Links 4/10/11

Many faces of the ‘Arab Spring’ Al Jazeera. Glimpses of those faces in the next few links.

Libya rebels repel attack on Misrata, Gaddafi appears Reuters.

Egypt: Army crackdown in Cairo’s Tahrir Square BBC.

Thousands attend Syria funerals Al-Jazeera.

Sadr calls for an end to ‘US occupation’ Al-Jazeera.

Anger flares up in Yemeni town Al-Jazeera.

Bahrain arrests leading activist, as crackdown hardens International Business Times.

Two Bahraini protesters die in police custody BNO news.

Tepco Says Damaged Fukushima Nuclear Plant Was Hit by a 15-Meter Tsunami Bloomberg. Something for any country with coastal nuclear plants in tsunami territory to think about.

Banks Are Off the Hook Again New York Times on the Foreclosuregate deal (which they expect to be announced this week).

George Osborne’s cuts: Say goodbye to Britain and hello to Austeria The Guardian. Rob Parenteau’s coinage goes international.

Were Attlee’s Labour deficit deniers? A lesson for George Osborne. The Green Benches.

Irish regulator says Anglo’s senior bonds at risk Reuters. The capital part of the Irish problem

ECB Lending To Irish Banks Shows Funding Dependency WSJ, with a cameo appearance by blogger and Twitterer Lorcan Roche Kelly. The liquidity part of the Irish problem.

Too much finance? VoxEU. It could be…

Two Major Tests for Bank Regulators EoC looks at Basel III’s liquidity rules; part of a series.

Antidote du jour:
Sleeping Dogs

h/t: Peter G.

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    1. KnotRP

      > “The time for negotiations has passed,” he said.
      > “The international bankers still have the obligation to pay us back.
      > This is now a case for the courts.”

      fixed that for you

  1. markincorsicana

    I sent pizza and Subway sandwiches to Wisconsin. Anyone have the number for pizza or Subway in Iceland?

  2. ambrit

    Hey there;
    You folks are way too subtle for me. Is that an Irish Wolfhound looking so forlorn and aged on the floor? And why is the Lap Dog on the comfey pillow? Are you hinting that the ECB and the Chancellor of the Exchequer are ready to kick the Irish out of bed and onto the cold, cold floor? Woe is me, that it should have come to this!

    1. Bill

      Yves, there is a caption for your Antidote photo that completes and explains the joke: Alpha Dog !

      1. MyLessThanPrimeBeef

        That’s a good caption.

        The small dog represents the 5 all-world-owning bankers who have more than they can consume.

        The large dog represents the tired, poor and huddled masses totalling about 5 billion that have less than what they need to sleep.

  3. Ignim Brites

    Against the case for Keynesian spending made by Dr. Clarke in “Were Attlee’s Labour deficit deniers? A lesson for George Osborne.” (The Green Benches) we have the example of Japan. Why did spend, spend, spend fail in Japan but succeed in Britian post WWII and post 73-74?

    1. Hideo Gummikrokodil

      spend fail in Japan but succeed in Britian

      ~~Ignim Brites~

      Is extent of spending the controlling variable, or is the crucial coefficient the source of the money spent? Should we spend more by taxing the Chinese and selling bonds to Americans? Let Americans collect the interest on the bonds every 6 months? Let Americans roll the interest over into more bonds? Let Americans spend interest money locally? Leave the Chinese in abject poverty by taxing them out of business.

      Or should we sell bonds to Chinese but tax Americans?

      Think about it

    2. reslesz

      The usual explanation is that as soon as the Japanese economy showed signs of improvement, political will for deficit spending tanked. Spending was dialed back and taxes hiked. And this cratered whatever minor recovery had been in progress. See Richard Koo on the subject.

      Premature Fiscal Reforms in 1997 and 2001 Weakened Economy, Reduced Tax Revenue and Increased Deficit

      1. Japan

        I have lived in Japan for 20 years and I would say its more to do with how spend spend spend was implemented.

        They basically covered the countryside in cement. Political pork barrel spending targeted at favored lobby groups in other words.

