Links 8/10/11

Drug Dealers May Have Wiped Out “Uncontacted” Amazon Tribe Slate (hat tip reader Carol B) :-(

Swelling list of demands fuels Israel protests Financial Times (hat tip Mark Ames)

Vigilante groups aim to combat riots Independent

A dead man, a crucial question: should police have shot Mark Duggan? Independent

Writer to BBC interviewer: ‘Stop accusing me of being a rioter’ Yahoo News (hat tip reader Scott A). Lambert Strether notes: The Beeb goes Fox.”

The year we realised our democratically leaders can no longer protect us Guardian (hat tip Buzz Potamkin)

Is Obama Smart? Wall Street Journal (hat tip Carol B). Not quite right. It attacks Obama for lack of smarts when intelligence takes multiple forms (readers of the Black Swan may remember savvy Fat Tony was more insightful than quants; there are plenty of people who are nominally intelligent but become wedded to methodologies or ideologies that make them functionally stupid). But the evidence cited points to another, serious flaw: narcissism.

Why not create new banks from QE3? One Salient Oversight

4 Wisconsin Republicans survive recall elections, GOP maintains control of state Senate, AP projects Washington Post. This may be due to ballot box hijinks in one district, the Dems needed one additional seat to break Republican control.

Union Workers Stand Up to Extreme Demands from Verizon Crooks and Liars

Auerback on S&P Downgrade, Europe Fox News

Uncertainty and indecision threaten Bank America and global markets Chris Whalen

Poverty, Joblessness, and the Job Guarantee Pavlina R. Tcherneva, New Economic Perspectives

Fear beats greed Financial Times (hat tip Joe Costello). This is now outdated by the rally in the US, but a thoughtful long term discussion nevertheless.

Bank of America death-watch Yves Smith, Salon. I didn’t refer to it in a post proper because it is a recap and an intro of sorts for non-finance types, plus they wrote a subhead with glitches. Lordie.

Goldman reveals 15 days of trading losses Financial Times

Feds sue Goldman Sachs over credit union losses Los Angeles Times (hat tip Lisa Epstein)

There is going to be a huge financial story next week Cynthia Kouril, FireDogLake (hat tip reader Carol B) Update: Whoops, this story is from late June; I’ve asked Carol B to ping the author to find out what happened.

The Art & Science of Robosigning in the Post Scandal Era (New & Improved Document Fabrication) Foreclosure Hamlet

An excuse for slashing entitlements Matt Stoller, Politco

Did S&P Leak Ratings Downgrade? Fox Business. Our nemesis Charlie Gasparino confirms NC reporting more than 12 hours later. Read it here first!

Antidote du jour:

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    1. MyLessThanPrimeBeef

      Stage 3, past thought patterns become painfully apparent.

      That’s when I realize killing vegetables is not nice, like killing animals is not nice.

      Worse, you torture them when you thoroughly chew and slowly grind living vegetables in your mouth to aid digestion.

      Progressives are particularly prone to this sort of cruelty.

    2. okie farmer

      The boy and the cow share the same world. Both are moved to joy by the union they share. Cow made a covenent with Man about 8,000 years ago to sacrifice her life for men in return for Mans’ protection. Look at the boy. Look at the cow. Love their world – opposite of ours.

  1. dearieme

    O’s IQ: he’s a Democrat and therefore, by definition, fearsomely bright. Like John Kerry. Like Teddy Kennedy.

    On the other hand, for all I know, perhaps John Edwards is genuinely bright, and surely few would prefer him as President. Anyway, IQ is overrated. Hoover was a highly intelligent chap, blessed with lots of relevant experience, yet proved a dud President. FDR, who was much inferior in character, and who was nobody’s idea of a clever fellow, gets all the plaudits.

    1. Anonymous

      Overrated is an understatement. More like complete nonsense. Intelligence is one’s ability to identify and craft effective solutions for problems. What folks call IQ, and what most call, ‘smart,’ is simple socialization more than anything else.

      And I disagree with Yves. If you cling to a method that’s proven partly or entirely incorrect and inadequate to a given task, there’s a significant intelligence deficit there. Self-awareness and empiricism matter. The idea that someone could be, ‘smart,’ for performing at 100% at a flawed, poorly-designed game — or ‘methodology,’ the academics call it — they designed for themselves is simplistic, adolescent, and absurd.

      1. Anonymous Jones

        So, you’ve redefined the word “intelligence” to a more narrow (presumably favorable to yourself) meaning, determined that almost all current methods of evaluating a person’s mental abilities are completely inapposite to this new definition, assumed that all the empirical evidence on Obama’s policies is in, undertaken to determine that they are all “failures” despite the fact that every single policy decision has winners and losers and that the winners never consider it a failure (i.e., you intimated something as an absolute when it is incontestably relative or I guess more to the point, you don’t actually know what the “task” was), and I’m supposed to take you seriously? Hmmmm….

        1. Anonymous

          You’re all over the place here. I didn’t reference the president. A discussion about specific policy-making by the president, and how consistently given policies track the president’s stated objectives, would be useful, but that’s not related to my post, and only tangentially related to the op-ed Yves linked to.

          RE: intelligence, my definition is the broader one, not the colloquial, ‘iq,’ definition.

          To your personal quip, I’ve consistently performed at or above the 95th percentile on iq tests (one of the common current methods, like you referenced) since early childhood, and I’ve personally encountered very many people who’re far more adept and agile when moving from one complex problem to another, quickly identifying pivotal points, and proceeding to craft effective solutions, one after another in quick succession, than I am. It’s something I personally have to work at constantly. So I have no insecurities RE: commonest intelligence definitions. Lots of rigorous work by serious folks in the field, many real world examples, and plain commonsense point up the vapid, facile assumptions and motives that gave rise to the colloquial definitions, and worse, the absurd and damaging effect they’ve had on public policy, especially education policy.

