Links 10/6/11

Fish perform giant leaps on land BBC

Autism seen as asset, not liability, in some jobs MSNBC. For those of you who read Vernor Vinge’s A Deepness in the Sky, remember “focus”?

Jobs’s Death Draws Outpouring of Grief and Tributes New York Times

Italy and the UK Paul Krugman. Krugman is being awfully kind to an economist who missed something very basic (or perhaps he is being tongue in cheek, I can’t tell).

Banks face new European stress tests Financial Times

The Questionable Balance Sheet Of Dexia Bank masaccio, FireDogLake (hat tip reader Carol B). A nice overview on the bank most likely to fall over next.

The U.S. approved to grant 400 M1A1 Abrams to Greece DefenseGreece. Per Mark Ames: “More signs that Greece is preparing for the eventual coup: so there’s no money to pay public sector workers, but somehow the bankers are allowing Greece to put another 400 M1A1 Abrams tanks on the credit card. ”

Europe Girds for Breakout of More Troubled Financial Firms New York Times. This is really depressing. The Eurozone is going down the same path as the US in the crisis, except with far too little firepower at its disposal and far too cumbersome a process to handle a meltdown effectively. This is the worst of all possible worlds: no will to get tough with the banks and decent odds the rescue will fail.

The democratic transition Fabrice Murtin and Romain Wacziarg, VoxEU

In praise of Wall Street protesters John Gapper, Financial Times

Top Democrats endorse Occupy Wall Street protests Politco

Ten Reportedly Arrested as Protesters Stand Off With Police Gawker

NYPD and Seattle Police Beat Up Protesters George Washington

Tax holiday would kill jobs, not create them Daily Kos (hat tip reader Carol B)

Debt and Taxes Heteconomist (hat tip reader Doggett)

BNY Mellon ‘Sledgehammer’ Lawsuits Raise Pressure to Settle Bloomberg (hat tip reader Scott)

Legal Assault Hits BNY Mellon Shares Wall Street Journal

Banks Repay Tarp With Funds Meant to Spur Small-Business Loans, Wall Street Journal. It’s only two billion, but is proof of 1. yet again, lack of proper oversight and 2. small banks can behave just as badly as big banks.

Rep. Inslee to Justice Dept: Don’t settle on bank’s mortgage fraud without a full investigation Daily Kos (hat tip reader Carol B). Late to this, but at a minimum, this increases the odds that the Washington AG Rob McKenna will abandon the “50 state” negotiations. If so, that would be the first Republican defection.

Did The NAR Lie About August Pending Home Sales? Lee Adler Wall Street Examiner (hat tip reader Carol B). Um, some people think NAR tells the truth?

Bill allows tax-free use of retirement funds for mortgage payments Housing Wire. Debra C correctly points out this is horrible: consumers get the opportunity to drain retirement accounts, then default. And even worse, banks may start insisting consumers tap retirement accounts as part of any mod (as in they won’t mod to a level supported by current income alone).

Antidote du jour:

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  1. eightnine2718281828mu5

    consumers get the opportunity to drain retirement accounts

    It’s been said before; they took your stocks, your homes, and the only thing left is your retirement funds (both public and private).

    They need to teach kids in high school that you need to save enough to survive three garden-variety recessions and one depression over your working years so that our financial system can continue entertaining itself with the roulette wheel.

    1. Jim Haygood

      From the article:

      Sen. Johnny Isakson (R-Ga.) and Rep. Tom Graves (R-Ga.) submitted the Home Act Wednesday. Borrowers could pull as much as $50,000 from their retirement account or one-half of the current value of their account, whichever is smaller, and avoid the typical 10% tax penalty. The cap is a lifetime cap, and does not expire on a particular date. Borrowers are eligible to make multiple withdrawals until they reach the cap.

      It’s quite elitist for Debra C. to assume that silly little airhead consumers will ‘drain their retirement accounts then default.’ Some, for instance, are between jobs, or close to retirement, or close to selling out, and just need a bridge to tide themselves through.

      In practice, plenty of people already are taking unwithheld distributions from IRAs, and incurring tax liabilities which they won’t be able to pay, and which will continue escalating ominously. The proposed bill offers a measure of relief to this group.

      But the silver spoon set disapproves. If you have no job, why not just have your accountant make the mortgage payments from your trust fund, they wonder? Excuse me, kind madam, may I borrow some Grey Poupon for my Spam sandwich?

      1. Linden

        It’s quite elitist for Debra C. to assume that silly little airhead consumers will ‘drain their retirement accounts then default.’

        I see it happen every day in my work as a bankruptcy attorney. Then some of these folks lose their jobs and the 401K loan becomes a distribution, with the attendant tax consequences.