        They didn`t write down any of the bad loans made. During the bubble a typical house loan was 60-70 years duration. A father and his son would sign off on it. these loans are still being carried at full value. The banks are loaded to the gills with them.

        It would be like you losing your job and instead of using your credit card to go and get retraining in another industry, you instead went to Las vegas and used it getting wasted until the money ran out.

        They just didn`t use their spending thoughtfully. But the politically connected got richer naturally.

  4. MyLessThanPrimeBeef

    Thanks for the Middle East links, Richard.

    Now that fewer people are commenting on the situations, I feel there might be some real change…little by little, out of sight.

  5. KnotRP

    > George Osborne’s cuts: Say goodbye to Britain and hello to Austeria

    Nice ju jitsu….the non-austerians (average Britians, if you believe the title, Bankers if you don’t) create the problem and drive the world economy to the breaking point (over
    the shouts of the now so-called-austerians), but the austerians end up with a “hush-your-mouth” and a dismissive label, when the non-austerian comes home drunk, infected with various transmittable diseases, and holding an IOU from the mob. They (the non-austerians) want us (the austerians) to work **harder** to pay off the medical bills and make that IOU good, or the mob will break their legs! Oh, the humanity.

    And the Icelandic ants said, “I wonder what fried grasshopper tastes like”…

  6. KnotRP

    Same ju jitsu, in fact, that caused that other boat anchor to be named “Icesave”….Orwell would be proud of how dumb we’ve become.

  7. Hugh

    The banks were never on the hook. That’s just for the serfs. There is nothing surprising about this. Obama and the Democrats are as big of crooks as the Republicans.

    We are in late stage kleptocracy. Our infrastructure is falling apart. Our industrial base has been shipped overseas or allowed to rust away. Our K-12 education sucks. Ditto healthcare. There is the housing collapse. The markets are completely rigged. The political process and the government are owned by the rich. Ditto the justice system.

    We witness the spectacle of the kleptocrats’ political lackeys racing around papering over truly massive frauds and thefts. All the foreclosuregate settlement does is inculpate not just the banksters but the political establishment which sponsors it. Obama is not some well meaning guy who unfortunately has it wrong. He is a criminal. They all are. We really need to start thinking in these terms. A vote for a Democrat or a Republican is not just a wasted vote. It is a vote for criminality. When we say we want the banksters to go to jail, we also need to say they need to be joined there by our entire political class.

    That is what we need to hold to. These phony settlements that legitimize theft and fraud will not, must not, stand. And those who propose them and those who benefit from them must be held accountable.

    1. Hu Flung Pu

      Let’s say that I agree with you that the lenders who engaged in robo-signing and all manner of other illegalities and naughty behavior during the mortgage heyday deserve punishment (not a controversial position)… should we not also be going after all of the borrowers who engaged in mortgage fraud (and subsequently defaulted) as well? In other words, if we’re going to penalize the lenders for their bad/illegal behavior, should we not also be penalizing the borrowers who engaged in bad/illegal behavior? What if we were to discover that the number of folks who overstated their income, made false statements, etc. (that is, committed fraud) on their mortgage applications is greater than the number of fudged foreclosures on the part of servicers? How should that be dealt with? To be clear, I’m not saying that the lenders shouldn’t be punished, but… aren’t we forgetting the rampant fraud that went on on the other side of the transaction? And when does that get addressed?

      1. Eureka Springs

        Good, I’m glad you are saying you agree with Hugh.

        Let’s say after the banksters and their snake oil salesmen get out on parole with a felony record, lose all their homes, their jobs, their credit and health care, and run out of unemployment while driving a used 20 year old car that costs less than 3k on their way from the food stamp line to the nearest bankster barbwire gated tent community… Then and only then let’s say we will think about what should be done to punish the ten million family homes who will have suffered fraudclosure on a ponzi loan and all the rest.

        Indeed, Let us say that.

