Links 6/1/11

Posted on by

Ventriloquists for the Powerless Reason Magazine (hat tip reader furzy mouse)

Jetpack soars a mile high Cosmic Log (hat tip reader John M)

Small earthquake in Blackpool, major shock for UK’s energy policy Independent (hat tip reader Crocodile Chuck). Wow, fracking may be producing small earthquakes in the UK. Has anyone in the US taken notice? The Kobe earthquake was apparently set of by a shift in a very few rocks that avalanche-style set off more rocks falling near a thought-to-be-stable fault line.

How Goldmans cost Gaddafi a $1.3bn fortune Independent (hat tip Buzz Potamkin)

Cellphone Radiation May Cause Cancer, Advisory Panel Says New York Times

Irish banks: haircuts for senior bondholders? Financial Times (hat tip reader Swedish Lex)

The EU’s answer to the financial crisis: more EU Brussels Blog (hat tip reader Swedish Lex)

The Economist on Australia MacroBusiness

Pentagon to Consider Cyberattacks Acts of War New York Times (hat tip reader furzy mouse). Putting China on notice.

Mental health experts warn against pace of incapacity benefit cuts Guardian (hat tip reader Swedish Lex)

The Big Fail The Paris Review Moe Tkacik

Madison Ave. Declares ‘Mass Affluence’ Over Too Much (hat tip reader PQS). Be sure to read the comment at the end.

Car Bailouts Left Behind Crash Victims Wall Street Journal (hat tip reader Jay)

S.E.C. Case Stands Out Because It Stands Alone New York Times (hat tip reader furzy mouse). Torre was nuts not to have independent legal counsel.

Gundlach on another crisis: “How much currency do you have?” Ed Harrison

Feds look to give trustees more power Nashville Business Journal (hat tip Lisa Epstein)

what network science has to say about large universal banks ParetoEconomics (hat tip reader Francois T). Consistent with what the Bank of England’s Andrew Haldane has said about the need for diversity.

Concentration, Manipulation and Margin Calls London Banker. Important despite bland-sounding headline

Antidote du jour:

Print Friendly, PDF & Email


  1. Doly

    A couple more things from my mother, talking about the indignants in Spain:

    – Link to a survey made to about 3500 indignants (in Spanish):

    Results so far: 66% have gone to University, 53% have a job and 47% don’t.

    – The movement is now organizing neighbourhood groups. In the autonomous community of Madrid there are now more than 140 groups. They are also being formed in La Coruña, next Friday will be the first meeting for neighbourhood groups.

    My mother says: “Politicians haven’t known how to organize society, so we’re organizing it ourselves. It will be easy to do it better than politicians because they have done it terribly.”

    In other words, even if the protests on the street stop, it doesn’t mean that the resistance has disappeared. It’s too soon to tell how organized it will get, but I wouldn’t be entirely surprised if a new political party appears to come out of nowhere.

    1. Sock Puppet

      Reading Eric Hoffer’s “The True Believer: Thoughts on the nature of mass movements”. Written in 1951 in the shadows of Nazism and Communism, but still oh so relevant:
      “Those who would transform a nation or the world cannot do so by breeding and captaining discontent[…] They must know how to kindle and fan an extravagant hope.”
      I see the hope in the Arab Spring and in the indignants, but it has still to triumph over discontent.
      The UK? “It’s not the despair, Laura. I can take the despair. It’s the hope I can’t stand.”
      The US? Where’s the hope?

      1. Doly

        Thanks for mentioning Eric Hoffer, I googled him and he’s definitely worth looking into. I think I’ll answer your comment with one of his quotes: “It is not actual suffering but a taste of better things which excites people to revolt.”

        It’s pretty clear for the Arabs what better things they could have, and it’s fairly clear for the Spaniards, Portuguese and Greek as well. But for the UK and US? What can they aspire to?
        Maybe somebody will come soon with a good idea, but until that happens, it isn’t surprising that everybody’s looking around feeling confused.

        1. Sock Puppet

          And another quote: “There can be revolutions by the priviledged as well as the underpriviledged”. He cites the enclosures in the UK and the industrial revolution as examples. It seems we may be living through another in the form of the disaster capitalism being foisted on much of the formerly civilised world.

          1. masa critica ciclistas

            disaster capitalism

            ~~Sock Puppet~

            Yes! You are onto something. Lot of this was more than random events. Lot of this was carefully orchestrated.

