Links 11/11/11

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Most Advanced Robot Ever? Yahoo New (hat tip reader Aquifer)

Mushroom Death Suit Next World TV (hat tip reader Aquifer)

Amazon workers left out in the cold Morning Call (hat tip reader 1 SK). We’ve had other links re Amazon’s bad treatment of workers in its warehouses.

Fast Food is a Middle-Class Luxury Gawker

What Happens When Petulant Parents Won’t Share? School Funding Inequities, That’s What. Helaine Olen, Slate

L’Unesco suspend ses programmes jusqu’à fin 2011 après le retrait américain Le Monde (hat tip reader EmilianoZ ). Wow, is this petty.

James Murdoch grilled over phone hacking Aljazeera (hat tip reader Foppe)

The crisis in the eurozone James Galbraith, Salon

Merkel: I do not ‘want to let the people vote’ Ed Harrison

Market volatility limits EFSF firepower Financial Times. This is an amusing excuse.

Is Europe On The Verge Of Another Great Depression – Or A Great Inflation? Simon Johnson (hat tip reader Aquifer)

Most “Occupy” Protesters HAVE Jobs … Unemployent Much Lower Than In Tea Party George Washington

Occupy Des Moines: An Increasingly Important Occupation as Iowa Caucuses Near Kevin Gosztola, FireDogLake (hat tip reader furzy mouse)

Occupy Wall Street gets CME Group’s attention… Footnoted (hat tip Doug Smith)

Gov. Scott Walker gets checked, Mic Checked! YouTube (hat tip reader furzy mouse). This is pretty cool.

How I Stopped Worrying and Learned to Love the OWS Protests Matt Taibbi. Today’s must read.

Hard evidence: bailed-out banks take more risk Finance Addict. I wanted to write this paper up, but this is such a good job I don’t need to.

Finally, a Judge Stands up to Wall Street Matt Taibbi

US officials consider options on mortgages Financial Times. Whoops! Someone in the Administration realize the market might not want to buy deeply underwater mortgages!

In MF Global’s Wake, Regulators to Audit All Futures Firms New York Times

It’s Official: Wall Street Firms May Legally Steal From Their Customers – Rationalizations to Follow Jesse. This is a really big deal. It is based on a really important find by former Goldman employee, and now long standing journalist, Robert Lenzner of Forbes. The abuse of rehypothecation was how customers of Lehman’s brokerage unit lost big time. This sort of thing is against the Securities Act of 1934 (which John Hempton deems to be the single best piece of legislation ever written). But this was in a futures, not a securities brokerage operation.

Antidote du jour (hat tip Richard Smnith):

Vultures Chose Me from Green Renaissance on Vimeo.

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  1. dearieme

    “John Hempton deems to be the single best piece of legislation ever written”: he’s read all the legislation written in all the gin joints in all the world? Remarkable.

    1. aet

      You don’t need to hear every song ever sung before you can have a favorite.

      Or do you know of a law that says otherwise?

    2. Yves Smith Post author

      He was in the Australian Treasury, and I have a sense looked at a lot of international as well as domestic legislation. And with financial legislation, the devil is in the details even more so than other types of legislation.

      If you can say that of a piece of legislation more than 70 years after it was written, it probably is pretty good.

    3. EH

      he’s read all the legislation written in all the gin joints in all the world? Remarkable.

      You disregard the rhetorical content of his statement so that you can upbraid him on a literal interpretation? Remarkable.

  2. dearieme

    “Is Europe On The Verge Of Another Great Depression – Or A Great Inflation?” First one and then the other, perhaps?

    1. Susan the other

      Salon’s The Crisis in the Eurozone by James Galbraith. Good summary of nuttiness in an irrational world. This whole bank standoff reminds me of that notorious bridge game where anger rules and the partners bid up their hands without any good cards. Galbraith’s description of the EFSF was helpful. Currently it is a CDO, using tranching I assume to spread the volunteerism, and it will soon become a giant CDS like AIG. It will shift directly into insurance mode. Not sure how that will come about. The obvious occurs even to me – that at that point the EFSF will implode like a cathedral. (Because nobody knows how to make economies grow anymore.) That leaves only the ECB to shovel up the ruins. So do we conclude that the EFSF is just a mechanism to buy time because everyone knows the ECB will have to step up in the end?

  3. Jim Haygood

    From the FT article about the EFSF:

    Christophe Frankel, the EFSF’s chief financial officer, said the fund was prepared to offer short term bills to raise money quickly and said such an offering was likely before the end of the year. In the past, the EFSF has only been able to raise funds for bail-outs through five and 10-year bond offerings, a long and complicated process that makes it difficult to raise cash in an emergency.

    But Mr Frankel said the legal paperwork to issue bills was already in place and the programme could be triggered immediately, if needed. “The beauty of the bill programme is you can start with an amount which is a few billion and then raise it very rapidly,” Mr Frankel said. “Once it exists, we know we can raise huge amounts in a very short time.”

    Oh, what a capital idea!! Borrow short term, lend long term to skanky borrowers, in ‘HUGE AMOUNTS’ … meaning massive future rollovers at the most inconvenient times. What could possibly go wrong?

