that their reaction to that unease will likely not take the form of managing their public image – but in the manner of JP Morgan that they will instead follow the path of suborning the police departments to quell the outcry. It will be interesting to see, hey.

        1. Typing Monkey

          it does not matter in the slightest what the general public thinks – it is of absolutely no consequence to or impact on them.

          IMO, an industry that needs support once in a while probably doesn’t care what the public thinks. An industry that requires constant government propping desperately cares about what the general public thinks. If any part of the industry shouldn’t care about the public’s opinion, it would be the investment banks. Yet their dependence on government money is forcing even them to take note of public opinion.

          but in the manner of JP Morgan that they will instead follow the path of suborning the police departments to quell the outcry. It will be interesting to see, hey.

          That works if the crowd is small, infrequent, and has little popular support. That’s no longer the case here.

          I mean, look–if it comes to an outright battle, then the group that has the support of the military will win. I don’t think that, of all things, unpopular bankers that are hated around the world are going to be the cause of such a battle, nor do I believe that, if it came to that (and it won’t), the military would support the bankers to begin with.

          The idea that, over an even intermediate term, governments are going to destroy their own countries to ensure that (mostly foreign) banks and bondholders get funded is absurd. Over the short run, they’ve been content to make bondholders whole and kick the cans down the road. As soon as that road ends, they’ll turn on the financial industry very quickly. Politicians the world over are nothing if not opportunistic.

          1. JTFaraday

            They don’t care what the public thinks, they just need a lever within the government–

            “Romney Beating Obama in a Fight for Wall St. Cash”
            http://www.nytimes.com/2011/10/16/us/romney-perry-and-cain-open-wide-financial-lead-over-field.html?nl=todaysheadlines&emc=tha2&pagewanted=all

            just as Citibank thinks it can tell the MSM that it arrested 24 unruly protesters who wouldn’t leave, and the fact that there is video testimony to the contrary doesn’t matter because that testimony will only reach a small number of people who are really paying attention. So, they’ll arrest the 24 protesters for disrupting business and spin the MSM.

            The only way public opinion matters is if Romney wins and he decides to split the capitalist class and favors the (somewhat) less well subsidized part over the zombie bank wreckage. He could then conveniently be a little more aligned with public opinion and stay in line with his contributors, without granting the public too much.

            As of now, Goldman Sachs for example still favors Obama but it can also try to buy up another stooge, who will then have the same discretion Obama once had with regard to just how bought up he wants to be.

            Why would they think this wouldn’t continue to work? It’s clear that they think they are in the driver’s seat and that everything can be bought when they are constantly yelling about how they pay 40% of the taxes in NYC and about how they are the employer of last resort. (yippee).

            Meanwhile, I doubt the zombie wreckage thinks that the capitalist class will be split because it still regards itself as being as virtuous as the other half, (and they’re pretty incestuous anyway).

            If the banks need another bailout, this will just give Eric Cantor an excuse to cut more government spending–which is what they all want to do, minus maybe some parts of the Progressive Caucus or the CBC.

            So, full speed ahead. We may reach a tipping point at some point, but I don’t think we’re anywhere near close.

          2. Typing Monkey

            It’s clear that they think they are in the driver’s seat and that everything can be bought–Faraday

            To be honest, I disagree. I think that the banks had a very, very weak hand to play over the last four years, and that they played it relatively well–largely due to a very pliant government that completely misread the public mood (or at least the degree of public anger).

            The banks’ hand has gotten even weaker since–partly because they didn’t clean up the majority of their balance sheets (they couldn’t), partly because of their inept PR and loathsome actions, and partly because the public is (sort of) organizing in a visible way. They must realize that this can’t end well for them unless they make a hell of a lot of concessions. But they can’t make those concessions without basically failing. So they’ll delay and try to get what they can in the short run and hope for some miracle longer term. Bu the writing is on the wall, and people who for a living analyse tons of data and public sentiment to gauge values are probably smart enough to realize it…

            Again, buying politicians may help under normal circumstances, but that money has value only so much as it can ensure a candidate’s political survival–the money itself does not guarantee votes or chairmanships. It doesn’t look like a banker’s money will do much good if the public ire continues to rise and/or intensify.

