Links 9/22/11

I’ve had a lot of non-blog demands, and that will continue till early next week, so I hope you enjoy the guest posts.

Deadly bird disease is spreading BBC

Bernanke chooses deflation MacroBusiness

US government shutdown looms again Financial Times

European Stocks Slide on Fed View of Economy Bloomberg

The not-so-fearless Fed? FT Alphaville

Treason? Ed Harrison

Merscorp Sued in Dallas With Bank of America Over Mortgage-Tracking System Bloomberg (hat tip reader Mike S)

Volcker Rule May Lose Its Bite Wall Street Journal

S&P: Accounting Rule Cld Boost Lrg US Banks’Assets By Ave 68% Deutsche Borse. Via @alea_. Maybe comparing Eurobank and US bank gearing will make a little more sense when this is implemented. Under the new rules, liabilities tend to go up more than assets, so US banks will look more highly geared.

Why ‘Occupy Wall Street’ makes sense Amy Goodman, Guardian (hat tip reader Diane)

Yahoo blocked e-mails about Wall Street protests CNET (hat tip reader rjs)

No More Patents For Cute Tax Tricks Forbes

The Dangers of Cutting Medicare and Medicaid Dave Dayen, FireDogLake (hat tip reader Carol B). Be sure to read the first two comments.

CFPB expects ability-to-repay rule by early next year Housing Wire. Reader Peter W. points out that Raj Date is beating up on servicers.

Only the most educated 3% saw wage gains between 2000 and 2010 Daily Kos (hat tip reader Carol B)

Faith in the free market Economist (hat tip Philip Pilkington)

Antidote du jour:

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    1. liberal

      Weak tea. This “social contract” stuff is always trotted out when we argue that the rich should pay more.

      A far, far better argument is that made by those familiar with the works of Henry George. The rich should pay more because, for the most part, they got rich by legalized theft, and recouping ill-gotten gains via taxation is always fair.

      1. attempter

        Speaking of weak tea, if you recognize that one can become rich only be stealing, and care about that, then how can you justify the existence of wealth inequality at all? If someone steals from me, why would I want to “tax” back from him a meager portion of what he stole, rather than smash him and take it all back?

        The fact is that lies about social contract/trickle-down are the only possible way to justify the existence of concentrated wealth. That’s why the economists dicussed in the other thread have been so well-paid and the subject of such corporate media hagiography.

        So to say “they broke the social contract, and trickle down is a proven lie”, is to argue that even by their own measure the rich have forfeit the right to exist.

        To speak truth and say they’re nothing but thieves is to reach the same conclusion more directly.

        I can do either of those. But I don’t get taking the direct route only to arrive at a scam reformist conclusion. At least Warren’s using the system terms to arrive at a pro-system prescription makes sense given her pro-system premise.

  1. Richard Kline

    That cat is dead. Or those birds soon will be, having been desensitized to the real behaviors of live cats. Kind of like the middle class dabbling in the capital markets via their mortgage documents . . . .

      1. aet

        Cats must be taught by their mothers how to kill, or else they never do. Like people.

        Perhaps this one was never taught to kill.

        1. aet

          I hasten to add, that in the case of people, it is in fact quite rare for a person’s own mother to be the one doing that particular bit of teaching.

          1. Tyzao

            He’s just full at the moment, and the chicks are too young to know any better. I guess half of them will be his next lunch.

        2. Binky the Bear

          I trust that was not intended to be a factual statement, unless “playing with things until they die” is somehow omitted from the definition.

        3. spigzone

          Cats will kill and eat from instinct if hunger and opportunity are there. Cats have to be taught by their mothers to HUNT wild game successfully, at least without sufficient trial and error to make starving to death a distinct possibility before the skill is acquired on it’s own.

    1. aet

      The middle class NEVER “dabbled in the capital markets” with their mortgage documents: that “dabbling” was done by those who held those mortgage documents (feeling that they had to to “cope” with the brave new world of interest-rate de-regulation which, in advertised and promoted theory, promised to increase the wealth of all Americans), and unless banks are now considered “middle-class”, your statement attributes this action (and the fault therefor) to the wrong party.