  2. Hubert

    Nice nuances in US foreign policy:
    If one threatens BofA, one gets a phony arrest.
    If one threatens Goldman bankers, one gets a phony invasion.

  3. rjs

    just FYI:

    The calendar says spring planting time is over. But millions of soggy and unplanted acres say otherwise.

    Nearly one-third of U.S. spring wheat acres haven’t yet been planted, the U.S. Department of Agriculture reported Tuesday. Parts of Minnesota, North Dakota and Montana still are too wet, a pattern that is depressing farmers and pushing spring wheat to more than $10 a bushel, double last year’s price.

    “The final planting date for most of the state is May 31,” said Lola Raska, executive vice president of the Montana Grain Growers Association. “Some farmers will try after that. The prices are so good, you hate to not take advantage of it.”

    While spring wheat is the crop furthest behind schedule, planting delays are common everywhere. In Minnesota, 12 percent of the state’s cornfields – nearly 1 million acres – still weren’t planted by Sunday evening, the USDA reported.

    That’s worrisome in several ways. First, grain supplies already are tight and the grain trade was hoping for a huge crop. Yet major corn states like Minnesota (12 percent unplanted), Ohio (81 percent unplanted) Indiana (41 percent unplanted) and North Dakota (26 percent unplanted) are having trouble even getting started.

    “Both edges of the Corn Belt – North Dakota and Ohio – is where it continues to be slow,” said Chris Nagel, market analyst for Northstar Commodity in Minneapolis. “Ohio corn planting is only 19 percent complete, so they’re not making much progress there.”

    1. PQS

      I’ve heard that up here in the PNW we are about 30 days behind schedule for planting due to chilly temps and rain. My little plot in the back would agree. I should be harvesting peas soon – that won’t happen until July this year.

      Last year was even worse – no tomatoes and I let the raccoons eat the few ears of corn I got….

  4. Hubert

    “Pentagon to Consider Cyberattacks Acts of War” – So did Israel declare war to Iran ?
    And if the Pentagon cyberattacks some country or institution in a foreign country – what is that then supposed to be ? Foreign aid?

    1. James

      Pentagon to Consider Cyberattacks Acts of War New York Times (hat tip reader furzy mouse). Putting China on notice.

      Then I’m guessing they’ll be really upset when the Chinese dump US debt in response to our military posturing? Too big to fail? I have a feeling we’re going to find out very soon. Let’s see if a defunded MIC still has so much bluster.

      1. tyaresun

        So does POTUS have to take the permission from Congress before the US launches a cyberattack?

  5. LeeAnne

    Goldman Sachs, whose headquarters in New York is pictured above, lost 98 per cent of the $1.3bn it was given to invest by the Libyan sovereign wealth fund

    Complicated securities transaction, eh? Yea old churning. Nothing ever changes. Churn the bastard with leverage until commissions eat up the entire account.

    Now that’s nuance for ya. No discrimination. Nobody too big to fail. They do it to Gaddafi; they do it to you.

  6. LeeAnne

    Goldman Sachs, whose headquarters in New York is pictured above, lost 98 per cent of the $1.3bn it was given to invest by the Libyan sovereign wealth fund

    Complicated securities transaction, eh? Yee old churning. Nothing ever changes. Churn the bastard with leverage until commissions eat up the entire account.

    Now that’s nuance for ya. No discrimination. Nobody too big to fail. They do it to Gaddafi; they do it to you.

    All you need is trust. Trust them and you get the treatment -sooner or later. One way or the other.

  7. rjs

    dont know if you’ve covered this:

    Oregon Judge Blocks Seizure of Home, Questions Non-Judicial Foreclosure – U.S. District Judge Owen Panner believes that two wrongs do not make a right and, in keeping with this philosophy, has blocked the foreclosure on a Medford, Oregon home[1]. “While I recognize that [the owners] have failed to make any payments on the note since September 2009, that failure does not permit defendants to violate Oregon law,” he ruled. Bank of America, MERS and a trustee, Northwest Trustee Services, were involved in the foreclosure process. Panner believes that since “MERS makes it much more difficult for all parties to discover who owns the loan,” modification attempts are too difficult. Given the difficulties associated with MERS and with non-judicial foreclosures, Panner questioned whether any foreclosures should be allowed to proceed without the courts, given the consistently poor process evident in court-reviewed cases. In this particular case, the borrower’s mortgage note had been sold by GN Mortgage to Wells Fargo and then Bank of America. They were issued notice of default in May 2010 and sued to block the foreclosure in September of that year. The foreclosure had been canceled at least once due to “documents recorded out of order,” and four days before the original default notice was issued, “three MERS executives signed mortgage documents to other parties all in the same day.” Panner said that this led him to question how carefully the documents were reviewed, and added that since the same notary public witnessed all three executives signing the documents, the process “appears rushed.”