          3. JTFaraday

            Yes, but who is “the public”? For every avid supporter of OWS, there are at least 3 or 4 over there on Planet Pluto, also known as Andrew Breitbart’s BigGovernment.com, avidly following the anarchist socialist plot to overthrow the US that is OWS. (They have the smoking e-mails to prove it).

            Even in your own comments, you are not necessarily sympathetic to those in the 99% who got themselves into hot water during the bubble blowing phase. To a lot of people, that thought (along with thoughts that are even less charitable) translates into support for the “one percent” and traditional authoritarian institutions.

            Over there at The American Prospect, rotting house organ of the D-Party, they review every Republican candidate’s debate performance after each debate as if nothing else could possibly happen that might disturb business as usual.

            Even the fact that the D-Party is voicing support for OWS is just indicative of their belief that public dissent can be captured and steered into the usual channels for still more endless kabuki theater performances.

            So, I’m inclined to think that unless an elite decides to split the capitalist class at some point by appealing to their sense of virtuous vs. non-virtuous (bailed out) capitalism–and that person is not going to be Obama, because Obama has no imagination– then the Fed and the ubiquitous Treasury Boyz from Goldman Sachs will finagle another back door bailout in a crisis.

            The other reason it’s not going to be Obama is that no one wants to upset the money pot before the election. Obama, who in addition to having no imagination also has no courage, has always made it clear that such funding is his ONLY priority–thereby offering living proof to Wall Street that everything CAN be bought. Whatever Obama *says* to the rubes has never had any real consequences.

            I’m not saying it can’t tip in the other direction, just that it hasn’t yet, and more importantly, the banks and politicians don’t think it has either.

      3. Hugh

        Not saying that there won’t be a crash in the not too distant future since I have been predicting one for around this time for almost 3 years, but the Fed is still running the ZIRP, and has started the Twist, and dollar swap programs. Additionally, the banks are still permitted to cook their books by the FASB.

        Finally, I have posted this information several times. My count of special Fed programs in response to the 2008 meltdown as per the appendices of the GAO audit follows. These programs do not include the regular operations the Fed had at its disposal or efforts undertaken by the Treasury: the TARP, the FDIC lending program, and the shadowy backstopping of Money Markets.

        http://www.gao.gov/new.items/d11696.pdf

        I. Agency Mortgage-backed Securities Purchase Program: $1.25 trillion
        II Asset-backed Commercial Paper Money Market Mutual Fund Liquidity Facility: ~$217.3 billion
        III Aid to AIG: Revolving Credit Facility: $85 billion; $72 billion used
        Securities Borrowing Facility: $37.8 billion: $20.6 billion peak
        Maiden Lane II: $19.5 billion
        Maiden Lane III: $24.3 billion
        IV Bear Stearns/Maiden Lane I: $30 billion
        V Bank of America Lending Commitment: Backstop not used
        VI Citigroup Lending Commitment: Backstop not used
        VII Commercial Paper Funding Facility: $738.3 billion
        VIII Direct Money Market Mutual Fund Lending Facility: Never operational
        IX Dollar Swap Lines with Foreign Central Banks: $10.057 trillion
        X Money Market Investor Funding Facility: Backstop not used
        XI Primary Dealer Credit Facility and Credit Extensions for Affiliates of Primary Dealers: Primary Dealers: $7.3894 trillion
        Affiliates: $1.5616 trillion
        XII Term Asset-backed Securities Loan Facility: $200 billion authorized; $71.1 billion used
        XIII Term Auction Facility: $3.818 trillion
        XIV Term Securities Lending Facility: $2.319 trillion

        This gives a total of $28.1882 trillion.

        1. LucyLulu

          Thanks Hugh. I hadn’t seen your list before and always wondered exactly where all the money went.

    3. rd

      It is interesting that NYPD and the FBI are going through OWS e-mails and view them as a security threat to the IT system.

      Considering that Wall Street just about took out the world’s financial system, can we get them classified as a security threat too so that NYPD and the FBI can read their e-mails?

      My guess is that they would find much more to prosecute in the financial system e-mails than OWS’s.