      The banks, and NOT the “middle-class”, gambled with their customers’ wealth.

      You, sir, are blaming the victim.

    2. craazyman

      It’s Just Like the Economy

      Maybe the cat has already eaten 4 or 5 of the birds and can’t even sit up because it’s so full, and the birds we see are thrillseekers taking advantage of their comrades’ bad luck.

  2. Richard Kline

    Bad-ugly whackage in equities as the world turns; well beyond napalm, rather like thermite hoodies for seal pups. Oh well: subsistence farming worked for seven millennia give or take—with 1% of our present global population though, there’s the kicker. Aiiiy me.

    1. skippy

      “Oh well: subsistence farming worked for seven millennia give or take”

      No problem[!]…every one can just go over to attempters house..its all sorted…trial run was a success.

      Skippy…now if the weather holds? Any way great to see ya around.

      1. ambrit

        Dear skippy;
        Somehow I see attempter dressed up like a shaman, blessing the hydroponics tanks. The main problem with subsistence agriculture is, quite honestly, uncertainty. But, I’m told, look on the bright side. Global warming is actually beneficial to vegetation. Now, if gardening were promoted as a ‘healthy lifestyle’ occupation, we’d get somewhere.

        1. attempter

          “Somehow” you’d be wrong. And I already responded to your questions. Non-corporate agriculture is “uncertain”? Well, one thing that is 100% certain is the unsustainability and eventual failure of corporate ag.

          (Also certain is that, to the extent corporate ag continues to prevail, the non-rich populace will be reduced to serfdom. I’ll take democratic ag’s political “uncertainty” over guaranteed feudalism any time.)

          As for Skippy, I’d never dream of interfering with the bounty he thinks he’ll continue to enjoy from corporate agriculture post-oil, post-synthetic fertilizer, with sterile and toxic soil, and once GMO monoculture collapses and superweeds completely engulf the fields. He and his kind are welcome to eat whatever they can grow out of that.

          On the other hand, he certainly has no right to decide for others that CAFOs should be allowed to unleash lethal pandemics upon the rest of us. That would make him a putative mass murderer.

          1. ambrit

            Dear attempter;
            Gee fellow, I’m sorry. I have been reading your info on relocalization. Being bought up in urban environments, (London, Los Angeles, Miami,) the small scale farming concepts are difficult to comprehend on an emotional level. I, and I’ll wager a lot of the people here, don’t have the associations available to fully integrate the relocalization ideas. Sort of like the kid who thought that milk came from a plastic jug ‘on the farm’ somewhere.
            As for the shaman allusion. I read a bit of people like Robert Graves, (“The White Goddess” is very good,) Frazer, (“The Golden Bough,”) Weston, (“From Ritual to Romance,”) Campbell, (lots of his stuff deals with shamans,) and others. So, be not dismayed, I’m not seeing you as a Monty Python Shaman at all.
            If it’s some distress over the slow pace of progress with the relocalization idea, at least here in The Empire, be not dismayed. No Prophet is honoured in his own time.
            As for the depleting the ecology meme, this isn’t the first time nature has tried to kill off those pesky humans. Remember the Flood? (Something catastrophic had to have happened to have spawned all those Flood Myths around the world.) Thera? (It ruined a lot of Cretan expectations, I’m sure.) The nuclear winter of 535 AD? (See “Catastrophe” for that one.) The Black Death? (Even Conan Doyle in his “The White Company” accepted that the population drops resulting from the Plague spurred the economic transformation of the Late Middle Ages by driving up the value of labour.) This just happens to be the first time, I think, that humans have had a major hand in setting the system up for a Transformative Event. (Perhaps Mohenjo Daro and the ecological collapse of that part of the Indian sub-continent were the results of deforestation. That arguement seems to still be ongoing.)
            So, if worst comes to worst, feel secure in the knowledge that you and yours will be the lucky few who come through it intact. From a historical perspective, that’s what really matters.

