Links 10/25/09

Midway (hat tip reader Scott via Andrew Sullivan). The photos are very disturbing. You must see them.

Gene therapy transforms eyesight of 12 born with rare defect Los Angeles Times (hat tip DoctoRx)

Citigroup’s “Hail Mary Pass”: How To Know Citigroup Is In Serious Trouble Michael Shedlock

UK households ‘lost 13pc of wealth in one year’ Telegraph

Public must learn to ‘tolerate the inequality’ of bonuses, says Goldman Sachs vice-chairman Guardian. In case you missed this truly offensive item. We not only are told “let them eat cake”, but that it’s really in our best interest too.

“The Roots of Protectionism in the Great Depression” Mark Thoma

Tyler Cowen Is a Protectionist When It Comes to Health Care Dean Baker

Dissenting from the Conservative Othodoxy on Taxes Bruce Bartlett (hat tip Ken Houghton)

Patchwork Fixes, Conflicting Motives, And Other Things To Avoid: Some Lessons From the Regulated Non-Financial Sectors Peter Fox-Penner, Baseline Scenario

Another quarter of negative GDP growth in the UK: situation hopeless but not serious Willem Buiter

Small Business Faces Sharp Rise in Costs of Health Care New York Times

Contrarianism without consequences Paul Krugman

Imagine If September Hadn’t Seen The Homebuyer Tax Credit Clusterstock

Obama Declares Swine Flu a National Emergency as Cases Surge Bloomberg. The most troubling bit:

Swine flu is now widespread in 46 states and accounts for 411 confirmed deaths since Aug. 30 and more than 8,200 hospitalizations, according to the Centers for Disease Control and Prevention. The numbers reflect what would be the peak of a typical flu season.

After the Billionaires Plundered Alabama Town, Troops Were Called in … Illegally Mark Ames, Alternet (hat tip reader John D). The writing is over the top, but the facts are not pretty.

China Economy May Slow Next Year, Stephen Roach Says Bloomberg

Antidote du jour. Another award winning photo:

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  1. Richard Smith

    According to commenters to the Shedlock post (I haven’t checked), two other banks have 29.9% APRs on all credit card balances, namely HSBC (from November) and Wells (who have already made the move).

    It will be interesting to see what JPM does, if anything.

    Citigroup’s corporate body language unnervingly resembles Lehman’s, but in slow-mo.

    1. Skippy

      RS, over at ZH their all over this, and other goodies.

      Skippy…yeh s l o w – m o is a good description.

    2. Yves Smith Post author

      I should have offered my countervailiing personal Citi data point. I now look at all the balance transfer offers I get to see what is happening on the credit card front. Vastly fewer have shown up, and when they do, the norm is 5% balance transfer fee plus an interest rate anywhere from 3.99% to 5.99% for 6-7 months.

      I just got an offer from Citi that is a clear outlier. 3% fee, 0% interest for six months, 1.99% for one year.

      Not consistent with trying to cut credit card outstandings at all, curious to get reactions.

      1. Richard Smith

        Hmmm, not a one-way trend then. That makes me wonder what sort of FICO score these 29.99% payers have (I’m assuming yours is pristine). Perhaps the banks are trying to home in on the really good creditors and massacre the rest.

        Err, apologies to anyone paying the big interest rate who feels affronted by that.

        1. Yves Smith Post author

          Not just credit ratings, I think you have to be late on 2 payments to trigger a report to credit agencies, but if you are late on one, your issuer can jack your rate up to the moon. So the sweet spot for them is someone with decent income who gets sloppy and misses a payment.

          And on these special offers, they of course hope the person will carry the balance beyond the cheapie period, Even a few months beyond makes this attractive to them.

          1. Richard Smith

            Ye Gods, it’s like getting spammed.

            Card companies are much better behaved over here – our consumer protection seems to be s bit stronger. Note the principle on which the fairness of penalty payments is assessed in the UK:


          2. Skippy

            Bruce K over at ZH did a post about being hit for the full 29.9% increase after 30 years of spotless history. Even posted the letter.

      2. David Wigan

        Hi – I am trying to contact Richard Smith. Can anybody help. My email dwigan at

  2. Richard Smith

    Thanks Skippy, will take a look.

    I missed the Chase (JPM) move, also in the Shedlock comments: they have gone for 29.9% APRs too. So you can add JPM to the list. That’s a lot of big banks reaching the same conclusion at the same time.

    Given the way Americans fund their small businesses from credit cards this surely amounts to a whole extra credit crunch. Insane.

    1. Richard Smith

      Last time I looked there was $1Trn of outstanding credit card debt. I doubt whether every last cent of that is now paying 30% instead of 13%, so $170Bn extra, for consumers and small business to find per annum, is the maximum additional hit from this rate change.

      But maybe the actual number wouldn’t be so far shy of that. Enough to take the edge off what’s left of Obama’s $800Bn stimulus, anyway.

  3. ozajh

    Philosophically, the views expressed by the GS V/C in London remind me of Robert Toll’s comments on housing prices immediately before the top, where he was talking )approvingly) about the US moving towards the old European model where only a small minority ever got the opportunity to actually own.

    In both cases we see the beneficiaries of gross distortions in the financial markets blithely assuming that the distortions will continue, and indeed intensify, but that there will be no overall impediment to business-as-usual.

    The entire concept of mean reversion seems to have escaped them . . .

    1. craazyman

      This is a man possessed by demons, like so many of his kind. Anything founded in the light of true spirit will escape them.