  3. Jon

    I’m confused about the Strether video. The Santa Cruz protestors / customers were the ones who called the cops, and they weren’t arrested. So what are they complaining about? If I carried signs into the local Safeway saying I hated them I’d expect to get kicked out of there too, despite spending a lot of money there at other times. +1 for wanting to move their accounts, -1 for being more interested in making political theater out of it than *accomplishing* moving their accounts.

    1. LucyLulu

      The Safeway is under no obligation to sell you THEIR food that they bought and paid for. The bank however, if you have deposited your money in a demand account, IS obligated to give you your money upon demand. You are paying them to hold your money and provide you with any number of services, including providing your money to you, upon demand.

      The sign did not say that she “hated” BofA, nor did it say anything libelous, slanderous, or defamatory. It only said that she was closing her account. They also stated they would not let her in without the sign. Their policy was not to allow ANY protestors. I am not a lawyer, but it sounds flagrantly illegal to me, to place restrictions on who gets money returned, and upon what conditions. And if not illegal, the implications are far scarier yet. What would be the restrictions next week, next month? Preventing a bank run would be easy indeed.

      1. Jon

        If she had gone into the branch without trying to make a political point *while* she was conducting business activity, she would have closed her account and that would be that. For that matter despite what they said in the video, BofA website claims there’s another branch open the same hours within 3/10 mile. And using one of the numerous smartphones in her group, she could have withdrawn most of her money while standing on the sidewalk outside.

        I think you will find that the BofA depositor agreement does not actually say what you think it does. What it does say is “You or we may close your checking or savings account at any time without advance notice, except that we may require you to give us seven days advance notice when you intend to close your savings or interest–bearing checking account by withdrawing your funds.”

        But that’s beside the point that she was less interested in closing her account than in making videos about how terrible BofA is. And again, nobody was arrested here. If anything the SC cop, er, “peace officer”, was mildly sympathetic to the protestor. I have no idea why we “must watch this video”, because it doesn’t show anything except political theatre and a hapless middle manager who didn’t want to take part in it.

        And you’re right, you’re clearly not a lawyer, so why start making legal assertions about a business transaction gone slightly sour?

        1. EH

          I see, so we must all afford the proper deference to the sensibilities of our money holders. Consider that you may ultimately be on the wrong side of history with that perspective.

        2. Yves Smith Post author

          Jon,

          She has a right to withdraw the funds in her account, regardless of whether the account closure occurred that day or on a delayed basis. And I’ve closed bank accounts, including ones with large balances, I’ve never had it not done same day.

          She was not loud, not making a threat to anyone in the branch or any customers. She was carrying a sign they objected to. That was it. That does not seem valid grounds for denying her initiating an account closure. This was a one-sided abrogation of contract.

    2. craazyman

      it’s hilarious.

      I’d say if this was the first quarter of a football game it would be: Protesters 27, B of A zero.

      a few confident and articulate college girls kick B of A’s ass, 27-0 and it’s only the first quarter. ha aha hahahah.

      given all the kleptocratic crack-cocaine-money bonehead investments B of A made in recent years, why is this a surprise?

      I’d think, however, that it might be illegal to videotape on a business’s premisis without authorization. I know with street photography (a hobby of mine at times) it’s a very sensitive issue.

      I’d say the girls are lucky they weren’t arrested for videotaping without permission. That’s a real risk and I think the law is firmly on the side of the property owner.

      Those cops were very cool, it seems to me.

      1. BDBlue

        Perhaps they once had to call CIti’s “customer service” line. One of the worst, in my experience, in the sea of bad customer service lines out there.

  4. Bill G

    I guarantee that as long as we have a 2 party system:
    1) Banks will receive as large a bailout as they need to keep operating and pay out bonuses
    2) Any bank guarantees of repayment will be waived by the treasury or another government hand-out will be used to pay off the first – ensuring the taxpayer (the top 25% of incomes) is hosed.
    3) Any and all criminality by the banksters will be ignored until the statute of limitations expires at which time the banksters will rub it in your face by getting rich on tell-all books.

    Welcome to our the 2 party crony-capitalist oligarchy!!!