    1. Jim

      Or if you’ve covered this….

      Banks Hit Hurdle to Foreclosures

      JUNE 1, 2011

      In March, an Alabama court said J.P. Morgan Chase & Co. couldn’t foreclose on Phyllis Horace, a delinquent homeowner in Phenix City, Ala., because her loan hadn’t been properly assigned to its owners—a trust that represents investors—when it was securitized by Bear Stearns Cos. The mortgage assignment showed that the loan hadn’t been transferred to the trust from the subprime lender that originated it.

      Specific deal agreements required Bear Stearns to assign the loan within three months of the securitization. Because it failed to do so, Alabama Circuit Court Judge Albert Johnson determined, the trust didn’t own the mortgage. “The court is surprised to the point of astonishment that the defendant trust did not comply with the terms,” of the securitization agreement, he wrote.


  8. LeeAnne

    Concentration, Manipulation and Margin Calls London Banker. Important despite bland-sounding headline

    Thank you for the heads up Yves.

    Will there be revisions of all the books and articles, comments and testimony on this historical event? Is there any doubt Hank Paulson is the traitor of this century -with the help of Ben and Nancy Pelosi giggling -giggling with the Congress at her back at the signing of the bailout bill.

    from the article:

    “In October 2008 the global financial markets crashed. The story in the media is that it was a panic caused by the insolvency of Lehman Brothers. This is not the truth – or at least not all of it. The crash actually followed a $2 trillion margin call by these four global banks on their prime brokerage clients and OTC counterparties – effectively a 30 per cent increase in required margin. It was the margin call that forced liquidation of global portfolios of all asset classes – and particularly the high quality, most liquid asset classes.”

    1. Pat

      This “London Banker”s point is important and quite incredible. What he suggests, is that the “Big 4” banks did not simply EXPLOIT the market crash, they CAUSED it, by raising margin requirements. They did so in order to get a blanket guarantee from the government for their future debts, to offload toxic garbage onto the government, to effectively nationalize AIG and Fanny Mae, etc etc.

  9. LeeAnne

    Mr. Torres is still dependent on Goldman Sachs for his livelihood.

    “In September 2009, for instance, Mr. Tourre told friends he thought he had to use a lawyer from a list of lawyers at three firms that Goldman gave him.”

    Torres is being punished, an intelligent well-educated young man, for crimes of indescretion in his Godman, Sachs emails, the authorities acting as agents on behalf of Goldman, Sachs and all related finance criminals to whom secrecy and lying is their competitive advantage.

    Secrecy is all these people have.

  10. Roger Bigod

    The wonderful part of the story is the fable of FabFab’s messages from his attorney. We are asked to believe that Tourre discarded a laptop without erasing the disk, that it continued to receive messages for 3 years during which no passwords were changed, that the person who came to possess the laptop gave the material to the Times with permission to use her name and that the Times decided to breach attorney-client privilege without permission from either party.

    It could certainly have happened this way. And I could be Sherlock farking Holmes.

    1. Foppe

      Yes, Felix Salmon is very sceptical of that as well.

      How is what the NYT did not hacking into a private email account? I can think of three defenses, only one of which has any real merit.

      The first defense is that it’s only hacking if you somehow type in the password: if all you have to do is open up the email application and the emails just stream in automatically, then there’s no hacking involved. I don’t buy this defense at all. If Cohen found Tourre’s password on his computer and gave it to the NYT, they could then build an identical laptop for themselves — and doing so would clearly be hacking. It just doesn’t make sense that if you’re looking at two identical computers, using one to snoop through emails is ethically fine, but using the other is beyond the pale. The laptop is essentially the physical manifestation of the password, and using it is the same as using the password. Using someone else’s password to access their email is wrong, even if you found that password in the trash.

      The second defense is that it wasn’t the NYT reporters who were snooping through Tourre’s emails, but rather Nancy Cohen. Again, I don’t buy this one — Cohen was clearly delivering to the reporters exactly what they asked her for. If she was doing their bidding and acting as their agent, then they bear responsibility for her actions.