      2. Leviathan

        For most people, their 401k money represents all they have saved for retirement. It is at least as important to their long-term well being as their house. Shelter can be replaced, savings (past a certain age) cannot. It is therefore wrong to tempt people down on their luck with this sort of “deal.” For every one family this helps it will hurt several others. But all banks and servicers will be helped because it gives them access to previously locked up resources.

        Our political class has become criminal, and in a decidedly bipartisan fashion.

      3. wunsacon

        Jim, what’s your point in that last paragraph? I’m not sure I’m reading it correctly.

        >> The proposed bill offers a measure of relief to this group.

        There are better ways to provide “relief” to these people than to create a larger pool of suckers paying down what they owe the banks. E.g., expand bankruptcy homestead provisions, so people can declare bankruptcy and keep a larger portion of their assets.

        Your “relief” will induce more people to follow suit. More people will lack savings later on in life when they will need it. Very short-term thinking. This is just another anti-citizen, pro-bank measure.

      4. MyLessThanPrimeBeef

        I don’t know if it would help a little, but mabye if it only applies to those who can’t pass a ‘taxpayer stress test.’

  2. stibbert

    V. Vinge’s new book “Children of the Sky” will be published on 10/11, his “A Fire upon the Deep” was awesomest. this new one is said to be a sequel to AFutD. i missed his most recent, “Rainbow’s End”, & just learned that it Hugo’ed in 2007. guess i’ll be buying 2 Vinge novels on 10/11!

    1. liberal

      “i missed his most recent, “Rainbow’s End”, & just learned that it Hugo’ed in 2007”

      That book sucked. Some of his other stuff was awesome, but R.E. getting a Hugo was just absurd.

  3. bmeisen

    Speculation about Abrams tanks from an outlet associated with the Greek military, mixed with coup-talk, deserves as much attention as suggestions that the Greeks are prepared to devote their entire GDP this year to pay down their debts.

    A coup or a flare-up with Turkey is an issue for war-gamers at the Defense Ministry. If it happened, the consequences would be utterly catastrophic for everyone. The catastrophic has happened before, admittedly. Trotzdem, immernoch unvorstellbar.

    I wonder if we’re missing something about the power of the state. We have all be railing about state capture and how the end is near, and the Fed and the ECB, for different reasons IMHO, are persevering, and may ultimately succeed.

  4. LucyLulu

    I spoke with my state AG’s office this week. I’m in NC and he is part of the negotiating team. I was told the negotiations are still on and they are trying to push the deal through as quickly as possible (to reduce the number of future foreclosures). I was told that an investigation had absolutely been done. When I asked for specific details, I was told that letters were sent to each of the servicers last fall with questions, and they had received responses. Seriously, that was the answer stated.

    Of course, I expressed my displeasure, again, that there was no accountability to comply with the law. I was reassured that the agreement included rules that the servicers would have to follow. I asked why there was any confidence that this agreement would have any more effect upon compliance than previous agreements, including the most recent one signed with federal regulators in the spring. I told her that our land records showed that ‘robosigning’ was still prevalent.

    In other words, you can count NC as a definite yes if there is a multi-state agreement reached. I imagine BofA throws some money around this state, and Wachovia too, if they still have separate offices from WFC? (NC accounts get converted in a couple weeks, believe we are the last).

    1. russell1200

      NC AG does not regulate securities (that is the Secretary of State) and, unlike New York, does not have the ability to prosecute criminally. Many of the State’s AGs are in the same situation. Thus their main weapons are cease and desist (which of course the banks won’t argue with) and money damages.

      The State AGs are not the ideal venue for what needs to happen.

      1. LucyLulu

        What about prosecuting for fraud? Fabricating documents, forging documents, servicers signing off as owners of the debt when they aren’t? I would think that would fall under the state AG’s jurisdiction since foreclosures and property law is governed by state statute. For example, last time I went through the records, Chase was signing off on satisfactions of mortgages for defunct entities that they did not have signing authority for. If I presented a satisfaction of MY mortgage with an illegal signature as proof, I’m pretty sure I’d be facing charges.

      2. Yves Smith Post author

        LucyLulu is right, there are a lot of other grounds for action besides securities fraud (and the statute of limitations for most securities litigation has passed). Just look at the second amended claim by Nevada against Countrywide, for starters.

    2. Yves Smith Post author

      I am highly confident your state AG’s office is lying. I was told by someone involved in the negotiations from the Federal regulatory side that no (as in a big fat zero) document discovery was done.

      If any “letters” were sent, they were of the toothless variety.

