Links 2/11/11

Animal intelligence: sheep are raising the baa Sydney Morning Herald (hat tip reader Crocodile Chuck). The video is great, but now I’m gonna feel even worse on those rare occasions when I eat lamb chops.

Aussie crocs ‘traumatised’ by cyclone PhysOrg

Mali: A Gift Economy Forbidden Knowledge (hat tip reader Dwight)

NY Fed: 2005 Bankruptcy Bill Led to Hundreds of Thousands of Unnecessary Foreclosures Dave Dayen, FireDogLake. A bit late to this, but worth noting.

The Great British Corporate Tax Giveaway Lee Sheppard, Forbes

Spain orders drastic caja clean-up to win confidence and fight off EMU debt contagion Ambrose Evans Pritchard, Telegraph

Banks, Local Governments Feel Credit Pinch Caixin

Live from Cairo (19) Lambert Strether

Repo Runs jck

Commodities are overbought: Marc Faber Commodities Online (hat tip Ed Harrison)

WTI-Brent price divergence hits record $16 Financial Times. Storage capacity in Cushing is very limited; it’s a favorite place to play games. But this is both egregious and embarrassing.

‘Parasitic’ sugar speculators blamed for volatility BBC (hat tip reader furzy mouse)

Ship of Knaves Simon Johnson, Economix

Dimon Calls Fannie, Freddie ‘Biggest Disasters of All Time’ Bloomberg. If you had any doubts about the intellectual honesty of Jamie Dimon, this should settle them. No chieftan of a TBTF bank, particularly a major clearing bank, should taken seriously when they try to assign blame for the crisis to outside actors.

Arithmetic and the Fannie/Freddie Fix Dean Baker. This is actually pretty cool.

Court Revives Suit Over Blackstone I.P.O. New York Times. Couldn’t happen to a more deserving bunch.

Foreclosures, house prices, and the real economy Atif Mian, Amir Sufi, Francesco Trebbi, VoxEU

The Chamber of Commerce and the President of GE Have a Plan to Restore Business Confidence and Create Jobs, 1931 Edition. Mike Konczal

Antidote du jour:

Screen shot 2011-02-11 at 6.02.19 AM

Print Friendly, PDF & Email


  1. Richard Kline

    “They got the guns but we got the numbers . . . C’mon!”

    —Mr. Mojo Risin’

    “All barriers have been broken down,
    Our weapon was our dream . . . .”

    —The Long Time Comin’ Boys

    “Al-sha’b yurid isqat al-nizam!”
    The people want to change the system!

    . . . So the found their dignity, and lost their fear.
    And did. With an open hand, not a chambered round.

  2. Mark

    re: Mali

    I was a Peace Corps volunteer in Mali. I taught in a high school and supervised a village project to promote poultry production.

    1. I witnessed acts of astonishing generosity to not only other Malians but also strangers (such as me but also people like the French couple who wondered into the village one day on foot and were feted like visiting royalty).

    2. I also witnessed astonishing acts of xenophobia, brutality and selfishness. For example, one evening a man was discovered in a field carrying a machete (not an uncommon thing to do). He was identified as a member of the Mossi tribe, the dominant group in neighboring Birkina Faso, by his facial scarification. Accused on the basis of no other evidence of being a (literal) head hunter for a Mossi shaman only the intervention of the village chief allowed the man to be taken in custody (saved actually) by local authorities rather than beaten to death on the spot.

    What’s the point: Malians (actually the people and the proverbs quoted in the video are Bambara, the dominant ethnic group of Mali) are, like all other humans, complicated and contradictory. Like most “traditional” societies they place enormous value on family and will make amazing sacrifices for members of their extended family no matter how distant and no matter their own poverty.

    To me, the video does not do them justice and I never heard of a “dama” culture while I was there. The video is paternalistic and infantilizing. The reality is that they are just like you and me – at times wonderful and at other times, no so wonderful.

    1. Paul Tioxon

      My father would comment after reading some atrocity committed against an elderly retired woman for her social Security check, or a rape or other such brutal crime: this is not a civilized country. He would then launch into one of his few stories of survival in the Philippine jungle from WWII. He escaped from early on before the Batann death march moved further from his surrendered position. He said that the people he lived with in the jungle, without almost any clothes, and almost nothing we would call property, were more civilized than the people he read about in the cities. He would say they were not the savages, but the criminals out on the street were. The jungle people would not molest any of the women, who wore little clothing, the children would show no signs of mental retardation, I think my father had an expanded idea of that and may have also included general sunny disposition and happiness as opposed to crying and willfulness. The elderly would never be attacked for any reason, were immensely respected and they were generous and gracious in accepting him and helping in his survival for years in the jungle. Unlike the so called civilized world, as he would repeatedly remark, in disgust.

