Links 8/13/11

Another ash cloud soon ‘unlikely’ BBC

Fracking sand emissions caught on tape Colorado Independent

To defuse ‘flash’ protest, BART cuts riders’ cell service. Is that legal? Christian Science Monitor (hat tip reader Balaji)

Leaked AT&T Letter Demolishes Case For T-Mobile Merger Broadband Reports

The Excessive Calls for Curbing Freedom of Expression & Civil Liberties in the Aftermath of the London Riots FireDogLake

Feral Capitalism Hits the Streets David Harvey (hat tip reader Foppe)

An Open Letter to David Cameron’s Parents Nathaniel Tapley (hat tip Richard Smith)

First rioter given eviction notice Wandsworth Council. Notice the “rioter” in question has only been charged, not convicted.

For all you need to know about Rupert Murdoch, look at his lawyers John Dean, Guardian (hat tip Buzz Potamkin and reader May S)

What the Germans are reading Credit Writedowns

This could be worse than what followed the fall of Lehman Brothers New Statesman (hat tip reader May S)

Appeals court strikes down health overhaul requirement that most Americans must buy insurance Washington Post

Obama under water in N.Y. Politico. This is a big deal.

Paul, Santorum and the Sixth War (on Iran) Juan Cole (hat tip reader James B)

A County in Alabama Puts Off Bankruptcy New York Times. This is patently ridiculous, which raises the question of who the governor is trying to protect. My 83 year old mother, who lives in Jefferson County, had figured out 5 years ago that bankruptcy was the way out.

SEC Reviews S&P Math, Possible Leak of Rating Bloomberg. This suggests the SEC is looking into the issue we raised, that of selective disclosure.

Is The Earnings-Yield Divergence Unprecedented? EconomPIc Data

Some $50bn goes to money market funds Financial Times

Consumers, Cast Your Vote Katie Porter, Credit Slips

Consumer sentiment at 30-year low in US Financial Times


Capitalism with a human face? Emanuel Derman, Reuters (hat tip reader Peter J). Another fan of financial firms as utilities.

That Weimar Feeling Matt Stoller, Politico

Antidote du jour:

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  1. psychohistorian


    I feel a kindred spirit with Juan Cole now. He and I both know that they have been listened to by our government.

    In August of 2004 I received a telephone order for my business from someone who gave me a working email address with the order. During the conversation he made some mention to me that perhaps I ought not to be bad mouthing our then president to vendors overseas.

    The government that I grew up with in the 50’s and 60’s taught the American dream significantly different than I learned when I went looking in the early 70′ at college into the multi-national company and finance push into South America….read Namoi and the Shock Doctrine.

    I fear my government because it has violated my rights, but what the hell, where are examples of any miscreants of the past 4 years of finance in jail.

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

    1. G Marks

      “LAUGH” them out of power?

      This is going to get uglier than that. So far the mobs are confined to Main St… a poor choice for retribution.

      I look forward to a more ambitious target for our/their wrath.

      Now I understand why the crowds of 1789 Paris were cheering the blood.

      1. psychohistorian

        G Marks,

        If my senses are correct we worked together for the same overlord in our past.

        I hear your sentiment but history has shown that violence begets violence and this is too important a structural change to go down that path.

        IMO that are enough “adults” that could step forward and provide the needed leadership to say,

        “I’m sorry but this method of social organization is just not working for us any more. Worse than that, we believe that your actions have been malevolent and we have decided to hold you and others that we feel were actively engaged in social genocide for potential prosecution.”

        Laugh the global inherited rich out of control of our society.

  2. anon

    Yesterday, in an interview with the WSJ, Roubini made a headline by stating Marx was right. I posted this in the Links thread yesterday, but it was near the bottom. Since I think it’s worth a listen, here’s the link again:

    Screenshot of the headline (from WSJ online):

    Marx on the WSJ!

    Also, here’s discussion of the Roubini interview which has made the front page at Daily Kos:

    1. craazyman

      yep craazyman’s first law of economics has always been “one man’s cost is another man’s revenue”. Good to see the big guns like Roubini PhD are on to this. I don’t even have a GED.

      think where this money goes. it goes from nature to labor to capitalists, then it goes from democratic capitalists into oligarch capitalists in emerging markets or stip mine capitalist food commodity funds.

      then, in emerging markets, it goes into fat local bosses pockets, sweat shops, suicide nets, and labor get screwed even more all the way to zero.

      the capital to labor ratio keeps growing ’till it nearly reaches infinity.

      finally, labor revolts, everyone gets destroyed and there are wars, pogroms, rebellions and refugee camps and tents for the surviors.

      all these swarms of idiot money are like flocks of birds who fly higher and higher until they freeze and die in the altitude and then land dead like hail like soemthing out of the Bible. but that’s not surprisng because money is ID by metaphor and it’s always a problem reigning that in.

