Links 1/11/11

Hyenas ‘greet friends’ to ask for their help BBC

Two dead as wave of water smashes Toowoomba The Australian (hat tip reader Skippy)

Queensland Under Water Brisbane Times (hat tip reader Skippy)

Paranoia disfigures the Tea Party Gideon Rachman, Financial Times

False Equivalency Watch Steven Benen

Freedom fighters for a fading empire William J Astore, Asia Times (hat tip reader ward fleming)

Exclusive: America has ‘reached the point of no return,’ Reagan budget director warns Raw Story. One thing Stockman misses is the degree to which US military spending goes to contractors located abroad. That means they produce no benefit to the US economy.

The Future is Grey, Small and Female Paul Kedrosky. 60% of adult women in the US color their hair, so I’d not bet on the grey part.

Moody’s clashes with EU on advance warnings Financial Times

The Legal Issues in the Goldman-Facebook Deal Steven Davidoff, New York Times

China Owns Lots of Paper EconomPic Data

China Trade Surplus for December 2010 Economic Populist

Australia’s “Tulip Mania” About to Crash; 44% Jump in Property Listings Proves the Proposed Housing Shortage is Gargantuan Myth Michael Shedlock

Downturn’s Ugly Trademark: Steep, Lasting Drop in Wages Wall Street Journal. I’m a bit perplexed that this is news. For anyone over 35, a job loss typically means a big drop in pay. The difference is that this is happening to so many people that the visibility of this phenomenon is greater than in the past, and starting a new business (a commons response to poor employment prospects) is a far more dubious proposition than it once was.

Explaining Recent Trends in Household Saving Menzie Chinn, Econbrowser

Crushing State Budget Cuts Wiping Out Stimulative Effects of Tax Deal David Dayen, FireDogLake

Judges Berate Bank Lawyers in Foreclosures New York Times

The economic impact of the foreclosure slowdown FTAlphaville

Foreclosure pet rescues reach the 1,000 mark, group says HousingWire

Big Banks To New Jersey: Stop Bugging Us About Foreclosure Documents Abigail Field, DailyFinance

Group: Exclude Foreclosure Protection From New Mortgage Rules WSJ Developments Blog. Better investor protection is critical to getting the securitization marker off government life support. Borrower protection isn’t. Hence the MBA wants to bifurcate the issues.

Government-created climate of fear Glenn Greenwald (hat tip Ed Harrison)

Antidote du jour:

Screen shot 2011-01-11 at 3.59.25 AM

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  1. leroguetradeur

    Here is a wise comment from the FT piece:-

    “Once you move beyond the central demand for limited government that holds the Tea Party together, you quickly discover a fog of conspiracy theories, much of it expressed in wild language and backed up with violent imagery. There are accusations of betrayal, lies and manipulation at the heart of government. Barack Obama is said to be a foreigner who is ineligible to be president. He is also a socialist or, perhaps, a fascist. The Federal Reserve is conspiring with foreigners to debase the currency. George Soros, the financier, is a “puppet-master”, intent on the overthrow of the US government. Sharia law is being practised in parts of Michigan.

    “These accusations are not simply made on the crazier fringes of the internet.”

    Yes, its very true. The thing that strikes me is that this craziness is not confined to the right, you find similar left craziness in the comments on this blog.

    What has really happened is a poisoning of political discourse, and a political system that has lost the ability to manage and resolve conflict. It struck me that when Bill Clinton was impeached over Monica Lewinsky that all sense of proportion had been lost, and we had succumbed to a sort of senseless ferocity and childish bitterness. There was nothing similar with the Bush adminstration but you had an equally dysfunctional rhetoric about neo-cons.

    The only way that this will get fixed is if people somehow get back to conflict resolution, not demonizing each other. But its hard to be optimistic, and Jimmy Carter’s recent remarks about the bitterness of the divisions seemed very wise. Not that he has any answers either.