      1. Mark

        When people ask me “what did you learn in Africa?” I usually answer “eat with the rich but dance with the poor”. I realize that’s trite (look, it’s a dumb question and most people don’t really want a complete answer) but it’s really true.

        1. abelenkpe

          My hubby spent years in Ghana studying traditional dance and music and loves your reply. Nice and succinct ;)

    1. MyLessThanPrimeBeef

      Last seen, headed towards the Red Sea.

      Jordan: Don’t come wandering in my desert.

      Yemen: Not my desert either.

      Thailand: We have no desert, but don’t come.

      Where will Barak-from-Moo find his land of milk and honey? He needs a miracle now.

      1. MyLessThanPrimeBeef

        The last line from the play ‘Exodus From Al Qahiro:’

        ‘Oh, bummer,’ Barak-of-Moo cried out in anger, ‘It’s the end, the Foreigner dictated to me.’

      1. Paul Repstock

        All governments everywhere are “quaking in their boots”. If the ‘ordinary citizen’, can pull of a coupe like this without warning or violence, there’s Trouble in Mudville.

        Please expect and understand that every effort will be made to undermine Egypt’s nascent democracy. Every interest group; including militarists, capitalists, nationalists, and religious fundamentalists, will heap support on their chosen group to work an advantage and sabotage the others. Probably North Korea and Thailand ill both be sending deligations to ‘assist with the transition’, as will all the other interested parties. I expect to see representatives from The Vatican, General Electric, and Bank of America converging on Cairo in the next few days. A whole new industry, “Nation building tourism..:)

  3. Ron

    RE: Fannie and housing per David A. Rosenberg this morning


    February 11, 2011 – BREAKFAST WITH DAVE

    I am still trying to get into the bulls’ heads on this file, but I don’t think it is as straightforward as it would have been coming out of a normal downturn. Even the early 1990s housing correction to eventual recovery in the U.S. was more
    regional and with fewer headwinds.
    One thing that I left out in my prior musings that was pointed out by a reliable contact of ours, a former colleague who is extremely knowledgeable regarding
    the credit market, is that one-third of Americans have FICO scores below 660 and most lenders will not even give an FHA (Federal Housing Administration)
    loan to anyone with a FICO score below 660. In fact, the average FICO score for a new FHA/VA loan is around 700, up from 630 just a year ago. Additionally, expect the Treasury to recommend increasing the down payment requirement for new FHA loans from 3% to possibly as high as 7% (with increasing fees). This will very likely end up taking the homeownership rate in the U.S. below the long-run mean of 64%. Keep in mind that it remains 2½ percentage points above the long-run norm fully three years into this housing depression.
    As was pointed out to us by a reader who closely follows the situation, another “structural” issue impeding any recovery in the housing market is that Fannie
    and Freddie have gotten religious … big time. Especially with the government contemplating the phase-out of the GSEs, and the consequent move by the agencies to more radically tighten up their requirements. As it turns out, GSE
    financing, even for well-qualified buyers, has become a much more onerous exercise than it was in the past and credit is only flowing freely if the deal is an absolute no-brainer.
    One of our portfolio managers is right ― we will have many more renters in the future.
    At the same time, the demographics in the U.S. are not constructive for builders of single-family homes. Move-up buyers of the last cycle want to trade down, the empty nesters will increasingly opt for smaller bungalows. Moreover, the youth cohort is not just grappling with record-high unemployment, but graduates are
    saddled with massive debts and without a job cannot get a credit score or see their current awful FICO scores eviscerated. Coupled with high student loan debt ratios, many 20-somethings simply do not qualify for a home, and that assumes they have at least a 10% down payment.

    The demographics in the U.S. are not constructive for
    builders of single-family homes — move-up buyers of the last
    cycle want to trade down, the empty nesters will increasingly opt for smaller bungalows.

    Somehow I think the onus is on the bulls to prove their case and explain what will happen this year and next (that didn’t happen in 2010) that will ignite the

    1. mk

      Just received this announcement from California Association of Realtors:

      Wells Fargo lowers credit score requirement for FHA mortgages
      Wells Fargo recently announced that effective Jan. 15, 2011, it will accept FHA-insured mortgages for borrowers with credit scores as low as 500. For borrowers with credit scores ranging from 500 to 579, a 10 percent down payment is required, and the down payment may not be a gift or be part of a down payment assistance program. Borrowers with credit scores of 580 to 599 are required to put down 5 percent, and the down payment may not be a gift or part of a down payment assistance program. Borrowers with a credit score of 600 or higher are required to have a 3.5 percent down payment, and a gift is acceptable. For all borrowers, seller concessions are limited to 3 percent.