    Meanwhile, Portugal’s president confesses to Bloomberg his fervent, bug-eyed faith in the ECB cargo cult:

    “The European Central Bank has to go beyond a narrow interpretation of its mission and should be prepared for foreseeable intervention in the secondary market, not as the central bank has done up to now,” [Portuguese president] Cavaco Silva said yesterday in an interview at Bloomberg headquarters in New York.

    “It has to be able to be a lender of last resort,” said Cavaco Silva, 72, who as Portugal’s prime minister presided over the 1992 signing of the Maastricht Treaty. “It has to be a foreseeable, unlimited intervention.”

    Such ECB purchases in the secondary market “would stop speculation, would stop doubts about the future value of those Italian or Spanish or Portuguese or Irish bonds,” the president said. “The real firewall is in the European Central Bank.”

    He said the ECB won’t convince investors of its commitment if it continues “as the central bank has done up to now, saying ‘I don’t like it, but I’m forced to buy some Italian bonds.’”

    Poetic justice, comrades! Silva’s a eurocrat who helped craft the Maastricht treaty, solemnly pledging that EU nations would limit deficits to 3% and cumulative debt to 60% of GDP.

    Now, having overrun both prudential limits by a country mile, he screams for “unlimited” euros to rain down on Lisbon from the ECB’s beautiful blue helicopter with the shining golden stars, in order to stop malevolent ‘speculators’ from sanctioning his nation’s profligacy.

    And how is poor Portugal going to repay this mountain of unlimited liquidity — by exporting plonk wine, porto and cork? LOL! I’d stick a cork in this fruitcake’s idiot mouth!

      1. William C

        A couple of snippets I have picked up on the British media in the last day.

        Katinka Barysch (German, Centre for European Policy Research?) claimed on the prestigious Newsnight programme that she had spoken to German politicians and they want the ECB to go in and monetise Italian debt in large amounts although they feel constrained to say the opposite in public.

        Paul Mortimer Lee of BNP (he is no fool – I know him) on the Today programme suggested the way forward is for the ECB to lend to the IMF for them to lend under IMF conditions to Italy. That way the inability of the ECB to impose conditions can be circumvented and the IMF given unlimited fire power. PML was quite upbeat that the current problems will eventually be sorted, once the debtor countries have bitten the bullet. I hope he is proved right.

    1. craazyman

      Lying Got Us into This Mess, Lying Can Get Us OUt

      Some people say you can’t solve a problem with the kind of thinking that created the problem. I say that’s too pessimistic.

      Lying caused the euro debt debacle and until we try to strategically and shamelessly lie our way out, I say there are stones yet unturned. If all these countries can lie their way into the eurozone and the CDS market can lie about countries going default, Then why can’t the ECB lie about buying PIGS bonds and just solve the whole problem.

      Consider. The ECB could “acquire” (we won’t say “buy” or “purchase”) PIGS bonds on either the primary or secondary market and immediately transfer these bonds to a special purpose vehicle for sale at a pre-determined profit at “a later date” to be determined by future consultations.

      We can call this process the “Sovereign Continuity Asset Mechanism” (SCAM) and we can call the bonds (to be sold at a later date) “Financial Intervention Bonds” (FIBs) or possibly even “Liquidity Incentive Enhancement Securities” (LIES), or even “Fiscal Reconstruction Asset Underwriting Debentures” (FRAUDs).

      There is no reason why we have to use the words “purchase” or “buy”. It’s amazing, with all that talent just sitting there collecting bonus checks, they can’t come up with a plan that works.

      1. MyLessThanPrimeBeef

        I won’t say it’s the best by craazyman becuase I haven’t read every single one of his comments.

        But I can say it’s a favorite of mine.

      2. Dave of Maryland

        If lying is the solution, they all used to print their own currencies, either in their own nation, or by foreign presses under license. So, heck yes, Greece can simply print as many 100 Euro notes as it needs to make things right. Pass them out on street corners. Why wait for the Second Coming of the Central Bank of Jesus Christ that will (predictably) never arrive?

      3. Valissa

        LMAO, that’s just brilliant!

        Of course I have a sneaking suspicion that the elites have always been Lyin’ Kings… propaganda is not a recent invention.

      4. skippy


        Skippy…afterwards, they all go to the new club in town, a converted nunnery, ask for Suzanna.

  4. Jessica

    How I Stopped Worrying and Learned to Love the OWS Protests Matt Taibbi

    Taibbi nails the broader picture in his imitable way.

    “This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it’s 10,000 feet down into a vat of razor blades that you can never climb out of.

    That, to me, is what Occupy Wall Street is addressing. People don’t know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.”

    The article about the new crisis in Iceland is about how this undeserved fall into a vat of razors is happening to an entire country.

    1. Richard Kline

      Yes, I agree. The Tabibi piece was interesting; he finally ‘gets it.’ And what is interesting about this piece, to me, is that he thinks through out loud his process of ‘getting it.’ The light comes on for him that power isn’t about individuals but about structures and how behavior complies with/conforms to structures; my language, not Tabibi’s, he uses the vernacular in his inimitable way. And the process and vision expressed by the occupations lies in behaving in _non-compliance_ with those structures. And thus making those stuctures visible, since by habituation and numbness we learn to block such structures out of our mind’s visible field.

