Moonwalkers: Reflections from Sterling, Diamandis and more h+ (hat tip reader David C)
States close rest areas in bid to stave off shortfalls: Travel expert warns safety could suffer USA Today (hat tip reader DoctoRx)
Man bursts into flames after being hit by Taser Telegraph
The Case Against Larry Summers Elizabeth McDonald (hat tip Barry Ritholtz)
Despite the meltdown too many still think money = brains Collateral Damage
The Decline and Fall of Hillary Clinton Nile Gardiner
Losing my religion for equality Jimmy Carter, The Age
Is Something Wrong with Certain Kinds of Trading? Cassandra
Insight: Regulating human nature Andrew Lo, Financial Times
Treasury clashes with Tarp watchdog on data Financial Times
Goldman and JPMorgan — The Two Winners When The Rest of America is Losing Robert Reich, TPM Cafe
Economists warn jump in home loans is unsustainable Independent
Flow of credit to businesses falls for second consecutive month Guardian
Bernanke: Fed able to foil inflation when time comes Reuters. If you believe that, I have a bridge I’d like to sell you.
Moody’s is unimpressed by German bad bank scheme Eurointelligence
Inside the Meltdown: Financial Ruin and the Race to Contain It Michiko Kakutani, July 20, 2009
Big Estimate, Worth Little, on Bailout Floyd Norris, New York Times. The critics are correct that Neil Barofsky’s $23.7 trillion number does not reflect the actual damage taxpayers will suffer, but they miss an important point. That figure is a combo plate of hard dollar expenditures like the TARP, plus guarantees and special facilities, which are tantamount to credit lines and guarantees. The fact that the POTENTIAL support extended is this large is a politically significant fact.
China’s Magic Numbers: Is the republic really growing at 8 percent a year? April Rabkin, The Big Money (hat tip reader Don B)
Judicial Apartheid: Heralded by the Supreme Court as Fair, Vast Private Judicial System Exposed as Fraud Pam Martens, CounterPunch (hat tip reader Steve V). Today’s must read.
Antidote du jour:
Most of the commentary in the space travel piece is techno-triumphalist drivel.
The moon landing as "human civilization's greatest achievement"? Give me a god damn break. The work of any minor artist infinitely outstrips it. Even any basic gesture of friendship is vastly more meaningful than this glorified Hummer incursion to the liquor store.
Of the commentators sampled, only Nakashima-Brown, and perhaps Sterling, get to the bottom of it.
Here's the best thing I've ever read on space travel, by Hannah Arendt in 1963:
Her basic point is that, for all the bloated rhetoric about slipping the bonds of the earth and becoming astrally free, man is in fact never so dependent, never so shackled, never so hermetically sealed, never so absolutely dissociated from the environment, never less free, never more a slave and useless appendage of technology as when he's in a space can.
This is therefore the best metaphor and example of man's enslavement to technology in itself.
Interesting view by "attempter" and the quote is a refreshingly different perspective.
On "Goldman and JPMorgan — The Two Winners When The Rest of America is Losing" …all I can say, this is the obvious outcome of too big to fail – way too big to fail. And why do we have to support the firms, that were too venal, stupid, or venal and stupid, to see the bubble?
"Judicial Apartheid" story quotes Richard Neely as saying: "Banks and other bloodsuckers make campaign contributions and single moms don’t."
So the banks own the courts.
They own the senate and congress.
And they certainly own President Obama and his little "scientist-kings": Geithner, Summers, Bernanke, etc.
I didn't care for the "Judicial Apartheid" piece, which attempted (unsuccessfully) to hide a legal agenda underneath the facade of a social justice crusade. One rather gets the impression of an out-of-work trial lawyer pining for the good old days of yore, when carefully selected New Jersey inner-city juries would readily award judgments that would make the PowerBall Lottery blush.
Michiko Kakutani's juxtoposition of a talented and articulate Wall Street sophist, the Wall Street Journal's economics editor, David Wessel, next to the dissident Lawrence G. McDonald, raises some interesting questions.
Wessel argues that the government's allowing Lehman to collapse “caused — or coincided with — so much financial turmoil in large part because of the lack of a consistent story.”
But was that "consistent story"? Was it not that the U.S. government could be counted on to backstop and bailout prominent financial industry players, regardless of how incompentent or stupid they had been? After all, as Kevin Phillips meticulously documents in Bad Money, the U.S. government has consistently and unfailingly indemnified large banks for losses resulting from their poor decision making, beginning in 1982 with the bailout of the creditors to Mexico, Argentina and Brazil.
Enter Mr. McDonald, a resentful ex-employee of Lehman. He argues that Richard Fuld ignored warnings “that the real estate market was living on borrowed time and that Lehman Brothers was headed directly for the biggest subprime iceberg ever seen." But why shouldn't Fuld ignore those warnings? Wasn't it reasonable for Fuld to believe that, if indeed Lehman did collide with "the biggest subprime iceberg ever seen," that the U.S. government would bail it out?
Wessel praises Geithner, intoning that "smart people solve crises one at a time and worry about dealing with unintended consequences tomorrow.” But is that not the sort of thinking that landed us in our current predicament?