      The third possible defense is that Cohen waited for a good six months after Tourre was in the news before dumping all of his emails onto some kind of drive and delivering it to the NYT in a one-shot deal. The NYT, with a trove of data in its lap, then combed through the emails and wrote its story, without asking Cohen to keep further tabs on Tourre’s email or give them any further data. That I think would come closest to the we-found-this-in-the-trash scenario, and doesn’t involve the NYT taking advantage of having password-protected access to Tourre’s email account. But it’s also pretty improbable.

      It goes without saying that Tourre is extremely upset right now, and feels violated by the NYT. He’s not wrong to feel that way. The question is whether the NYT was wrong to snoop around his emails while fishing for a story — even if doing so meant hacking into his private account

      1. Roger Bigod

        Salmon accepts the objet trouve narrative, which I question. He’s certainly smarter than me, but he may have been distracted by a shiny techno bauble while the magician’s other hand is busy elsewhere.

        The story makes our boy Fabrice look like a victim, which has been his public posture from the beginning. So I wonder if Ms. Cohen isn’t an old friend who has nothing to lose by telling a fib about how she came by the messages.

        This wouldn’t be the first time the lead headline on page 1 of the Times has been based on a bogus gimmick. It will feed Mr. Torre’s obvious narcissism that he has achieved a slot usually reserved for promoting trillion dollar wars.

        1. Foppe

          achieved a slot usually reserved for promoting trillion dollar wars.

          Are you trying to suggest the NYT reports on the goings on in Iraq/Afghanistan? ;)
          Anyway, the way I read his article, Felix notes that ‘we found a laptop’ is a convenient narrative often employed by journalists. The question on your (and in my reading his) mind is who gave this information to the NYT, and what it is they’re hoping to accomplish by doing so.

          1. Roger Bigod

            There’s nothing new in the story except the laptop. We all knew that GS was selling securities that JP Morgan would not have considered ahem *sound*, and that Torre was a minor player. Having it rehashed now benefits him, so perhaps his negotiations with the SEC are at a critical stage.

    1. PQS

      Go to bagnewsnotes to see photos of Japanese TEPCO officials apologizing to, and being chewed out by people who’ve lost their homes due to their mistakes. “We apologize.”

      Would that even one lower level VP from Wall Street would even say such a thing in public, nevermind actually sit in front of regular Americans to hear them out.

  11. Valissa

    re: Ventriloquists for the Powerless

    Some very interesting thinking in this article, which makes many good points, although I think the author is a little too enamored of his insight and thus overapplies. This a common intellectual failing.

    The article put me in mind of two of my favorite quotes:

    If all you have is a hammer, everything looks like a nail. (common phrase attributed to Maslow)

    The best political, social, and spiritual work we can do is to withdraw the projection of our shadow onto others. –Carl Jung

    IMO, one could easily swap the word ‘ideological worldview’ for ‘shadow’ in the above sentence but it would lose something in the translation ;)

    1. Tertium Squid

      Hiking above Zion Canyon one time, I saw a herd of cows on the other side of a creek. I don’t hang out with cows all that often, but they are familiar enough creatures to not cause any alarm. In this case, however, they bunched up at the edge of the creek, looking at us. I recognized that weaponless me vs. pretty much any cow would have a predetermined outcome. A fairly intimidating experience, recognizing that it is just their unawareness that ensures their place in the food pyramid. If the cows could just get organized, they would be in charge in fairly short order. Perhaps it takes a bold visionary like Mr. Hribal to lead them to the promised land.

      A pity then, that he is focusing on menagaries – which have only ever affected a small number of animals over the past few centuries, while the millenia-old forced collaboration with domesticated animals is constantly going on all around us.


      “It’s not difficult to dismiss Hribal as a Marxist Doctor Doolittle or his social science as cartoonish. After all, he ascribes political consciousness to creatures whose thoughts cannot be known. But his claims of knowing the thoughts of animals are no more arrogant or absurd than the claims countless academics and activists continue to make about the consciousness of people whose ideas are also inaccessible.”

      This does not dignify Mr. Hribal’s arguments or justify reading his book. Rather it argues against reading “academics and activists” who purport to know why people do what they do.

      Banging rocks together…

  12. MyLessThanPrimeBeef

    If your background is university, you perhaps don’t truly realize the need for diversity.

    But if you are a graduate of a biversity, triversity, etc, anything more advanced than a university, you understand the importance of biodiversity, cultural diversity, ethnic diversity, aesthetic diversity, humor diversity, product diversity, cuisine diversity, portfolio diversity, relationship diversity, etc, etc.