    1. DownSouth

      There is a balance between idealism and realism that must be maintained in human affairs. When this balance is lost, the result is nihilism.

      The neocons have completely gone off the deep with their idealism, and they have become totally disconnected from reality.

      Perhaps one of the greatest exposés ever done on the neocons is Adam Curtis’ film The Power of Nightmares, which can be viewed for free here. He covers all the most influential neocons: Cheney, Rumsfeld, Wolfowitz, Pipes, Strauss, Perle, Kristol, Ledeen, Bennett and Casey. (Curtis also directed The Century of the Self.)

      You state that “It struck me that when Bill Clinton was impeached over Monica Lewinsky that all sense of proportion had been lost, and we had succumbed to a sort of senseless ferocity and childish bitterness.” I agree. But then you follow that statement up with this one: “There was nothing similar with the Bush adminstration but you had an equally dysfunctional rhetoric about neo-cons.”

      There’s a problem with this last statement, and that is that, as Adam points out in the The Power of Nightmares, it was the neocons who were the intellectual authors of the impeachment of Clinton. So how can you blast those who would criticize the neocons as engaging in “equally dysfunctional rhetoric” as the neocons themselves? In your playbook, is anyone who attempts to restore some sense of reality in the United States the same as those who live in a totally fictitious, defactualized world?

  2. dearieme

    Climate of Fear: I have friends who are no longer prepared to fly NZ-London through LA but now go the other way round via Singapore. Yes, “authoritarian” Singapore.

    1. Rex

      That article put the fear into me. I knew the country was broken in many ways, but didn’t think we were this far down the Totalitarian path.

      If they ramp up this fast the out sourcing to Cuba won’t be able to handle the load. Is that what Arizona is doing with their big prison business?

      1. LeeAnne

        You may have seen this on HuffPo thismorning “Newly-elected Georgia Governor Nathan Deal (R) announced Monday in his inaugural address that putting drug addicts and abusers in jail was placing an unsustainable financial and civic burden on his state.”

        It occurred to me, upon reading this, that, not only would some compassion for the injustice of locking these people up in the first place be welcomed, but that concentration and excess money, specifically the money in the Criminal Justice System it took to lock these people up in the first place, is EVIL.

        So municipalities going broke isn’t all bad, and the profit making prisons can now concentrate on lobbying for white collar criminal occupants who can then be taxed for luxury accommodations and prison treats.

  3. skippy

    Skippy update,

    No need for links its all over the planet now. Just to put the problem in perspective the area affected is the size of Germany, France and England combined. All those with commonsense are pulling together family, neighborhoods, community’s, etc.

    Skippy…someone tell Mish he needs to factor in these events to a 2 / 6 year out look…the Universe just delivered one of its classic fractal spiit balls…gaussian norms are under a few meters of water by now or did someone invert the Y / X axis or compression tails monkey boys.

  4. divercal

    Agree with the Link about America reaching the point of no return but have to disagree with your comment about contractors not producing a benefit to the US Economy. Actually on average a large portion of a contractors income is returned to the US Govt. in the form of federal income taxes, another large portion is returned to specific states income tax. These taxes may not be a direct benefit but they are a return back into the Treasury of Federal money spent, (Basically a wash of some of the money).The remaining wage is on average, in my opinion and in my case, mostly all spent on goods and services in the US. producing a definite positive effect on the US Economy. To say that contractors… produce no benefit to the US Economy is in my opinion a gross misstatement and creates a false image of the money paid to and spent by contractors.

  5. LeeAnne

    Paranoia disfigures the Tea Party Gideon Rachman, Financial Times

    Main Street Media; newspapers, TV, right wing radio and the think tanks they own and control to use as sourcing window dressing, that bought, paid for and controlled by multinational corporations, use this power to control the spin for creating fear. They are tragedy vultures.

    It would be negligent for anyone who takes their political thinking seriously to fail to take into consideration the possibility and near certainty that these power greedy entities, the shadow governments, shadow banking systems are behind all the spin, if not the actual events they are reporting and commenting on -such as this article in the Financial Times this morning.

