Grr, I had this ready at 6:00 AM and neglected to post it! Apologies!
New Jersey snow sculpture gets frosty reception BBC (hat tip reader bena gyrek)
Homeland Security fails to secure procurement records Gumbat Stew
Scales of Justice: In Zurich, Even Fish Have a Lawyer Wall Street Journal
Unnatural Acts: Breaking the Fever of Militarism Chris Floyd
Can Japan Say No to Washington? John Feffer, TomGram
The Top Ten Ways to Crack Down on Corporate Financial Crime Counterpunch (hat tip reader Crocodile Chuck)
Expanded use of body scanners slammed by ACLU Raw Story
President Obama: Replace Rahm with Me …an open letter from Michael Moore Huffington Post
Downgrade of consumer financial protection agency threatens Obama’s overhaul plan LA Times
The Dangers of Deficit Reduction Joseph Stiglitz, Project Syndicate (hat tip Mark Thoma)
Los Angeles Fires First Shot In California’s War On Banks, As Cities Seek To Wrangle Out Of Swaps Clusterstock versus Reputational Risk: Living in a Derivative World Institutional Risk Analytics
Obama Plan To Modify Second Mortgages Has Yet To Help One Homeowner Shahien Nasiripour Huffington Post
Antidote du jour:
Purchased your book online at B&N — downloaded ebook. Able to read it on the PC, but haven’t found a non-brain-damaging way to read it from Droid. Weird thing is that the B&N ebook reader, Nook, used the Android operating system.
Also, do you have a public email address? Could you send it to “firstname.lastname@example.org” if you get a nanosecond?
Oops, correction: I downloaded another ebook apparently. Is yours avail. for download?
I’ve been thinking (and despairing, given the lack of any derivative reform proposals) about JPM and Jefferson County recently after the GS/Greece stories. I’m not sure what blog ettiquite rules I may be breaking but I thought this , from the IRA link is worth highlighting:
The Fed’s current interest rate policy has caused the City of Los Angeles to go into the red to the tune of $10 million per year because of interest rate swaps sold to the city by Bank of New York Mellon (BK). That’s right, thanks to Chairman Bernanke and the FOMC, and an OTC interest rate swap, the City of Los Angeles must pay $10 million per year to BK so long as the Fed continues ZIRP — potentially until 2028.
By skewing interest rates down below the true rate of inflation, the Fed has levied a tax on all of the OTC interest rate counterparties that were trying to hedge against higher interest rates. And there are literally thousands of other cities, states, public agencies and insurers around the world which are caught in the unintended consequences of ZIRP. When you recall that the Fed has been and continues to be the chief cheerleader in Washington for OTC derivatives, the implications for the global economy are truly mind boggling.
But at IRA we believe that it is better to get even than to get mad, especially when there are billions of dollars in public funds at stake. This is why we have begun to assist public sector agencies in negotiating the repudiation of OTC derivatives positions that are causing unanticipated losses to customers like the City of Los Angeles. The message to the OTC derivatives dealers is simple: Take back the deceptive, unfair and misleading OTC contract or else the public sector client will pursues any and all options. Remember that defrauding a state agency is a felony in most jurisdictions.
The fact is that with proper legal advice and support, it is possible for both public and private sector clients to force the OTC derivatives dealer banks to take back their “sacred” gaming contracts. If you know what buttons to push and which lawyer to have under retainer, it is possible to force the OTC derivative dealer bank to tear up the agreement and slither away. We know this to be true because we have helped two private sector institutions in New York achieve such a result in the past month.
This idea has grassroots movement written all over it.
“This idea has grassroots movement written all over it.”
Yes, it does.
maybe take it one step further and cut the drug and slave (‘er derivative) dealer banks out of all future business, of any kind — bond offerings to checking accounts.
I think that’s the only way to pull the plug on these criminals.
The Fed won’t do it, the Obama administration won’t do it, the Senate won’t do it and the Congress won’t do it.
But the people have the power to do it, if they would use that power. If they won’t, they deserve what they get.
And what power is it that you speak of?
If you are a municipality or a corporation that needs financial services, be more selective about who you work with. Don’t give your business to these firms, who screwed you and society to the wall. The “people” in this case are the folks who work in the decision-making financial roles at the client organizations — states, municipalities, etc. — and by extension the taxpayers who support them. Corporations also, and their employees, shareholders, stakeholders, etc.
Instead of bawdy scanners, why don’t we just require everyone to fly naked?
It may be unsightly, but it’s a cheap way to improve flight safety, which is useful these days as we try cutting government spending.
IMHO most of the people who commented on the “Complexity is the handmaiden of deception” post only hold of one end of the stick. They were all discussing obviously complex contracts, and the assymetric knowledge issues emanating therefrom. All perfectly valid concerns, to be sure.
To me the other HUGE issue is that a lot of the deception was “hidden in plain sight”, to use a Sherlock Holmes metaphor. Relatively simple statements with non-intuitive meanings (or meanings requiring non-trivial parsing).
1. ‘It can’t go up more than 2% a year’. “It” is the interest rate in this case, but a lot of unsophisticated borrowers would have been encouraged to assume (or certainly not corrected if they did assume) that “It” was their PAYMENT.
2. ‘The starter rate is (some ridiculously low number).’ Same as above. The borrower thinks this is the INTEREST rate, when in fact it is the (minimum) PAYMENT rate and the principal is thereby increasing.
3. ‘The loan will reset in X years’. Ignoring the fact that if the minimum payment schedule is followed, the loan will RECAST much sooner.
I have personally called BS within the last month on a young work colleague’s statement regarding the interest rate on his car loan. Got him annoyed enough to check his contract right through, in fact, because he wanted to prove the old fogey wrong. 20 minutes later he’s cursing under his breath, and is on the phone to his fiancee to work out how far they can accelerate the payment schedule.
Now this is a genuinely smart guy, who got taken in by the difference between flat (quite prominently displayed) and reducible (quietly hidden away, in small print) interest rates. He and his fiancee also earn enough so they can in fact blitz the loan and write off the interest paid to experience.
(And when he asked me why I was so sure of my contention, I told him I’d seen the same stunt pulled on a good friend of mine many, many years ago, and never forgotten it. From what he then said I suspect he’s not going to forget either, and also not going to forget that a ‘family friend’ brokered the finance for him.)
So Yves, over at the Nation, a quickie article notes that -98%_ of Icelanders voting just rejected their populace being saddled with paying out the depositor losses at 100% for their crooked pirate banks which failed holding billions in yield-chasing European deposits. This would be a good one for a link.
Icelanders: I knew when I was there that I liked them and loved the place. The crooks who ran those banks have all left the country and should be being pursued by international authorities for arrest and incarceration. Yes, many smaller depositors at those failed banks put their money in in good faity—many of them were Icelanders, who lost big, their savings wiped out. Icelanders bought property in a bubble; now most are severely underwater in an environment of greatly reduced earning: they are going to be paying off their own personal debts for many, many years. The Icelandinc government had only the dimmest idea of what those banks were doing, and the public less, nor did the government have the reserves for deposit insurance on a 100% recovery basis. What is that old phrase . . . cavaet emptor? If the UK and the Netherlands decided to cover depositors at those institutions at 100%, that is their decision, and substantially there problem. They had no consent in doing so either fromt the population of Iceland nor its government. Surely it’s fair to ask Iceland to shoulder a portion of that cost burden, but the idea of _forcing_ Icelanders to pay for somebody else’s crime and somebody else’s government decision is not on. —And still, the Euros wanted the Icelanders to take all of the hit. There’s a word for that. We’ll pass on it, but another word that means the same is, “No.”