          RE: taking me seriously, it’s pretty clear you’re getting off on playing an, ‘I’m-smarter-than-you’ game here, so doesn’t bother me one way or another what you think. But knock yourself out.

    2. MyLessThanPrimeBeef

      ‘Intelligence’ is too narrow an eco-niche to depend on for survival.

      One should broaden out to include other eco-niches, like emotional, social, physical and spiritual niches.

      And when you pigeonhole your survival into that tiny niche, you will be constantly threatened by someone more intelligent than you are and be completely unhinged, probably, when told that no one of the species is really intelligent after all.

    3. KFritz

      “….inferior in character…”

      That low-life nonentity Oliver Wendell Holmes had a slightly different assessment of FDR: “…a second rate intellect, but a first rate temperament.”

      This assessment followed a one-to-one meeting.

      One of the penalties of being a lion or a titan is that pygmies will always be there to belittle greatness. Since even the greatest person has flaws, it’s always possible to put down greatness.

  2. dearieme

    BoA or Societe Generale to go first? Or one of the Italians? Or, I do hope not, a big Landesbank. Or, please God no, a big Brit?

  3. Carol B

    I blew it. The Cynthia Kouril FireDogLake link is an old one and refers to the June RMBS auction. Sorry about that. FDL has a listing of older diaries and I’m not used to their current format.

    Apologies, Yves.

    1. Yves Smith Post author

      Oh, I didn’t check, so it is my bad.

      Can you ping her and find out what happened?

  4. Jim Haygood

    From the New York Times-Titanic:

    It is particularly disturbing that three members of the Fed’s policy committee view inflation as a bigger threat than a weakening economy and opposed Tuesday’s decision to keep rates low into 2013.

    This ‘democracy’ stuff is getting out of hand! First it’s S&P, rudely dissenting from the people’s budget policy. Now three wayward commissars dare to defy the chairman of the People’s Reserve, who wants to issue more desperately-needed free money to suffering citizens.

    Unless these ideological deviants are dealt with now — and harshly — we will never meet the GDP quota of the five-year plan. To your posts, comrades! Produce!

    1. Cedric Regula

      Not so suprisingly, the NYT misquoted/misread the actual Fed release.

      The dissenters wanted to keep the low rates “for extended period of time” wording instead of “the at least mid 2013” wording.

      Contrast that to this NYT conflation.

      “It is particularly disturbing that three members of the Fed’s policy committee view inflation as a bigger threat than a weakening economy and opposed Tuesday’s decision to keep rates low into 2013.”

      My initial reaction was …so the Fed is forcasting a 2 year recession? Then I saw a real wall Street guy pose the same question, which in an odd way gave me some relief that I may still be sane.

      The NYT did say the market liked the 2 year min wording because it closed like a rocket to the moon. But this morning dow futures are down 250 at the moment, so it may not like this for an extended period of time.

      Plus we have all the kick the can down the road things in the entire developed road synced to be good till 2013, so I’m a little worried if the plan goes awry, the world will end in 2013 and the Fed will never get to raise interest rates.

      1. Cedric Regula

        s/b “entire developed world”

        Seesh. Need some shovel ready coffee quick. No time for engineering a good pot.

        1. ambrit

          Mr Regula;
          Considering the enduring mystery of a good coffee, (and I speak as one who, long in the far away, worked in the French Quarter of N’Awlins,) shouldn’t that last comment be; “No time for artificeing a good pot.”?

  5. Kristiina

    So it seems there is a lot of discontent among the plebs – mindless rioting and thugs, as reported even by the leftist press (like the Guardian link). The commentators are lost, as there seems to be no “agenda”, no message in what is going on. No organisation – so it seems the establishment can hardly believe it exists. So there’s a part of body politic that’s acting up in a nasty way without any apparent reason.

    My suggestion is, that there is a reason: as the plebs watch the elites “wreck the system for fun and profit” (to use Yves’ very accurate term) they want a bit of the fun. As they lack the means to extract millions from the system through the devious methods the elites have figured out, they have to resort to what is acheivable locally: attacking the officials (police, firebrigade, ambulance personnel) and looting the shops of their own neighbourhood. As the elites have figured out they don’t need to care about the law, so have the plebs. And they are right.

    The milk cow that pays for all this, and has forever (or ever since agriculture produced enough surplus for any elites to form) done so, the middle class, is stuck between the Scylla and Charybdis of greedy poor and even more greedy elites. The illusion of the meek lower class bought by social benefits is crumbling. Strangely, the poor seem to reflect the attitudes of the rich – the nastier the elites, the meaner thuggery the poor invent. The indignant middle class can’t understand why “they” destroy their own neighbourhoods, while the elites loot the very system they depend on to remain elite. There is some inner logic in looting that seems to go soemthing like: there’s still something standing, there’s still something to take, and as everything else is already in ruins, let’s go for it. Looting is the only game in town that is left.

    As to the Guardian commentator declaring impotence as political leaders and police turn out to be powerless: now is the time to reap the fruit of centralization, outsourcing and heightened “efficiency”. As anyone who has eyes to see knows, outsourcing the cleaning to some vast company just means cheaper costs and less cleaning, making the police more efficient means closing down stations and fewer police. Outsourcing the political decision-making to the political elite means they will create their own version of reality and start a mighty whine when reality slaps their face. Yes, middle-class has been bamboozeled to impotence. Every step down that road we have had choices and now we live with what we have chosen.