    Fear is not paranoia. Were newspapers such as the Financial Times still working for the public interest, they would be attacking the politics of fear mongering, not its victims. They wouldn’t be writing such commentary as the ‘tea party paranoia’ at all; they’d be doing some decent journalism and investigative reporting on white collar crime, the collapse of rule-of-law and our supine US Justice Department.

  6. LeeAnne

    …and Paul Krugman was doing alright this morning, until this pandering to the powers that be and his editors:

    “Of course, the likes of Mr. Beck and Mr. O’Reilly are responding to popular demand…. But even if hate is what many want to hear, that doesn’t excuse those who pander to that desire. They should be shunned by all decent people.”

    1,000,000 or so viewers is not my definition of ‘popular.’ What’s popular is turning the TV OFF and getting rid of it altogether;.

    1. Stempy

      The ducks are a single duck photoshopped with a pair of left-right mirror effects. Ah, the joys of bilateral symmetry.

  7. aL

    Well looks to me that everyone is complaining? Who wants to join me and fix this mess? How can a Nation rise with one-MAN? What you need to do is think tank with the right group.
    Its going to take more public meetings A.S.A.P Topics, WATER, CLEAN FOODS, HEALTH, EDUCATION.
    Solve Water crisis, aka miss managed. Next once you have stopped the water issues we would only agree to move forward since you stopped the use of chemicals in our soil that lead to contamination .
    Impacts of chemicals in our soil are, soil contamination, and then rain run off into the water supply, the produce is plumped with all sorts of toXic chemicals that are dangerous according to hazmat the EPA, FDA, USDA, scientist. Governments, Universities, authorities, professors, you and your neighbors. You don’t listen well do you? So now that you stopped the use of toxic additives you can Grow in a lets just call it a more ORGANIC way. Now that America eats clean energy-foods and guess what? its local, because back when America thrived we had tons of Farmers and yes they all grew what we call today ORGANIC.
    The out come will be healthy people! Cheap Health coverage and the best of modern Medical care. The health defecates will dwindle and so will cancer obesity, diabetes, heart disease, and Americans will not be zombies. The point is Everything’s going to be just fine no worries you see as you were sleeping, living it up? not worrying about it because you figured the Government had everything under control and you don’t read about who you vote for anyways, also they were under skilled over pressured over ruled and under worked, in the mean time some of us have been working on solutions :) and guess what we got them LOL. Relax go back to sleep we got you covered. For all you pharmaceutical Zombies hooked on what should of been a temporary solution to depression or maybe to an injury or something that led you to get permanent disability just to collect, Social security, Aid, because the lobby guys wanted to make the Government pay for commissions to the science community but even that was twisted. All those industrial Farmers on welfare are not farmers because a farmer wouldn’t use poison in his crops and his ethics are of what our founders of food has held every since the garden of Eden. Business suits will pour major chemicals down them VINES we drink called wine and it simply transfers the toxins into our VEINS (say cheers anyone). (just keep in mind wall street is about bottom-line)The subsidies in farming are causing disruption in many reasons its long so bare with me on just a few. Farm subsidies are ok if only an Organic farmer received it and should be. The Organic industry is on life support because if we no longer have them we no longer have food (the same folks that dropped the ball says .05% of farmland in the USA is organic, “shocking“). Farm subsidies are Currently given to massive scale farmers and because they grow using so many chemicals it cuts out labor and because fuel is the new donkey it replaces man so the false concept of cost for our strongest resource is under valued and organic produce will less likely be to compete in price but holds unprecedented non appreciation. Look at it from another point of view kind of like a sustainable strategies. If our Nation thinks its going to rely on genetic modified and processed food distributors, manufactures, and artificial favorers’ including false vitamins that only stimulate the body into believing it had the real thing thus altering your hormones and results in chemical imbalance, we can only imagine the effects it will have when wall street collapse the Government, the monetary and what happens when fuel goes up or Monsanto raises seed prices and because that will happen look forward they will lobby to tax and permit and you will be sues if you re-seed with-out paying for your 2nd gen seed? We really don’t believe Giant Agriculture will survive, no one to bail it out. (strategies) With out subsidies the Un-ethical farmer can not afford Agri-chems. Mexico has lost their workers because they heard America has a huge Farming industries so they hurried to do what they do best work the fields but when they arrived they see big machines that need no helping hands. Farm subsidies have crushed the Mexican Farm industries