So what is the lesson we should take from all this? Wessel seems to argue that it is that large financial players must be bailed out, regardless of the cost.
Kakutani posits that more attention might "be focused on why Lehman — and other firms like Bear Stearns and A.I.G. — were ever allowed to engage in the sort of reckless, illogical, self-destructive gambling that turned them from Wall Street behemoths into combustible houses of cards in the first place."
But it seems that, given that Goldman Sachs and Morgan Stanley have gone right back to their old tricks–high-risk, highly leveraged activities back-stopped by the full faith and credit of the U.S. government–that Wessel has prevailed.
That piece on Hillary was bizarre. I really have no idea of whether Gardiner is right on Clinton or not (especially because he seems to report on her motives, and I have no idea how he would be privy to such information), but I'm pretty certain he doesn't understand the meaning of the word "foolhardy." I meet a lot of people who suffer from the disease that they think they know a lot more than they actually do, but Gardiner has suddenly jumped way up the list in the category of most delusional.
DownSouth, FWIW, I met Wessel (back in December 08), and I don't think much of him. He's pretty much an apologist who learns enough to write an article, but not to understand the system – a lack of intellectual depth is not a good thing to produce a good reporter. I had a chance to ask him what he thought of the CDS market, and his reply was to provide a textbook definition of what it was. When I asked him what he thought of its activity, and whether there will be any issues he provided the most useful of responses of 'we'll see.' That's the economics editor of the nation's largest business newspaper, and he couldn't provide depth to this sort of question.
Yves, I also looked back at one Pam Martens piece that seems like it could be useful to go over, and I'd like to hear what you think.
It's a piece written around Jon Stewart's interview of Jim Cramer, but also focuses on defining the real core of the matter in today's markets existing in trading, not necessarily in the products that were being used and sold.
"China’s Magic Numbers: Is the republic really growing at 8 percent a year?"
According to Cajing, 7.1 of the 8% growth came from investment (aka gov't). So, without ongoing stimulus and/or an economic upturn, China's growth rate is a few percentage points per annum.
I showed the antidote picture to a friend and he thought it had been photoshopped, somehow. Can you tell us where you found that picture?
Anonymous at 12:38 PM said in reference to Wessel: "That's the economics editor of the nation's largest business newspaper, and he couldn't provide depth to this sort of question."
So what are you telling us, that for these hothouse babies like Wessel to be successful it's not necessesary to be either talented nor articulate, only to ape the party line ad infinitum? Or should that be ad nauseam?
More accurately, gasoline spilled on man carrying gigantic Molotov bursts into flames.
The Case against Larry Summers repeats what many of us have been saying since before the Inauguration. I agree that Nile Gardiner is a whackjob. It would be hard for Hillary Clinton not to be eclipsed at State. Most of our foreign policy is either military or economic in nature and neither is run through State. With extremists in control in Israel, there will be no movement on Israel-Palestine so where exactly is she supposed to leave her mark?
I agree too about Wessel. These are guys who never saw the housing bubble or the financial bubble. They consistently misread and underestimated the situation, and Wessel portrays them as tough exhausted professionals trying to stave off disaster.
The photo isn't Photoshopped, it's just a trick of perspective: the camera is very close, so the cat seems bigger, note the relative size of the hands. Still, that's a big kitty, most cats can be held with one hand (although they certainly don't like it.)
So Peripheral, Pam Martens is a securities lawyer, if you track her background. Not a trial-side. Dug into Madoff waaayyy back, for example. She's anti-fraud.
And regarding those jury awards you dislike, yes, the system of jury trials has its flaws. If the jurors aren't too bright or the judge exploits the advantages of the bench, they can yield farcical advantages. Here's a phrase to remember though: 'checks and balances.' Institutional power and wealth have tremendous inherent advantages. The right, nor potential but right, to a public trial judged by regular folk is one of the few checks on those inherent advantages that we have. Are you ready to throw that over, just like that? And consider the outcomes described all too well here: rigged 'arbitration' which amounts to mandatory verdict for institutional powers in all cases. Read those numbers; the amount to in all cases. That, if you're following the situation, is a license to fraud: there is no penalty, no recourse to law, so there is _absolutely no rule of law_. None, it's gone. If you have a contract that goes into mandatory arbitration, the verdict has been bought, and you've already lost.
If you don't like _that_, what do you propose as an alternative? Other than purchasing a firearm and aiming it at someone's head including your own??
Thank you a million times for the refer to tha article by Hannah Arendt. Very relevant to me right now. And very insightful in other ways too. Aren't we all suffering under the idea that whatever can be done, must be done? Be it financial gameasmanship or scientific folly, everything is done without further consideration, and consequences are carried by whoever happens to stand too close. And the only safety is to stay aware all the time on the whereabouts of the hucksters to keep sufficient distance – so that one only needs to carry the systemic burden in the form of taxes etc.
Kristina, you're welcome. I'm glad you liked the piece.
"If it can be done it should/must be done" is indeed the sociopathic, nihilist emptiness at the core of science, technology, engineering.
Modify the nightmare to "If it generates one cent of profit it should/must be done", and you have the same evil core of capitalism.