Yves here. This post is more important than it might seem. I find it is taking more and more effort to navigate through the hall of mirrors of propagandizing, particularly in the geopolitical realm. Thus it is critical to read news on two levels: its content, and how it is presented, as in how it is framed, what experts are cited, what issues are buried or omitted. Living with all Pravda, all the time, is intellectually taxing, at least if you care to understand what is really going on.
Wednesday, October 1, 2014
Yves here. Martin Khor focuses on the alarm created by the ruling against Argentina that allowed a Paul Singer’s NML, a vulture fund with a small position in Argentina’s bonds, to vitiate a hard-fought bond restructuring. The particularly ugly part that don’t get the attention warranted is that it is widely believed that Singer took a much larger position in credit default swaps, meaning he was seeking to create and betting on an Argentine default. And another ugly wrinkle is the role of private law in these processes. ISDA, a private organization, determines what is an event of default for credit default swaps.
Singer was on the committee that voted whether Argentina was in default (recall it had made payment under the restructuring to the trustee, Bank of New York, but BONY was barred by the court from remitting payment to the bondholders). This gave him a direct say in an event in which he had a large economic interest. And that was no lucky accident.
Eric Holder bails while press maintains radio silence on his failure to prosecute criminal banksters, ObamaWar news, and Apple’s buggy software and bendy phone.
Topics: Water Cooler
Posted by Lambert Strether at 1:58 pm |
In a mere four months, the SEC has gone from calling out widespread abuses in the private equity industry to not just walking back its detailed criticisms, but actually enabling a coverup.
Posted by Yves Smith at 6:55 am |
A corrosive development is the ease with which lenders
steal extract income which is not properly theirs from borrowers through what is at best incompetence and in far too many cases is fraud. This pattern has repeats itself again and again: in mortgage servicing, with debt collection, and more and more with student loan servicing.
Yves here. It’s hardly uncommon for big international pow-wows like the G20 to produce grand-sounding statements that when read carefully call for unthreatening, which usually means inconsequential, next steps. But this G20 just past was revealing, in a bad way, about the state of international political economy.
If you had any doubt the US economy had been rearchitected to favor the haves versus the have-lesses, this chart by Pavlina Tcherneva should settle it. Justin Wolfers, hardly a raging liberal, just tweeted:
Today’s Water Cooler: War in Syraqistan, Peoples’ March on Climate roundup, Scotland aftermath, our financialized economy, and Cyprus gas
Yves here. In the wake of increased debates over rising inequality, particularly income inequality, many economists take the point of view that high levels of disparity are a state of nature. But that’s a terribly uninformed way to look at the question. Economies of any complexity are not natural; even modern capitalism comes in many forms. This post looks at developing economies that have done a better job of dampening inequality to see what they have in common.
Posted by Yves Smith at 6:55 am |
ObamaCare’s website may be fixed, but enrollment figures are bad, the project is out of control, and the back end is still broken.
The housing market is looking wobbly now that big money investors are pulling back. But anyone who was paying attention should not be surprised.
Yves here. Please note that Don’t Start from Here: We Need a Banking Revolution has been released in the UK and was scheduled for publication in the US in early September but apparently is not yet for sale. I hope readers will keep an eye out for it, because it appears to fill a void, that of describing in high-level accurate terms why the banking system no longer works for society at large, how post-crisis banking reforms missed the mark, and what measures need to be put in place.
Today’s Water Cooler: The People’s Climate March, the latest war news on ISIS and the new demon figure Khorosan, and Silicon Valley follies.