    Farm subsidies are causing border control issues because so many jobs were lost from the free trade agreement but it wasn’t fair because the American Government gave big tax dollars to fund farmers that grew major corn and other commodities (since then methane gas has been a major issue high corn syrup replaced Haiti’s Global sugar Cain trade). lets clear this up we can all agree nothing wronged if your Nation invest into Agriculture but do it right and with ETHICS. Exclude the use of any chemical or synthetic, inert, and it will be a GREAT program achieved . The free trade agreement would be more competitive and Mexican workers wont want to cross the border because the real truth is they like it in Mexico they are mostly family orientated people China’s economy is booming I don’t see many Americans running to China but let America bleed and you‘ll see. Here’s a CRISIS about to happen and it takes an EXPERT to figure this one out, are you ready? Ok now when Fuel price sores like it did in Bolivia, Pakistan, Japan, and many other Nation States, we will only have Organic Farmers and localization because the truth is our life is rapidly becoming degenerative. Life is water and water is life clean water is what you damaged Generation NOW is fixing your mess and will place your life style on hold because they want to breath fresh air in 5years, they want no defecate they want clean water and they don’t have the time to read all the laws hoops and addendum’s of past lawmakers and policy, they are generation instant gratification with now results and its causing major confusion frustrations and wrongful acts towards anyone that maybe or possibly seemingly the one in the way of social justice. Farm subsidies ruin health from all the toxic inputs, Ruined health means divide the cost of health defecate due to linkage to subsidy, link water contamination to this, link water shortage to this, link Fracking to L.A having less water coming in from Colorado river, link fracking in that zone and how much water it destroyed and is Paris NEXT 40miles S/W or N/E? What we have is a case of the finger pointing the lazy the un-ethics, and the ignorant. A polar shift is coming and most folks will not like it because the Government is not as savvy as the free market. Not enough Americans seem to care? Most of you are the same complainers that stood on the sidelines and watched it unfold. You were scared of taking action and now look, your screw ups are frustrating young adults and the only thing they will do is take action they don’t understand complex wording and slivered truth of distortion, plain and simple they are emotional and confused along with many Americans and if you weren’t paying attention the world.
    P.s when poison farming can-not produced because lack of oil hopefully we will have enough ORGANIC FARMERS left. Hopefully our Nation will invest into Small Sustainable business and agriculture along with retro-fitting every building in the Americas before the money is gone. At that point a couple things will happen job creation, and our Power struggles will be lifted. Don’t wait join me now . Once you add subsidy money and health impacts Organic cost less, its sustainable and its health coverage. People its time to Sue Monsanto in a class action law suit for modification of our produce its time to sue the FDA its time to sue the USDA they are the ones that dropped the ball and they need to be fired. Simply paying for a chemical, spray permit dose not make it ok. Its your country its our PLANET do the right thing! Join your Nation Help rebuild it we will make it stronger than EVER!

      1. JTFaraday

        Unless there’s more artwork to come, that’s not Jared. Jared, at least as we’ve seen him, is a very terse logic chopper.

        (I note that he counts The Republic and Meno amongst his formative influences).

        Although, the NY Times today cited a mental health expert on his schizophrenic condition that made note of his his “rambling” incoherent writings:

        “the writings and comments attributed to him point strongly to the kind of delusional thinking that is common in schizophrenia.