    1. Foppe

      Actually, this point is understood just fine by many academics; the problem is that, because the “value” of diversity is hard to measure, the bean counters (and University boards) are impossible to convince on this point, as they are required by law to only believe things expressed in pie charts and staff graphs.. Anyway, a (popular) book that goes into some research on this topic is Scott Page’s The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies (0691128383, 2007), though the book is too superficial to really make the case even qualitatively.

    2. MyLessThanPrimeBacteria

      I am well versed in diverse versities and am here to tell you not to be fooled by the uni in university. There is a multitude of multiverses in the universe of universities.

      1. MyLessThanPrimeBeef

        Bacteria are living beings too!

        It’s like you can’t doing anything without murdering something.

        1. Anonymous Jones

          It’s certainly getting much harder to avoid murdering something these days! And it seems like, now, there’s consequences not just to actions, but also to inactions!

          I wish I had a manual on how people avoided this in the past.

  13. Eagle

    I think there’s more to the story of how they came across Tourre’s emails. It just strikes me as highly improbable that someone who pulls a laptop out of a dumpster would have the presence of mind to hang on to the email settings of a previous owner who just happens to be in the midst of an SEC investigation.

  14. Pauline Kale

    Critics are calling the movie “Too big to fail”, “not…believably bad”…that’s “good”, right?

    One critic raves: “this movie is a sustained campaign of mockery directed at anyone who ever bothered knowing about anything.”

  15. MyLessThanPrimeBeef

    More haircuts?

    I believe if we all cut our hair once a day, we will stimulate the economy and create more jobs like more barbers and hairstylists.

    As yesterday’s post on consumer confidence shows, it’s all about belief and faith. Look at the numerous financial entities that are back by not just the full credit, but full faith, of the government.

    It’s about faith, belief or confidenece.

    So, if you believe cutting hair more often, say once a day, will help stimulate the economy, it will.

    Hollywood, go to work brainwashing, sorry, educating the public!!!

  16. MyLessThanPrimeBacteria

    Apparently haircuts are considered a punishment for wayward bankers. Nobody in banking wants to get one, much less a shave. They want to grow their hair long like hippies.

    People keep saying “They should take a haircut” (n.b. normally people don’t take a haircut, they get a haircut), “They lost their money, now get a haircut” implying that only people who didn’t lose their money are entitled to have long hair.

    Roubini keeps saying “haircuts for everyone!” as if he was some beneficent barber buying everyone a round of drinks.

    Once the haircutting time has arrived, one legitimately asks, but which style? Crew cut? Mohawk?

    Lots of people are calling for the bankers to shave it all off. That would be scary–bankers walking around looking like Vin Diesel. I think we need to be able to distinguish bankers from angry right-wing skinheads. I prefer a more bouffant doo, perhaps with sideburns and curly moustachio with pommade. I picture bankers wearing the urban sombrero looking like Mexicano zappatistas.

    1. MyLessThanPrimeBeef

      Just remember to shampoo the hair before you cut it.

      Question Du Jour:

      Do you prefer

      A) Sham Poo


      B) True Poo?

      In a world gone mad, people seem to like the sham thing over the true thing.

      That’s why to the sane, the world is insane and to the insane, the world is sane.

      Take a stand. You are either with the sane or against them.

      1. MyLessThanPrimeBacterium

        You are either sane, in-sane, with-sane, or anti-sane. Most who are in-sane figure they are therefore sane and not anti-sane. Don’t be misled by labels!

        1. MyLessThanPrimeBeef

          So, true poo or sham poo?

          Disclosure – I don’t wash my hair…in the future maybe.

      2. Artaud the Schizo

        “Insanity – a perfectly rational adjustment to an insane world.” – R. D. Laing

  17. Foppe

    Here’s a brilliantly interesting reading of the 2008 financial crisis and its forerunners, embedded in a public lecture on the possibility of new emancipatory struggles (within urban environments and the like). Harvey begins by discussing the aftermath of the great depression, and argues that the suburbanization of the USA was a very explicit policy response to the great depression. After that, he moves to a quick discussion of the crisis we’ve seen occurring in different parts of the world starting from the 1970s, showing how they move around between stock, housing and government debt markets, and linking the policy responses to the different political systems they occurred in.
    I’m certain you won’t regret it, but make sure you watch at least the first 15mins.

Comments are closed.