      1. Susan the other

        So theoretically, is capitalism supposed to be self-correcting – demand must be maintained for capitalism to thrive? It is so simplistic. No wonder we are so confounded. We primates survive and evolve by theft. It isn’t a question of money at all. So it can’t be a question of capital. It is a question of morality. And nobody wants to moralize. But that is exactly what we need now that we have fucked it all up.

        But dear god, please don’t let Elmer Gantry-Perry take the pulpit.

        1. K Ackermann

          We survive by theft

          The greatest gains are through efficiency, not theft.

          Ice preserves dead meat.
          Antibiotics preserve living meat.
          Writing preserves knowledge.
          Schools concentrate and disseminate knowledge.
          Farming is sustainable.
          Credit to purchase a tractor is sustainable.

          Theft undoes it all.
          Usury undoes it all.
          Derivitives undoes it all.

  3. attempter

    Right, just communism (which was nothing but a form of capitalism) with a human face was a scam, but the fascist-corporatist variety can be humanized.

    (BTW, that whole metaphor is bizarre. It’s basically admitting the whole thing is a cosmetic scam. Wouldn’t metaphors about the heart and soul make more nominal sense?)

    Another fan of financial firms as utilities.

    We could drop the phrase “as utilities” and have an accurate depiction.

    minimal interference by the “state” with private behavior

    But maintain the government-artificed corporate form and rentier propertarianism. If that’s “minimal interference”, I wonder what he thinks significant, let alone maximal, interference is. To have corporations at all is already a major step toward a command economy, and to give them personhood and rights is to fully establish that command economy.

    treat people as adults.

    But maintain economic and political elites. Now I know he must be joking, since no one could be that stupidly self-contradictory.

    1. Susan the other

      I kinda thought he was stating the case for accountable taxation. If taxation accomplishes a savings and provides well-being to all then it is good and a proper step forward. Single payer health care – a medicare for all would provide huge savings and provide the health care the country needs. Proper taxation for services is undeniably a savings – do we want private companies fixing potholes and repairing gas and water mains? Can anyone say “extortion?” Taxes to provide full employment would pay off several fold. Funny that it takes a self-confessed Quant to state the case for taxes. I liked what he implied. And I think banking is out of control like a drug addict and is begging for relief. Of course they will never put such a fine point on it publicly.

    2. wunsacon

      Yo Attempter, please expound on this statement:

      >> Right, just communism (which was nothing but a form of capitalism)

      How so?

      Also, if communism was indeed a form of capitalism, is there anything that’s not a form of capitalism?

      1. attempter

        Communism still meant an elite extracted most of what the workers created as “surplus”, and then lived off “investing” it as “capital”. The only difference was that instead of private rackets, the racket was nominally the State, and really the Party. Lenin himself often used the term “state capitalism” in approval to describe what he was trying to build.

        What wouldn’t be capitalism? Anything which abolishes all parasite elites. Anything which empowers people who actually work as full managers and cooperative owners of all economic endeavor. Economic democracy, AKA anarchism.

        Everything I just said about the theft of economic sovereignty and its restitution applies equally in the political realm, for positive democracy, against all extractive elitist forms including “representative” pseudo-democracy.

        1. wb

          So, attempter, I wonder if you’d approve or disapprove of

          ‘The John Lewis Partnership’s 76,500 Partners own the leading UK retail businesses – John Lewis and Waitrose. Our founder’s vision of a successful business powered by its people and its principles defines our unique company today. The profits and benefits created by our success are shared by all our Partners.’

          1. MyLessThanPrimeBeef

            Why no sharing of profits with the most important part of the process – the customers?

            At the end of the year, split the profit three way: 1/3 to management/owners, 1/3 to workers and 1/3 in rebate to customers in porportion to how much each customer spent.

          2. attempter

            I don’t know much about it and don’t have time to research it right now. But my default is to figure it’s a scam, and I’m seldom wrong.

  4. Middle Seaman

    The “Feral Capitalism” is excellent and absolutely accurate.

    I find Obama’s negative polling of 49% in the Empire State way too low. The guy deserves a 75% negative rating at the very least. Now, with the Postal Service asking for elimination of workers’ pensions and elimination of 120K jobs, with a complete understanding that Obama will probably consent, Obama will go into history as much worse than Hoover. He will be credited with transforming the US from somewhat democratic to a complete oligarchy. Way to go Barry!