    Probably the only way to avoid parasites – be they of the poor or the rich kind – is to have no surplus. Nothing for beggars, nothing for tax-collectors. It would also mean goodbye to civilization, which is a pity. But i could still make beads to decorate myself, invent poetry, sing and dance – all this would be left, and it is also useless to tax-collectors and beggars. Not too bad. But i would still have to have some effective means of self-defense: as the unfortunate tribe who were able to duck civilization but not the drug-barons prove with their defeat. As far as i can see, everything seems to point towards a need for full reorganisation of the body politic.

      1. Skippy

        Is democracy another word for humanity’s…flawed consensuses…bad teachers thingy…or…republic…deity’s license…monarchy’s extrapolation by fiat…cough deity’s wish…

        Skippy…whom is the ultimate strong man…the person or their ideology or the lack of one…IDK.

        1. ambrit

          Dear skippy;
          This is just another demonstration of the old observation; “Primus inter parasites.”

          1. skippy

            “Primus inter parasites.”

            the group’s unofficial or hidden leader, and thus the reference to this person being “equal” to the rest is intended to be sarcastic.

            Skippy…ambrit, if the trail was to be had, you would be a companion, your calluses have a velvet-ness, hard trick to pull off, reconcile the past, bravo!

          2. Jim Haygood

            “Primus inter parasites.”

            Mwa ha ha, that’s a good one!

            But I wish you’d stop talking about the Speaker that way.

    1. Foppe

      I doubt you’ve noticed, but the damage the poor have inflicted so far is smaller by a few orders of magnitude than the havoc the rich have wrought. So your implicit suggestion that we should worry equally about both is a bit ‘misguided’. Unless you want to argue that quantitative considerations should be ignored in this little morality play of yours?

          1. psychohistorian

            I think ambrit has the tool and is using it well.

            We need to laugh the global inherited rich out of control of our society.

            I though for a bit that maybe we should organize ourselves to create more snark to laugh at but anarchical snark seems to be emerging quite nicely…may it spread far and wide.

            We need to laugh the global inherited rich out of control of our society.

          2. ambrit

            I have no logical reason for my ‘inventiveness’ this day, alas. (There used to be a wonderful low tech advertisement on the first Spanish language TV channel in Miami that went: Pull focus to a suited ‘announcer’ type behind a desk. He speaks, “Tienen problemas ‘en el banyo?’ Mira! No hay mas ‘problemas’ con Preparacion Ache!” Somewhen about that point I finally ‘got’ the wonder of absurdity. It’s been with me ever since, for better and worse.
            All this brings me to Spike Jones and “Der Furhers Face.” Now, no one claims that this song appreciably effected any of the battles of WWII, (except for the eternally inventive National Lampoon.) Its big strength was in changing the publics perception of the madman across the water. Once that paradigm shift takes place, all bets are off.
            What is emerging here, and on some of the other “thought leader blogs,” is a “Hearts and Minds” campaign. The famous retort to this assertion would be the supposed quote from Lyndon Johnson: “Forget ‘Hearts and Minds.’ When you’ve got them by the B—, the rest will follow.” Well, History has judged otherwise Lyndon, wherever you are.
            The US Elites should feel grateful for the struggle continuing in this vein. The alternative is “Tottenham on the Hudson.”

    2. Kevin de Bruxelles

      You are one of the rare people who get it. The fastest way to kill a society is to allow parasitic classes to thrive. In many countries we see the Rentier and Lumpenproletariat both sucking the life blood out of the American productive classes (working and bourgeoisie). The political system is designed there so that the Right will with knee-jerk certainty protect the Rentiers banksters while the Left will with Pavlovian regularity insist that the Lumpen gangsta bloodsucking is somehow less offensive that the Rentier version. For example many on the Left have a huge hard-on for the “English Spring” Lumpen uprisings as well as the troubles in Philadelphia. The truth is that these troubles are really just an attack by a ravenous parasitical group that is impatient for the productive class’ blood and is more analogous to the TARP debacle than to any revolution.

      Even surpluses are not the problem. Parasitic thugs, rich or poor, will steal anything they can get their hands on with impunity. And then when they eventually kill off the entire productive class they just go out on the hunt for new host victims to leech off of.

      The problem is that as you allude to, one cannot live in isolation, as that tribe in Brazil shows. The State developed because elites were better at massing military force than anarchic groups of individuals. If this were not true then states would never have arisen. Since the state is a given, the question is what kind of state is best.

      The answer is a state where the productive classes band together against the parasitical scum. Only a totalitarian state can completely wipe out the parasites so the goal should be to keep this scum to a minimum. Instead, in the US at least, the productive classes spend all day debating each other which class of parasites is worse. Unfortunately this is not an answerable question and all it leads to is inaction. Sure maybe the Rentier scum steal is higher numbers but the Lumpen thugs steal and maim at close proximity. It’s like arguing who was worse, Stalin or Hitler. Who cares, they are both bad.

      So the productive classes have a choice. Stop debating among yourselves and instead aggressively lash out at all parasites or suffer the typical fate of passive hosts and sit back meekly and let the Rentiers and Lumpens perform a parasitical pincer movement and destroy your society. You see some of this productive class solidarity arising in Birmingham and other English cities as common people band together to protect themselves from the thugs. The key is to not see the rich bankstaz and poor ganstaz as opposites. The truth is that they are exactly the same thing.

      1. Foppe

        Oh, look. a self-appointed member of the “productive classes”, talking about lumpen proletariats without talking about how they are (re)produced. Did you perhaps miss my comment above yours? Because it strikes me that it applies just as easily to your little story.

        1. skippy

          Another monkey with a carcase, diving it up for status, yet I will share with you, for our over all strength.

          Skippy…Individualism…umm…what is its well spring…the individual or the slack a good society offers.

      2. skippy

        Once an architect, all ways one, they look at a blank piece of sheet and imagine how they can imprint themselves upon it, with out ever lifting a tool, save the pen, which has been reduced to a cursor, trepidatious, cathedrals of homage.

