Links 2/22/10

Wishing it don’t make it so Le Monde diplomatique (hat tip reader LosingGround)

Democratic senatorial candidates vie to be seen as outsiders Washington Post (hat tip reader Joe C)

Schwarzenegger slams GOP stimulus hypocrisy Raw Story (hat tip reader John D)

Campaigning for State-Owned Banks Web of Debt (hat tip reader John D)

Global Crisis Leads I.M.F. Experts to Rethink Long-Held Ideas New York Times

Euro Worst to Come as Greece Hammerlocks ECB on Rates Bloomberg

China: No one home Financial Times

Some movement at the station billy blog

What the PBoC cannot do with its reserves MIchael Pettis

Antidote du jour. This is from Time’s Pictures of the Week. Not sure I like tigers being treated as overgrown house cats (although I have no such qualms about performing seals as zoos, they seem to like clowning around). Caption: “Siberian tigers perform for visitors at a zoo in Fuzhou, China, on the second day of the Lunar New Year – the year of the Tiger”.

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  1. jbmoore61

    Yes, tigers deserve better than to be circus performers or Chinese medicines. With fewer and fewer of them left in the wild, those tigers in that picture are priceless genetic stock. Humans are a dumb species at times.

    1. MyLessThanPrimeBeef

      Animals and plants don’t call them Homo Not-So-Sapiens Not-So-Sapiens for nothing!

      I notice one big cat looks particularly uncomfortable…probably worrying about the value of the securitized Chinese real estate loans he will be paid in.

  2. DownSouth

    ► “Global Crisis Leads I.M.F. Experts to Rethink Long-Held Ideas” NY Times

    Chan says: “…the I.M.F. is re-examining some of its long-established orthodoxies as part of its response to the global economic crisis that began in 2007.”

    TRANSLATION: As long as it was brown people outside the borders of Euro-Anglo land who were being forced to take the bullet to the head, austerity, unimpeded capital flows and deregulatory absolutism were embraced as the one true religion. But now that someone within the Euro-Anglo sphere might have to feel the pain, these scriptures might have to be removed from the phylactery.

    That said, these are nevertheless welcome and much needed examinations of the IMF’s highly rigid and dogmatic way of thinking.

  3. alex

    Yves Smith: “Not sure I like tigers being treated as overgrown house cats”

    Oh come on, just toss them the occasional spectator for lunch and they’re happy.

    1. NotTimothyGeithner

      Rome did start to decline when the Romans stopped throwing Christians to the lions. Coincidence? Maybe.

  4. kevinearick


    The savings from dismantling the Soviet Union were invested to rebuild the same basic structure globally, which just goes to prove that if you’re patient, and get out of the way, the proprietors will put a gun to their own head every time. It’s like watching a Mel Brooks comedy, only not.

    Basically, global cartels breed national management stock to control economic slave stock, which are then forcibly contained within artificial geographic stockyards, to systematically deny them self-sustaining resources, to the end of charging tolls.

    The economic slaves must pay an increasing price for artificial scarcity, to feed increasingly artificial demand, in a vicious cycle, which can only lead to war, from which the same global cartels again make a profit, while management sheds crocodile tears.

    As a result, a large global population has been bred to believe that they are entitled to an economy when they wake up in the morning, the operation of which is to collect as many non-performing assets as possible, doing the least amount of work.

    Big Capital provides “leadership” by growing larger and larger populations of economic slaves, to feed these entitlements, through control of demographic acceleration. That economy has reached its planetary limit, resulting in viral replication and collapse.

    There are way too many want-a-be chiefs, coming up with all kinds of bs objective-based solutions, that no Indian in his or her right mind would even consider, because productivity, after all the wage arbitrage misdirection, continues to measure economic liquidation, transfer of wealth from the Indians to the chiefs, which has reached the least common denominator. The Indians pretend to work, and the chiefs pretend to pay them a fair return, globally.

    Soon we will be getting a telemarketer call with a recorded message from Robert Rubin, asking for donations to support the endangered cartels. And Bill Gates is already “donating” $10B to inoculate the economic slave population. That’s right up there with Bill Clinton pleading for donations so he can get his economic slave camps back up and running in Haiti.

    The party’s over, and many are desperate not to wake up with the hangover, because there is no place on the planet to hide, and the usual scapegoat sacrifice will not appease the natives.