  5. Jim3981

    “Autism seen as asset, not liability, in some jobs”

    I have aspergers, and it is not an asset. There might be some slight changes in thinking, but I’m convinced I would have been brilliant without it.

    This idea that Autism is an asset propaganda. That garbage is probably being fed to us now so governments don’t have to pay for the upcoming epidemic.

    It makes life much more difficult, and most of the people are struggling and not ending up as computer programmers or CEO’s like they want you to believe with their propaganda.

    Don’t underestimate the amount of propaganda you are fed constantly in the media.

    1. Anonymous Jones

      Don’t underestimate the ability of any attribute to be a positive or a negative on a situational basis.

      You have missed the point.

  6. Jim3981

    “Did The NAR Lie About August Pending Home Sales?”

    The way I see it, is austerity and spending cuts are being forced on us at the worst possible time.

    Once the rug is pulled out from the economy. We have the mother of all collapse. Once that happnens, housing is bought up on the cheap from the federal reserve and Fannie/Freddie.

    All financed with with record low interest rates!

  7. Ignim Brites

    Why is the theory of the advantages of having your own currency not extended to California? Is it ignorance, pride, cruelty? Whatever the origin, with unemployment in the Central Valley at 20 to 30 percent, the US dollar is certainly not the right currency for CA.

  8. john bougearel

    This is just the sort of headline and action you would expect to see when an country is exposed to a strong dose of Shock Doctrine (Naomi Klein)

    “The U.S. approved to grant 400 M1A1 Abrams to Greece DefenseGreece. Per Mark Ames: “More signs that Greece is preparing for the eventual coup: so there’s no money to pay public sector workers, but somehow the bankers are allowing Greece to put another 400 M1A1 Abrams tanks on the credit card. ””

    Next thing ya know, Greek citizens will have to worry about being disappeared if they are not properly politically-positioned with the elite powers that enforce austerity, job cuts, wage cuts, and privatization of assets

  9. Jim Haygood

    This is as sinister an article as you’ll ever read:

    (Reuters) – American militants like Anwar al-Awlaki are placed on a kill or capture list by a secretive panel of senior government officials, which then informs the president of its decisions, according to officials.

    There is no public record of the operations or decisions of the panel, which is a subset of the White House’s National Security Council, several current and former officials said. Neither is there any law establishing its existence or setting out the rules by which it is supposed to operate.

    The panel was behind the decision to add Awlaki, a U.S.-born militant preacher with alleged al Qaeda connections, to the target list. He was killed by a CIA drone strike in Yemen late last month.

    Several officials said that when Awlaki became the first American put on the target list, Obama was not required personally to approve the targeting of a person. But one official said Obama would be notified of the principals’ decision. If he objected, the decision would be nullified, the official said.

    A former official said one of the reasons for making senior officials principally responsible for nominating Americans for the target list was to “protect” the president.

    When the name of a foreign, rather than American, militant is added to targeting lists, the decision is made within the intelligence community and normally does not require approval by high-level NSC officials.

    If Hitler had lived, one wonders how the Nuremberg tribunal would have viewed a claim on his part that ‘my subordinates made these decisions. I was not informed.’

    1. b.

      They were just drafting orders.

      We already have that, don’t we? The torturers cannot be prosecuted because they followed orders. Those that ordered the torture cannot be prosecuted because they just wrote the orders. Beyond responsibility diffusion by bureaucratic structure, we now witness proactive responsibility dispersal.

    2. Hugh

      I am always struck by how al-Awlaki is identified as “US-born” instead of a US citizen, as if his US citizenship were somehow less than that of others or more accidental. He is elsewhere described as American but it is this initial categorization that sets the tone.

    3. Cynthia

      Of all the developments in recent months, none have made me nauseous and sick like this drone-warfare business, and it is literally a business.

      The last time I was sick to my stomach like this was during Israel’s massacre of Gazans in early 2009.

      To think that the US plans on implementing so-called biometric data to murder people from the air is appalling:

      Those Americans who are complacent now, should not be surprised when domestic law enforcement agencies start using similar technologies to “hunt” for “criminals”. After all, look at how the militarization of law enforcement has resulted in the nationwide adoption of SWAT teams.

      Science Fiction movies, from the Blade Runner of the 80’s to the Minority Report of the 21st century, have all depicted such wanton erosion of basic civil and human rights. And modern technology is making it easier and easier for governments to abuse their subjects like ants under a magnifying glass.

    4. Francois T

      Hmmm! So, we now have a National Security Star Chamber, huh?