        Skippy…Lumpen thugs exists *as* a_by product_b[u]y design, people need an example of a pit, which they loth to fall into, en spite of empirical evidence to the opposite.

        PS… I smell your fear of personal loss over humanity’s trajectory, you fight for your position and not continuity…Aryn Rand would be proud…duplicitouslly…sucking the teat of everyone’s toil.

        1. KFritz

          “Lumpen” construction workers everywhere agree…but there are caveats

          -There are design/build people, who actually, like, pick up tools, ie, a few human architects, designers. There are also many people who wield tools AND give orders. Mea culpa.

          -The delineations of ‘class’ aren’t linear or exclusive. The “lumpen” are often just as flawed as the “uebers.” I’m reminded of Melvin Konner’s description of the empty mansions of Malibu, “…our own lives writ large.”

      3. ambrit

        Dear Sir;
        The difference between the two types of ‘parasite,’ as I see it (with all due and necessary disclaimers and apologies,) is one of the “Economy of Scale.”
        The big “Banksterz” cartelle has perfected the process of extraction of value as a semi-hidden and ‘sanitized’ criminal enterprise. We might be able to put forth an arguement that “High Finance” is now the ‘last refuge of a scoundrel.’ (Apologies to Dr Jonson [sic].) Thus, the proper charge against them should be; “Operating a criminal enterprise under ‘cloak of Legality.'”
        The street “Gangsterz” movement would be basically just a bunch of disorganized opportunists at work. (Somewhat like those of us who got burned trying to capitalize on the recent ‘commodities’ run up. {Seen the spread between the industrial use of silver costs and the speculative price?} Our dear skippy won the prize here.) But, and in our mediaized world a big but, the ‘street theatre’ being played out in England right now, (no mention of Wales or Scotland, hmmm..) is played up as the ‘Second Coming of the Apocalypse.’ Well folks, England has gone through numerous “riots and civil insurrections” in its long history. The long term trend has been toward the increase of personal liberty, and standards of living. I posit that the two are intimately interconnected. We are now seeing the diminuition of the standard of living, and the natural result is the amplification of the other side of the duopoly. How do you amplify personal liberty? Act out strongly! The “Gangsterz” are the canary in this coal mine.
        For long, the ‘elites’ have taken the diamonds and left the rest of us the coal. We made peace with that, life was agreeable, if not fine. Now ‘they’ want the coal too. All H—is going to break loose.
        Enough ranting for now. Cheers!

        1. psychohistorian

          Youse “guys and gals” keep making my point above.

          Keep up the good work brothers and sisters.

          We need to laugh the global inherited rich out of control of our society.

        2. KnotRP

          The common identifiable trait of course, is the use of force.

          Forcibly breaking into a shop, or forcibly (Paulson’s threat) redirecting public moneys to private pockets.

          The middle class will, at some point, resort to responding in kind.

      4. Doug Terpstra


        Alan Greenspan, the maestro über-architect of financial disaster, said it best for you, perhaps after reading about the noble and heroic architect Howard Roark:

        “‘Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.”

        Of course, the Maestro was referring to the lower-order parasites, the only ones he could see through his special lenses. Like the maestro, I think you and Kristiina don’t seem to grasp that a difference in degree is a difference in kind: that the “lower-order parasites”, though far less virulent and deadly, are in fact the manifestly inevitable spawn of the “higher-order” that has set itself conspicuously above the law long ago. The breakdown of law and order that you and Kristiina mourn occurred by design decades ago, and if it is ever again to have any legitimacy at all, it must begin at the source—on Wall Street, The City, and finally in The Hague with war crimes trials.

      5. Anonymous Jones

        Haven’t seen you around here lately, KdB. Always appreciate your thoughts.

        I kinda think the rabid responses to your comment proved part of your point in a way. Your more abstract view incenses those colored by actual facts. While this seems like sarcasm, it is surely not. One who can be misled by facts as well as theory, specifically because the infinite number of facts in the universe is beyond our powers of categorization and comprehension and we tend to give undue weight to the specific facts upon which we have focused.

        One quibble: What kind of state is “best”? Well, your answer (as all answers would be) is certainly relative. It should not be surprising that a member of the productive class feels that a state in support of the productive class is best. I can assure you that the Rentiers don’t agree!

        1. Skippy

          AJ…give me a break…

          Ive worked up and down the ladder, have zero attachment to titles and my identity as a human. Just yesterday I was having a chat with a IT Phd and the completely crazy Mgmt (architects) decisions made with system changes / up grades. The inability of these architects to see let alone consult the tool users about best practice / application. You see a University and the state itself around here have ripped out old systems and inserted new ones with out running the old in parallel. Well in the University’s case you can’t log out or it crashes the entire system [lol], there is no log out button[ my system for a bit of code! ]. In the states case it was payroll, some people, a large group, went weeks or over a month without pay whilst debugging crept along. All these problems could have been easily solved…shezz…with consulting the tool users.

          Skippy…top, bottom, productive, classes…barf…what a bunch of word enabling dehumanization double speak, more human than a human…eh.

          PS. it never ceases to amaze me…the strained faces…the folks give…when they realize…that a tool wielder…by their metric…is equal too or better off…than them…onset of rabidity[?]…or the Q7 jamin Mr Recardo Queso Fresco..rocking up[?????] IDK.

          1. Skippy

            addendum…they removed the log-out feature…open source would have enabled a collaborative effort, facilitating better out come[s and peer to peer relationships.

