Links 8/9/11

Explosive Jackie O tapes ‘reveal how she believed Lyndon B Johnson killed JFK and had affair with movie star’ Daily Mail (hat tip reader furzy mouse)

DSK Accuser Sues Over Alleged Sex Assault Bloomberg

Robots put leadership under skills pressure Financial Times

Earth’s Dirty Secret: Our Magnetic Field Traps Antimatter DailyTech (hat tip reader Valissa)

Start-up to release ‘stone-like’ optical disc that lasts forever ComputerWorld (hat tip reader furzy mouse)

Feds Turn To Hackers To Defend Nation In Cyberspace Hufffington Post (hat tip reader furzy mouse)

‘Mindless violence’ spreads to Liverpool, Leeds and Birmingham Independent

Inflation Climbs in China on Higher Food Prices New York Times

Austerity Plan Might Not Work for Spain and Italy New York Times. As if they work anywhere?

Why U.S. of AA Matters Credit Writedowns

CHART OF THE DAY: French CDS, ‘Nuff Said Clusterstock (hat tip reader furzy mouse)

ECB Wrote Detailed Letter To Italy “Dictating” Reforms Wall Street Journal (hat tip reader Foppe)

Slithering to the wrong kind of union Otmar Issing, Financial Times (hat tip reader Swedish Lex). This is a very clear and well argued piece.

Senate to probe S&P downgrade Financial Times. This probe looks misguided, see our post today for a related discussion.

Rumsfeld Loses Attempt to Have Torture Suit Filed Against Him By Two Contractors Dismissed FireDogLake

Mysterious company dissolves after giving $1 million to pro-Romney PAC The Ticket (hat tip reader Suzanna). I missed this story last week, but this is the sort of thing that might not go away

Hedge Funds Hit ‘Sell’ Wall Street Journal

Who has got the margin call? John Hempton. He argues that the downdraft was hedgies hit by margin calls.

IRS: 1,470 millionaires paid no income tax in ’09 USA Today (hat tip Buzz Potamkin)

IRS Buckled To GOP Pressure On Secret Donations, Lawyer Says Huffington Post (hat tip reader Francois T). There is more to this than meets the eye. The 5 donors targeted were believed to include both the Kochs and Soros. But Soros is no longer giving to Obama, so going after him would make it look non partisan (although there is another layer…..big but not as big as Soros donors would probably be deterred….so you probably need to be a real donation maven to triangulate accurately).

Maine Quashes Wall Street Negotiated Deals Citing No Free Lunch Bloomberg

The Impotence of the “Intellectual” Elite Arthur Silber (hat tip reader BDBlue). Oh good, I’m not the only one to be underwhelmed by that piece.

Antidote du jour:

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  1. dearieme

    typo on date of links. Mind you, why not use the jolly, international 2011/08/09? Isn’t that what progressive people should use?

    P.S. Dreadfully disappointed that nobody wanted to discuss the wonder that was the Soda Dogs. We howled with laughter.

      1. aet

        Nice to see somebody like you D honestly come out against progress. Refreshing, after all the usual lies from the “regressives”.

        I also like your “argument by insult” style – that’s a GOP thing too, is it not?

        1. aet

          And that the insult is both subtle and iml plied relly helps to convince people that you want the best for them and to help with your comments.

          Doesn’t it?

        1. ambrit

          Dear Stupid Southerner Expat;
          As the lately lamented, (by his absence from the political discourse,) Ross Perot once infamously remarked; “You hear that giant sucking sound? That’s the job your ol lady’s going to have to take (give?) after your job gets ‘outsourced’ to some other third world country.”
          Diety! I miss Ross.

          1. Just Tired

            ‘That’s the job your ol lady’s going to have to take (give?) after your job gets ‘outsourced’”

            I thought that job went to your crazy old aunt in the basement.

    1. Cedric Regula

      I really liked the soda dogs too. Maybe we’ll get a re-run on a slow market day (check with Soros for a date).

      But as usual, whenever I see these clips, I want to start improving on them with editing and a musical score sound track.

      This one may work with xylophone music played to the nursery rhyme melody of Frère Jacques (but I always defer judgement to artistic people).

      Frère Jacques, Frère Jacques
      Dormez-vous, dormez-vous?
      Sonnez les matines, sonnez les matines
      ding ding dong, ding ding dong.

  2. Diego Méndez

    Your “antidote du jour” makes me hungry… It looks so tasty. A short grill, some salt and French fries… Delicious!

    1. MyLessThanPrimeBeef

      I think it recently won the ‘Cutest Frog of the Pond’ contest.

      Please, go kill some vegetables instead.

  3. Max424

    I just got here and was sorta lazily going through the links — from the bottom up — wondering, hmm … what do I feel like reading today, and I arrived at ‘Mindless violence’ spreads to Liverpool, Leeds etc. and I skipped over it, thinking, riots in England, so what; then it dawned on me, is it possible that “mindless violence” was in quotation marks?

    And I went back to it, and sure enough it was, and I laughed my balls off.

    1. Paul Tioxon

      Surely the “conventional wisdom” on violence is that when it is not mindless, it is policy in the national interest.

      1. Cedric Regula

        There is “tactical violence” and “strategic violence” too.

        Also “psyop violence”, which is a very tricky one because it leaves no evidence- here you get the target’s neurons to beat the crap out of the target. Reportedly, it can be done at a sociological or national level as well. Usually implemented by beaming satellite waves at them to get the necessary beam strength and area.