          2. Skippy


            “Well, one thing that is 100% certain is the unsustainability and eventual failure of corporate ag.”

            With out a doubt there many aspects to assembly line petro mono culture ag that are worse than fail, it can harm / transform the environment and not be taken back. Yet much of the developed world is structured to operate with-in it, pulling the rug out will kill people. Would you describe the means by which we can transition to your system and provide a full risk assessment.

            Any way I never said or promoted the things you assign to me, it really detracts from the good information you provide. You just need to climb down out of your tree and rub shoulders with those that have not had your education.

            Skippy…ummm 6+ generations of farmers on one side of my family, my first tractor was a JD A, know how to rotate both crops and animals, utilize every output, sweeten the ground, can relishes – veg – preserves etc, salt – smoke meats, ya de da da. In the old days you had to be every thing, carpenter, mechanic, electrical, vet, horticulturalist, advanced first aid, infini. BTW how many acres do you have and what are you running on it and for how many years. whats your market like?

          3. attempter

            Skippy, you’re the one who has been obsessing on me ever since I said the same thing about your beloved telecom rackets which I say about every other kind of racket. Now you’re obsessing on me in threads where I hadn’t even commented. So it’s hardly possible for me to “project” anything. You keep writing these bizarre personal comments and then backpedaling when answered.

            Is it that you’re a Verizon scab or something, and feel bad about it?

            Since I’m sure your questions aren’t serious, I won’t bother with much of a reply. I’ve discussed my whole idea at length here


            and elsewhere. Links to all the studies can be found in those posts. (But I’ve linked the studies plenty of times here at NC as well, as you already know. You’re simply lying when you pretend I haven’t provided copious evidence.)

            As for pulling out the rug, as you know perfectly well both the rug and the pulling of it are 100% the doing of corporatism. Corporatism is also responsible for 100% of dependency upon it, and will no doubt continue to commit mass murder through famine and violence to prevent humanity’s evolution beyond it. All those murders have been and will continue to be 100% the responsibility of corporatism and its supporters.

            Meanwhile, democratic agroecology is the only way humanity can maximize food production and political democracy and freedom going forward. It’s the only way humanity can realize itself. Humanity will make this decision for itself. All I do is try to help work out the ideas for how to do it.

          4. Skippy

            The only thing defective is your ability to project your basis upon others. I never said any thing about telecoms, it was that government crated the web…shezz. Your worse than speaking to a tel-marketer, multi color binders in front of you with canned responses to questions – requests…got an original thought[?] been any where besides the hundred acres woods? Are you like beard where every thing comes out of a book?

            Skippy…Btw still waiting to here about your farm, your plan for transition, your actual experiences and ability’s or did I get the zealot hot line.

          5. Skippy

            Addition…answer my questions rather than prose or worse reconstruct and engage in rhetorical comebacks. How is your farm?

            Skippy…nothing but accusations with out acknowledging the fact that whether we like it or not, were all a product of the past, egregious vitriol for the propose of incitement. In fact I would petition for your removal from this site if you can not engage in discussion with out your constant grandiose accusations, your over the top black and white view of the world, your complete lack of accomplice in a world we all were born into. A Bill O’Really doppelganger.

          6. attempter

            In fact I would petition for your removal from this site if you can not engage in discussion with out your constant grandiose accusations, your over the top black and white view of the world, your complete lack of accomplice in a world we all were born into.

            You seem to be having a meltdown.

            And as I’ve said several times, before, history is not your friend here. Anyone can go back to the original thread:


            and our exchanges since then, including this latest one, and see who has initiated the personal attacks each and every time.

            But whatever bizarre view of me you have, I have so little regard for you that it would be beneath me to “petition for your removal”. I’ll ignore you from here on.

          7. Skippy

            What do you do for a living, what experience do you have with regards to any thing you say, how far and wide have you traveled, why do you fail to answer simple questions but instead redirect. Obsession[?] yep its in the conversation but by whom?