    Unique individual “errors” are few and far between, but individual expression of system errors are everywhere, like LTCM on steroids, because laws examine the individual to absolve the system.

    The days of getting paid to process symptoms, with treatments that create more symptoms, has come to an end. There is no lack of demand. There is simply all kinds of supply for which there is no demand.

    It’s in everyone’s enlightened, economic self-interest to make the necessary adjustments. The puppet shows are nice, but the work has to get done, the work has to keep up with evolution, and economic slavery is not getting it done.

    The global economy is in the same position as the Soviet Union just before its collapse, despite feedback signals everywhere, because the workforce has been assigned to do all the wrong things, in all the wrong places, with all the wrong materials. That is a CAPITAL ALLOCATION PROBLEM, of infinite inbred resistance.


    We now have the as-is, the to-be building blocks, and aligned, albeit unresolved, interests. The flux is hot enough to flow. What we need now is some mythology, a cover, so the participants can save face, illogical, because no one is responsible for History, but human components are not logical, while we build out the forms.

    History is like a bunch of pool balls, randomly colliding, with someone taking pictures at conveniently biased intervals. Capital hires government to take the pictures and write the story, with a shopping mall survey for verification. However, this will all go much smoother if everyone goes along with the mythology, and the bridge will last just as long as everyone remembers that it’s just mythology. That’s the contract, meant to be broken.

    Economies get this far out of alignment because future descendents of Big Capital at present transformation draw a curve through the snapshots, expecting the propagation wave of the economy to follow the same pattern, in a self-fulfilling prophesy that others buy into. Small labor doesn’t rely on the mythology to make decisions; it’s stupid that way.

    If you recall CFA training, its underlying assumption is a portfolio of independent economies trading in their own enlightened self-interests, measured by mechanical statistics. We must have sufficient voltage to pick that existing $500T load + expenses + profit.

    There are simply too many enlightened individuals watching, for incremental improvement, and the usual write-off procedure. We must have the required propulsion to get the economy into the next quantum orbit.

    “In advertising, there are no lies. There are only expedient exaggerations.”

    (Cary Grant; North by Northwest)

    1. kevinearick

      So the brick wall of worry has hit the public radar, as it approaches the yield curve, another opportunity cost of government. Not to worry, you still have some time to make a profit on the 30 yr no C. It’s the same calculus. Buy as the cowboys move the herd in, build your own exit gate, because the computers are now extremely sophisticated at shutting the exits to create the slaughter chute, and sell when you see the cowboys start to gather. Pensions, associated foreign governments, and uneducated individuals, encouraged by the media, do not make for good bond vigilantes, and where’s the next field to fatten up the stock again?

      China didn’t work out, the emerging markets didn’t work out, and now they are talking up big business spending as the economic driver, which is being backstopped and funded by the same underwater taxpayer that can’t pay existing debt, let alone the upcoming property tax rate increase of 6-18%, leaving the economic priests where they started, with no real final demand.

      In terms of investigative disclosure, the action is in the dead pool, where the bigger sharks are now eating the smaller sharks, and will soon turn on each other in a Big Capital shakedown. Who wins is immaterial to small labor, so long as they reform the ballast.

      My guess is the mafia, because its algorithm is pretty simple – if someone is going to steal, we are going to be the ones that do it. And if we are going to steal, we are going to be better at it than anyone else. Older capital lives in a ritualized fantasy world. When you tell them that unprotected labor will require a minimum 51% return on the economy to avoid total discharge, they look at you like you have four heads, because structural demographic deceleration isn’t part of their mythology. There has always been another area for geographic expansion and re-tooling of the economic slave trade. When you say the same thing to the mafiosi, they say prove it; where’s your gun?

      Leave it to Big Capital to put a gun to its own head, and expect small labor to remove the firing pin, before it pulls the trigger on itself.

      1. kevinearick

        Without a constitution that examines the system, instead of the individual, with a positive feedback loop to effectively wean the population off of government, the system is toast.

        As far as using labels … in a self-governing society, labels would not be an issue.

        1. kevinearick

          Allow me to add this:

          The arts is what makes humanity great.

          Economics is the foundation that provides the base.

          The only reason the artists need to have a basic understanding of circuitry is so they do not inadvertantly, or otherwise, throw wrenches in the machinery, or jump out a safety circuit upon which their lives depend.