        The Federal Reserve will try that one again this afternoon. We punish the chinese with food inflation that way in retaliation for taking all our jobs away. Works on indians too which may or may not be collateral damage. War is not perfect, not even the psycho kind.

        That’ll teach ’em for messing with our economy.

        1. Cedric Regula

          Well, The Fed decided not to pull the QE III trigger. Satellite beam must need more time to re-charge.

          Went with the hardened ZIRP line instead. They are now predicting full employment and rising inflation to occur exactly in mid 2013. Now we know.

          1. MyLessThanPrimeBeef

            Are these guys graduates of the Mayan End of the World Economic Prophecy school?

          2. Cedric Regula

            Not that I am implying wall street does. Dow dropped 400 points just before and during the announcement, then quickly tacked 400 points back on.

            I’m looking for a day or two of market commentary about how wall street both liked and disliked QE III, and depending on market close, if they decided something else is going on, good or bad, of course.

    2. psychohistorian

      I read this earlier at Crook & L:iars

      One London blogger notes:

      In one NBC report, a young man in Tottenham was asked if rioting really achieved anything:

      “Yes,” said the young man. “You wouldn’t be talking to me now if we didn’t riot, would you?”

      “Two months ago we marched to Scotland Yard, more than 2,000 of us, all blacks, and it was peaceful and calm and you know what? Not a word in the press. Last night a bit of rioting and looting and look around you.”

      Eavesdropping from among the onlookers, I looked around. A dozen TV crews and newspaper reporters interviewing the young men everywhere.’’

      1. MyLessThanPrimeBeef

        There is yin violence and there is yan violence.

        We usually are not aware of yin violence. It’s less visible and/or takes place over a longer period of time.

        Nagging a person and causing him to die of heart attack years later is not less violent than just sticking a knife to the same victim.

        Seducing someone to listen to music that’s too loud for him that he loses hearing years later is, again, not less violent than slapping the victim too hard on the head.

        Tempting someone with decadence would be the yin equivalence of robbing the guy.

  4. Jim Haygood

    Re inflation in China [NYT] … on a composite basis, the stock indexes of Brazil, Russia, India and China (the BRICs) are now in bear market territory.

    A great secular theme of the past decade, and particularly the post-2008 recovery, has been the rise of the developing world. In 2005, Brazil and Argentina repaid their IMF debt ahead of schedule, and have boomed ever since.

    Are we back to the hoary 20th century paradigm of ‘When the US sneezes, the developing world catches pneumonia’?

    Too early to say. But the mother of all secular themes is that an unstoppable Chinese economy is the buyer of last resort. From a contrarian perspective, this notion rhymes with the universal belief (circa 1989) that a mighty Japan would end up ruling the planet.

    If the overheating, overbuilt Chinese boom falters, a global rethink is in order. Crude oil’s headlong plunge is a clue that Chinese demand may be sliding. There goes a global locomotive which was thought to be bulletproof! Germany’s export sector wouldn’t like this a bit.

      1. MyLessThanPrimeBeef

        Nor paintings for reality.

        This is not a pipe.

        Don’t confuse words with reality either.

        1. aet

          The real economy gets consumed.
          Stock markets get traded, and nobody eats money.

          Don’t confuse the stock marlkets with the real economy.
          And words are a “subset” or piece of reality: which language makes no difference.

          Don’t confuse lies for truth.

          1. MyLessThanPrimeBeef

            Paintings are a subset of reality as well.

            But a painting of a pipe is not a pipe.

        2. hermanas

          Years ago, a novel mentioned a man confused about (playboy) photographs and real women. Was it Vannegut’s work?

  5. Skippy

    Umm…7+T just went poof with one rotation of the planet…guess they don’t make *price added electrons* like they used too!

    Skippy…Fraud always collapses sooner or later, no underling *true equation*, hence the need for innovation [LOL].

    PS. someone crack S. Forbe over the head, his brilliant idea is to unleash the great american entrepreneurs, by unburdening them from social liability’s…delusional leadership…cheer leaders…Daft!

    Ethos dead dance…with their beauties…fiat electrons spinning…just to check it out.

    1. ambrit

      Most Felicitous Skippy;
      Ah yes, Busby Berkely would have gleefully loved that! Get a gander at the “We’re In The Money” sequence from ‘Gold Diggers of 1933.’ Now that’s what I call a ‘Money Shot!’

        1. ambrit

          Most Esteemed skippy;
          Thanks for that link! Where is our modern day Busby Berkley? With what looks to be a New Great Depression looming, we need Berkley Channelers more than ever. I forsee a big revival of Stoicism.
          LAKs, your American Cousins.

    2. Cedric Regula

      I was expecting the Fed to release a research paper soon showing how stock prices are “sticky”, but I imagine that project has been shelved for the time being.

      1. aet

        It’s not the “class” it’s their money that rules.

        People forget that who they are, even in that class, is nothing compared to why the have power.

        Even the wealthy are trapped by class.

        1. ambrit

          Dear aet;
          May I most humbly and grovellingly suggest that you’re confusing ’cause’ and ‘effect?’
          ‘Class’ can be described as an illusion, the effects of its’ implemation cannot. (Unless you are an afficionado of Mary Baker Eddy.) The secret here, as usual, is education of character. Balance is all.

          1. aet

            “Class” ceases to exist once it has no legal consequence or significance. And it actually doesn’t
            not where I’m from – if the machinery of justice blind to it, then ‘class’ truly is an illusion, a distiction without significance.

            Otherwise, not.

            Equality before the law, realized, is in actual fact a “classless” state of affairs.

            People riot when enough of them perceive unfairness. that’s classy, in my book.