    3. Paul Tioxon

      The survivors of brutal violence, in any society, all distinguish themselves by also surviving the socialization that makes any given social order possible. The prime examples are criminals, organized criminals and organized political groups engaged in armed struggle. The Russian Mobsters who survived Soviet “police state” tactics to emerge post 1989. The Hong Kong triads, IRA brigades that refuse to stand down, and the world champs in my opinion, Pol Pot and the Khmer Rouge. Under the most vicious crack downs and savage political oppression that the state can mete out to its citizenry, including economic violence of neo liberalism, the good and decent shop keepers, the 9-5 church going types are disadvantaged during periods of chaotic discontinuity.

      What was adaptive behavior to a well enough meaning system allowed for a reasonable enough measure of prosperity to live a life without want, if not affluence. When drug dealers take over your neighborhood or rioters burn down your furniture store or capitalism packs up and leaves Detroit, what and who are you left with? Political sophisticates who understand the world system of capitalism and extractive policies that decimated their lives? Not exactly. But, they do act out, criminally and all together, under the right circumstances, they act out in larger numbers, with greater frequency, and are socialized by those experiences. There does not need to be socially redeeming value much less a roughly formed political agenda for rioters to burn down LA or Liberty City in Miami under President Reagan. The out of control violence in Chicago or Philadelphia on a bad weekend simply can not be beat by troop casualties in Afghanistan on it worst day. These riots in slow motion are a daily feature all across America, but are ignored due to not having an appropriate spokes person, the appropriately loquacious Norman Mailer type to translate the jungle drums to the uninitiated. Certainly, we do not look to Obama to tell us what it all means due to his street cred. He has none. Having grown up in Hawaii and other sumptuous Ivy League outposts. So, we are left to our imaginations about our current American Dilemma: what does the plebeian, the great unwashed, the underclass want? What the Romans gave out in bread and circus, what the welfare state gave out with a place in society, if not an exalted office, what the Emperor of Rome gave to Attila, a Roman Generalship, gold, political embassy and yet more gold. Yes, the famed Hun, used political guile, the threat of unspeakable carnage in raids to garner the respect of the Empire to the point where he was a “General” and a whole lot of gold, in ever increasing amounts as he took advantage of thinly spread legions fighting visigoths etc. Perhaps if we appoint key junior G-Men with badges and festive picnics and bowling tournaments, they will break the heads of the lesser punks and vandals before they escalate out of control. It may work for a while, until the social order erodes more and more and greater and greater areas, and begin to be populated with better educated, estranged and ruined former shop keepers, former church goers and former pillars of the community. When the Arafats, and Guevaras and Carlos’ start to populate the ranks of those acting out, it will be another milestone in the brewing chaos, worse than mindless looting thugs.

  6. lambert strether

    “[T]he opportunistic desire to steal and get away with it …” is an unintentionally hilarious line from The year we realised…”

    At least the UK rioters didn’t take the opportunity to steal $16 trillion dollars! And get away with it.

    As above, so below.

  7. lambert strether

    8:00AM I imagine that the link to the Waukesha story goes to a placeholder page that reads “[configure paragraph]” because the Ds backed off on the story.

    You’d think that before issuing one of the most toxic charges in politics — besides false charges of racism — they’d want to be sure they had the story straight, but that’s our Ds.

  8. kristiina

    I somehow like the concept or idea of body politic, although i quite detest Hobbes’ political philosophy. As above, so below: imbalances in body, be it of the physical kind or political result in various sicknesses. Among human bodies, it is considered everyone’s personal freedom to be fat, or alcoholic or whatever, and the symptoms, like failing knees and chirrosis are treated. The poor looting and rioting is a symptom, and i dearly hope there will be more than just police action to cure the ailment. If the parts of the political body start fighting with each other, it is obvious that it will make the whole body very weak.

    Instead of saying the rioters are wrong, why not admit they are right? The consumer society, police and all that is in place to keep the plebs stuck in front of the tv – methods of oppression that make for a life so bleak that a bit of rioting seems like a fun idea. Why is media so keen to distance “normal” people from the rioters, calling them thugs and thieves? Are we really living in the kind of culture and society that we want to protect? Or is it actually so that most people think good riddance about the looted stores? There’s stories about people organising to protect their stores, but i don’t expect there will be anyone volunteering to protect a mcdonalds. When there is some part of the body politic that has become so disopssessed they have nothing to lose, the system will become quite volatile. Because there is that strange paradox that those who have nothing to lose are the strongest. The dispossessed can turn the tables. The question now is, do we care? The media is working hard to whip up moral outrage – personally, being far away, i just wonder at looters who destroy sports chains and leave bookshops untouched. Of course it is wrong to destroy property, but the real nasties always burn the books first.

    1. craazyman

      they want the shoes not the books! LOL

      the human problem is that you don’t know anything unless you’ve experienced it personally. The media reporters and talking heads have NEVER EVER been somebody’s invisible man, never been the stranger, never been los olvidados, never been the instantly forgotten, never been the utterly ignored, never been the burning orphan soul. always been the darling, the patted head, the fortunate son. they don’t know shit. why do you even listen to them? what’s the point other than wasting your own time.

      1. M.InTheCity

        I’m finding it amazingly frustrating to watch any news at all right now (since it is Riots 24/7). All anyone wants to respond with is violence. A woman at work yesterday said we should shoot them. I made sure she understood I took great umbrage at such a stupid remark.

        And today I was trying to explain to an intelligent man in his mid-20s who works for me that these people are acting out what the rich/bankers (ruling class?) have been doing for some time now. If you have a society based on greed, stealing from others and a general attitude of me-first, why wouldn’t people just act it out? The thin veneer of society has been ripped away and we’re being shown the truth of what we believe. Since we work in asset management, you can imagine he was a bit incredulous…

        1. MyLessThanPrimeBeef

          If it’s stealing, we want it there for all to see.

          If it’s procreating, you do it in your privacy.