    1. Jim Haygood

      Shedding 120,000 middle-class jobs at USPS is an unwelcome event.

      Look at the horrific mismanagement, though. USPS is literally weeks away from default. But Congress — which must assent to any cost-cutting moves such as eliminating Saturday delivery — is on holiday. Lazing in the hot sand at Gordon Beach in Tel Aviv, they can’t hear the postal workers’ primal screams.

      USPS may become the third example — following the crack-up of Fannie Mae and Freddie Mac — that 535 political clowns (forty percent of them attorneys) couldn’t operate a summertime lemonade stand, much less a multi-billion dollar enterprise.

      Reality is a harsh taskmistress. Most of us like our letter carriers and the folks behind the counter at the post office. But let’s face it — delivering letters is a job that bright high school kids could do after school. You don’t need to be a rocket scientist.

      Electronic communication and commerce having gutted the demand for paper letters, today’s economy will no longer support paying $41.15 an hour for a function that could be performed by minimum wage earners.

      But it’s the chronic management neglect by KongressKlowns which makes the necessary transition so harsh and painful. Why anyone imagines that these world-class incompetents could design and manage a health care simply boggles the mind. They’ve already run up a negative equity of tens of trillions on Medicare and Medicaid. Dumkopfs!

      1. dearieme

        45 years ago I spent 3 months in the US. I was struck then by disobliging comments about the US Mail, which contrasted with the high regard at home for the Royal Mail. But now all Mail services are in trouble for just the reasons you cite. Hell, our lot cancelled the early morning deliveries a few years ago so you can no longer read the post at breakfast. Next they’ll cancel the Saturday delivery, I expect, and then the Sunday collections. If even a densely populated wee archipelago can’t keep a healthy mail service, no wonder you chaps are having difficulties.

        1. Jim Haygood

          Too bad we weren’t around in the 19th century, when the penny post in London offered three deliveries a day.

          Quill-pen scribblers could exchange notes almost as fast as we volley emails back and forth today.

          Match that, FedEx!

      2. wunsacon

        >> USPS may become the third example — following the crack-up of Fannie Mae and Freddie Mac — that 535 political clowns (forty percent of them attorneys) couldn’t operate a summertime lemonade stand, much less a multi-billion dollar enterprise.

        Jim, although I agree more than I disagree with your statement, can private clowns run a summertime lemonade stand either? Enron, Arthur Anderseon, Lehman, Unisys, and a gazillion other private businesses have come and gone. Do we condemn the idea of privately run businesses over it?

        1. Jim Haygood

          The bad-apple companies you mentioned are a minority of the business population.

          Whereas the management record of Congress is dismal across the board.

          In the political realm, perverse incentives are at work. There, it pays to steal from the future.

  5. Pwelder

    Yves – That link on fracking sand is not up to your usual standards. As you yourself have said with regard to a number of essays by various mortgage minions, it’s so bad it’s not even worth shredding. If there’s anything to it at all, it’s a garden-variety minor OSHA violation by a worker who wanted to take off his dust mask on a hot day.

    I make it a point to read your posts on items in your wheelhouse, which I take to be finance and political economy broadly defined. You are often ahead of the business press with your reporting, there is real value added in your comments, and you have an editor’s sense of what’s important and what isn’t.

    When you dabble in oil and gas, not so much.

  6. Susan the other

    The article from the Colorado Independent about Halliburton’s fracking business in Garfield County: They are worried about the health hazards of breathing fracking sand because silica damages lung tissue and they are concerned about hydrogen sulfide which is being tapped unexpectedly. Sounds like a sloppy enterprise typical of Halliburton.

    Another concern should be that Garfield County sits at the headwaters of the Colorado River watershed and any poisoned aquifers will eventually drain into it.

    One more point. Two years ago there was a mysterious foamy sludge reported coming down the Green River in eastern Utah which killed everything in its path. There was no investigation. So it could have been military. But it also could have been fracking because the Green also has its headwaters in the northwest corner of Colorado where energy exploration is going on.

    The point being: there will be a lot of toxins in Lake Mead.

  7. barrisj

    Sayeth Harold Bloom:

    We live, too, in the age of the Tea Party, a movement that cherishes stupidity and zealotry and hates thinking, reading, and teaching. If these people had their way, we’d be done with teaching. It shows the weak-mindedness that has descended upon America, the proclivity for nonsense and political hatred, the disrespect for literature, history, and serious thinking. There is only one remedy to the current predicament, and that is to encourage people to think independently. And that, in turn, begins with reading. People need to remember the best that has been said and thought in the past. That is the starting point, and that is the path, out of our current appalling situation.”
    (from an interview with Scott Horton in his “No Comment” blog –

    1. reslez

      I suspect learning and literature might be held in higher regard were the practitioners not, on the whole, chauvinist sellouts and shills for the greedy grasping elite.