  4. Hugh

    Great article by Konczal. We are seeing a replay of the Hoover Presidency, only with more malice this time around.

  5. Paul Blankenau

    If you were lower on the food chain, would you prefer to be raised and eaten by animals that saw you as intelligent, or that only saw you as a protein source?

  6. Anon

    Re Mali:

    I’m married to a Malian and I find this video very Africanist (in the sense of Orientalist). I tend to think of Malian culture as basically a village culture. Not only is there abundant gift giving, but an ethic of intervention. If you see something that isn’t right going on, it is your moral duty as a human being to speak up for what is right and do what you can to make things right. I’ve seen people castigate their friends for the way they discipline their children and, after a fairly minor domestic incident, know of a brother who made sure his sister-in-law knew she had a place to stay until she wanted to go home.

    On the other hand, it is definitely true that this kind of a system creates a disincentive for some people to take care of themselves. And a lot of petty rifts, that can turn very destructive in a group of people living together develop over these issues. The theory also works much better than the practice: While every child in a household may be fed, often it’s only the mothers’ children who are raised with love and care, the others become kind of de facto servants.

    1. Mark

      a brother who made sure his sister-in-law knew she had a place to stay until she wanted to go home

      I have a story that illustrates this to an even higher degree. The head of household of my host family had two wives (polygamy is a Bambara tradition and continues to be common now that they are mostly Muslim). What’s interesting is why he had two wives. Benke’s brother had died at a young age. It was therefore his absolute familial obligation to see to the welfare of his deceased brother’s wife and children. So he married his sister-in-law and moved them all into his own compound.

    2. Anon

      Mark, I don’t think you understood my point. A situation that in the U.S. would probably degrade into domestic violence was handled with finesse. So that the potential offender was put on warning that any such behavior would be met with implacable opposition from his own family — long before there was any real concern of such behavior.

      At its best a village social structure can be amazingly resourceful in preventing socially destructive behavior. If only it always worked that way!

      The custom of marrying a brother’s wife after he dies is a completely different issue, but an effective way of ensuring that nephews and nieces are well provided for.

  7. Neil Anderson

    Not a good Forbes article – the author has no grasp of international tax matters. Always frustrating to read people who you should be onside with, as in generally criticising the banks/government tax structures, who fail to understand their subject matter.
    Also overplays the UK Uncut movement, which has its heart in the right place but is let down by a lack of expertise. Be great to see UK Uncut reach out to the tax professionals (not some temp in the Revenue like that 6bn vodaphone canard) as there are many among us who have cogent criticisms to make.
    Yves is well placed to comment on banks and we trust her in no small part due to her background, need a tax version of Yves now…

    1. Yves Smith Post author

      The author wrote seven page article (in teeny print) on the same tax law change for Tax Notes International, which is a VERY well respected publication on Jan 3. I would have run that except it’s an $1100 a year publication which does not take well to having its copyright violated. She knows exactly what she is talking about. In fact, she’s a recognized expert and pretty much all she does is write about tax law.

      So tell me exactly what your tax law credentials are and whether you have even read the proposed UK regs?

      Looks like halo effect: you saw this ran in Forbes and read with prejudice.

      1. Anonymous Jones

        I’ve been reading Lee since mid-1994. She is well respected and smart but, like all of us, occasionally wrong. I would not have considered this her area of expertise, but as I am not an expert, I am refraining comment other than to assert my ignorance about my own knowledge *and* hers.

        1. Yves Smith Post author

          She may not be good at simplification for lay audiences, I see that a lot with people with narrow expertise.

    2. Deus-DJ

      You’re right, it’s not a good Forbes article…it’s not a free market, no taxation, pro-globalization article in line with other Forbes articles.

  8. KFritz

    Re: Sheep

    Based on my observations 40 years and more ago, they may have gotten their reputation because, their emotions are fear based. Goats, a comparably sized animal, are far less fearful.

    Sheep everywhere agree their reputation is nothing but humbug.

  9. MyLessThanPrimeBeef

    Little kitty, I hope you will train your Homo Not-So-Sapiens Not-So-Sapiens houseservants well.

    Be firm and stern with them and never get distracted into debating about the meaning of life or things like that with them. There is a reason why they get ulcers and you and zebras don’t.

    Best of luck and hope you live a happy un-declawed life!

    A friend.

  10. MyLessThanPrimeBeef

    Oh, bummer, Barak-von-Moo’s Swiss assets have just been frozen.

    Why couldn’t Switzerland have done it before he left office?

    Shouldn’t it be a matter of official Swiss policy to admit no money from foreign leaders on the principle that a leader should have faith in the country he’s a leader of? I mean, that would make the leader more attractive, more trustworthy (on the surface at least) in the same way it would for a mutual fund manager who puts his own money in his fund.

Comments are closed.