        1. Hu Flung Pu

          I think you’re confusing those folks who truly deserve sympathy (and arguably a remedy) – those who lose their houses as a result of unemployment, health issues, etc. – with the more voluminous number of folks who simply lied on their loan applications in order to purchase a home (and/or HELOCed their house to the gills in order to pay for toys and then decided after the fact that there was an “injustice” committed). Shouldn’t we be going after the latter (I’m pretty sure the lenders didn’t force them to sign the loan docs, after all – they chose to do so) with the same vigor we’re going after the lenders? Or is it that the lenders are a larger, less fragmented, easier target? Just sayin’…

          1. skippy

            Too true, the only force applied was from birth, the incessant echo espoused, broadcast with psychologically enhanced amplitude…if ye not own a home ye are not a man and a man with out property, is not a man unto the law!

            Skippy…the cruelty! To make a slave_a man_and then strip it way, like tasting freedom…chains departure, only to add weight upon its resumption…debts default shame. Maybe this time they will learn, they are unfit to weld the law and leave it to their betters.

            PS. biggest scam ever yet some still have the time to chase naked sheep through the paddocks…sigh…whippings for all!

            Never lose sight of the fact that all human felicity lies in man’s imagination, and that he cannot think to attain it unless he heeds all his caprices. The most fortunate of persons is he who has the most means to satisfy his vagaries. —Marquis de Sade—

          2. Ming

            Both of you have good points. As a principle, there should be justice for all, not just justice for some. So the banksters who loaned money to people who had no chance to pay it back should be Stripped of tillicitly gotten gains and jailed, and the homeowners who falsified documents to gain access to loans should be booted out of their homes. Not to sure what to do with the rest.

            I would add though, that the irresponible easy credit polices of the bankers caused everyone in the US who bought a home since 2003, to overpay for their homes due to easy availabilty of mortgages and the imprudent amount of mortgage debt that the bankers allowed people accumulate relatve to their income…. Resulting in bidding wars between potential buyers, which boosts the price of assets

          3. La Caterina

            Hu Flung Poo- I am a foreclosure attorney in a community targeted by predatory lenders. I’ve never seen a loan application that was actually filled in by a borrower. How were the borrowers to know exactly what multiple of their monthly income would produce the number needed to qualify for the loan? They didn’t. A computer program input the appropriate income amt based on the amt to be financed.

            Borrowers saw NO documents prior to closing, at which time they were presented first with the note & mortgage signature pages, which effectively obligated them BEFORE they were hustled thru the signing of the application (income amt in 6 pt type) and all the BS forms where they acknowledged receiving all the pre-closing disclosures. I know this not only from borrowers’ stories, but also from former bank settlement agents. You don’t get to defraud the man, he just makes it look like you did.

          4. craazyman

            This, gentlemen (and ladies, if there are any here now that Yves is in abstentia) is why God invented Hell.

            I was just reading the Gospels again and Jesus says it all.

            Woe unto those who transgress, for the weight of their sins will be worse than any earthly prison could ever be. But let light be given to the innocent, who feel they have sinned when they have not. Ja and Ja vibrations, yeah, positive. “Emancipate yourselves from mental slavery, only ourselves can free our minds.” – The eternal Bob Marley

          5. Hu Flung Pu

            La Caterina – I have little doubt that things were as you describe them in many foreclosure cases, but allow me an anecdote that may apply to many if not most of them.

            My girlfriend’s brother (both recent mexican immigrants) bought a place with 3% down at the height of the boom (I live in CA). He had no business buying this place at all. And his experience was, more or less, as you describe. So, he paid his mortgage for a year and then stopped paying (once the value started declining) and sat in the home for almost 2 1/2 years prior to being foreclosed on. But he wasn’t particularly upset about it. He realized how dumb he was and said, “Hey, the rent I didn’t have to pay for 2 1/2 years was much greater than my down payment, so I actually came out ahead.” He wasn’t happy about the situation, but he wasn’t particularly put out either.

            So, my question to you is… how many of your cases involve folks where they put down a substantial down payment AND the sum of the payments they haven’t made (or didn’t make) are not greater than the down payment? In other words, how many actually have a real financial injury? Because it seems like the vast majority of these cases involve folks who put down very little money and never should have been homeowners in the first place, and they’re just being returned to the rent rolls.

          6. bob


            “So, my question to you is…” why is life so unfair? I am embittered by one unethical past decision made by a peer that made me look bad. Now my wife and brother in law both call me a sucker for not doing the same. Rather than pointing out the unethical behavior to my wife and her brother, I am taking my case national, and in the process ascribing the same motives to everyone who may have taken out a mortgage who is now underwater.