      The Occupiers have abandoned the learned helplessness of 21st century First World drones for the mutual aid of 19th century communal activists and even the resourcefulness and economical simplicity of pre-agrarian transhumanants (to use a few $5.00 words). One message from the Zones might be, to those perched above, climbing stacks ever higher toward the Mammon those there wish to see face to face, that, “Your money is worthless here, and you have nothing else to offer: No, less than nothing.” It’s the zombies at the tops of the towers who have gone nuts and fouled the world, not the communitarians down in Liberty and in base camps everywhere. Tabibi has had his ‘liberate your mind’ moment.

      1. Foppe

        Quite so. Which is heartening, because I think I would’ve found it quite grating to see him troll for Obama as the lesser evil in the next elections, as he seemed to be intent on doing a while ago.

        1. Richard Kline

          So Foppe, to me Tabibi has been heavily engaged for some years in counter-messaging, i.e. undercutting or better counter-propagandizing against hard right memes placed in the media to shape debate. That has some uses, but it’s not nearly as powerful as organizing or counter-action. Another downside of counter-messaging is that one ends up, intentionally or circumstantially, lumped in with those against whom the message countered was aimed at. Thus exactly as you say the tendency of Tabibi and other well-informed critics to lead toward the odious Democrats in a ‘hold your nose’ fashion. An utterly useless lean if the Demos simply auction off essentials of the social system as opposed to Republicans stealing them or blowing them up.

          —But the light went on for Matt when he finally saw what _counter-action_ looks like. Tabibi’s generation has been pretty down on ‘action,’ going out in the streets and all that. Not hip enough. To ‘Old Left.’ And even more, Tabibi seems to be having the contents of his brainpan stirred regarding the _weakness_ of COUNTER-messaging as contrasted to the strength of committed example. Counter-messaging is a weak form of resistance, limp celery as opposed to directly contradicting the entire mindset of the message opposed. Break the frame, not scribble graffiti on its unmarred surface.

          Occupy your mind, or the propagandists will occupy it for you. Tabibi is expanding his view, and one may hope his critique therefore. He’s not bad, but he’ll be much, much better if he steps out of the structure of argument he’s been grappling with. Glenn Greenwald has had one foot outside for some time, and looks to be taking the final step too. We need more in the punditocracy to break the frame of past argument; not because w need pundits per se but because amplifying a more potent and human argument is so essential.

          1. Foppe

            Richard: I’ll have to ponder to what extent it makes sense to make to frame it that way; there seems to be something to it, but I think there were other reasons for his critiques often striking me as somewhat reluctant or self-restrained (with regard to the bigger picture) as well. (For instance, his discussion of Russian corruption often seemed to focus overmuch on personal failings, compared to Klein’s account of what went on during the time he was there. I’m sure part of that is journalistic style, but…)

            As for Greenwald: Yesterday evening I saw this review of his new book (which I haven’t read yet) at Amazon which supports your point quite well. Glenn seems to make rather more of the fact that the elites started to explicitly push two-tier justice starting with Nixon than seems warranted. But who knows, Yves might educate him on the importance of economic matters yet.

      2. Sock Puppet

        Yes I enjoyed that article, especially the parallels with the anti Vietnam war movement. That movement start an awareness and debate that eventually stopped the war. This has the potential for that level of change on a global level if it can, like the anti Vietnam war movement or the civil rights movement, change the terms of the debate. Nice to have something American to be proud of again.

      3. vern

        Very true. American life is like the old movie Omega Man, where Charlton Heston has to jump out of his easy chair and blow away attacking bands of mutants besieging his bolthole. That’s how every corporation acts, with the connivance of its kleptocratic government, ambushing and trapping you and jumping you from all sides. The movie is actually escapist. It would be much less stressful to handle the continual attacks with a shotgun like Omega Man does.

      4. Anon

        I watched a thing about the making of Dr Strangelove recently on YouTube.

        Interesting that Taibbi has taken Kubrick’s subtitle to that film, “How I Learned to Stop Worrying” – because yes, our current economic system, effectively a military-industrial-entertainment complex for many years now, is as batshit-crazy as it ever was.

        The war on terror has replaced the war vs the USSR, and the piles of swag amassed in the mansions of the squiderati grow ever higher, but the madness is essentially the same.

        Blankfein & co. are a collective Dr Strangelove, trailing death and destruction in their wake, and I do not mean metaphorically – see Chris Hedges on the extraterritorial effects of the US Commodity Futures Modernization Act 2000 as the genesis of his activism.

        Taibbi is no doubt more alive to the class war being fought by the 1% of the global elites against the 99% of the rest of us, given his experience in post-Soviet Russia. He has a conceptual framework and a genuine, lived, historical understanding of political economy that most of the corporate shills in the US media could only gasp at.