            Class doesn’t matter, however you wish to define i only conduct.

    1. aet

      yeah the US seems to have only drawn one lesson from the WWs of the last 100 years: violence works.

      And it’s OK to lie, to everybody, if you think it helps.
      Well, maybe not the second one so much. but definitely the first.

      I like moral superiority more than I like military superiority. But the armed forces forcefully dis-agree.

    2. LeeAnne

      and a plug for Blackberry:

      ‘Rioters and looters, … maintained contact with each other, planning attacks on the BlackBerry Messenger service, which is encrypted and so cannot be accessed by the police.’

      Their FLASH camera is a must have. Excellent for photo IDing police in poor light. Great magnifier for close-ups and videos; photographing wounds, etc.

      ‘Ed Miliband, the Labour leader, welcomed the decision for Cobra to sit and called for “the strongest possible” response to the disturbances.

      Shocked, Shocked. Makes me wonder if these words are sounding as hollow, sanctimonious, and hypocritical to masses round the world. Sure do hope so.

      ‘He said: “I am shocked by the scenes we are seeing in parts of London. This violence and vandalism is disgraceful criminal behaviour. What we need to see is the strongest possible police response to restore calm and security to our streets and for communities to work together.”‘

      ‘Co-operation from the Canadian phone giant Research in Motion, which makes BlackBerry handsets, could prove vital in securing prosecutions. Unlike Twitter – which is open to the public and easy for the police to monitor – BlackBerry messaging uses a private network. Patrick Spence, managing director of BlackBerry UK, said last night that his technicians were willing to “assist” police investigations. But the company refused to say whether it would hand over users’ data without a court order, or give police access to the messages. Last year it refused to co-operate with the governments of Saudi Arabia and the UAE when they sought access to encrypted messages. ‘

  6. Philip Pilkington

    From the FT Eurozone piece:

    “What we see happening now is something quite different. More and more national taxpayers’ money is now at risk to “save” the euro.”

    This argument gets a lot of traction, but I don’t think its true. Myself, Mosler and Auerback had an interesting email exchange on this a while back and we figured it skews the facts.

    No taxpayers have been ‘charged’ for the bailouts. Ask a German if they’ve paid their ‘PIIGS tax’ recently and see what sort of response you get.

    What happens is that EU countries take on more government debt. Some claim that this will act as a burden on their children but then we get into the whole ‘inter-generational accounting’ mess. I.e. Does this debt REALLY burden future generations or should it be seen as an endogenous element in the Eurozone economy (obviously, I think the latter is true).

    Then you have to consider the trade dynamics within the Eurozone itself. If Germany didn’t join the Eurozone it wouldn’t have been able to export as much. So, if they had wanted to get the level of economic growth they had in the past few years they would have had to run higher budget deficits (read: more government debt). By running an export driven economy, the Germans used the periphery as a consumption base. That they now have to incur government debt to pay for this seems fitting given the nature of the union.

    Finally, as I said before, no Germans have incurred a ‘PIIGS tax’, nor will they. If the German government decide to reduce deficits that is an independent decision. What’s more the German bund still has low enough yields. But what if these rise in the future? Well, that will reflect their mishandling of the crisis and NOT their using government debt for bailouts.

    I might write something about this when I’ve finished up what I’m doing at the moment…

    1. aet

      I agree.

      People ought to remember: “Haste makes waste”, particularly when the Press stridently insists that “something must be done!”

    2. ScottS

      People are loss-averse. They don’t second-guess or even remember the good times.

      Only when the train stops suddenly is the motion apparent.

    3. MyLessThanPrimeBeef

      Maybe it’s an endogenous burden on future generations?

      But this is I am more certain: If Chian didn’t join the WTO it wouldn’t have been able to export as much. By running an export driven economy, the Chinese used the the rest of the world as a consumption base. That they now have to incur government debt to pay for this seems fitting given the nature of the trade pact.

      1. psychohistorian

        MLTPB says:

        “Maybe it’s an endogenous burden on future generations?”

        Like maybe Fukushima? Or is it bad planning and risk assessment?

        Does real science have endogenous variables to the degree economics does?

      2. Philip Pilkington

        If it’s endogenous its simply part of the economy.

        Example: Petrol is endogenous to the working of an engine. You can complain petrol costs too much. But if you remove it the engine stops working.

        That’s what I mean by ‘endogenous’.

    4. Jim

      Philip argues, “Then you have to consider the trade dynamics within the Eurozone itself. If Germany didn’t join the Eurozone it wouldn’t have been able to export as much.”

      I don’t buy it. Were Germany not part of the Eurozone, it could adjust its currency in the same fashion that China has done.

      The German citizens are getting shafted, and it’s regrettable that the same NK readers who would take the GOP to task if it executed an unpopular policy because Americans are too “ignorant” to know what’s good for them, are giving the ECB and the EU a pass for doing the same.

      The truth is, the German voter was explicitly promised, no fiscal union. If the EU and ECB want one, have them put it to a referendum.

      Otherwise, it’s taxation without representation.

      1. Philip Pilkington

        “Were Germany not part of the Eurozone, it could adjust its currency in the same fashion that China has done.”

        What a load. Where would it’s products have gone? To the wealthy moon-colony circling Mars?

        People need to get real. They need to start looking at the dynamics of consumption as well as production. Otherwise they’re just spouting moralistic nonsense.

        “Devalue,” they will say, ” and sell to… erm… er… someone that… er wants to er… buy… shit I don’t have a theory of demand, therefore I’m irrelevant.”