            This is personal. I will take everyone down and hopefully at the same time teach my brother in law a lesson.

            Truth be told, I am most bothered by the fact that I didn’t do it myself.

          7. Shane

            The one thing that I just can`t get over, above and beyond ALL this is the fact that no-one seems to be making this simple to understand. Surely we should be reducing everything to their component parts.
            1: “LIAR/NINJA” loans etc. Surely it is the banks responsibility to do due diligence here? O.K, maybe they could try and prosecute a few people, but frankly (and I`m sure they know this) the banks themselves were utterly complicit. Homeowner says “I didn`t fill out that form, the mortgage broker did”. Game over.And even if they were prosecuted, what would the penalty be? Lose their house?

            2: The main issue I see here, is that if YOU showed up in court with a piece of paper purporting to show that you owned your neighbors house because you`d forged his signature, you`d go to jail.

            Why isn`t anyone in the mainstream media just pointing out simple facts?

          8. Hu Flung Pu

            Bob – that life is unfair is obvious and a motto I live by. And it will be proven for the umpteenth time when the TBTF banks (and their executives) largely speed away from the crime without much in the way of penalties. Such is life.

            In fact, I do not feel embittered at all by my girlfriend’s brother’s decision, nor the decision of others who default. Frankly, I’m glad I’m not in their position. (Truth be told, I own two homes, neither of which are anywhere in the ballpark of being underwater. That’s for context since you brought the issue up.) Rather, my point in my posts here is that there was fault on both sides of the transaction – both lender and borrower – and it seems like certain folks like to concentrate solely on one or the other. I’d like to see punishment meted out evenly – that’s all. I’m under no illusion that that’s possible, of course. But since theory is not off limits here…

            It seems like the sentiment of many folks here is that, “Most people are too dumb to understand a mortgage and the lenders duped them, so the lenders are to blame.” OK, let’s assume for argument’s sake that’s true. The next logical step is to figure out some way to ensure that a huge portion of our population – perhaps anyone who can’t pass some rudimentary test regarding mortgages – doesn’t get access to credit. That’s going to be a very big number. I’m OK with this if you are… but let’s not beat around the bush with the implication: Most people are too dumb to have a loan, right? That should go over well with public interest groups…

      2. KnotRP

        Those who committed fraud should lose it all.
        From the home owners I know, they are losing it
        all, including what little principal they put into their purchases.

        And yet, the bankers got BAILED out with tax money (that
        all home owners past present and future will have to pay)
        while still getting bonuses (because we can’t afford to lose
        these people, apparently, even though we cannot afford
        to let them continue to be bankers) and yet…when it’s
        all over, look at who is still living in (sometimes one of many)
        a home with no threat of being kicked out.

        Prosecute fraud across the board – but I know where I’d

      3. Hugh

        As I often say, the most powerful weapon in class warfare is distraction. In this case, it is to blame the victim. They lied on their loan applications.

        “We was took,” moan the banksters.

        There are only a few things wrong with this scenario. There are obvious and extraordinarily informational asymmetries that we have to overlook. The vast majority of those applying for a mortgage loan were not financial experts. Yet you seem to equate their knowledge of finance with loan writers and banks whose profession it is to know how to process and verify loan applications and who have vast legal resources on which to rely. The question you don’t ask is what were these “experts” doing making unverified loans on terms that guaranteed their failure under almost any conditions?

        More than this. You ignore the magnitude of the problem. This wasn’t just a few bad, incompetent, trusting loan writers. It was systemic involving millions of mortgages. How could the professionals get it so wrong? The short answer is they didn’t. They were giving loans to anyone with a pulse, charging their fees, and passing the dreck along to somebody else.

        As for homeowners losing their homes for any misstatements on their loan applications, my question is lose it to whom? The scission of the title from the note in the securitization process has created the bizarre, though poetically appropriate, situation where the titleholders who would have standing to foreclose have no financial interest to uphold (since they sold this in the securitization process) whereas those who do have a financial interest (the buyers of the securities) have no legal standing, not having the title. Indeed because of the way the CDOs were cut up and repackaged it’s probably not even possible in most cases to associate a discrete financial interest with a specific mortgage.