  5. Jim Haygood

    Bloomberg has a good update on the MF Global situation, from the customer perspective. Some excerpts:

    SIPC is a private, government-sponsored company that insures brokerage accounts for up to $500,000 in securities with $100,000 for cash in case the brokerage firm goes bankrupt. While SIPC covers losses in stocks and bonds, it doesn’t cover commodity futures contracts unless defined as specific property under certain conditions.

    1. Jim Haygood


      Well, isn’t that lovely? Futures traders have been under the impression that SIPC covered them. Now they’re told ‘maybe so, maybe not; better have your attorney read the fine print’?

      But wait, there’s more:

      Customers who still had open positions have been transferred to new brokerages with about 60 percent of their cash collateral, and now face margin calls for the rest, which is locked up at the MF Global accounts.

      [Trustee spokesman Kent] Jarrell said customers with open accounts were transferred while those with all cash accounts were not because, “moving the open positions could avoid market disruptions and allow customers to have some sort of choice of what to do with the positions.”

      “We can’t distribute cash because we have to know what the amount of segregated cash held for customers is and verify the claims against that pool of segregated cash,” he said.

      Legal options are less clear for those who have not just frozen cash, but margin calls, Butler said; “people can’t understand how the new margin is being calculated. Some people say they’re getting less than 60 percent transferred, others say they’re getting 80 percent,” he said.

      My, my — yet more fine print! Having open futures positions (which are inherently risky, since their value changes every day) turns out to expedite the transfer of your account, though you may be stuck with a margin call when it pops up at a new broker with 20 to 40 percent of your cash missing. Whereas an all-cash account with no open positions gets stuck completely. Customers are not being treated equally, in other words.

      If the CME and futures brokers can’t get their act together as an industry and do right by MF Global’s customers, then they should be regarded as thieving sleazeballs unsuited for prudent investment — the modern-day equivalent of unregulated, fly-by-night, early 20th century bucket shops.

      Many futures products now have ETF analogues that can be traded through conventional stock brokers, where the precedents and case law regarding SIPC coverage are well established. That being the case, for now I am shunning the sleazy, mismanaged futures industry. CME — you blew it, big time!

    2. Jim Haygood

      And for the crowning touch of over-the-top squalor:

      CFTC [Commodity Futures Trading Commission] chairman Gary Gensler, an Obama appointee who worked with Corzine at Goldman Sachs, recused himself from matters related to MF Global, the agency said.

      Recused? Why hasn’t Gensler — this Goldman-Sachs ringer and pal of Corzine — RESIGNED?

      And where are the Kongressional ‘watchdogs’?

      The system is broke, comrades. Yes, that’s a double entendre.

      1. BondsOfSteel

        The way I look at it, not only did MF Global fail…. CME failed. The fact that they’re doing the audit… doesn’t give me any confidence.

    3. Anon

      You mean, speculators got burned in the commodity futures market?

      Fucking A.

      Makes a change from them burning everyone else round the globe.

  6. Jack

    Jeez Yves…
    I’ve enjoyed a number of your articles over the years, but then you keep actively campaining to raise just my taxes (but not yours)!

    How about if my tax bill gets reduced due to Gov Walker’s plan, then I’ll be able to make a contribution to your tip jar…

    There’s a good chance that might happen as Gov Walker’s plan seems to be working.

    I’ll keep you posted!

    1. craazyman

      I Just Can’t Help It

      Seriously Jack. Consider that your long-term personal security costs will go up by some scalar factor in proportion your tax cut.

      And your portfolio value will eventually go down by some scalar factor in proportion to social instability.

      You can pay now. Or you can pay later. And the price will only rise.

      You’re already getting a good deal. Why rock the boat your sitting in?

      1. Jack

        Well craazyman, considering that my property taxes have been rising by 8% per year, let’s just play out your comment… WIth your suggestion to maintin the status quo, that means by the time my kids leave the house in 2 doubling periods from now, I’ll be paying $16,000 in yearly property taxes on a $150,000 house on a 0.33 acre lot in a ho-hum section of town. I could buy a lot of personal security for the money that I wouldn’t have to spend on future taxes.
        Finally, I’m absolutely certain that you do not live Wisconsin, have no awareness of the local situation, and have no qualms about having people, other than yourself, paying more for taxes.

        1. craazyman

          you’re pretty much correct across the board Jack. I should be out drinking but I have a cold and feel like sh*t. I was in Wisconsin once for about a day and hardly remember, it was business. And it truly sounds like your taxes are too high for a house of that size. I live in a rented apartment so don’t have to worry and I only have 3 pots to cook with. I keep my overhead waaaay down. NO TV even. And when the revolution comes, I’ll be ready to move to Paris France. Maybe sooner. :) It’s hard even to take all this stuff seriously because it’s basically a spiritual problem once you get past a certain level of income. Not that I have that figured out yet, it might take a few more lives. Jesus that hurts to think about.

          1. Yves Smith Post author

            Why don’t you just not come back here? I am quite clear I am NOT coming back to this plane. There are other realms of existence that aren’t like an on-the-verge-of-breakdown E ticket ride.

          2. craazyman

            LOL. Easy to say, hard to do.