        “I’d say the chances are 99 percent that he has schizophrenia,” said Dr. E. Fuller Torrey, the founder of the Treatment Advocacy Center in Arlington, Va., which advocates stronger laws to require treatment for people with severe mental illnesses. “He was together enough to take courses, and people with untreated schizophrenia can function very well for periods. But when you see these rambling, incoherent writings and comments, there is almost no other disorder where this is a prominent symptom.”

        He may well be schizophrenic but at the same time it’s simply amazing how many people have weighed in, publicly, on this matter without checking what’s coming out of their own mouths against the available evidence, including Dr. Torrey here.

        1. James

          Granted, and I was a little hestitant to post such a seemingly flippant and possibly inflammatory reply to any post given the current circumstances.

          Nonetheless, the poster’s entry did – and still DOES – seem a bit mANIC! to me, and I stand by that opinion.

          As to Jared in person; I agree that all is speculation, which is to say that all is speculation in our every day lives as well, albeit somewhat less spectacularly (hopefully!) so.

          As in, thank your local deity (or not) for every moment that you have in this world, for it very well may be your last.

    1. MyLessThanPrimeBeef

      I have alwasy liked the sound of ‘The United Organic States of America.’

      Maybe even ‘The United States of Organic America.’

      Remember, people, back in the paleolithic days, everything was organic.

    2. avgJohn

      You make some very good points as people will discover for themselves when it all ends in blood and tears.

      In particular, your approach would lead to a focus on local community and make global domination, with all it’s attendant aggression and evil, passe simply in and of its self.

      But for now, for most of us anyway, it’s as if your message has arrived from the future through a tear in the fabric of time as it exists in cyberspace, and people inherently have problems relating to such a drastically different reality.

      But when the “end” finally strikes home, you can bet a larger percentage of the population, though smaller in absolute numbers(those that have survived), will relate to what you say and much of human activity will be centered on addressing the basics of carrying on human life, and the attendant change in human values that will accompany it.

      I would hasten to add that I think the same basic “organic” approach to using a thoughtful reasoned manner of growing our foods, could be used to develop transportation, communication, construction and other technologies and services to make our lives richer and fuller.

      I believe there are many thousands of brilliant and creative minds in the world just waiting to unleash a torrent of exciting new ideas and possibilities, when the approaching disaster necessarily ushers in your Brave New World. But, like the author, Buckminster Fuller said, at the present time we are still gridlocked by archaic social, political and economic institutions.

  8. Jim Haygood

    From the David Stockman interview:

    But very few, if anyone, in Congress, the National Security Council, the State or Defense Departments have even dared to publicly raise the prospect of reducing the military establishment and its spending to offset the national debt, Stockman said.

    “Unless you have a profound change in foreign policy, you’re not going to have the possibility of a radical change in defense spending. The later follows from the former,” he said.

    “This is a profound disappointment that there’s not even a debate — a serious debate about dramatic change in our imperialist foreign policy and war-making establishment in this administration — allegedly the most left-wing administration that we’ve had in modern time.”

    “I don’t have much hope that what needs to be done will be done until it’s finally forced on us by a world bond market crisis, which will happen sooner or later,” Stockman added.

    Stockman is not an economist, but he sees the big picture that thousands of PhD Econs with their Taylor rules and ARIMA models miss: you CANNOT grow a capital-intensive economy when you’re mindlessly flushing 5.4% of GDP down the toilet on a dysfunctional military empire which can’t even whip a bunch of ragtag Afghan cave dwellers.

    Stockman says that defense spending could be cut to 3% of GDP by 2015. Sure, as an interim target. But in one of the world’s most peaceful neighborhoods, the US could easily defend its borders long-term at a price of 1.0 to 1.5% of GDP, as Japan did for decades in a considerably more dangerous region.

    Unfortunately, as Stockman hints, a paper money democracy is replete with perverse incentives to continue living beyond its means until it slams into a financial brick wall. So it’s probably a forlorn hope to expect the ossified Depublicrat duopoly to demobilize the warfare state, when most of the populace (led by the redoubtable Kurgman) are still slinging feces at each other in the left-right ideological sandbox.