    1. Wendy

      EXACTLY. It is a comforting illusion that public opinion matters. But it is only an illusion. The indisputable fact is, public opinion was strongly against the bailout at the time. No one in Washington DC cared: they did what they wanted, against very strong contrary public opinion, and just made some speeches to make it all better.

      Public OPINION means nothing. This often makes me feel hopeless. However the Occupy movement may be showing us that public ACTION (not just opinion) may be able to accomplish something.

  5. Jim Haygood

    SEVEN DAYS TO DESTINY, comrades:

    (Reuters) – The world’s leading economies pressed Europe on Saturday to act decisively within eight days to resolve the euro zone’s sovereign debt crisis which is endangering the world economy.

    In unusually direct language, finance ministers and central bankers of the Group of 20 major economies said they expected an October 23 European Union summit to “decisively address the current challenges through a comprehensive plan”.

    http://www.reuters.com/article/2011/10/15/us-g-idUSTRE79C74G20111015

    You’ve been warned, doubters and footdraggers: the ‘plan to have a plan’ is going to deliver a plan — REALLY!

    Yes, next weekend seventeen blind mice huddled in modest molehills are miraculously going to erect a Big Rock Candy Mountain of gushing liquidity:

    In the Big Rock Candy Mountains
    There’s a land that’s fair and bright
    Where the bailouts grow on bushes
    And banksters sleep at night
    Where Zuccotti Park is empty
    And the sun shines every day
    And the fines and the fees
    And the arbitrage trees
    The POMO springs
    Where the brokers sing
    In the Big Rock Candy Mountains

    Lawdy, lawdy! But just in case, I’m gonna hold a few short positions, should those majestic ice cream-topped purple peaks on the horizon turn out to be just the shadows of streetlights mingling with my exhaled cloud of hashish smoke …

    1. Jim Haygood

      Europe hectors its PIIS-poor steerage passengers left waving white rescue flags from their below-deck portholes on the Euro-Titanic:

      The Greek bond losses now envisaged in the plan may be accompanied by a pledge to rule out debt restructurings in other countries that received bailouts, such as Portugal, to persuade investors that Europe has mastered the crisis, said the people on Oct. 14.

      http://www.bloomberg.com/news/2011-10-15/g-20-tells-europe-to-deal-decisively-with-debt-crisis-at-oct-23-summit.html

      BRILLIANT! 21st July and all that — just suck it up like the Irish do!

      ‘Mastered the crisis’ — does that rhyme with ‘Mission accomplished’? Bwa ha ha ha … piece o’ cake, bro!

      Bloomberg highlights the magnificent scene of colorful chaos, as dozens of cooks jabbering in regional tongues scramble to add their own secret sauce to Europe’s boiling cauldron of toil ‘n trouble:

      Officials are considering seven ways of multiplying the strength of Europe’s temporary rescue fund.

      A consensus is emerging to accelerate the setup of a permanent aid fund planned for July 2013, the European Stability Mechanism [to] July 2012.

      Seven ways to Sunday, comrades! By July 2012 we’ll have this all sorted right as rain. Steady on, lads!

      Meanwhile, why don’t we just CRASH THIS SUCKER RIGHT NOW to give Jean-Clodhopper Trichet a rollicking send-off, ending his catastrophic term in office at a Greenspandian pitch of turmoil, deceit, larceny and despair?

  6. LeeAnne

    Occupy Wall Street had its Stonewall moment last night.

    An epic even defeating kettling (portable prisons) and inciting tension and an excuse fo NYPD violence.

    Late last night, after police erected barriers in the path of demonstrators planning to march to Washington Square, its white shirts insistently demanded the crowd move back -another kettling maneuver for creating tension and potential for violence the peaceful demonstrators resisted.

    They shouted ‘you step back’, later when police claimed over a bull horn they had to protect pedestrians, the crowd shouted back “we are pedestrians” and “this is what a pedestrian looks like.”

    Leaders changed ‘hold your ground’ -the demonstrators did with changes to police “fight crime, not peace.”

    I got this watching the live feed from home -so can’t pretend I got every bit right -so please, write your own version -corrections, additions whatever.