            As the true proverb says:

            “The dog is turned to his own vomit again, and the sow that was washed to her wallowing in the mire.”

            Great fundraiser! I gave you $100 via paypal and if I hit my 10-bagger I’ll boost that 5 times next go-round. BTW, Can you occassionaly remark on promising penny stocks? Just a suggestion. ha ahaha haha ahahahaha haahahha

  7. Patrice

    Re: the Taibbi article. How I stopped worrying and learned to love the OWS protests.

    “All over the country, thousands of armed cops have been deployed to stand around and surveil and even assault the polite crowds of Occupy protesters. This deployment of law-enforcement resources already dwarfs the amount of money and manpower that the government “committed” to fighting crime and corruption during the financial crisis. One OWS protester steps in the wrong place, and she immediately has police roping her off like wayward cattle. But in the skyscrapers above the protests, anything goes.”

    At this rate America will end up like some extreme version of Spielberg’s film “Minority Report”; crime will be redefined as any protest against Wall Street corruption, and so the “precogs” (i.e., brains endowed with the gift of pre-cognition) will identify these crimes before they occur and the “pre-crimes” (squads of police who identify crimes before they occur) will intercept and neutralize potential OWS “criminals” before they even have a chance to protest.

    1. Hugh

      I have remarked before that kleptocracy has a lot of totalitarian aspects. Hannah Arendt in her Origins of Totalitarianism spoke to the point you are making but expanded further upon it.

      Only in the initial stages, when a struggle for power is still going on, are its victims those who can be suspected of opposition. It then embarks upon its totalitarian career with the persecution of the objective enemy, which may be the Jews or the Poles (as in the case of the Nazis) or so-called “counter-revolutionaries”—an accusation which “in Soviet Russia … is established … before any question as to [the] behavior [of the accused] has arisen at all”—who may be people who at any time owned a shop or a house or “had parents or grandparents who owned such things,” or who happened to belong to one of the Red Army occupational forces, or were Russians of Polish origin. Only in its last and fully totalitarian stage are the concepts of the objective enemy and the logically possible crime abandoned, the victims chosen completely at random and, even without being accused, declared unfit to live.

      For Hannah Arendt, the key to totalitarian control is terror, a fear that anyone can be smashed at anytime, not for any reason, but for no reason. The 99% are victimized by the kleptocrats, not for anything we did, or might do, but simply because we are there. And this is also how they maintain their control. Stray but a little bit and they will dump you into the pit with the razorblades, and then they arrange it that anyone, the good, the bad, the indifferent, will stray: a lost job, a trick mortgage, unforeseen debts, good habits, bad habits, the vagaries of chance, a downturn in the economy, whatever.

      1. Patrice

        Reading the Hannah Arendt quote above reminded me of a certain commenter who disappeared from NC a long time ago.

        Here’s to DownSouth, wherever you are!

      2. SR6719

        Hannah Arendt: “…..Only in its last and fully totalitarian stage are the concepts of the objective enemy and the logically possible crime abandoned, the victims chosen completely at random and, even without being accused, declared unfit to live.”

        Hugh: “The 99% are victimized by the kleptocrats, not for anything we did, or might do, but simply because we are there. And this is also how they maintain their control.”

        “And this is, in fact, the truth of the situation: the fact is that, one way or another, populations themselves are a terrorist threat to the authorities. And it is the authorities themselves who, by repression, unwittingly set the seal on this complicity. The equivalence in repression shows that we are all potentially the hostages of the authorities.” -Jean Baudrillard

  8. Max424

    I despise the evil vulture! Begone from my sight you vile and hideous creature!

    Ok, that was yesterday. Today, I confess, I like them. In fact, I’ve come to realization that vultures are kinda cute (in an unbelievably ugly sort of way).

    Hard to believe, but fifteen seconds of video was all it took to erase a lifetime of pigheaded ignorance.

    1. craazyman

      There’s a new restaurant in Zucotti Park that opened back in October.

      I call it Soul Kitchen but I’m not sure if it has a name. It’s right there in the middle of the park, you can’t miss it.

      And it’s free! No pesky $300 bottles of wine or $100 cognacs.

      Could be a possibility if Mario’s joints are off limits to youze guize. ho ho.

      1. Lloyd C. Bankster

        Thanks, but I don’t think I’ll be going anywhere near Zucotti Park any time soon. Some of the boys had a friendly chat with Mario, and now he’s apologized for comparing us to Hitler and Stalin.

        End of problem.

        This is good because it means I no longer have to cancel my expense account at Del Posto. These things happen, once in a while, like every few years or once every decade, someone will misspeak or get out of line, then I have to send the boys around to straighten them out, then life goes on as before, without further incident.

        1. MyLessThanPrimeBeef

          Still, it pays to inspect your organic salad before you eat it.

          This goes for all restaurants. I am not insinuating about anyone in particular.

      2. A Good Bankster

        It’s good that Mario has seen the light.

        I was never in favor of boycotting Del Posto’s and had to pop a xanax at the mere thought of giving up such treats as BOLLINGER Vielles Vignes Françaises 1999 ($1750 a bottle) or BOLLINGER Vielles Vignes Françaises 1992 ($2000 a bottle).