  8. Freude Bud

    I think that Cole has succumbed to the imminent war with Iran meme. Thus I asked him if he would like to make a bet:

    “Freude Bud
    08/12/2011 at 4:38 pm

    If you mean to say that you think that we are on the brink of war with Iran, are you willing to make a bet? I warn you I’ve been winning this bet for a few years now with various takers, but are you willing? We could make it interesting: how about the price of a barrel of oil–lets say WTI? If you’re right, the price of oil will skyrocket at the time war starts, if you’re wrong you have some chance that the price will be lower now than the end date of the bet.

    The timeline could be up to you. I’m willing to bet a year’s time from now. We’d have to clarify what’s meant by war I guess, but are you willing to put your money where your mouth is?

    (That is if you’re predicting war with Iran–maybe that’s not quite what you are suggesting.)”

    Pretty generous terms if you ask me. Another poster suggested that Cole simply meant that we would go to war with Iran if a Republican were voted in President. I find that construction a bit tenuous, but Cole hasn’t clarified yet or taken me up on the bet.

    In any case, the notion that we are about to go to war with Iran is absurd, has been mooted every two months for the last five or so years, and has always proven wrong. The notion that the Republicans if elected will take us to war with Iran is slightly less absurd, but still pretty damned unlikely.

    This scaremongering is a little surprising from someone of Cole’s repute.

    1. Susan the other

      There are only two reasons to surround Iran: 1. to protect it from the rest of the mid-east and keep the oil flowing, or 2. to place it under siege and strangle it.

  9. Kris Schmidt

    Yves – I could not figure out how to send you a message directly, so I will post here. There is this myth going around that we have a shortage of engineers and scientists. All engineers and scientist know that the real problem is a shortage of positions for them appropriate to their level of education and experience. This article eloquently describes to problem for the lay audience:

    I have several colleagues who left engineering for investment banking due to the better pay and number of job opportunities. I ride in their airplanes and sailboats now and have an insight into banking I never would have had otherwise.

  10. Externality

    The drumbeat for another war grows.

    Strike on Syria is technically feasible, former French general says

    A Nato strike to disable the Syrian army is technically feasible according to experts, such as former French air chief Jean Rannou. But it could make the country’s internal situation worse.

    Nato member countries would begin by using satellite technology to spot Syrian air defences. A few days later, warplanes, in larger numbers than Libya, would take off from the UK base in Cyprus and spend some 48 hours destroying Syrian surface-to-air missiles (SAMs) and jets. Alliance aircraft would then start an open-ended bombardment of Syrian tanks and ground troops.

    The scenario is based on analysts in the French military, from the specialist British publication Jane’s Defence Weekly and from Israel’s Channel 10 TV station.

  11. Ignim Brites

    Stoller: “The credit rating of the United States is not in jeopardy. The U.S. government prints dollars — it can no more run out of dollars than a bowling alley can run out of strikes.” Brazil prints its own money but its rating is BBB+.
    Presumably Stoller would argue that Brazil’s rating should be AAA too. One can argue that the downgrade is meaningless without resorting to the absurd argument that under every circumstance a printed dollar will be credit worthy.

      1. Jim Haygood

        Nonsense. Most of Brazil’s debt is denominated in Reais:

        As of January [2006], the Treasury owed BRL 978.4bn (equivalent to USD 442.3bn)to the public in “domestic” debt securities (for these purposes defined as local-currency obligations), while “external” (hard-currency) debt stood at USD 73.9bn.

        Local debt has grown rapidly in recent years, thanks to Brazil’s ongoing public sector deficit (3.1% of GDP in 2005) and the authorities’ efforts to fund this shortfall in the domestic market. Indeed, on a net basis, the government has both paid down external debt and built its cash cushion in the past two years, thus over-financing its deficit locally.

        The Banco Central do Brasil publishes monthly updates. It is and will remain Brazil’s policy to finance a majority of its debt in local currency.

        1. Cedric Regula

          I had a bunch of Brazil Real gov bonds in my foreign bond fund. But back in the days before the more stable Real, they had no choice at various times to sell dollar denominated gov debt. This is pretty common in S. America.

          Plus corporate debt is dollar denominated even more often, whether in bond sales or direct loans from banks.

        2. Jim Haygood

          Corporations with overseas sales often have dollar income to service dollar debt.