    Finally, police relented VICTOR over NYPD portable prisons aka police all over the world kettling (imprisoning on the spot) for violence opportunities.

    /www.livestream.com/newchannel/popoutplayer?channel=globalrevolution

    As police imposed barricades, mounted police show up while demonstrators shout “get those horses out of here.”
    http://www.youtube.com/watch?v=yWow5WIypis

  7. b.

    Getting this in Chrome for the article link:
    http://www.nakedcapitalism.com/2011/10/24-people-arrested-for-trying-to-close-accounts-at-citibank.html

    The must-watch corrente link works fine:
    http://www.correntewire.com/so_how_many_times_have_banks_had_people_arrested_who_tried_to_close_their_accounts

    Interesting:

    “Warning: Something’s Not Right Here!
    http://www.nakedcapitalism.com contains content from robondmv.dyndns.tv, a site known to distribute malware. Your computer might catch a virus if you visit this site.
    Google has found malicious software may be installed onto your computer if you proceed. If you’ve visited this site in the past or you trust this site, it’s possible that it has just recently been compromised by a hacker. You should not proceed, and perhaps try again tomorrow or go somewhere else.
    We have already notified robondmv.dyndns.tv that we found malware on the site. For more about the problems found on robondmv.dyndns.tv, visit the Google Safe Browsing diagnostic page.”

      1. b.

        No worries – my comment was meant as a heads-up for you (in the expectation that others would get the same notifier). Even it it wasn’t a false positive, you are not responsible for remote sites.

        I wouldn’t be surprised either if a lot of the sites reporting on OWS outside the “respectable” ‘stablishment channels generate false positives. It doesn’t take a conspiracy, just selective attention. Nobody wants to blacklist the NYT, no matter how many meme pandemics the place is causing.

      2. ZachPruckowski

        Yves, my guess would be that the infected site is hosting an ad your ad network is serving. That’s probably causing the issue.

  8. LeeAnne

    correction: Leaders chanted ‘hold your ground’ -the demonstrators did with chants to police “fight crime, not peace.”

  9. Dave of Maryland

    Hello Yves,
    I just clicked on the arrests at Citibank link and instead of the full story, Google Chrome came up with a big red WARNING, claiming there was malware on your site and that I (or rather, my computer) was at risk. And while I’m not a geek, I would guess that to be phony.

    This, along with the extremely slow site response a couple of days ago, which I noticed, too. Is somebody out there playing hardball?

    1. Percy

      Not funny. My own computer froze when I tried to go to the story from the link. I imagine I am not the only one. I am not tech-savy enough to know how this is managed by whoever did it, but it is unpleasant. And worrisone, as so much is these days.

    2. Yves Smith Post author

      I’ve put up repeated messages on this. These are false positives, we’ve scanned the site and my tech guy looked at the code manually. There is some oddly written but benign code in the Wikivest links that seems to be triggering some programs.

    3. gatopeich

      Curiously enough, I am getting the “Malware warning” at several unrelated sites, the most likely shared point is the mention of Occupy Wall Street movement:

      animalspirits.blogspot.com
      financialarmageddon.com
      georgewawhington2.blogspot.com

      Defamation campaign anybody?

  10. the anti-kristof

    From the Kristof article
    “I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses.”

    efficient uses like war! Yep Kristof really gets it!

    By the way, the incoherent mumbling and mob rage of the OWS? That’s “the primal scream of democracy.”

    1. the anti-kristof

      The phrase “primal scream of democracy” was from Al Gore who invented the internet, and was the first to try to stop global warming and to bring it to our attention. Isn’t it a nice phrase? Tipper thought so.

    2. BDBlue

      In addition to campaign funding, war is also why the banks are so powerful. Can’t fight a war without access to credit/funding and the banks provide that.

        1. Jim Haygood

          More precisely, war is the purpose of the Federal Reserve.

          Historically, wars were quite difficult to finance. Thanks to the Federal Reserve, we now can finance permanent war.

          Victory in Vietghanistan! Onward to Kenya-Uganda!