        This had me far more upset than being compared to Hitler or Stalin.

  9. psychohistorian

    Hey Skippy,

    How do my mates down under like becoming the latest outpost of American empire?

    You will be assimilated……….

  10. Bill

    Vultures are one of those species who are not pretty, but magnificently and savagely beautiful.

    Thanks for the video today, I would love to be gliding through the sky with them.

  11. Adam's Myth

    Just to clarify, the Malibu school issue is not about taxes, which are already redistributed evenly in the district. It is about limiting choice in charitable donations. The Slate writer seems not to grasp this.

    The school district is attempting to ban personal choices in charitable donations. Want to give extra money to your kid’s school? Well, you can’t. You can only give to the district, which will then redistribute as it sees fit.

    To see how senseless this is, imagine I walk up to a homeless man and offer him 20 bucks, but a policeman says no, you can only give that 20 to the city, which will then divide it evenly among all homeless men in the city. Most people would stop donating. That’s what will happen in Malibu: donations will be completely fair, but will fall dramatically. Not smart.

    1. reslez

      Your metaphor seems misaimed. A more accurate version would be if, instead of choosing a homeless person for your charity, you offered $20 to the policeman — who demurred and pointed your “donation” to the Police Officers’ General Fund.

      The homeless man is a private individual, which makes your metaphor ludicrous, while your child’s school is a public institution.

      Of course, it would be convenient if all public schools accepted bribes, so that marginally wealthier parents could selectively improve their children’s education — but you didn’t think you could do it on the cheap, did you? Numerous private schools would be only too happy to accept your money. Both your money and your child would be welcome there, I expect.

      1. Adam's Myth

        Schools are a public good, the centerpiece of equal opportunity. Public goods are the central function of government. The right way to pay for them is taxes, not voluntary donations. If districts don’t have enough money, raise taxes, and don’t waste time and political capital trying to force voluntary donors to do involuntary things.

        California painted its schools into a corner with Prop 13. Repeal that, and we might really have a chance at decent schools here. Going after donors is impractical.

  12. kravitz

    Another Reason NY Foreclosure Mill Steven J. Baum P.C. Hates the Affirmation Affidavit…

    Meaning, Steven Baum, the company with the Halloween party that mocked people it was foreclosing upon, and recently bitched about having to comply with New York’s Affirmation Affidavit (AO 548/10) lost a case because it couldn’t say it was telling the truth about the case it was trying to bring.
    You got that, right?

  13. Vidar

    Have donated and recommended others to do the same. Really appreciate the work you have done over the last several years. As so many others on here have noted – it is important, particularly in times like the present when many people are starting to understand they have been screwed, but haven’t quite yet figured out how or what to do about it. Keep it up.

  14. kravitz

    Service Members? “$116,785 plus compensation for any equity lost to compensate them for the bank’s alleged violation of the Servicemember Civil Relief Act (SCRA).” [And that’s only one bank. Read on.]

    Civilians? “…Foreclosure victims abused by one of the five banks would be eligible for restitution payments of around $1,500 or $2,000.”

  15. mk

    From Matt Taibi’s post: Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar.
    Why couldn’t a person/organization raise funds to buy up some of this debt for pennies on the dollar, then let the debtors off the hook?

    Could an idea like this work?

  16. Jack

    I don’t mean to dampen the problems that exist with Amazon’s treatment of its workers, but I sincerely doubt this is limited to Amazon, alone.

    I worked in a distribution warehouse for a fairly large grocery company back in 2002, and quit after a month because of the terrible treatment (to add insult to injury, it was closed shop, and our union did nothing). Remember when Amazon got a lot of flak for their warehouses being too hot? Same thing; there were enormous fans in the warehouse, but in the summer heat, and wearing heavy jeans, gloves, and work boots, it did very little beyond circulating hot air from the ceiling down to the ground level. I can’t attest to conditions in the winter, but I was told by coworkers they just dressed appropriately for the much colder conditions.

    Same goes for my brother, who spent time at a distribution center for a package delivery company, though he worked the night shift, so it was not as bad as day shift workers.

    Personally, I could handle the heat in the warehouse, it was everything else about the job that I detested. Just as one example, in the whole time I worked there, I received 1 day off, despite supposedly being guaranteed 2 days off a week by the union agreement, and having to pay $100 a month in union dues for a job that paid $10 an hour.

  17. barrisj

    On the difficulty of prosecuting financial fraud: Jeff Madrick and Frank Partnoy discuss the relevant issues in a recent article in NYRB:

    Should Some Bankers Be Prosecuted?
    November 10, 2011
    Jeff Madrick and Frank Partnoy
    In our article in the last issue,1 we showed that, contrary to the claims of some analysts, the federally regulated mortgage agencies, Fannie Mae and Freddie Mac, were not central causes of the crisis. Rather, private financial firms on Wall Street and around the country unambiguously and overwhelmingly created the conditions that led to catastrophe. The risk of losses from the loans and mortgages these firms routinely bought and sold, particularly the subprime mortgages sold to low-income borrowers with poor credit, was significantly greater than regulators realized and was often hidden from investors. Wall Street bankers made personal fortunes all the while, in substantial part based on profits from selling the same subprime mortgages in repackaged securities to investors throughout the world.