        P.S. I wrote one on this… on the way hopefully.

        1. Jim

          Philip, why not put it to a vote in Germany, fiscal union or no fiscal union.

          Or are the German people not smart enough to know what’s good for them?

          Would you feel the same way about Congressman Ryan’s bill that would turn Medicare into a voucher program. Are his supporters correct when they argue that the American voter is simply not smart enough to realize that a voucher program is the only way to “save” Medicare?

  7. Jim Haygood

    Excerpts from an article that appeared after nudecapitalism’s publishing deadline:

    “Trichet has become the de facto president of Europe,” said Marco Valli, chief European economist at UniCredit Global Research in Milan. “He is the only one who’s delivered the leadership necessary during this crisis.”

    In his latest attempt to stop the debt crisis from spreading, Trichet convinced a majority of the ECB’s 23-member Governing Council to start purchasing Italian and Spanish government debt, overcoming opposition from Germany’s Bundesbank in a move that economists estimate could cost as much as $1.2 trillion.

    For now, the gamble is paying off. The yields on Italian and Spanish 10-year bonds, which rose to euro-era records last week, have plunged about 100 basis points since the ECB started buying the nations’ debt yesterday. They were at 5.08 percent and 4.96 percent, respectively, as of 11:16 a.m. in Frankfurt.

    The longer the ECB has to wait for governments to approve the EFSF as a bond-buying entity, the more assets it may have to accumulate. That may hamper the ECB’s ability to “sterilize” the purchases by taking the same amount of money from the system in the form of deposits from banks. If it fails to do so, the purchases could swell the money supply and fuel inflation.

    Trichet’s the president of Europe, like I’m president of the solar system.

    Does anyone recollect Bozo Bernanke’s first $300 billion Treasury-purchasing program in March 2009? Immediately the 10-year note yield plunged from 3.0% to 2.5%. But by June, it rocketed to 4.0%.

    Galactic president Trichet will get exactly the same results. Italian and Spanish yields are bottoming right now, on the jakeleg Oxycodone rush of free money. Three months out, they’ll be higher than ever. You read it here first.

    As for sterilization, OECD economies are best modeled as a Ponzi scheme. You CANNOT withdraw liquidity from a Ponzi scheme without crashing it. Neither the Federal Reserve nor the ECB will EVER materially shrink their balance sheets. Their junk bond purchasing sprees are permanent.

    1. aet

      Money people should make the rules for money – they always end up doing so, anyhow.
      The primary qualification is actually that such be HONEST money people.
      Without that, money people are as bad as thieves.

      1. ambrit

        Honest Money people? Didn’t some Frenchman once remark that; “..large fortunes start with large crimes..?”
        I won’t even belabour you with that old chestnut: “Honest money is a doubtful oxymoron.”

      2. MyLessThanPrimeBeef

        That’s like saying violent people should make the rules for violence, that they end up doing so anyhow.

        1. aet

          History shows that after the first gen such people themselves see the need for social stability and prosperity, as such is integral for the preservation of their own personal fortunes as well.
          the Norman conquest was a net gain for britain, but it took a while.

          Societies settle down, and ours are now very well stlled indeed.

        2. aet

          Successfully violent people do, don’t they?

          They always have in the past. But after that success, peace becomes to be in their interest too.

          War of any kind is a obsolete, and a waste.

  8. Foppe

    Just to point out: Here’s the BBC interviewing 2 girls who, according to the caption,

    took part in Monday night’s riots in Croydon, who boasted that they were showing police and “the rich” that “we can do what we want”.

    The pair were drinking wine looted from a local shop at 09:30 BST the following morning.

    Croydon was one of several areas plagued by unrest on Monday night, on a third night of riots in the capital. There were also violent scenes in several other English cities.

    And note especially how we’re ‘just looking’ at all of the fires that are burning, while these two girls are telling the BBC their story. Michael Moore is also quite good at this stuff, overlaying footage of ‘terrible things’ with sad music, and then showing someone else to be laughing (such as G.W.). I’m not sure if this is intentional, but it sure seems weird to me.

  9. Valissa

    re: millionaires who didn’t pay any income tax

    A few months ago there was an article in Business Week about the tax issue (sorry I read it in print so don’t have link) and they pointed out 3 things. The whole focus on people making more than 200K or 250K in salary is only a small part of the tax problem and any increase in taxes there won’t bring in that much money, relatively speaking. The other two issues (where most of the tax losses are occurring) were the big decrease in corporate taxation over the years (due to policy change – from lobbyist influence – and related loopholes) plus all the loopholes the wealthy use to avoid paying the graduated rate they’re supposed to pay. SO that increasing taxes on the earner which congress was focussing on would not deal with the lmuch arger lost tax revenue due to the other two items.

    Some of you may remember a couple of years ago when Warren Buffet affered to give 1 million to the favorite charity of any of the uber wealthy if they would publicly admit that they paid a smaller percentage of taxes than their admistrative assistant did. Not surprisingly none of them took him up it.

    1. Anonymous Jones

      This is an interesting take, but I would at the very least reformulate the assessment from “small” problem to “small but substantial” problem. No matter how small the problem may be, I would love to see it ameliorated.

      Also, I am not very fond of the focus on the corporate income tax. Despite legal fictions, corporations are not really persons. It is the owners and other stakeholders in corporations who really bear the burden of taxation. Generally, the corporate tax is an anti-tax-deferral mechanism for these owners and stakeholders. There are, as they say, many ways to skin this cat.