  11. Evan J

    The LA times link is remarkable news. The trustees of the California Medical Assn have recommended legalization of marijuana! This is a first for any major medical organization. In a state medical association, the trustees are usually the most conservative old farts, and longstanding AMA members, making this even more surprising.

    Several years ago, as a member of a medical specialty organization in another state, then considering medical marijuana legislation, I argued against it. Most physicians, myself included, don’t want to be put in the middle of this, for many good reasons. I argued for a resolution in support of full decriminalization or legalization, but got no support whatever from my colleagues (who also firmly opposed the medical marijuana law).

    While the drug certainly is not without potential risks and adverse effects, the harm to individuals, families and society caused by ongoing prohibition is far greater than any risks associated with use of the plant, in its various forms. However, physicians should not be in the business of prescribing an intoxicating drug, for nebulous and poorly substantiated medical indications. Available marijuana also has little effective regulation or recognized standards for product potency and purity, so a physician would have no idea how much to prescribe.

    People who wish to consider treating their symptoms with cannabis (or to use the drug for any other reason) should be free to make their own informed choices. While consultation with a physician is advisable, it’s ultimately the patient’s decision. The state should not foist the responsibility and liability for cannabis use onto physicians.

    1. Jim Haygood

      Thank you. If it were not for the ugly threats of asset forfeiture and multi-decade prison terms for ‘manufacturing,’ people could grow their own herbs as easily as tomatoes. Physicians’ prescriptions would be an entirely moot point.

      State medical marijuana laws are a complex workaround for an intransigent and hidebound fedgov, which foolishly intruded into this issue in 1970 and now refuses to get out of the way.

  12. Sam

    Let the bank CEOs direct their many lobbyists in Washington, DC, to reinstate Glass-Steagall. If the CEOs don’t, within five days, then they are criminals and can be treated as such. In addition, repeal all de-regulation legislation from the past 40 years. If bank CEOs squeal, that’s a good sign repeal is what we need.

    1. craazyman

      I’d give ’em 30 days, just cause I’m a nice guy.

      But it sounds like a plan to me!

      I’d also say that any publicly held corporation has to report on a quarterly basis, on its web site, the pay differential between it’s highest 10 and lowest 10 paid employees — including contract workers like office cleaners and security gaurds.

      Let the 99% decide if they want to subsidize financial rape by the 1% by buying their products.

      I don’t. In fact, I have yet to buy an iPad, simply because of the image in my mind of the suicide nets. What’s up with that Apple? F*ck your iPad and your nauseating “change the world” self regard.

      Anyway, I’m sure I have a Foxconn peripheral somewhere in my collection of computer junk, but I’m not entirely rational. I’m just pissed off like everybody else.

      I’ll probably end up buying an iPad, eventually, but I need to simmer for a while, and hold out as long as I can. Still trying to get over the underwhelming uselessness of my Droid. I gues I’m just a “printed page” kind of person.

    2. LeeAnne

      I love that idea. Mines has been to declare the Supreme Court intervention in the 2000 election illegal, and reverse every Supreme Court decision and law passed since then.

  13. Tyler

    Is there some reason that it’s almost impossible to read the contents of recent items? It’s all washed out and very hard to see. I’m no coding expert but I think that last number in what’s below has to be changed:

    Recent Items

  14. Tyler

    see what I mean, I forgot to take out the arrow signs that make things invisible..Here it is without them.

    div id=’main-wrapper’

    div class=’main section’ id=’main’
    div class=’widget Feed’ id=’Feed1′
    h2>Recent Items</h2
    div class='widget-content' id='Feed1_feedItemListDisplay'
    span style='filter: alpha(25); opacity: 0.25;'

  15. rjs

    re: MERS; an email i recvd from a real estate agent in WA:

    I’m so glad they are doing a class action about MERS. MERS is a straw buyer, it’s obvious, and the government knew it. They did not keep track of the real owners of the properties in most cases. Why should they? They already committed felony upon felony. Why bother? They destroyed our private property tracking that had worked fine for over 200 years. If you have thousands of investors with an interest, however small, in a mortgage, they have to join in a foreclosure, period. So the banks are not going to waste time foreclosing on MERS.