            Skippy…for someone that has all the answers, you fail the most direct and simple? If not in the book of attemper its not relevant…ummm sounds like an neo classical economists attitude.

    2. aet

      Capital markets are for raising working capital – not for gambling, or so-called “saving”.

      You want savings to generate reasonable interest? Re-regulate consumer interest rates for consumer finance and saving.

      That seemed to work well back then: until the borrowing for the Vietmnam War came home to roost, anyhow.

      And things have gotten worse for the average Joesephine, since consumer interest rates both paid and payable were “freed” from such regulation.

      Why not learn from out mistakes? Instead of throwing good money after bad?

      Re-regulate consumer interest rates, both payable and to be paid, by and to them, the savers and the borrowers.

    3. JimS

      Low population is what you do if you *don’t* want subsistence farmers on the margin. It’s all in Ricardo.

  3. GA

    Sorry, but the differential increase in assets and liabilities is likely just an artefact of basic accounting – assets and liabilities (not including equity) are likely to go up by almost exactly the same amount in absolute terms; the ‘liabilities going up more’ is just the fact that liabilities go up by _relatively_ more because they are smaller to start with (capital making up the difference between assets and liabilities).

  4. Barbyrah

    Yves, there’s a spiritual aspect to many of the photos you post…not religious, but spiritual (as in acknowledging the sacredness in everything, acknowledging the possibility of moving out of the predator model and into a “cooperator” model, etc.)…and I’m grateful, delighted, uplifted.

    Today’s was so inspiring I needed to make my gratitude more direct.

    So thank you for this lovely photo, and for each and every other one you post that enlivens us to what the potential for true peace and community is on this planet – so touchingly demonstrated to us by our non-Homo sapien friends.

  5. Jefe

    Cat: in “Build it Better Yourself” (Rodale)one of the best chicken coop designs incorporates a cat shelf. Keeps the rodents down.

  6. F. Beard

    I imagine that cat was raised with chicks.

    You cynics should watch more You-Tube animal videos.

    And the wolf will dwell with the lamb, and the leopard will lie down with the young goat, and the calf and the young lion and the fatling together; and a little boy will lead them. Isaiah 11:6

  7. MyLessThanPrimeBeef

    First, formally declare Wall Street a global disaster zone.

    Then you occupy it.

    That way, you have more freedom in dealing with the looters.

  8. Jim Haygood

    Bankster thugs prepare to shake down small business:

    Visa, the world’s largest network, and No. 2 MasterCard may increase fees from 8 cents on a $2 purchase to 23 cents, Thomas McCrohan, an analyst at Janney Montgomery Scott LLC, wrote in a note. They will eliminate the so-called interchange portion of the fee, charging the highest amount allowed by rules announced in June, McCrohan said yesterday in an interview.

    The change “will kill the economics for small-ticket debit purchases and influence a shift back to credit cards,” McCrohan wrote. “It will almost certainly lead to a merchant revolt against the card networks.”

    The Federal Reserve said June 29 that U.S. debit-card transaction fees, mandated by the Dodd-Frank Act, can’t exceed 24 cents on an average transaction, replacing a formula that averages 1.14 percent of the purchase price, or about 44 cents.

    Twenty-three cents on a two-dollar purchase — that’s a modest 11.5% vig. It makes payday lenders look like veritable philanthropists.

    Use cash, starve a bankster!

    1. F. Beard

      Use cash, starve a bankster! Jim Haygood

      Amen! What would be better is if the US Post Office would offer free money storage and check clearing up to a certain amount.

    2. Typing Monkey

      <Visa, the world’s largest network, and No. 2 MasterCard may increase fees from 8 cents on a $2 purchase to 23 cents

      I don’t see how they will get this to work. Most likely, the vendors will simply stop allowing people to use Visa or Mastercard to purchase things under $X. I’m not sure how this helps the CC companies.

      As a side note (I found this story far more interesting)

      1. Yves Smith Post author

        The network agreements forbid them from setting minimums on purchases. Smaller merchants can probably get away with it, but the big retailers won’t.

