Links Valentine’s Day

Prairie dogs kiss for an audience BBC

Why infertility will stop humans colonising space Independent

Egypt Crafts Stimulus Plan to Jump-Start ‘Sudden Stop’ Economy Bloomberg (hat tip reader bob)

The west can no longer claim to be an honest broker in the search for peace Guardian (hat tip reader May S)

Arab rulers confront a new world Financial Times

Mideast Unrest Spreads Wall Street Journal

Farm insurance fraud is cheating taxpayers out of millions Los Angeles Times. From a few days ago, and reader James P. sent it as support of our thesis that it is hard to track food inventories

The Escape Artist: How Timothy Geithner survived Noah Schreiber, The New Republic. Dood, I already said why. He gives good meeting.

Thanks to readers for noticing that Frank Rich noticed us!

Obama’s Pentagon cuts not what they seem CNN (hat tip reader May S)

Housing Crash Is Hitting Cities Once Thought to Be Stable New York Times

At Media Companies, a Nation of Serfs New York Times (hat tip reader Buzz Potamkin)

Guanxi vs Analyst: Carlyle and the coming collapse in Asian Private Equity John Hempton. This is major. Odds are high you will see variants of this story elsewhere.

US woos sovereign funds in AIG sale Financial Times. This suggests they regard this as a tough sale.

Haircut 100 – how is the burden shared when a banking system goes bust? Bond Vigilantes. Per Richard Smith:

I should add: so far no law change in Ireland to allow the fate of bondholders to be decoupled from the fate of depositors. What they are doing instead is moving deposits out of Anglo Irish Bank and Irish Nationwide. Once that’s done they can probably haircut the bondholders without needing to change the law.

Bondholders are exposed: Lenihan Independent (Ireland, hat tip Richard Smith)

Banks’ hidden subsidies worth £32bn a year Independent (hat tip reader Buzz Potamkin)

Ignorance is Confidence: Fedtalk or Newspeak? Andrew Jackson on Repealing a Central Bank Chris Whalen

Accountancy has forfeited its right to call itself a profession Ian Fraser, QFinance (hat tip Richard Smith)

In Re Agard – Another MERS Defeat ForeclosureHamlet. By e-mail, Lisa Epstein points out some pretty pointed language in the decision:

MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.

Antidote du jour:

Screen shot 2011-02-14 at 4.58.10 AM

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  1. Ignim Brites

    Re the Guardian piece: Maybe I’ve missed it but it seems like Jimmy Carter has been pretty quiet about Egypt too.

    1. aet

      Still hounding that old man so deep in his retirement?
      He’s only what – 88 tears old?

      Why not cut Mr Carter some slack?

      1. aet

        …although come to think of it it is wierd that Mubarek was ousted almost thirty years to the day afterCarter left Office.

        Still less reason to think that Mr carter has anything interesting to say about Egypt thiry years after he’s been out of the loop, though.

        1. Ignim Brites

          I wouldn’t expect Carter to have anything interesting to say, but I would expect him to say something. He may be deep in retirement but the evidence is he still wants to be a player. And one little observation hardly counts as hounding, but in general I concede that my remark was uncharitable.

          1. myboysherman

            I think you would lose the argument. See: Sadat, ARAMCO, Moseddegh, Suez, King Hussein of Jordan. I don’t think the hostage crisis could be shown to have changed US foreign policy much.

  2. attempter

    Re housing’s continued obedience to the law of gravity:

    “We went into 2010 feeling gangbusters, thanks to Uncle Sam,” Mr. Humphries said. “We ended it feeling penniless, with home values tanking.”

    Why would anyone think that anything other than Bailout Sam’s brute larcenous force can defy asset deflation?

    Perhaps in part because of this kind of “journalism”:

    Now, though the overall economy seems to be mending, housing remains stubbornly weak. That presents a vexing problem for the Obama administration, which has introduced several initiatives intended to help homeowners, with mixed success.

    1. Even where the evidence wasn’t 100% to the contrary, it would be unprofessional for a reporter to serve as a stenographer regarding the government’s alleged intentions.

    But we know that this kind of stenography serving the lies of the elites is the enshrined if unwritten practice at the NYT. The only reason it’s unwritten is because the NYT’s editors are consciously aware of what lying criminals they are and are too cowardly to openly admit it.

    2. Of course, the evidence is 100% to the contrary. Even the administration admitted last summer that the HAMP was a scam, although that was self-evident from the start when they put the servicers themselves in charge of it.