        So before we dump all this on the rubes, let’s remember the banksters called the shots on all this. The situation we have now was not created by the rubiat. It was engineered by the banksters. So if we are going to assign responsibility, let us distinguish between the chumps and the criminals, the lootees and the looters.

        1. Hu Flung Pu

          Hugh – I’m not ignoring anything. I’m agreeing with you regarding the lenders – their actions were beneath contempt. But… no one put a gun to the borrowers’ heads; on the contrary, the borrowers had to find a house they wanted to buy before applying for the loan. So, yes, the lenders were horrifically bad enablers in the whole thing and deserve to lose a sh*tpile of money (with some criminal prosecutions – but I ain’t holding my breath). But… the Prime Mover in the transaction is the borrower/home buyer. Without him/her the transaction never gets underway in the first place.

          Regarding title issues (MERS, etc.) I kind of view it like this. Let’s say there’s a landlord who rents an apartment to a renter. He doesn’t do a good job of qualifying the renter (the renter doesn’t have good credit and can’t really comfortably cover the rent) and after a few months the renter stops paying (the reason is irrelevant) and won’t leave. So, now the landlord has to get rid of the renter. The landlord gets very ill and explains the situation to his heir and also mentions that he can’t find the lease. The landlord dies and the heir can’t find the lease either, so he does a very bad thing – he creates a new one under the original terms and forges the signatures. The renter, who hasn’t been paying for months, challenges the heir to produce the lease in court which the heir does, but it’s declared a forgery (which it is) and the heir is in a heap of trouble. Now, eventually, the renter will be booted out and clearly he’s in the wrong in what he’s doing, but… the heir clearly screwed up as well in forging the lease. Who is more at fault? I don’t know. But I’m not letting the dirtbag renter off just because the original landlord and his heir both screwed up.

          1. Name (required)

            Hu Flung Pu argues that no-one put a gun to borrowers heads to sign up for eye-watering mortgages and in literal terms this is true.

            Yet I watched enough young married couples, or young soon-to-be-married couples, or young ought-to-be-married couples or young hoping-to-be-married-one-day-perhaps-even-to-each-other couples sold on the American dream and themselves watch house-prices rocket far beyond the price of anything reasonable or reachable, desperate to fling themselves onto the rapidly accelerating property train before it vanished over the horizon knowing that it meant giving up having children for the foreseeable future because they’d need two incomes just to pay the mortgage and even if it meant risking falling on the tracks.

            And I watched bankers and their associated slime who claimed to understand financial matters assure them that all would be well and all manner of thing shall be well, and that interest rates were sure to stay low while house prices continued to climb but that they had to be on the racing train just to stand still, but that the economy was stable and their jobs safe and their income would climb in a few years to cut them some slack for having babies and..

            Many of these young folk who knew the risk they were taking but who had the rug pulled from under them by bankers who squeezed the golden goose to death and wrecked the economy for their private benefit resemble their great-great grandparents who built the American dream by launching themselves into the wild, strange and largely unknown West because they had faith in themselves, a belief that fortune favours those trying to try and a determination to better themselves.

            Fortunately for them the only skunks, snakes, leeches, wolves, ticks and other parasites they had to face were part of the natural fauna.

          2. Hugh

            You continue to minimize the culpability of the bankers. They weren’t enablers. They were the ones with the money. No one put a gun to the head of the bankers to loan to people who could not prove they were good credit risks. No one put a gun to their head to loan on impossible terms. They did all this because they could get away with it at the time and thought they would never be called on it, or more precisely IBG, YBG. And again these were not sporadic mistakes. They were systemic and conscious informed policy.

            Beyond all this, the housing collapse was never only about just subprimes or even housing It was the Alt-As. Now it is regular mortgages that are having problems. It is the HELOCs. It is commercial real estate. It all goes so much beyond your characterization, albeit a fairly flawed one, of one small part of it.