      One way to formulate the goal of income taxation is to make sure the ultimate beneficiaries of any income bear a burden of taxation that has a substantial and reasoned relationship to such income and the services that provided by the government for that beneficiary (e.g., those with more income receive greater proportional benefits from the security provided by the government (police, army, etc.)). This is of course always imperfect because of the difficulty of defining income, especially with respect to randomly selected periods of time (such as a fiscal or calendar year, when the income can be indeterminate over much longer periods of time).

      It’s a complex subject, but it does seem that many, if not most, people think the burdens of income taxation should be shifted upward from their current state.

      1. Lyle

        So to take the suggestion about corp tax, we should just abolish it. First raise cap gains and dividend taxes to regular rates. (Note that this would also fix the preference of the tax code for borrowing over equity). Then for the rest of the revenue, put in the vat. Limit the mortgage interest deduction to 1 home and no more that 500k in loan amount. Further, cash out re-fis cancel the mortgage interest deduction (to make all borrowing the same tax wise).

      2. Valissa

        IIRC, GE is famous for having the best corporate tax department (and the best very highly paid tax attorneys) and therefore despite being hugely profitable GE paid no taxes last year. Also Google only paid something like 2% in taxes and they are also hugely profitable. Both are big Dem donors, btw. Apparently corporations get to offshore jobs and get tax breaks for making their money outside of the US on top of that.

        Can’t remember if it was the same article or another, but it used to be that about half the taxes the IRS took in were from individuals and half from corporate taxes. Now the IRS takes in a much smaller percentage from the corporations. Both corporations and the very wealthy have all kinds of tax loopholes that aren’t available to lesser mortals. Sure the folks making 200-250K should pay more taxes, but will there be any effort made to close those loopholes for the other two categories?

        I am not anti-corporation, I just think they should pay their fair share. As always it appears that the mega-corporations (esp. the globalists) get more benefit from the tax laws than the little guy corporations. Honestly I don’t know enough about it to have an opinion on the best way to determine what a ‘fair share’ of taxes is. Corporations get many benefits from being based in the US, whether it’s taking advantage of the infrastructure or the overseas influence of Pax Americana.

        1. Cedric Regula

          I looked into corp tax collections

          (not max nominal rate – it’s 35% if you missed the bazillion times that’s been in the press)

          a bit lately

          (not too hard – I don’t work for a think tank, the IRS, the Treasury, Mr. O’s Council of Economic Advisors, nor a Presidential Special Commision on Screwing Citizens, Huffpost or any other investigative reporting media, the FBI, CIA, NSA or Men in Black (tho I’ve applied), The Roosevelt whatever’s, or any other place that pays money)

          and have come to the conclusion it is classified info.

          It does seem to get released after a significant time lag, and I found a real enough looking report which put the 2005 number at 15% of total Federal income tax actual revenue.

          Then I was recently shocked by reading some press article recently that intimated it was 7% more or less . But the article didn’t reference the data source or even the year the data was collected. I am sure the 2008 number was crappy but this article was recent and corporate profits for the trailing 12 months are just about up to pre-crash levels.

          If anyone has data on this I think it would be worth a main post.

  10. ambrit

    Just read CNNMoney short piece about home ownership falling to lowest level since 1965. This is a big deal. My parents emigrated from England in the late 50’s to the New World partly in the hope of becoming ‘owners,’ a long cherished desire in the European ‘Working Classes.’ America has benefitted hugely from this century long migration of strivers. To drop back to old style Aristocratic class relations is nothing short of a repudiation of the ‘American Dream.’ Mark my words, nothing good will come of it.

    1. ScottS

      Seriously. It will get ugly when people wake up to the broken social contract. I hope the coup will be a bloodless.

      So are there any countries looking to accept America’s and the rest of the world’s ensuing brain drain?

  11. tz

    More details on Romney Flash-corp moneybomb:

    From the Washington Post, Monday, Aug. 8:

    It didn’t take too long to smoke out W Spann LLC, the mystery corporation that sprang up, wrote a $1 million check to a political action committee backing Mitt Romney and then dissolved. W Spann, it turns out, is the creation of Edward W. Conard, a former managing director of Bain Capital, the investment firm once headed by Mr. Romney.

    Like many mega-donors, Mr. Conard appears to have preferred the comforting shield of anonymity, masking his identity behind the corporate veil when he contributed to the Romney-backing group, Restore Our Future. But the campaign finance laws are premised on the notion that disclosure — effective disclosure — is essential. Mr. Conard said in a statement that he created the company and authorized the contribution “after consulting prominent legal counsel regarding the transaction, and based on my understanding that the contribution would comply with applicable laws.” That is subject to dispute.

    1. MyLessThanPrimeBeef

      If you and Barry over there can flip 100 burgers each a day and if business is slow that the shop only sells 100 burgers that day versus 200 burgers the day before, then your and Barry’s productivity each declines 50%, if the boss doesn’t fire one of you.

      If he fires you, the same Barry now has doubled his productivity. He’s more efficient and productive. He’s not a lazy bum any more.

    2. Cedric Regula

      “Worker productivity” is another economics misnomer. If we just rename it “business productivity” you can start to make more sense out of it.

      My bet is that overhead related to capital investment and fixed costs amortized less well and ate into “output”. It’s not because workers started working slower because they fear layoffs.

      Conversely, it’s kind of fun, just for a moment, to imagine the productivity of a corporate CEO. I get an image of a movie of the corner office and exec conference room and a Charlie Chaplin character playing at 11200 frames per second. The others in the scene are scaled down in speed depending on relative base salary and what bonus they are on track for that year.