    3. The economy is most definitely not “mending” except in economist and MSM bizarro world, where a term like “jobless recovery” can be taken as anything but a sick joke and mortal insult. On the contrary, we’re now undergoing the final binge of looting and pouring concrete down the elevator shafts (as the Portuguese did when they had to abandon Mozambique).

    And even their phony numbers are nothing but accounting fraud propped up by Uncle Sam’s Bailout, as I mentioned above.

    Re more trouble for MERS in those pesky courts of law:

    The quote above expresses the real plan these criminals were counting on. They expect to prevail through sheer might makes right. Plenty of judges have made this same complaint, that MERS and the banks really think they’ll directly trample the laws with what they try to depict as a tyranny of accomplished facts like their market share. No doubt Congress is trying to figure out how to help them.

    1. PQS

      They expect to prevail through sheer might makes right.

      Hey, it appears to be working very well for TBTF institutions and other assorted well-connected mighties, too.

  3. Toby

    Re: Egypt Crafts Stimulus Plan to Jump-Start ‘Sudden Stop’ Economy, Bloomberg

    How depressing; no mention of changing the money system. Until nations start a revolution in this department ‘freedom’ will be attached to money/purchasing power, and the system which controls the money will control that ‘freedom.’ That’s terribly radical of me I know, but hardly new either. Sadly, as Bernard Lietaer has publicly said, economists do not touch the money system if they want to have some sort of a career.

    Also, it’s not ‘Growth’ they need, it’s not ‘Growth’ anyone needs, it is sensible and carrying-capacity-aware distribution of human ingenuity, as human endeavor and enterprise transforms finite nature into goods and services. Nature/environment should be the first priority, rather than the current dumb double-act of debt-money and the Invisible Hand. Efficient markets my arse.

    The absurdity of ‘can’t afford it, not enough money’ must be made culturally plainer. Money is a tool we devise, not a divinely ordained, 1-1, joined at the hip Siamese-twin of wealth. Until this simple fact is properly embraced, no nation or people anywhere can put themselves on a sustainable footing. If we don’t manage sustainability, we are ‘choosing’ possibly our own extinction, and certainly civilizational collapse, by definition. What do we want?

    If anyone knows of any group pushing for economic and monetary reform in Egypt (isn’t usury quasi-illegal in Islam?) I’d love to hear about it.

  4. Jim the Skeptic

    “Obama’s Pentagon cuts not what they seem”

    We need real budget cuts from every segment of the federal government. This piece illustrates that what we will get is constant argument.

    There is a very simple way of dealing with this problem.

    Make every department’s appropriation the same dollar amount as it was last year. That will mean a small cut right across the board.

    The House of Representatives is now controlled by the Republicans and their have the power to initiate appropriations. The ball is in their court.

    Being a skeptic, I believe they will opt for argument.

  5. Sherparick

    To really cut the DoD’s budget would need a change change of the American elite to run a world empire. As it is, the military forces are being stretched to near the breaking point, so you could say they are underfunded (with such obvious exceptions as the F-35, a combination of fighter pilot nostalgia (fighter pilots run the Air Force) and military-congressional-industrial welfare). At some point there will be an American Roicroi, an American Singapore, some signal defeat or catastrophe that will make it blindingly obvious to the most obtuse that the whole thing is corrupt and hideous nightmare, and the retreat will begin.

    1. PQS

      I would have thought the ten wasted years, untold Iraqi lives, and bajillions of dollars thrown away would have been signal enough that It’s Not Working.

      But perhaps, as we say in my business, “It’s not Broken, that’s Just the Way it Works.”

  6. Ignim Brites

    Chris Whalen asserts that the Fed chairman is speaking like a politician. Would it not be more appropriate to say he is speaking like a shaman? Conjuring the animal spirits? Literally?

  7. MyLessThanPrimeBeef

    For Valentine’s Day – beware of Ninja slugs shooting ‘love darts,’ per National Geographic.

    1. MyLessThanPrimeBeef

      So, I guess we can conclude that

      Birds do it

      Bees do it

      Ninjas do it

      slugs do it

      Even cold-blooded capitalists do it.

  8. GuyFawkes

    Yep, Seattle’s getting hit with the downturn. Big time.

    Last night at a party that was all anyone could talk about. Led to some interesting conversations.

    Seattle homeowner’s getting organized. 2nd meeting:
    Tues, March 8th. 6:30 pm. Tully’s on the corner of 22nd Ave NW & Market St.