          The reason there are Walmarts all over the place is because the curent crop of economists think that the point of economics is to produce economists.

          Small labor only becomes transparent when the fulcrum is critically out of balance. One need know nothing about economics to see a fulcrum out of balance, or to take action to correct it. Too many people walk by and ignore the obvious, because they are led to believe that economics is rocket science.

          Rocket science is not rocket science.

          Ultimately, evolution favors instinct that produces diversity. Random trial and error would produce better results than $500T in unfundable liabilities. That took some work, and intent.

          If you have a good feedback apparatus, you can really start from anywhere, and come up with good results, ones that adjust resonance to meet both internal integrity, and external incorporation into symbiotic systems.

          1. kevinearick

            if you take a look at actual production requirements and the actual input requirements, you will see that there is no need for anyone to be working more than 20 hrs / week to meet requirements for food, shelter, and clothing, unless that happens to be their thing to work more.

            Economic slavery is a mindset, a bad habit.

  5. John

    Interesting little blurb about how 54% of Americans either don’t know Tim Geithner or have no opinion on him:,FNM,FRE,XLF,C,^DJI,^GSPC&sec=topStories&pos=9&asset=&ccode=

    After reading the above article, it occurred to me that there are at least ‘two Americas’ — a smaller group that gets its news from blogs and doesn’t trust the MSM and a larger group that either gets its news from the MSM or doesn’t pay much attention to news/politics at all. Obama is exploiting this by essentially engaging in medium-specific triangulation.

    To wit, Obama made his comments about ‘fat cat’ banks in a televised interview with CBS. This comment was made for the benefit of the larger MSM-following crowd. His comments about how BFFs Blankfein and Dimon are savvy businessmen were made in a print interview to Bloomberg BusinessWeek. The blogosphere was in an uproar over those comments, but I don’t recall them getting much play with the MSM.

    When Bill Clinton engaged in triangulation, he simply co-opted a popular Republican meme and made it appear as if it were his own. Obama is taking this one step further (perhaps a better description is ‘triangulation-squared’?). Obama is trying to win over the populist crowd by making populist comments (i.e., ‘fat cats’) in the MSM. This is par for the presidential course.

    However, Obama is also trying to co-opt an unpopular Republican meme (love for banksters and their donations) by making comments favorable to them in non-MSM sources. So far, he has been able to get away with this to an extent because the Republicans and the MSM are both in the back pocket of Wall Street. The only crowd raising a ruckus is the blogosphere which has a much smaller following.

    Prior to this self-awakening of sorts, I never would have thought that a President could contradict himself so blatantly in this era of the Internet and get away with it. It will be interesting to see if politicians of any stripe will call out Obama on his blatant hypocrisy. Republicans haven’t been willing to do it as they are also in Wall Street’s pocket, but perhaps some third-party candidates will be willing to speak out about it.

  6. sparkylab

    Sorry – I do normally look forward to the ADJ but I find this grotesque. They did not learn to perform like this willingly.

    1. MyLessThanPrimeBeef

      Fortunately, Yves doesn’t include trees as antidotes; otherwise, it would be quite queasy to look at what has been done to Bonsai trees – no one would think of doing that to animals and yet, they do that to trees.

      Sure, women of the Karen tribe of Mynammar do weird things to elongate their necks, but that custom will probably die out soon.

      By the way, I find it funny we have the Karen people and the Pagan people in Burma and the Kandy people in Sri Lanka.

    1. craazyman

      That article was fascinating indeed.

      I had no idea that was going on in North Dakota, nor did I have any idea about the groundswell of support elsewhere. This is exactly what I’ve been channeling in recent months in images about two feet above my head and slightly to the right with very fuzzy images of determined activities taking place in the upper noousphere. At first I thought it was just tweaking by the lower levels of the angels to try and adjust the broacast frequencies, but now I see that in fact it’s human in origin. This is quite in line with my theory that money is a form of the spirit of a community and that it can be stolen first in the astral space with manifestation in the physical plane, like bits and pieces of your soul energy are stolen by demonic operators. The parallels are stunning, really.

      Interesting quote by Stiglitz.

      1. brodix


        I’ve been following Ellen Brown for several years, as I’ve had similar ideas.