      1. MyLessThanPrimeBeef

        I have lost the ability to track economic misnomers ever since I switched from beef to chicken to dumpster dining.

      2. psychohistorian


        You would be trying to kill those poor global inherited rich the minute you add them to the equation… many frames per second can they take… might be fun to find out.

        On further consideration this maybe why we don’t see them behind the curtain….they are just moving too fast.

        1. Cedric Regula

          They would certainly disappear into the ether, and they know it too. That’s why they have their hedge fund manager make corporate CEOs go at 11200 frames per second.

          Then 14 frames per second somewhere nice and relaxing seems like the proper speed to chill out at.

    3. aet

      There’s no “assumptions”, it’s simply the amount of output you can produce per given unit of input.

        1. Cedric Regula

          Material can come in slow too. Or if workers increase in numbers, temps or otherwise, and sales revenue from shipments falls, then that is declining productivity.

          If you are a multi-national corporation, it is probably just accounting noise. At least at macro-economic scale.

  12. barrisJ

    Culled from John Aravosis’ blog, an amazingly prescient profile of Obama, written in 2006 by Ken Silverstein Ken Silverstein in Harpers Magazine, detailing how BHO and his handlers “branded” him to appeal to both “progressives” and to Big Business, and to whom Obama would eventually owe his loyalty. Silverstein’s article ends with this sentence:
    On condition of anonymity, one Washington lobbyist I spoke with was willing to point out the obvious: that big donors would not be helping out Obama if they didn’t see him as a “player.” The lobbyist added: “What’s the dollar value of a starry-eyed idealist?”. What indeed?

    1. psychohistorian

      If our pres is the starry-eyed idealist playing n-dimensional chess with the global inherited rich, their military and minions then may the force be with him…..

      Us pond scum are trying to do the right thing also.

      Into the breach…………..

    1. Externality

      This is the result of a decade of asset stripping and exploitation through predatory interest rates:

      But that pain has been compounded by debt that has made it harder for the company to make a profit. The investors [led by Wasserstein & Co.] who acquired Harry & David in 2004 first loaded it up with debt to finance the deal. Then they piled on more debt a few months later to pay themselves back all the cash they put up to buy the company.

      “This is a classic case of a leveraged buyout,” said Raj Parikh, dean of the business school at Southern Oregon University in nearby Ashland. “They hoped to increase the earnings through a combo of slashing expenses and then paying off the debt.”

      Ellis Jones, chief executive of New York private equity firm Wasserstein & Co., which led the buyout, acknowledged that the interest payments that Harry & David now must make are a drag on the company. But he said the borrowing appeared prudent at the time.

    2. Externality

      And profitable exploitation at that:

      Meanwhile, thanks to the debt, Harry & David’s new owners have already gotten back everything they invested in the company, and then some. In the acquisition, the investors put up only $82.6 million in cash. Since then, they have received more than $100 million in cash, directly and indirectly, from Harry and David’s coffers — and they still own the company.

        1. psychohistorian

          I think that it is in our best interests to put some of those “smart” people in jail for the rest of their lives. I find it interesting that it seems to be all “legal”. If I were one of those 2700 folks I think I would be pretty upset and wonder if we will read about any of them relieving those frustrations in the news.

          I have a small Koch pension and wonder if it will be there when it is due me. They probably won’t do anything until further down the road when they can insure themselves that those union paper makers can’t get to them. GFL with that.

          1. aet

            just because something is legal, does not mean that it is equitable.

            Inequity cannot stand, for inequity is as unjust as illegality.

  13. Hugh

    Poverty in the industrialized world is a product of elite looting. I second the view that the only “mindless” aspect of the rioting is that it took place in local neighborhoods and not in the financial district. If it had taken place there, does anyone doubt that the police response would have been very different and much more aggressive? If the poor burn down their own neighborhoods, who cares? But if they attack the temples of kleptocracy, well of course that is an entirely different matter.

    Characterizing the violence as mindless is a way of trivializing and discrediting it, the first steps in ignoring the causes which sparked it.

    Trichet is a kleptocrat. None of his actions are geared toward fixing anything. They are instead aimed at making countries safe for looting whether this is protecting the rich who own bonds or pressuring countries like Italy and Greece to open themselves up further to the depredations of the looters.

    Silber expresses the frustration many of us have with those who are still struggling with the reality that Obama is at least as conservative as George Bush and substantially more conservative than Ronald Reagan and Richard Nixon and who still can not wrap their minds around how completely and utterly they have been had, even after more than 2 1/2 years of daily events reinforcing this view staring them in the face.

  14. ScottS

    Re: “Feds Turn To Hackers To Defend Nation In Cyberspace”

    Bwahahahahaha! Why even waste your time trawling for geeks?
    1. It’s such an obvious sting operation. “Hey, everyone who’s good at committing crimes! Come to the authorities! We’ll give you jobs, we promise!”
    2. Related to #1, won’t they just push you to inform or sting other hackers? That’s a good way to make friends.
    3. Hackers do what they do for entertainment. Working for the government is rarely entertaining.
    4. In lieu of entertainment, hackers could be persuaded with money. Since when are government jobs paying well?
    5. Hackers resist authority by definition. They don’t want to be told what to do, especially by someone they don’t respect. Why on Earth would they sign up to be a cog in the largest authoritarian regime?

    1. reslez

      Why on Earth would they sign up to be a cog in the largest authoritarian regime?

      Because they need money, because they want to avoid jail, because their ego is gratified by the idea of being recruited by some security agency. Arrogance is a big part of the culture. People who are active on the scene say it has largely been infiltrated by law enforcement and those who shill for them in exchange for tiny amounts of money and lots of ego stroking.