      The most sinister aspect of this whole affair is the total lack of outrage by a majority of Americans. Alas, it is not really surprising; with a name like his and the skin color, Al-Awlaki has never been considered a “real American”. Just like this Turko-American kid shot and killed by the IDF: “What’s the big deal?” asked the repugnant Joe Biden then.

      They shall change their tune when the victim is James Smith, Caucasian male born in Topeka, Kansas, whose only “crime” was coming too close to the financial corruption on a multibillion dollars national security contract implicating several high-powered DC insiders.

      Of course, I am assuming that by then, Americans will still be able to freely sing ANY tune.

    1. barrisj

      I’m afraid Herman Cain is a walking, talking illustration of the dangers of consuming too much junk-food, including his industrial-processed pizzas…serious deterioration of higher cortical functions is inevitably the result.

  10. b.

    “For those of you who read Vernor Vinge’s A Deepness in the Sky, remember “focus”?”

    Asides like this are why this site has become my one blog to read, these days. Well done!

  11. wunsacon

    “Free market” medicine:

    Let’s eliminate government regulation of food / medicine! “Externalities — what’s that??”

    Yeah, yeah, I can anticipate some “liber”-tarian pointing out the government isn’t completely absent from the scene. What would their complete absence mean: less drug sales or more? Complete absence won’t clamp down on damaging pharma use. Only more enforcement/penalties will.

  12. Herman Sniffles

    Regarding jummping fish, any commercial fisherman (or avid sport fisherman)could have told them that. I once stupidly brought a very live 90 lb halibut into a 12 ft skiff. It immediately “jumped” out of the net, then it sort of levitated into the air and seemed to be flying with a sort of hyperactive inchworm action. When it hit the deck it started charging around the boat with the same rapid inchworm motions and snapping its jaws. My rat terriers almost abandoned ship. I got him with the fish billy before he did any damage, but now I dispatch them BEFORE they come in the boat. I bet those miraculous movements fish perform on land evolved for escape/prey-pounce under water.

  13. Hugh

    On the bright side, things will have probably come to a head in Greece before the tanks arrive. The comments were interesting. The Greeks sounded like they needed them for use against the Turks, another NATO member. The Northern Europeans thought Greece should be allowed to crash and burn. It was a self-selected grouping but European solidarity was not much in evidence.

  14. nobody

    THANK YOU, Yves, for including the article on autistic assets. It’s not a question of one or the other, and sometimes the same autistic trait is a liability in one context and a strength in another.

  15. MyLessThanPrimeBeef

    Breakout of more troubled financial firms –

    So, they are going to use the already-insufficient ($400 billion or so) EFSF to prop up troubled governments in Spain, Greece, Italy, etc AND troubled financial firms as well?

    By the way, when is St. Upid’s Day, the patron saint of fools?

    By the way, that’s my favorite day – St. Upid’s Day. Everyone has fun that day.

    1. MyLessThanPrimeBeef

      By the way, I just realized I began two consecutive sentences (and paragraphs) with ‘By the way.’

      It was stupid of me.

  16. scraping_by

    The Greek tanks have a strange, multipossible reality.

    The Greek government, composed of the same kleptocrats who used the nation’s credit rating to slide cash to themselves and friends, might really think tanks are good for urban warfare. Non. Abrams tanks are useful for open field action. Get them between buildings, where the rioters are, and a teenager with a bucket of gasoline can take them out.

    Turkey? Only as mercenaries for the ECB. Part of the American Interests the Marines protected in the Banana Wars were the American banks. The Latin American governments of those times were also faced with unpayable debts racked up by self-serving elites, and were repudiating those debts. Our boys were patriotically busting thumbs of deadbeats.

    There’s this: the only real industrial export the US has is military technology. Perhaps, a little gift to get at least one outside government on their side? Never know.

  17. Valissa

    RE: Top Democrats endorse Occupy Wall Street protests

    Sounds just like what the Republican party did to the original Tea Partiers, who are now mostly long gone (people like Karl Denninger) and replaced with republican operatives, traditional conservative propaganda interests and astroturf. A nice way to corral dissent, eh?

    Washington, D.C., has its turn in the anti-Wall Street spotlight

    Earlier in the week, former White House advisor and environmental activist Van Jones said at a conference for progressives in Washington that the momentum behind Occupy Wall Street protests should be used to form a liberal answer to the tea party.

    But Zeese says he’s fighting to keep the Occupy Wall Street protests unaffiliated with any political party.

    “Van Jones is very much inside the Democratic Party and we want to stay outside the two-party system,” Zeese said. “If this movement is co-opted by a political party, it’s dead.”

    I wonder if the Occupy Wallstreet protesters will be able to keep the Dem operatives out of the game.

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