        You are right that the nature of money is far more organic than we give it credit for, as it is drawing rights to community productivity. This is a short essay I wrote in another blog:

        There are two primary commons which we all already support and use. One is the road system and the other is the monetary system. Expressing and clarifying this fact would go a long way towards a fair, efficient and sustainable society and economy.

        While it is obvious the roads are a form of public commons, I think that pointing this out would make many people understand just what a public commons is and how it interacts with private space and property, without subsuming it.

        What is less well appreciated is the fact that the monetary system, drawing rights on community productivity, is also a form of public commons. It is understandable why this isn’t clear, given the evolutionary history of money, but the fact remains that it belongs to whatever entity guarantees its value. Just try printing some up, if you think otherwise. There have been times when private banks issued and guaranteed their own currency, but the central banking model is set up so that the public is responsible for maintaining the value of the currency, while private banks profit from managing it.

        One of the central tenets of Capitalism is that money is simply another commodity and therefore is private property. Not only isn’t this true, but it is poor economics. To the extent it is a store of value and thus property, it is subject to the laws of supply and demand, with the lender as supply and the borrower as demand. Since supply is potently infinite, it is demand, the amount of sustainable borrowing the economy can support, which determines how much notational wealth can be stored. The problem is that the desire for stored wealth is much greater than the economy can sustain. While we blame the bankers for our current predicament, they were simply enabling our obsession with this illusion of monetary value, by lowering loan standards and creating enormous bubbles of extraneous circulation.

        So that is why money doesn’t work as private property. When we assume it to be, the inclination is to hoard as much as possible, but if we understood it to be a form of public commons, our natural selfishness and lack of trust would incline us to not drain value out of our social relationships and environmental resources to put in a bank in the first place. We all like and need roads, but there is little inclination to pave more than we must. If we applied the same principle to monetizing our lives, other avenues of trust and economic exchange would have the space to grow and evolve and society and the environment would be much healthier as a result.

        Political power started as private initiative and eventually grew into monarchy. Monarchists railed against mob rule, but we eventually learned how to make politics a public trust by allocating power where it was most responsive. Why not do the same with the banking system? As the currency is a public utility, so profits from its administration could be public income. A public banking system would not be one huge behemoth, but consist of institutions incorporated at every level of governance, so individuals could bank with the ones which funded the services they are most likely to use. Different communities would seek to provide the best services with these funds, otherwise they would lose business and citizens to other communities. Regional consortiums could band together in currency unions to facilitate broad economic exchange and for large economic projects. It would result in a far more organically integrated society that didn’t need as much government support, since those controlling the financial process wouldn’t be draining as much value out as possible. It may not be as globalized a system as we have now, at least to start with, but it would provide a solid economic foundation for a more sustainable global economy to develop.

        One other subject which might attract attention and support is the issue of why the government is so poor at budgeting. The current system is designed to overspend by buying votes for enormous bills that can only be passed or vetoed. This serves to create debt in order to store capital, as government debt is the primary investment vehicle. So if we learned to store value in our environment and communal relationships, there would be far less need for government debt.

        In the spirit of actual budgeting, a possible solution would be to break the spending bills down to their constituent items and have every legislator assign a percentage value to each one and then re-assemble them in order of preference. The president would draw the line at what would be funded. This would divide responsibility, allowing the legislature to prioritize, while giving the president final authority over total spending. Since making the cut would be graded on a curve, there would be much less incentive to trade favors and the percentage system would allow legislators to fine tune their granting of favors to other legislators and lobbyists. Since this likely would reduce local spending, a system of local public banks funding their own communities would fill this need.

        It all may seem far fetched now, but the current system is terminal and when everyone realizes the wealth they think they have is an illusion, this might seem quite reasonable.

  7. craazyman

    good stuff brodix, there’s a lot there and I appreciate your thoughts and point of view. good ideas. contemporary finance is a scourge, a virus of thought, a delusion and a madness. it’s throwing babies into the pit at Carthage to appease the Gods, while the throwers get commissions on every toss and bill the parents. But the Roman Navies still get closer and closer and closer. Like Santa Claus with a Glock coming down the chimney, opening fire on everyone in pajamas around the tree. they would never believe it if it were a Hollywood Grade B Horror film. “Christmas Eve” starring Maxwell Cash as Santa and Penny Wise as “the Mom”. Once Upon a Midnight Clear. . . ho ho ho. Actually, that might be a moneymaker. Booowhahahahahaha.!!

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