      1. ScottS

        You mean Adrian Lamo? It hasn’t even been proved that he did in fact speak to Bradley Manning.

        Sorry, I have to disagree. Money could be better had in the private sector, or criminal sector (as if there’s much difference). And hackers can hack with a netbook, which can be had for a few hundred dollars. After that, it’s all about the lulz.

        Rolling over to avoid jail time is possible — just as it was in the Bradley Manning/Adrian Lamo case. But this is hardly the basis for a burgeoning job field.

  15. MyLessThanPrimeBeef

    Is a way out of this for the government to apply for membership in the American Automoible Association (AAA) or just nationalize it?

    1. Cedric Regula

      Name change could help. Association of American Areas.

      People couldn’t help but abbreviate that to AAA when referring to us.

  16. anon

    london mayor/joke boris johnson vs residents of south london’s riot-torn clapham junction:

    “boris, why don’t you talk to the youth? talk to the youth!”

    “boris, when you shut down youth centers, this is what happens! this is your fault!”

    “you talk about robust policing, what does that actually mean?”

    “where were they [the police]? by 5 o’clock, we knew they were going to hit, and no one was here… no one was here to defend me”

    “what about mark duggan [29yo father of four shot dead by police submachine gun, whose killing is the catalyst for all this mayhem]? what about the response to his family?”

    “why are you here now? three days too late! why are you here now? why are you here now? three days too late!”

  17. MyLessThanPrimeBeef

    From Creditwritedowns:

    A nation that issues debt denominated solely in its own currency and which is in full control of its monetary policy, cannot default unwillingly.


    Just curious and I don’t know the answer – if a nation (let say some country other than the USA) issues too much debt in its own currency that it has to lopped off a few zeroes, is that considered default? Perhaps if we see it as ‘willingly’ lopping off zeroes that it’s not strictly defaulting unwillingly?

      1. MyLessThanPrimeBeef

        A government can be said to be morally in default or morally bankrupt for allowing a situation like that to happen.

  18. Foppe

    I don’t think this is anything really worth writing about, but I would just note that there is something really strange going on in Felix Salmon’s two recent posts on S&P’s actions.
    To start, he posted <a href= — substantively terrible — ‘defense’ of S&P’s actions post about two days ago. In it, he quotes an ad hominem argument made by Tyler Cowen to pretty much suggest that anyone attacking S&P’s judgment is only doing so because they have something to gain by doing so. Then, primarily via bullshit argument “all sovereign defaults are political, not economic,” he suggests that S&P’s methodology is actually more meaningful than that of Moody’s and Fitch’s.
    Anyway, this generated quite a few annoyed responses on his blog, so the next day he posted this PoS follow-up, in which he spends about 25000 words to once again argue via a strategy of ‘answering questions’ — in a really messy fashion, almost as though it’s meant to confuse — once again that their choice to downgrade was rational. Most confusing here is the fact that he at the same time argues that nobody has any reason to take S&P seriously, but, and this is the stupidest point of the lot, that the US deserved to get a downgrade. And that therefore, all is well.
    Anyway, I can’t really do ‘justice’ to the amount of hoops Felix jumps through, but it’s rather disturbing to see how much effort he put into this.

  19. Valissa

    Fascinating article… The Trillions of Microbes That Call Us Home—and Help Keep Us Healthy

    A very timely article for me right now as I am taking both an antibiotic (Amoxicillin for an infected tooth root that finally got pulled out today) and probiotics to compensate. I avoid taking antibiotics as much as possible so it’s been many years since I’ve done that. The probiotic I’m taking is Jarro-dophilus EPS, and I’m also eating some yogurt. If anyone has other suggestions that would be very helpful.

  20. readerOfTeaLeaves

    Ratigan speaks truth:

    Here’s hoping he breathes soon… ;-)

    Weirdly, it reminds me of that moment in the movie Jerry McGuire where Tom Cruise announces he’s completely fed up with the phoney, bs-riddled firm he works for and scoops “Flipper” the goldfish out of the aquarium and stalks off to a more honest, tougher life while getting screwed by the Bob Sugars of the world.

    Ratigan does not walk off the set, but he finally calls bs on the Dem-GOP tit-for-tat chit-chat of his usual political panel.

  21. BDBlue

    Via Ian Welsh, a Guardian columnist tries to give context to the London riots, including the fact that there have been at least 333 deaths in police custody in the last eleven years with no successful prosecutions (and very few attempts).

  22. ScottS

    Re: “Explosive Jackie O tapes ‘reveal how she believed Lyndon B Johnson killed JFK and had affair with movie star’”

    Wow. I always figured it was LBJ. He had a very guilty, shady look about him. I guess I’m not as paranoid as I thought.

    Besides, if it were anyone else (Cuban nationalists, the mob, etc), they would have been caught. Only an insider would have been able to cover it up successfully.

  23. elizablack


    Wall Street, known variously as a barren wasteland for diversity or the last plantation in America, has defied courts and the Equal Employment Opportunity Commission (EEOC) for decades in its failure to hire blacks as stockbrokers. Now it’s marshalling its money machine to elect a black man to the highest office in the land. Why isn’t the press curious about this?