  9. MyLessThanPrimeBeef

    Faith in the free market, or in anything religious, can be strengthened by chanting, meditation, candle lighting and many dark nights of the soul.

  10. MyLessThanPrimeBeef

    Only the most educated 3% saw wage gains between 2000 and 2010.


    I am not sure that’s where you want to look.

    I am more interest in knowing how well the most ruthless 3% did during the decade.

  11. barrisj

    I could never understand why in Merika “God” always wants people to be rich…there are legions of religious frauds who made fortunes preaching this gospel. But, “Jesus”, on the other hand, despised the wealthy, and offered succour to the poor. They both can’t be right, can they? A most peculiar theologic conundrum. Is there evidence of “Satan” having a hand in all this?

    1. F. Beard

      I could never understand why in Merika “God” always wants people to be rich barrisj

      All things being equal, the Lord would prefer that we be rich, I would bet. Remember, we started off in a Garden.

      And a lot of poverty cannot be blamed on the Lord but on usury and other economic sins such as counterfeiting – so-called “credit” creation.

      1. barrisj

        Yes, but “God” in all “His” wisdom, also created a zero-sum game, as to be rich demands that others be poor, unless “He” actually assumes “trickle-down” economics as well…you know, “a rising tide lifts all boats”. Any theologians out there who can elucidate these points for the non-believers amongst us?

        1. F. Beard

          The economy is not a zero-sum game but currently the rich get most of the increase.

          As for the Lord, it can be safely said that He believes in justice and mercy – not government privileges for the rich.

          1. barrisj

            The history of capitalism is one of winners and losers. The counterparties to wealth accrual are the exploited and impoverished. Sorry, but I don’t see the benign hand of “The Creator” here, mate.

          2. F. Beard

            Sorry, but I don’t see the benign hand of “The Creator” here, mate. barrisj

            Of course you don’t. He forbids usury between fellow countrymen (Deuteronomy 23:19-20), commands periodic debt forgiveness (Deuteronomy 15) and condemns counterfeiting (“Thou shall not steal”)and oppression of the poor (The entire Bible).

          3. barrisj

            “A feast is made for laughter, and wine makes life merry, but money is the answer for everything”

            – Ecclesiastes 10:19

            “But remember the Lord your God, for it is he who gives you the ability to produce wealth”
            – Deuteronomy 8:18

            “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.”
            – Matthew 6:24

            “The blessing of the LORD brings wealth, and he adds no trouble to it”

            – Proverbs 10:22

            “Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.”

            – Hebrews 13:5

            One can cull through the Bible and find examples of “Scripture” to support virtually any position one takes on “God and Money”. It’s a mug’s game, and all bollocks, I’m afraid.

          4. F. Beard

            One can cull through the Bible and find examples of “Scripture” to support virtually any position one takes on “God and Money”. barrisj

            Nice quotes! Those are some of my favorites wrt money.

            It’s a mug’s game, and all bollocks, I’m afraid. barrisj

            I don’t think so. It has taken effort and a lot of reading it, but I find the Bible to be consistent. But there is no doubt that the Bible can be puzzling unless it is sufficiently read.

          5. barrisj

            Yes, all this is fascinating, I’m sure, but at the risk of protracting a debate without end, my original point was the apparent divergence or dichotomy between what is ascribed to “God” and that which attributed to “His” son, “Jesus”. While there seens to be much equivocation in “God’s” view on wealth, no such ambivalence is present in the teachings of “Jesus”…or so one is led to believe. So who indeed of the “Two” has the last word here?

          6. F. Beard

            …or so one is led to believe. barrisj

            Indeed. Jesus has been hijacked for any number of causes. One should just read the NT for oneself.

            So who indeed of the “Two” has the last word here? barrisj

            There is no disagreement. What you think Jesus said about economics is mere hearsay, I’d bet.

            However, the Jews in the time of Jesus had strayed with regard to the OT’s teaching about money so it is no surprise that He emphasized a proper attitude toward it.