      2. A reader

        Well said, I like your analysis of the lack of insight of the so call media or press or MSM. The thing here is as Dan Rather so well put it, they afraid of the burning tires.

        Not that they don’t understand 9/11 and what the free-fall movement means intuitively as in here:

        “Amazing, incredible, pick your word. For the third time today, it’s reminiscent of those pictures we’ve all seen too much on television before, where a building was deliberately destroyed by well placed dynamite to knock it down.”

        CBS News anchor Dan Rather commenting on the collapse of Building 7 – September 11, 2001 at approx 5:30pm EST.

        CBS anchorman Dan Rather tells the BBC that he and other journalists haven’t been properly investigating since 9/11. He says, “There was a time in South Africa that people would put flaming tires around people’s necks if they dissented. And in some ways the fear is that you will be necklaced here, you will have a flaming tire of lack of patriotism put around your neck. Now it is that fear that keeps journalists from asking the toughest of the tough questions.” [Guardian, 5/17/2002]

        Apropos Dan Rather and the next chance for cleanup:

    2. Susan the other

      We do not know who set those fires. Nor why. We might start investigating the big corporations that will benefit from the London Olympics.

  9. craazyman

    tz you rock dude. you called this crash almost to the day. i need to follow your advice. when it didn’t happen Friday I was a skeptic, but now i’m bowing in yure generul direction if I knew which whay it was.

    what kind of weird juju ryou flowing?

  10. MsExPat

    Note: Darcus Howe, the man interviewed by the BBC in that clip, is far more than just a protester. He’s a venerable West Indian activist from Trinidad, a distinguished journalist, and the nephew of socialist intellectual CLR James. The fact that he was treated in this shocking manner by the BBC interviewer is reprehensible.

    1. KnotRP

      And completely on par with MSM behavior.

      The only surprise is that you are surprised.

      Do you believe the MSM when they label people you DON’T know?

    2. A reader

      A black man was shot dead by the police – that was a fact, somehow that need a commision to investigate, if the man was black and the shooter was a police officer and if the man …

      So the should-be respected old man shouldn’t say the fact as he see it, but the shxt the BBC want a black and respected man say on BBC on that occasion,…

      After this, well the man is even more respected.

  11. hermanas

    I like your comments, when I heard the prime minister say they would do whatever was necessary to restore order, I thought “JOBS”, but no he was talking water cannon and plastics bullets.
    Good Luck with that. In the 60’s we thought the automation of labor would free us all, not dispose us all.

    1. hermanas

      just walked out in the yard, heard Janis singing,
      “Freedom’s just another word for nothing left to loose.”

      1. psychohistorian

        Bingo, Bango Bongo!

        Us pond scum have nothing to lose but our chains.

        We need to laugh the global inherited rich out of control of our society.

  12. A Webber

    I have some great antidote pics I’d like to send Yves. For the life of me I cant find a site email address. Yves where can I send you these pics? Thanks.

    1. psychohistorian

      Yes, Slim,

      Just the facts here. This topic was cover immediately after it happened at NC and is somewhere in the archives where I can’t tell you where to go except to the archives, sorry.

      It is a bitch trying to stay on top of this Shock Doctrine event… much stupidity and so little humor.

      We need to laugh the global inherited rich out of control of our society.

      1. john

        Saw Amity Shales on Bloomberg saying (paraphrasing) “…we need less shock therapy”, meaning less Keynesian intervention. Amazing how good they are co-opting. Like how the Iraq war was presented as being pro-woman.

    2. Teejay

      Re: Ratigan’s Right-on Rant

      ‘Any chance Yves’ll offer comment/analysis w.r.t.
      “extraction”. eg: deeper understanding and
      ramifications of extraction of: assets, capital
      taxes, etc.

    1. ambrit

      Mr Haygood;
      Being one who never, ever could afford gold, the only gold I have is on my ring finger. As such, it represents my trust in a now 30+ year relationship. Seing as Treasuries are also a manifestation of trust, in the long term solvency and honesty of the issuer, the two are roughly coequal. So, the basic issue here is trust. Phyllis and I have been up, down, and all around over the years, and each of us has demonstrated a willingness to work towards maintaining the trust underlying the relationship. I can’t say the same for the commodities ‘market’ or the ‘financial sector.’ A ‘break up’ here will be messy, and, as usual, the kids will suffer the most.

      1. Jim Haygood

        Congratulations on your rewarding long-term relationship.

        Presumably you are of, or approaching retirement age. Until ten years ago, most people (including myself) complacently assumed that in retirement, they could earn an easy, safe 5 percent annual return in T-bills, CDs or the like.

        Today, the yield on the 5-year Treasury note has fallen to an awesomely pathological 0.9% — the lowest in history.

        This, while the year-on-year change in the Consumer Price Index is 3.6%. Thus you lose 2.7% of purchasing power annually, in 5-year T-notes.

        To save the hides of reckless banksters, pensioners are being liquidated, or forced to speculate. It’s an immense crime. The Federal Reserve must be abolished.

        1. ambrit

          Mr Haygood;
          Phyllis says thanks, so do I.
          As for the retirement issue, yes indeedy, I’m now retooling for a “work till you drop” lifestyle. This brings up the topic of ‘social contracts.’ Just who enforces ‘social contracts?’ There is lively discussion here, and on a few other blogs, as to this function. Bring the subject up on the Street? Another ‘reality’ altogether emerges. Thus, my focus tends to be on the concept of ‘social engineering.’ I, as most others here can testify to, am in no wise a Quant. I am just now getting around to reading a short history of the original Bretton Woods Conference. This shortcoming is well nigh universal in our culture. So, to gain traction in any meaningfull way with the public, other tools are more effective. For an instance, humor. Why do we wonder at Jon Stewart being cited so much in opinion polls as a primary source of political and economic knowledge? It’s really quite simple and understandable. Continuous gloom and despair are not generally desirable lifestyles. When you can laugh at something, or someone, the fear and despair don’t disappear, but do become bearable. This sense of calm is the best source for action known.
          By the way, the more I read and understand about the Fed issue, the more I question it. You may convert me yet.
          Be of good cheer.