    Yet thus far, federal agencies have launched few serious lawsuits against the major financial firms that participated in the collapse, and not a single criminal charge has been filed against anyone at a major bank. The federal government has been far more active in rescuing bankers than prosecuting them.
    Basic financial fraud involves a financial firm’s relationship with its clients, investors, or trading partners. The securities laws of 1933 and 1934 require full and fair disclosure of material risks, those that reasonable investors would consider important. Moreover, even if the securities laws did not exist, the employees of the financial firms could be charged with violating a variety of other federal and state antifraud statutes, which prohibit making false statements in various circumstances. New York State passed an especially aggressive law in 1921, which gives prosecutors expansive powers to fight financial fraud. The common law, created through rulings over the years by judges, also prohibits fraud under many conditions.

    Many people may understand that crimes typically have two central elements: actus reus, a guilty act, and mens rea, a guilty mind. To convict someone of criminal fraud under any of the laws we have mentioned, a prosecutor must prove both that the defendant misrepresented important facts to investors and also that he or she knew those facts were false. In other words, failure to disclose pertinent facts to investors out of sheer negligence can’t give rise to prosecutable fraud; there must be full knowledge that such essential information is not being disclosed.

    But it is difficult to prove criminal knowledge. For one thing, the facts in financial cases are usually complicated. Not very many jurors, for example, would feel competent to assess the correlations in a mathematical model that misled investors about the riskiness of subprime mortgages.

    Within the article is a lengthly discussion on Deutsche Bank’s “Gemstone 7”, a particularly nasty CDO representing accretions of bad RMBSs, where the traders and salepeople knew first-hand that this shite was toxic, yet passed it along to clients regardless. Madrick and Partnoy argue that this – even more than Goldman’s notorious “Abacus” offering – is clearly worthy of prosecution, and the Feds simply can’t keep doing the “settlement” route, as the deterrent value in that is practically nil. Well recommended piece.

    1. Yves Smith Post author

      The SEC’s enforcement chief, Ray Khazumi, was general counsel for the part of Deutsche where the CDO operation sat. Any wonder it hasn’t been pursued?

  18. ginnie nyc

    Re: Amazon warehouse conditions – After the first article Yves linked to, I stopped buying from, which was something of a sacrifice because of my problems getting around, and the need to watch pennies. Recently, I bought an item I formerly got through amazon through a vendor on ebay; when it arrived it was in an amazon box with an amazon packing slip! I was really upset – there was no way to know from the listing that amazon was the seller.

    I congratulate the Allentown Morning Call for continuing to follow this important labor issue, and at such length.

    1. Jim

      And a Brussels-appointed Viceroy takes over.

      So I guess we want OWS and democracy in the US, but unelected Eurocrats in Europe.

      Go figure.

      1. Valissa

        Economists to the rescue in both Greece and Italy? I have been totally creeped out as the not-so-quiet coup of the financial elite continues. Pay no attention to the oligarchs behind the curtain… just click your ruby slippers together 3 times and you will return to the far off Land of Democracy.

    2. Lidia

      Beh, out of the frying pan, into the fire.

      The WP profile of Berlusca is fairly accurate as a sketch might go, but Monti is a child of the banks to a far greater extent than is Mr.B.

      Monti’s a “senator for life” in Italy, a position which in and of itself would be universally reviled by Americans (one hopes) and by any true democracy.

      The BBC says of Mr. Monti that he is an “expert in economics”… what does that say to NC readers? ;-))

      I have not personally been following Monti closely but my Italian DH is apeshit: this is an utterly bank-centric move, according to him.

      1. Foppe

        Correct; Monti and Papademos are cut from the same cloth, and are both extremely pro rentier extraction.

  19. Valissa

    In honor of 11-11-11 here is one of my favorite essays on the power of the imagination.

    Art & Artifice

    Festinger, Peckham, the science historian Thomas Kuhn, and a broad range of punditry on the evolution of knowledge, have stressed the need for a ‘tension’ to exist between observation and experience. Like any self-modifying system, crazy, erroneous ideas compete with consensual knowledge – and some survive. As Arthur C. Clarke observed, the incomprehensible magic of one period becomes the productive science of the next, despite the kicking and screaming of sceptics. This mutation is the raw material of change.

    The recognition of false phenomena invites such crucial (and truly sceptical) questions as “What if it were real?” or “What is it about us that makes placebos so effective?” It encourages the discontinuous, paradigmatical leaps of scientific advance. These are often only achieved, noted the philosopher Paul Feyerabend, by irrational, counter-inductive and ‘unscientific’ methods. Whilst early modern science brought liberation and enlightenment, he believed it now inhibits freedom of thought: too many scientists today are devoid of ideas, full of fear, fixated by the status quo.

  20. Lidia

    Europe: depression vs. inflation. I’m not sure it matters when either one means you can’t afford the goods on offer.