    We plan to organize, protest and lobby in Olympia. Come join and find solutions!

  9. Hugh

    The Guardian piece is mistitled. It is really more about the self-serving involvement of the West in the Middle East. It’s well written but also fairly obvious.

    Illusory cuts to the Pentagon budget? Same as it ever was. The last I heard and something the article doesn’t mention is that some of the cuts the Pentagon is willing to make involve pushing more of the costs of healthcare on to non-combat troops. Of course, once you have been seriously injured you are likely to turn into one of those non-combat troops.

    The Guanxi article is a good one. It supports my thesis that kleptocracy is a worldwide phenomenon. It’s here. It’s in Europe. As the article notes, it is in China. And as events in Egypt have illustrated it is endemic in “developing” countries. What this means is that we have multiple foci of economic instability in the world. China’s economics are just as Ponzi as everyone else’s. At some point, one of these is going to blow up, and when it does, the others because of their interconnectedness are going to go with it.

    Speaking of Ponzi, that’s what Chris Whalen’s Fed talk is. But it’s not about expectations management, it’s about selling the con.

  10. MyLessThanPrimeBeef

    “It will be difficult enough to avoid disaster in the next 100 years, let alone the next thousand or million,” he said somewhat pessimistically last year. “Our only chance of long-term survival is not to remain inward-looking on planet Earth, but to spread out into space.”


    I am more pessimistic than Hawking.

    If we can’t take care of this little blue dot, colonizing space will just mean us Homo Not-So-Sapiens Not-So-Sapiens will make a bigger mess everywhere.

    Then, where will we go?

    Let’s save the research money.

    1. attempter

      It’s the Peter Principle in action. Hawking’s been saying this for years, and to the best of my knowledge he never even acknowledges such moral or philosophical issues.

      It looks like he reaches the level of his incompetence as a philosopher. But then, Einstein wasn’t all that great at it either.

      1. psychohistorian

        IMO it represents two things

        1. Mankind needs a frontier. Something bigger than themselves to “strive for”.

        2. By studying our place in the universe, perhaps we will attain some humility and reverence for our mere existence.

        1. attempter

          Trickle-down humility? :)

          Isn’t it strange how, for any kind of elite whatsoever, we can somehow never directly tackle problems or seek self-improvement, but need some convoluted (and contractor-lucrative) journey to finally come back around and, almost as an afterthought, find some oblique solution?

          If I didn’t know better, I’d think they were lying about wanting to solve problems at all…Even that they don’t consider human problems to be elite problems; quite the contrary.

  11. jest

    RE: Geithner’s fluff piece

    “says a former administration official who interacted with him… ‘He’ll be fine with Obama. Once they get to know each other, they’re like the same person.’”

    I visibly cringed upon reading that line.

  12. john bougearel

    Yves, nice summation on Geithner’s Houdini Escape Artist capabilities:

    “Dood, I already said why. He gives good meeting.”

    What a chooch! In Noam Schrieber’s interview, he quoted Geithner as saying “I don’t have any enthusiasm for … trying to shrink the relative importance of the financial system in our economy as a test of reform, because we have to think about the fact that we operate in the broader world…We want U.S. firms to benefit from that.” He continued: “Now financial firms are different because of the risk, but you can contain that through regulation.”

    David Dayen at FDL was flabbergasted. saying:

    “I don’t even know what to say about this. We’re just a few years removed from the financial oligarchs destroying the global economy through their own greed and negligence. And the man put in charge of regulating them, who had a front-row seat to all this destruction and who has been given expanded powers under Dodd-Frank to see to it that never happens again, thinks that there’s a great “financial deepening” about to take place where the demand for sophisticated financial innovations will jump. Therefore, the financial sector will need to grow and become the most reliable spur of the US economy. That’s his feeling. And regulation can reduce the risk, even though the new regulations barely put a dent into Wall Street’s core business, and are being systematically defunded besides.

    Financialization of the economy has led to practically nothing but pain for the average worker and risk for the taxpayer. It has turned the allocation of capital into the placing of bets at a casino, and the stock market into a particularly sophisticated video poker game. This territory was all covered before in the run-up to the Great Depression as well, and we know the precise causes and remedies involved. Geithner prefers not to address the plutocracy he’s really advancing here – where elites provide “financial deepening” services abroad and amass ridiculous profits that they wall off.

    You have the Treasury Secretary of the United States, three years after a major financial crisis, saying out loud that what’s good for Wall Street is good for America.”

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