          7. Lidia

            Christianity is also about winners and losers. Without hell there is no point to “heaven”.

            Augustine promised that that was one of the benefits of heaven: getting to see the damned writhe in hell for all eternity. I believe Calvin also indicated this as a bennie.

          8. F. Beard

            Christianity is also about winners and losers. Lidia

            The Lord would prefer that we all win:

            Cast away from you all your transgressions which you have committed and make yourselves a new heart and a new spirit! For why will you die, O house of Israel? For I have no pleasure in the death of anyone who dies,” declares the Lord GOD. “Therefore, repent and live.” Ezekiel 18:31-32 New American Standard Bible (NASB)

            As for Augustine and Calvin – their writings are not Scripture.

    2. Bill

      @barrisj says:
      “They both can’t be right, can they?”

      Sure, they’re the original “good cop, bad cop” duo.

      1. barrisj

        Well, this is what I find so enthralling about this website: both the sacred and the profane can weigh in, no matter how absurd the argumentation. “How many angels can dance on the head of a pin?”, indeed.

        1. F. Beard

          “How many angels can dance on the head of a pin?” barrisj

          That has been determined using physics and information theory. I forget the number.

  12. Valissa

    No voting please, we’re Chinese; The government shuts down a TV show in which viewers vote for the winner

    “Happy Girl” is broadcast by a state-owned satellite-television company in the southern province of Hunan, but has a devoted following across the country. Exhibiting the extraordinary gap that has opened between officials and the viewing public, a station spokesman said the broadcaster would replace the show with uplifting programmes such as “practical information about housework”.

    Oh… my… god/dess… Chinese female identity stuck between Scylla and Charybdis. So thankful I do not live in China.

  13. Julie

    Hi Yves.
    I’d like to clarify that link to the study which asserts that somehow PhDs are on a gravy train with biscuit wheels.
    There is mass unemployment amongst PhD holders in chemistry, biology, biochemistry and physics and many of those science fields the power elite claim there are prospects(I’ll assume that the liberal arts docs are even worse off.) Hundreds of thousands of scientists have been laid off in the last ten years as research moves abroad and hiring visa wage slaves in the US becomes the law of the land. This has been accelerating since around 2001. It is not a direct result of the current recession.

    So who’s pushing up those stats on salary increases?
    Of course their gain is the pain of their students. Every year a new round of tuition hikes to con the unwary into a life of debt serfdom to pay for wage and benefit hikes for professors and administrators.

    I would warn any reading this blog that most PhD holders in today’s market are underemployed or unemployed.

  14. Valissa

    Hewlett-Packard Snarls Show Peril of Outside CEOs: The Ticker

    The broader lesson here goes beyond Apotheker’s own shortcomings, whatever they might be. Any hunt for an outside CEO tends to be a hasty courtship, in which directors may be enchanted by a candidate’s persuasiveness, without taking a slow, dispassionate look at a newcomer’s full strengths and weaknesses.

    Rakesh Khurana, a professor at Harvard Business School, pinpointed these risks a few years ago in his book “Searching for a Corporate Savior.” As he wrote, outsiders who dazzle in boardroom job interviews turn out to be on far shakier ground when their on-the-job duties call for detailed industry knowledge or an ability to connect with the existing management team.

  15. barrisj

    Moving beyond tedious theological discussions, here is an amazing bit of work reported by researchers at Italy’s Laboratori Nazionali del Gran Sasso wherein a claim is advanced that neutrinos are capable of faster-than-light speed, which in fact – if proven true – not only calls into question Einstein’s Special Theory, but also the entire notion of causality: Can effect precede cause? Check it out here:

    Faster than light particles found, claim scientists

    Particle physicists detect neutrinos travelling faster than light, a feat forbidden by Einstein’s theory of special relativity

      1. ambrit

        Dear Mr Beard;
        That speed-o-light thingy must have been instituted by God to save Aliens, from us. (See “A Case of Conscience” by James Blish.)

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