  4. LeeAnne

    the photos are unforgettable and Andrew Sullivan’s reporting exemplary; he made sure that in this case we can be sure the photo isn’t lying. I’ll have to pass on the many ways I can personally do something about buying and disposing of plastics but the scope of the problem is overwhelming. Who could ever buy another plastic roller after seeing this? We sort the trash but only plastic deposit bottles are recycled; the myriad of other small plastic items are pervasive.

    But there is a mystery here. I don’t see New York City pigeons bothered by this. The only dead pigeon any of us have ever seen is road kill. Could it be evolution at work? The pigeons do seem to be getting larger and more ominous, flying and swooping closer to our heads. hummm –maybe just my perception –scary economy, decrepit government and all that.

    1. Yves Smith Post author

      I don’t know what the native diet of NYC pigeons is, but they do get some food from ladies in the park, and have access to more edible human garbage (food leftovers). The great Pacific garbage patch is presumably crowding out whatever the birds would normally eat.

  5. BDBlue

    From that NYT link on small business owners facing sharp increases in health insurance costs:

    “The higher premiums at least partly reflect the inexorable rise of medical costs, which is forcing Medicare to raise premiums, too. Health insurance bills are also rising for big employers, but because they have more negotiating clout, their increases are generally not as steep.

    Higher medical costs aside, some experts say they think the insurance industry, under pressure from Wall Street, is raising premiums to get ahead of any legislative changes that might reduce their profits.”


    “There’s no one out there who hasn’t had to do a mea culpa to Wall Street,” said Sheryl Skolnick, an analyst for Pali Capital who follows the companies. While the industry is particularly vulnerable now in Washington, she said, “it seems like they’re more afraid of Wall Street.”

    Gee, I’m so happy that the bloodsuckers on Wall Street also get to run America’s healthcare system. And that, whatever “reform” comes out of Congress, that isn’t going to change for most of us.

  6. LeeAnne

    Embezzlement is the issue.

    “Public must learn to ‘tolerate the inequality’ of bonuses, says Goldman Sachs vice-chairman.” Prince Andrew, member of THE royal family, was quoted recently saying the same thing –stupid of him to think he could be a credible commentator considering how they get their money with anachronistic arranged breeding and all that.

    Inequality isn’t THE issue, –Ill gotten goods by a few who continue their embezzlement of the people of countries all over the world, is.

  7. mobutu's rotting corpse

    The banana-republic analogy in the alternet link is completely apposite – especially the authoritarian politics of it. That’s why the IMF guys are the only insiders who make sense – they know 3rd-world collapse because they’ve seen it all before. People still think we’re different – we used to be but now we’re an undeveloping country. Of course the south will lead the way. Couldn’t happen to a nicer state, by the way.

    1. gordon

      Victims of United Fruit now and in the past might smile at your statement “People still think we’re different – “. As you say, couldn’t happen to nicer people.

      1. Mobutu's rotting corpse

        True, it just felt better when the peons were somebody else. But debt peonage is such an effective social control mechanism, you just knew it would come home at some point.

  8. fresno dan

    Public must learn to ‘tolerate the inequality’ of bonuses, says Goldman Sachs vice-chairman

    “One of the City’s leading figures has suggested that inequality created by bankers’ huge salaries is a price worth paying for greater prosperity.”

    I always wondered if our financial problems were caused by the bankers being evil, or very, very stupid (or BOTH)

    Well, they’re not stupid…they’re insane,… delusional, bonkers, unable to perceive, comprehend, and acknowledge reality.
    “Greater prosperity!!???!?”

  9. eh

    The Midway link…just another reason why I will never understand anyone who says ‘I love people’.

    Nice work if you can get it:

    Goldman Sachs Still Paid for Swaps on Redeemed Bonds

    Oct. 23 (Bloomberg) — New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc. for protection against rising interest costs on bonds that the state redeemed more than a year ago…While New Jersey replaced the debt with fixed-rate securities in 2008 after the $330 billion auction-rate bond market froze, the swap — in which two parties typically exchange fixed payments for ones based on floating interest rates — isn’t scheduled to expire until 2019.

  10. halbhh

    This Antidote du jour photo was surprising. Unless that cat gets an intervention, it’s over. Perhaps the fact of the photo suggests the cat might be rescued.

    Coyotes, only slight more powerful than that fox, take pets quite often in our area.

  11. halbhh

    I clicked through. The cat survives this particular moment. A fierce house cat in it’s prime could chase off a fox temporarily, sure, if the fox wasn’t accustomed to cats, and…most important, if the cat is nearby to a greater danger the fox is afraid of, as in this case.

  12. MyLessThanPrimeBeef

    Regarding the Midway photos, it’s not about the plastic rollers themselves, but about people who use them.

    It’s the same with any scientific research. A scientist has to ask herself, OK, I am looking for a discovery. What is it, I don’t know yet. So, how do I know the discovery won’t be evil?

    That kind of consciense probing inner search ought to stop any research effort dead on its track.

    And you can’t pass the buck and say the good or bad your discovery is up to how other people use it. You can’t guarantee that it won’t be mis-used. Sure, your research is going to save the planet. But how do you know if the littel secret about nature you are about to uncover won’t make her more vulnerable?

    I said it before. If a little subprime builder needs to file an environmental impact report for his little subprime subdivision, so should any research scientist.

  13. leeAnne

    you mean Einstein could have included a variable for ‘war not’ or ‘peace only’ in m=E/c2 and/or E=mc2?

  14. Francois T

    About this Alternet link, where the Army occupied an Alabama town;

    I’m still struggling to wrap my head around that affair. This should’ve been national news big time.

    How come the national media never covered that?

    I mean, are they so bought and paid for by the oligarchy that they won’t cover a clear violation of the Constitution by the US Army within the country?

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