          3. Shane

            In this case anyway Hu:
            Firstly its the landlords job to verify the renter can pay.
            Secondly, the risk the renter DOESN`T pay is a cost of doing business.
            Thirdly,surely, at minimum its the landlords job to keep the damm lease.

            That is not a good analogy at all.

            A better analogy (using your rubric) would be:

            A real estate agent tells an old lady she should invest her savings in rental properties and that he can find good rental tenants.
            He takes the old ladies cash and buys a place worth half as much as she gave him.
            He then finds some crackheads and encourages them to lie on their application form and takes their welfare check for the first couple of months rent.
            They trash the place and don`t pay rent.He throws their leases away.
            He stashes all the rest of money from the old lady in Switzerland,blows all the money he got from the crackheads partying in Las Vegas, kites a few checks with the old ladies signature on them and then goes on welfare himself.

          4. Hu Flung Pu

            Shane – I appreciate the creativity but, while not perfect, I’m going to stick to my analogy as the better one. You dramatically overstate your case, which doesn’t improve your argument, in my view. In yours, after all, the real estate agent runs off with not just a commission… but half of the old lady’s money! Please. We’ll have to agree to disagree here. (Although, to be clear, in certain other ways your analogy isn’t too bad… unfortunately.)

  8. Ignim Brites

    Obama is not a criminal. He is just poorly educated, like most of the political class. The real culprits in this fiasco are the leaders of our universities. And even in these cases the culpability is severely limited due to poor education. We confront a massive civilizational failure. No amount of bloodletting is going to remedy that.

    1. Foppe

      Right, because university boards are totally independent of the rest of society, and not at all dependent on government support. Have you heard of someone like Larry Summers?
      University board members can be just as easily captured by neoliberal dogma as everyone else can..

      1. Ignim Brites

        You’re supporting my point except for this one difference. University leaders (boards, presidents, department heads) are uniquely accountable for the ideas that are widely disseminated in the society.

    2. Name (required)

      I would suggest that the real ‘culprit’ is religion which even in its many forms and the many names of its many one-and-only true Gods long ago lost sight of the understanding that its purpose was to give man a soul and awaken him to the nobility of ideas such as integrity and care for the other. Religion instead has become fossilised and fixated with form and ritual, with the search for the correct interpretation of the recipe for the Alchemist’s Stone believed to be hidden in the ramblings of ancients who believed the world was flat and that women were a sub-set of the male.

      Blame the priests for failing to remain relevant.

    3. Jack Rip

      Backbone stiffening isn’t a university course, neither is vision development. And then, dogs don’t go to universities.

  9. bob

    Fiscal issues-

    Obama Reached Breaking Point in Talks After Tense Hour With Boehner

    For more than an hour in an Oval Office meeting on April 7, House Speaker John Boehner had insisted that any compromise on the government’s budget include a prohibition on federal funding for Planned Parenthood.

    Obama already had reluctantly agreed to a provision banning the District of Columbia from spending funds on abortion services — and that was as far as he would go.

    “Nope, zero,” he told Boehner, according to a senior Democratic aide. “John, this is it.” The room went silent.

    For the record, 190 abortions were done using federal money last year. There is no data on why they were done.

  10. Rick

    In America we don’t solve problems anymore. We like to complain and that’s it. Wake up America. It’s time to regroup.

    Read “Common Sense 3.1” at ( )

    “Spread the News”

  11. Michael H

    David Runciman reviews two books for the London Review of Books:

    1. “Treasure Islands: Tax Havens and the Men who Stole the World” by Nicholas Shaxson

    2. “Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class” by Jacob Hacker and Paul Pierson

    from the review:

    “Washington has gone offshore: its politics has been captured by the interests of a narrow group of very wealthy individuals, many of whom work in finance. For Hacker and Pierson this, more than anything else, explains why the rich have got so much richer over the last 30 years or so. And by the rich they don’t mean simply the generally wealthy; they mean the super-rich.

    “The real beneficiaries of the explosion in income for top earners since the 1970s has been not the top 1 per cent but the top 0.1 per cent of the general population. Since 1974, the share of national income of the top 0.1 per cent of Americans has grown from 2.7 to 12.3 per cent of the total, a truly mind-boggling level of redistribution from the have-nots to the haves.”

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