    So I offer this advice from Stockman, quoted in Wikipedia:

    “I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries.”

  9. ep3

    In regards to State budgets, I think California got hood-winked just like the U.S. got it with Obama. I think it was a foregone conclusion people weren’t gonna vote for Ms. Ebay and her draconian cuts to everything. The people would revolt. So it was set up that Jerry Brown (just like Obama) could come in and be the voice of reason, the voice of the people and say “we must act like adults, take the pain” etc. And people think “well, this is a democrat, he’s not gonna slash gov’t so we can trust him”. But he does it anyway.
    So Democrats are like a spoonful of sugar to help the medicine go down.

  10. Gene

    Re judges “berating” lawyers — where are the indictments? Just imagine if the lawyers and robosigners were indicted on each count of fraud. Are these people immune from prosecution merely because the work for TBTF banks? There is only one way to restore public confidence in the rule of law. And that is to enforce it with a vengeance.

  11. Tertium Squid

    WSJ article about decline in wages:

    “While difficult for individual workers, lower wages can make U.S. industries and companies overall more competitive and allow employers to hire more workers than they would otherwise. In the long run, that may make the nation more prosperous.”

    Talk about missing the forest for the trees. Middle-class American wealth and debt filled the gas tank of the global economy for decades.

    And in this zeal for a wage-race-to-the-bottom they forget that somebody will have to buy all the stuff. It won’t be wage slaves.

    The road to prosperity is poverty!

    1. ScottS

      In my head, I could hear the pause after he said that realizing it doesn’t add up, then changing the subject.

      Trickle-down economics has had its chance. Time to try some trickle-up!

    1. ScottS

      Not even half-way through that list and I feel nauseated.

      If people can get that worked up over having a half-black president, imaginary gun regulation, and health care reform, then we are in serious, serious trouble.

  12. Tertium Squid

    There’s a peculiar article in the NYT about the actual traders at the Fed tasked with buying all those securities for their QE2:

    “Each morning Mr. Frost and his team face a formidable task: they must try to buy Treasuries at the best possible price from the savviest bond traders in the business.”

    Market manipulation is HARD.

    “Across Wall Street, three musical notes — an F, an E and a D — sound on trading terminals, alerting traders that the Fed is in the market.”

    Here’s what it sounds like:

    Finally, this gem:

    “They have their work cut out, trying to outwit the 18 investment firms that deal directly with the Fed. These so-called primary dealers — the Goldmans and Morgans of the world — employ some of the sharpest minds on Wall Street.”

    It’s remarkable how blase we have become, that the amoral avarice of the TBTF’s is taken as a given and passed over without comment.

    But the statement also takes for granted that our government is actually working AGAINST them.

    The aliens have TUBAS.

  13. Hugh

    State budget cuts, further federal budget cuts, speculative, i.e. Wall Street-driven, inflation in commodities pricing, ongoing high disemployment (despite the BLS’ recent jiggering of its numbers), the foreclosure mess, and the anti-stimulative effects of tax cuts for the wealthy, non-productive sectors of the economy are all negatives on the economy. The Obama-Republican tax cut package had very stimulus in it and what there was is more than wiped out by any one of these negative factors.

  14. Hugh

    Stockman is a self-described libertarian. He is also a deficit hawk. While it is good to hear someone talk about cutting back our imperial military, it is important to bear in mind that Stockman is clueless, as are libertarians and deficit hawks generally, on how the federal government actually finances itself.

  15. kravitz

    Danielle Gilmore. Remember that name.

    Meet Danielle Gilmore, The Southern California “Super Lawyer” Who Will Make Bank Of America Sweat Tomorrow

    “tomorrow, employees from Bank of America and Countrywide face the MBIA lawyer to give testimony that they didn’t mislead MBIA into buying packages of bad securitized mortgages”

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