          As for emerging market (EM) sovereign debt, local currency borrowing is much greater than dollar-denominated borrowing:

          Though the US dollar public EM debt market has a
          longer history than its local currency counterpart, the
          latter market is notably larger – more than three times
          larger, in fact.

          Market Cap as of June 30, 2010

          GBI-EMB [local currency] $1,222 billion
          EMBIG [dollar-denominated] $372 billion

          Emerging market nations learned from past crises. Those who can borrow in local currency do. Those forced to borrow in dollars are usually the ones with underdeveloped or dysfunctional capital markets and illiquid local currencies.

        3. Alex

          Thanks for pointing that out, but US$72B of external debt still breaks down the analogy to US debt obligations.

      2. Ignim Brites

        Thanks Alex. I will be careful to avoid Brazilian bonds for not only do they have a substantial default risk but they are paid off in a currency that is depreciating, and over which depreciation they have no control. No wonder their interest rates are so much higher.

    1. Cedric Regula

      The problem that Brazil had – and I can only hope this is an unique anomaly in the history of the world – is they kept running one official currency down to zero, then re-issued another new one.

      This would have a negative impact on both foreign and domestic confidence in the currency, methinks. But then we know rating agencies are just supposed to only consider default risk, and not the fact that you lent good money and eventually get paid back in toilet paper. So my guess is the rating agencies screwed up again when they handed out the BBB+ rating to Brazil.

      This go around they changed the name to the “Real” when they issued the new one in the latter 90s. My Brazil insiders back then informed me that means “this is the real one” when translated from Portuguese.

      It has been the best one so far. They did a few mods to the economy too, like sugar ethanol for domestic consumption and discovering oil for export. Then Embraer had good success in the smaller jet airliner market left vacant by Boeing and Airbus.

      So balance of trade issues improved greatly, tho they now seem to want to make a big push on developing a consumer consumption market, so we’ll have to see how that goes.

      But Brazil is not the US nor is the US Brazil. Probably nothing to see here.

      1. Ignim Brites

        I like the description of the Real as the best Brazilian currency so far for its remarkable nonchalance and tone of ironic amusement.

        “But Brazil is not the US nor is the US Brazil.” Sure. But when you have people seriously making the argument that the US should have a triple A rating because it can print its payments ( ); well this should give one pause. The fact is that there are political constraints on the ability of the Treasury or FED to do this.

        But for the record the downgrade is meaningless as the markets have amply demonstrated.

  12. Externality

    The US is forcing the impoverished people of Iraq to pay billions of dollars in tribute “reparations” to the US government and US corporations.

    In addition to making hundreds of millions of dollars in reparation payments to the United States, Iraq has been paying similarly huge sums to corporations whose business suffered as a result of the actions of Saddam Hussein. While millions of ordinary Iraqis continue to lack even reliable access to drinking water, their free and representative government has been paying damages to corporations such as Pepsi, Philip Morris and Sheraton; ostensibly for the terrible hardships their shareholders endured due to the disruption in the business environment resulting from the Gulf War. When viewed against the backdrop of massive privatization of Iraqi natural resources, the image that takes shape is that of corporate pillaging of a destroyed country made possible by military force.

  13. K Ackermann

    I’m surprised people here aren’t expressing anger of BART’s actions to deprive people of their ability to communicate.

    I watched Sicko again yesterday, and I forgot about the part where Moore points out that Americans have been de-balled by the government.

    Eunuchs waiting for whatever happens to them.

    BART offered a ready-made excuse for sheep: it’s dangerous for people to gather on a train platform.

    Because, you know, that never happens any other time.

    I’m just going to start taking whatever I want from people. The tone has been set.

  14. bmeisen

    “What the Germans are reading” is a shitty title that sends another piece of schrapnel into the back of an objective and informed American citizenry. Bild is the most widely read newspaper in Germany, printing about 3 million which get around to some small multiple thereof. It’s garbage and it has dubious influence on German politics. There are however a number of social dem sponsored or social dem leaning dailies, including Frankfurter Rundschau, Berliner Zeitung, Tageszeitung, Süddeutsche Zeitung. In total they print millions which get around to some small multiple thereof. In addition the establishment center/right newspapers like the Frankfurter Allgemeine, Stuttgarter Zeitung, Die Zeit (a weekly) that do a better job of maintaining journalistic standards than the NYT and the WaPo do. This is a country that is smaller than Texas, with a population of 80 million and 418 universities, the vast majority of which are free or virtually free to the millions of students who attend them. Germany is reading more than Bild.

  15. Francois T

    What’s this cease and desist letter from REBA’s gonna do? Register of deeds is simply doing his job; he’s supposed to cease and desist from doing his job?

    Like Hell!

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