          1. Foppe

            For an eye-opener written in good cheer, I do recommend David Harvey’s Cosmopolitanism and the Geographies of Freedom. He even discusses/mocks Thomas Friedman in it.

          2. psychohistorian

            Back in the day…..The Rules of The Club by William Greider told me enough to understand who owns and runs our world through the Fed.

            After a while it doesn’t take a weatherman to understand which way the wind blows….

        2. MyLessThanPrimeBeef

          Jim, I am currently the only member of the American Savers Society (ASS).

          Can I interest you in becoming one?

          1. Jim Haygood

            Perhaps, if we can agree on a manifesto. My proposal:

            RESOLVED: that after the Federal Reserve Open Market Committee is rusticated to Yucca Flats to dig nuclear waste pits with their bare hands, their former headquarters shall be rededicated as the ‘Marriner S. Eccles Mausoleum of Monetary Misanthropy.’

          2. MyLessThanPrimeBeef

            You got a deal.

            I would also add a gift shop next door, with real voodoo magicians offering free fortune telling.

          3. Cedric Regula

            To be fair to Eccles, we should go with the name:

            “Marriner S. Eccles ‘I told you pushing on a string wouldn’t work’ Mausoleum .”

      1. Typing Monkey

        Which makes no sense. France will default sooner than the US (and both will default…)–the country is publicly hoping to run a deficit of 6% of GDP (and rest assured that it will be much higher than that, given the upcoming elections and general economic malaise). The property bubble there hasn’t popped yet, either–this will further pressure ratios, both as GDP declines and deficits rise.

        Maybe the US downgrade was purely political. If so, it’s pretty sad that the only time a country gets a clearly deserved downgrade is when politics, rather than fundamentals, dictate that it be so.

    1. ambrit

      Dear MLTPB;
      Why the false dichotomy? Like Janus, the god appropriated by the Romans, these are manifestly demonstrable as aspects of a syncretic ‘mercantile’ diety. (Some may suggest that Janissary, denoting troops tasked with enforcing contracts, is a derivation from Janus. However, there is much controversy surrounding this assertion.)
      In true syncretic fashion, each feeds off of and supports the other. (The wonderful Mexican film version of Steinbecks “The Pearl” illustrates this perfectly.)
      Thus, at the end of a long day ‘herding’ the stock markets, Fear and Greed can proudly sit together at some trendy Midtown bar and toast each other for a “Job Well Done!”

      1. MyLessThanPrimeBeef

        Well…that’s the last time I am going to follow Yves blindly. Can’t believe she gave me that false dichotomy.

        1. ambrit

          Dear MLTPB;
          Sorry to go all Scholiast on you there. Mz Smith might have given you a True Dichotomy, such as ‘Honest Broker’ and it morphed into one of the dreaded “Emoticon Moments.” Sort of like ‘Catholic Keynes’ versus ‘Protestant Keynes.’ The dividing line between ‘sect’ and ‘cult’ is fine, and therin has many a fine mind lost its moorings.
          As a celestial curiosity, if the mythical “Third Moon of Mars” is ever found, I vote to name it Avarice.
          BTW, yes, my eyes ARE brown.

  13. Hugh

    Is Obama a smart empty suit like Clinton or a dumb empty suit like Bush? Is he a smart conservative or a dumb conservative? Is he a smart puppet of the kleptocrats or a dumb one? Questions, questions.

    An excuse for slashing entitlements? If a Republican is in the White House. Another excuse to slash entitlements? If a Democrat is in the White House.

  14. KnotRP

    > The year we realised our democratically leaders can
    > no longer protect us Guardian (hat tip Buzz Potamkin)

    Perhaps this isn’t an accident, but a goal…..discredit Democracy and Capitalism (even though we have neither operating right now)….in order to make way for something with a more authoritarian bent.

    All we need now is someone who promises us Safety.

    1. Valissa

      That is one of my concerns too. The combination of increasing political and economic centralization (and collusion) with anxious and confused/overwhelmed citizens seeking a savior could lead to even more authoritarianism.

  15. jcb

    I think you’re exactly right on the “Is Obama Smart” article. It is poorly argued because of the writer’s deep animus towards Obama. But it accurately describes a narcissist, albeit one of undoubted talents. And this country has had the great misfortune to elect him to an office — and at a time — that demanded public responsibilities for which he is poorly equipped.

  16. Jim Haygood

    US stocks closing at their lows send an eloquent message that somebody knows something.

    Most probably, that we awake tomorrow to a bloodbath in Europe that will curl your toenails.

    Trichet’s Folly grinds on to its inexorable conclusion: namely, driving the equity value of insolvent European banks to zero.

    Who will stop this deluded madman from wrecking the continent in his final squalid weeks of government employment?

  17. annoyed liberal (though i'm probably more an eisenhower republican)

    Obama indeed unites America!

    The poll found 73 percent of Americans believe the United States is “off on the wrong track,” and just one in five, 21 percent, think the country is headed in the right direction.

    The level of discontent is the highest since Reuters/Ipsos began polling American public opinion in February 2009.

    1. MyLessThanPrimeBeef

      I am sorry to be the first to inform you that if you are discontent but are not actively seeking contentment, you are not really discont…not officially, anyway.