    They could get out of it by modifying loans and taking MERS off the title, but they are SO greedy, they only take the modification fees and then foreclose, if they want, after they’ve told people not to pay their payments or they can’t get a modification! If that one AG hadn’t held out, all the lenders would be totally off the hook for trillions by paying a relatively small fine. Now several AGs are on the bankwagon, thank goodness.

    That was the first article I read where it says that even if you pay off your mortgage and MERS is on the title, you can’t legally sell your property because it probably has a clouded title. That is a felony, I believe. Many people think their title policy will cover that, but many title policies do not since they only cover what is recorded on public record. Much of this was never recorded, so the title company is not responsible unless you bought a special, more expensive title policy.

    I think what it will come down to, is what you have in your possession, is what you will get to keep. Maybe no income, but then again, maybe no debt. Who is going to foreclose on you? Who is going to repo anything you owe on? So the people most in debt may come out on top.

  16. Typing Monkey

    Re: Occupy Wall Street

    Conventional wisdom is that OWS will sort of fade away as the weather gets worse.

    OK, fine. But let’s hypothetically say that it doesn’t. How does it end? Because there are no real demands from a coherent and organized group, there’s nobody to negotiate with. To say that it’ll end when “the 99% get their “fair share” is equally vague–nobody knows or can define what constitutes a “fair share” to the protesters. To say that it’ll end only after people have free education, medicare, etc, involves the protesters basically being there forever.

    So, I guess the question, more succinctly put, is how does OWS end in any way other than forcible removal of those involved? And how (concretely, not vaguely) do any of TPTB actually placate such a movement?

    1. EH

      how does OWS end in any way other than forcible removal of those involved?

      How about, “when they accomplish enough change?”

      1. Typing Monkey

        Well, what constitutes “enough”? That’s what I mean by being vague. Of course, being vague is the best you can do in this case, because there are no real coherent and specific demands (nor can there be).

        I’m trying to play out various scenarios in my head as to what can happen. Most of them end with change, but a gradual change as opposed to an immediate one, but never mind.

        Let’s say that in three months or six months or whatever, I read a (highly unlikely) FT headline that says “OWS Wins, Peaceably End Protests after (all? key? Single?) Demands are Met”. What would the article say about what “OWS” got? What did Wall Street give up? What are the implications? What had to happen for everything to come together? (eg: Run on the banks? Constant worldwide protest? Resignation of Treasury officials or large bank CEOs? Increasing likelihood of an anti-Wall Street presidency? ). What kind of timeline is involved? A week? A month? A year? etc. How does the system evolve due to OWS “winning”? Do you get a right wing protest a week later to Occupy Iran? or another left wing one to Occupy Healthcare? and on and on.

    2. paper mac

      OWS isn’t a movement that wants to negotiate with TPTB. It consists overwhelmingly of people who recognise the futility of reformism and working within the hideously broken electoral system. It isn’t supposed to “end”, it’s supposed to build a new society within the shell of the old. This isn’t really that complicated.

  17. john c. halasz

    On oil price paper, the relevant comment from Thoma’s site was this one:

    “Paine said…

    Dallas fed
    On oil markets and speculation

    Dracula on Security at the blood bank”

  18. neo-realist

    In the 60’s, TPTB had the resources of the great society and a healthy pre-globalization american economic base to pacify the mob. Since government has been drowned in a bathtub thanks primarily to plutocrat welfare, wars on the credit card and an economic base that has been shrunken to dead end service jobs and housing bubbles by outsourcing and technology, TPTB doesn’t have the bullets of government surpluses and domestic economic growth to placate the people so they’ve resorted to the only weapons they believe they have left, i.e., outright repression of the movement and media mischaracterizations and lies about it.

  19. Glenn Condell

    Standard issue Serious Beltway Democrat, Iraq war enabler and enthusiastic imperialist Michael Cohen gets a gig at the Guardian to assist with Operation OWS Co-Opt:

    http://www.guardian.co.uk/commentisfree/2011/oct/16/occupy-wall-street-barack-obama

    A flavour:

    ‘OWS has arisen not because of the left’s activism, but despite it. Focusing on electoral victories and legislative accomplishments, the left has failed to push an effective populist movement, focusing its energy more on social issues than economic ones.’