    The first clue to an entrenched white male bastion seeking a black male occupant in the oval office (having placed only five blacks in the U.S. Senate in the last two centuries) appeared in February on a chart at the Center for Responsive Politics website. It was a list of the 20 top contributors to the Barack Obama campaign, and it looked like one of those comprehension tests where you match up things that go together and eliminate those that don’t. Of the 20 top contributors, I eliminated six that didn’t compute. I was now looking at a sight only slightly less frightening to democracy than a Diebold voting machine. It was a Wall Street cartel of financial firms, their registered lobbyists, and go-to law firms that have a death grip on our federal government.

    Why is the “yes, we can” candidate in bed with this cartel? How can “we”, the people, make change if Obama’s money backers block our ability to be heard?

    Seven of the Obama campaign’s top 14 donors consisted of officers and employees of the same Wall Street firms charged time and again with looting the public and newly implicated in originating and/or bundling fraudulently made mortgages.

    The Center for Responsive Politics website allows one to pull up the filings made by lobbyists, registering under the Lobbying Disclosure Act of 1995 with the clerk of the U.S. House of Representatives and secretary of the U.S. Senate. These top five contributors to the Obama campaign have filed as registered lobbyists: Sidley Austin LLP; Skadden, Arps, et al; Jenner & Block; Kirkland & Ellis; Wilmerhale, aka Wilmer Cutler Pickering.

    Is it possible that Senator Obama does not know that corporate law firms are also frequently registered lobbyists? Or is he making a distinction that because these funds are coming from the employees of these firms, he’s not really taking money directly from registered lobbyists? That thesis seems disingenuous when many of these individual donors own these law firms as equity partners or shareholders and share in the profits generated from lobbying.

    Far from keeping his distance from lobbyists, Senator Obama and his campaign seems to be brainstorming with them.

    So, how should we react when we learn that the top contributors to the Obama campaign are the very Wall Street firms whose shady mortgage lenders buried the elderly and the poor and minority under predatory loans? How should we react when we learn that on the big donor list is Citigroup, whose former employee at CitiFinancial testified to the Federal Trade Commission that it was was standard practice to target people based on race and educational level, with the sales force winning bonuses called “Rocopoly Money” (like a sick board game), after “blitz” nights of soliciting loans by phone? How should we react when we learn that these very same firms, arm in arm with their corporate lawyers and registered lobbyists, have weakened our ability to fight back with the class-action vehicle?

    Should there be any doubt left as to who owns our government? The very same cast of characters making the Obama hit parade of campaign loot are the clever creators of the industry solutions to the wave of foreclosures gripping this nation’s poor and middle class, effectively putting the solution in the hands of the robbers. The names of these programs (that have failed to make a dent in the problem) have the same vacuous ring: Hope Now; Project Lifeline.

    Silber> Martens

    From Part II, “The Obama Bubble Agenda”:

    The Obama phenomenon has been likened to that of cults, celebrity groupies and Messiah worshipers. But what we’re actually witnessing is ObamaMania (as in tulip mania), the third and final bubble orchestrated and financed by the wonderful Wall Street folks who brought us the first two: the Nasdaq/tech bubble and a subprime-mortgage-in-every-pot bubble.

    To understand why Wall Street desperately needs this final bubble, we need to first review how the first two bubbles were orchestrated and why.

    That brings us to today’s bubble. We are being asked to accept on its face the notion that after more than two centuries of entrenched racism in this country, which saw only five black members of the U.S. Senate, it’s all being eradicated with some rousing stump speeches.

    We are asked to believe that those kindly white executives at all the biggest Wall Street firms, which rank in the top 20 donors to the Obama presidential campaign, after failing to achieve more than 3.5 per cent black stockbrokers over 30 years, now want a black populist president because they crave a level playing field for the American people.

    The number one industry supporting the Obama presidential bid, by the start of February, — the crucial time in primary season — according to the widely respected, nonpartisan Center for Responsive Politics, was “lawyers/law firms” (most on Wall Street’s payroll), giving a total of $11,246,596.

    Senator Obama’s premise and credibility of not taking money from federal lobbyists hangs on a carefully crafted distinction: he is taking money, lots of it, from owners and employees of firms registered as federal lobbyists but not the actual individual lobbyists.

    But is that dealing honestly with the American people?

    Those critical thinkers over at the Black Agenda Report for the Journal of African American Political Thought and Action have zeroed in on the making of the Obama bubble:

    “The 2008 Obama presidential run may be the most slickly orchestrated marketing machine in memory. That’s not a good thing. Marketing is not even distantly related to democracy or civic empowerment. Marketing is about creating emotional, even irrational bonds between your product and your target audience.”

    And slick it is. According to the Obama campaign’s financial filings with the Federal Election Commission (FEC) and aggregated at the Center for Responsive Politics, the Obama campaign has spent over $52 million on media, strategy consultants, image building, marketing research and telemarketing.

    The Wall Street plan for the Obama-bubble presidency is that of the cleanup crew for the housing bubble: sweep all the corruption and losses, would-be indictments, perp walks and prosecutions under the rug and get on with an unprecedented taxpayer bailout of Wall Street. (The corporate law firms have piled on to funding the plan because most were up to their eyeballs in writing prospectuses or providing legal opinions for what has turned out to be bogus AAA securities. Lawsuits naming the Wall Street firms will, no doubt, shortly begin adding the law firms that rendered the legal guidance to issue the securities.) Who better to sell this agenda to the millions of duped mortgage holders and foreclosed homeowners in minority communities across America than our first, beloved, black president of hope and change?

    Why do Wall Street and the corporate law firms think they will find a President Obama to be accommodating? As the Black Agenda Report notes, “Evidently, the giant insurance companies, the airlines, oil companies, Wall Street, military contractors and others had closely examined and vetted Barack Obama and found him pleasing.”

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