  18. Valissa

    Being Like Soros in Buying Farmland Lets Investors Reap 16% Annual Gains

    So many investors have rushed to capitalize on food prices in the past three years that they may be creating a farmland bubble. The Federal Reserve Bank of Kansas City, which covers Colorado, Kansas, Nebraska and other agricultural states, said in May that farmland prices had surged 20 percent in the first quarter compared with a year earlier.

    Good article, except for the misleading title. It’s not about Soros other than a brief mention of his investments in farmland in South America.

    1. Cedric Regula

      The title implies they are flipping farmland…not farming it.

      I recall some farming profs at the Ag school at Purdue ( they attended friday happy hour a lot) solemly state that if farmland gets too expensive you can’t farm it. You have to build condos.

      Why does this always happen?

      1. Valissa

        Did you read the article? It is partly about flipping the land, of course as that is… The Way of the Bubble. Then there is the part about the tenant farmers paying rent so the land owners can make money off both the rent and the land appreciation. Hopefully the tenant farmer makes enough money from the crops to pay the rent to these new neo-feudal investors and still have a decent salary leftover.

        The investors next visit a farmer they hired, Ed Kerlikowske Jr., who grows watermelon, peas and corn on their 782-acre spread near Berrien Springs, Michigan. For farmers such as Kerlikowske, the entry of outside investors frees up money for new equipment that they would otherwise have to spend on land. “To really grow the business in today’s economy, you need partners,” Kerlikowske says as he passes around slices of fresh watermelon.

        Looks like some of the farm investors are becoming business farmers themselves. I would giess that to be a small percentage of the investors.

        In the U.K., where farm prices are also rising, one money manager traded his career at BlackRock Inc. (BLK) for one in farming. Graham Birch, 51, left in 2009 as the London-based head of the natural resources team at BlackRock, the world’s biggest asset manager, to run his two dairy, wheat and barley farms in southwest England full time.

        Birch, who says farming has suffered from a lack of investment and management talent, has spent $1 million on improvements. He now captures all of the effluent from his 600- cow herd, stores it in a 4 million-liter (1-million-gallon) steel tank and uses it as fertilizer for his crops. “At heart, I am basically a businessman, and I want to try to apply the things I learned over the years to see what I could do,” Birch says.

        1. Cedric Regula

          To be honest, I skipped reading the article cause I know already there won’t be a happy ending.

          Take this for example:

          “Then there is the part about the tenant farmers paying rent so the land owners can make money off both the rent and the land appreciation.”

          The tenant will need consistently high commodity prices to pay the ever increasing rent, because the land investor probably projected high commodity prices forever in his land valuation calcs he based his purchase offer on.

          The investor believes he will get land price appreciation, but has to sell to a real buyer someday to realize his dream.

          This worked swimmingly well in Orange Country, CA over a 50-100 year time frame. My prediction for Kansas is we get the shortest condo boom-bust real estate market in history, if the investor does find another buyer to make his dream come true.

          Also, for many decades now, farmers have graduated from 4-year Ag college, not a finance or MBA school. I’d bet my money on the Ag school grad. Course those MBA finance guys do hire if they got bookoo bucks already….

  19. K Ackermann

    I my opinion, a good move for NC would be to crank up the frequency of the posts at this moment.

    People are hungry for even the rumors. Everyone is twitchy, and the BofA death watch struck a chord that resonates.

    The market is forecasting an event or events right now, so tell us what it is, or what it might be. We are seeing day-after-day of 500+ point swings. Something is going on.

    Anxious readers will tune in…

    1. Yves Smith Post author

      I know that’s a good idea but I am exhausted, the guest posting at Salon could not come at a worse time, and I don’t do rumors.

  20. xct

    These riots reflect a society run on greed and looting

    “If this week’s eruption is an expression of pure criminality and has nothing to do with police harassment or youth unemployment or rampant inequality or deepening economic crisis, why is it happening now and not a decade ago? The criminal classes, as the Victorians branded those at the margins of society, are always with us, after all.(…)

    While bankers have publicly looted the country’s wealth and got away with it, it’s not hard to see why those who are locked out of the gravy train might think they were entitled to help themselves to a mobile phone. Some of the rioters make the connection explicitly. “The politicians say that we loot and rob, they are the original gangsters,” one told a reporter.”

  21. Frank White


    100% agree with your armchair diagnosis of Obama. He has no agenda, no principles but desperately wants to be president. His presidency is obviously all about his own ego gratification.

  22. Herman Sniffles

    I don’t think “narcissism” is quite right with regards to the Obamanation, I think it’s more that he’s self-sanctified. Look at the way he poses and assumes glorious facial expressions.

  23. Jon-Rainer

    Apologies for the noob question, but how does one email Yves to suggest a link?

    Thanks in advance!

  24. Jim

    Yves, you may want to link to the Grantham Manifesto, via AlphaVille.

    Shades of Marriner Eccles, President Roosevelt’s first Fed Chief.


    If we want to dig out of our current morass, don’t we have to change this equation and isn’t the most direct way of doing this to divide the pie more evenly? That would mean lower income and sales taxes for the bottom 75% of earners and higher taxes for the top 10%! We have allowed the vagaries of globalization and the plentiful supply of cheap Chinese labor to determine our income distribution, which has become steadily steeper, to the point where we have become one of the least egalitarian developed societies. Wouldn’t it be better for us to decide deliberately and by ourselves that income distribution which creates the best balance of social justice and incentive to work?


  25. Valissa

    Is an infrastructure bank a good idea?

    A Bank That Can Get Americans on the Road and on the Job: View

    Among the legion of problems facing the U.S., two stand out: Unemployment remains appallingly high, and the public works undergirding our economy are in alarmingly bad shape. Creating a national infrastructure bank presents a harmonized solution to these two problems that should be feasible even in austere times.

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