    ‘‘Washington, due mainly to the unceasing obstructionism of the Republican party, seems completely incapable of arresting America’s decline’’

    ‘their grievances and demands are very much at one with Obama’s emerging re-election strategy… For a president intent on running as an economic populist, a populist political movement might just be what the doctor ordered’

    I have tangled with Cohen in the past, at Tiny Revolution and at his base, Dem propaganda shop Democratic Arsenal. I mentioned this in a post on Comment is Free, in which I called Mr Cohen a shill and a post-comet dinosaur (thanks twig, for the term) – anyway it lasted less than an hour before removal by the moderator. Comment is Free but Cherrypicked.

  20. Stephen Purpura

    I was equally critical of the Fed report on speculation on oil, but I had a different take on it. It took me all of a week to realize in 2008 that the data the Fed was basing its report on (today) is cooked. Crooked. Fraudulent. Mis-reported. Institutional fiction. Etc.

    If you start with data that is cooked to be close to fundamentals pricing, don’t be surprised when you reach the conclusion that it’s close to fundamentals pricing.

  21. Foppe

    Not quite the most tasteful of topics, but it seems a decent enough article, and it documents yet another side of the many sided story surrounding the commercialization of “care”: “Designer vagina surgery: snip, stitch, kerching!

    I’ve come to the Congress on Aesthetic Vaginal Surgery because I want to learn more about one of the fastest growing cosmetic procedures in the US. This newish industry consists of doctors and their clients (clients, not patients, because these surgeries are cash-only elective procedures) who believe the female nether area can be improved upon or remediated. Procedures offered include labiaplasty (trimming or completely removing labia), vaginal rejuvenation (tightening), hymenoplasty (“revirgination”) and clitoral “unhooding” – among others.

    On my way to check out the exhibits, I pass a 4ft welcome poster of a woman’s bare back and well rounded buttocks. At a cosmetic gynaecology conference at a luxury hotel in Las Vegas only six weeks earlier (yes, these surgeries are so popular there are two competing conferences), even the ads for post-surgical “compression garments” were made to look a little S&M sexy, while the mostly male doctors walked around with name badges festooned with identifying ribbons (“Presenter”! “Faculty”! “Attendee”!), looking like generals returning from battle with a chest full of medals.

  22. doom

    Incidentally, Occupy the boardroom is looking like a honey pot. They’re using Cloudflare, so either they’re imbeciles or they’re aspiring homeland security heroes.

    Or probably both.

  23. Steve

    So Gretchen Morgenson is now a leader in the ‘blame-everything-on-our-government… we-must-destroy-our-government’ movement. She’s suddenly a pure-blood Tea Partier?

    The bankers/speculators must be dizzy with glee now that Gretchen is solidly on their side. Slaying the government dragon will finally let the ‘free market’ continue doing it’s magic (i.e. let home values plummet $trillions further, below true values, so that the bankers/speculators can make another killing first shorting the downside and then running it back up)!

    How many $billions ($trillions) is Gretchen’s ‘government-cannot-protect-us… government-is-our-enemy’ scam worth to the bankers/speculators? The over-inflated market was worth $8 trillion. How many $trillions can Gretchen help the bankers/speculators deflate the market?

    How many $millions did the bankers/speculators pay Gretchen for her assistance? How many millions of her book did they purchase? She will certainly get many $millions beyond her book sales! How many? Her assistance is worth $billions/$tillions. Will they reward her with a $billion? Do insiders like Gretchen have off-shore accounts being flooded with tens of $millions? Hundreds of $millions? $Billions? Or do people like Gretchen just sellout for a few measly $million?

    These massive market manipulations by the bankers/speculators (i.e. Organized-Global-Mafia-Criminals) have now totally destroyed Western economies. Western people MUST take back control of their Governments and organize a counterattack against the Global Mafia. Government controlled by, and acting in the interest of, the majority is the ONLY way out of this mess. Only when the majority recognize that they must organize together to form a government to protect them will there be enough concentrated power to fight back against the Global Mafia.

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