    I was shell-shocked today when I went to the yearly super town-market-fair in honor of San Martino: about 2/3 the usual number of booths; the booths that were there were un-original (20 of mostly-chinese? clothes, 10 of mostly-chinese? shoes, 15 of peanut brittle, 1-2 vegetable sellers rather than 10). Gone were the quirky wrought-iron mongers, basket-weavers, pizza-oven gadget suppliers, artisanal carvers, mushroom, chestnut, and live-chicken sellers and most local food purveyors in general… booths that I had seen in abundance when I first came to this town 8 years ago. Some exceptions to the crapola norm: a very nice booth of cashmere sweater creations from Florence, a booth selling small tractors, and another selling pellet stoves and fireplace inserts.

    A far-flung salami/cheese vendor from Norcia (a town 3 hours away) offered a porchetta, some cheeses, and sausages on display (no prices; if you have to ask you can’t afford it, I guess!). I left that stand having purchased roughly a pound of porchetta (roast pork with garlic and herbs) and a pound of boar sausage, for €27,00 total ($37.40). Maybe I’m out of it, but I’m still trying to elaborate/justify these prices, which our household cannot personally sustain in the long term, I don’t believe, even at half this quality/rate.

    A 6″ potted thyme plant priced at €2,50!?!? ($3.45)

    Shoes and boots can be had, however, from €15,00-€25,00. Go figure.

    My assessment is that the bulk of what is on offer is 1.) plastic; 2.) plastic from China, just as in the US. The rest is “over-priced”, ovverosia the ‘right’ price taking into account the real economy.

    What’s chilling is the fact that a single meal (a slice of pork and a handful of spinach) from an anonymous take-away in Florence can cost €10,20 ($14.00)… I was just there…, but you can buy a sweatshirt or a pair of shoes for the same price. Food is becoming sorely expensive, while there is otherwise a terrific glut of cheap consumer crap.

    When we contemplate “inflation”, to what degree do we contemplate artificial effects of monetary policy and to what extent do we take into account the true, real, effects of a growing population claiming dwindling resources. I had to view my pork purchases using the latter optic. What I don’t understand is the mechanism that privileges cheap plastic crap at the expense of real food. How can a crappy nylon rug, plastic shoe, or bogus kitchen gadget cost less than a single portion of a healthy family meal? And how is it that people can be charmed into valuing the former over the latter?

    1. MarcoPolo

      Sounds familiar.  Same in Spain where I spent the summer; markets full of cheap junk and the good stuff no where to be found.  When it is found – hams at 80€, cherries at >7€/kg, 2 plates in a bar 10€ minimum…

      Almost nobody is working, but those that are aren’t given air to breathe have to check their banks every day to see if they have been paid.  Everybody is past due on everything. 

      What they want is ECB to monitize everything. I don’t see how that helps in the end.

  21. The Heretic

    Thank you for all your excellent work. Your work, your selection of contributors, and the eco-system of bloggers really makes NC an treasure trove of knowledge.

    Thank you.

    To NC community…
    …Does anyone know why Downsouth stopped participating in the conversation on this site? I hope that he is well.

  22. Valissa

    Yanis Varoufakis… On the Brussels’ Agreement: Europe’s Reverse Alchemy in full throttle
    Judging by the headlines, the world’s media, markets, political leaders and opinion makers were biting their nails until word came from Greece that a national unity government will be formed so that the Brussels’ Agreement can be implemented. It is as if the whole wide world was praying for the Greeks to give the Brussels Agreement a chance. And since Silvio Berlusconi announced that he will go Mr Papandreou’s way, similar hopes have been raised about Italy.

    It is the purpose of this article to argue that the world’s prayers have been misplaced. That the anxiety to see Greece and Italy return to the Brussels’ Agreement fold is a sign of the calamity to befall the global economy. For this Agreement, as I shall be arguing below, is most likely to prove the euro-system’s greatest foe, rather than its cure. If I am right, the sights and sounds of a world agonising over the fate of the Brussels’ Agreement will be followed by the sights and sounds of a world readying itself for a major new twist in an already devastating Crisis.

  23. barrisj

    Readers here, who may harbour some serious reservations about Dr Drone the Nobel Peace Prize Laureate and his airborne assassination ploys, may well find this article (cited in Scott Horton’s “No Comment website) a really interesting piece indeed:

    Former Top CIA Lawyer Under Investigation
    The Justice Department is probing whether John Rizzo revealed classified information during Newsweek interview.
    The Justice Department is investigating whether a former top U.S. intelligence official, John Rizzo, improperly disclosed classified information about the CIA’s drone campaign, one of the spy agency’s most secretive and politically sensitive programs.

    People familiar with the matter say that the CIA’s general counsel’s office opened the probe in March, shortly after Newsweek published an article in which Rizzo — who had retired in 2009 after serving as the CIA’s acting general counsel — outlined an array of specific details about how CIA officials choose terrorists for drone strikes and which American officials sign off on actually carrying them out.

    The existence of the investigation hasn’t previously been reported.

    As in the business involving former NSA analyst Thomas Drake, this is all about quashing embarrassing information that the government doesn’t want put about—as distinct from the “classified information” that is constantly leaked to favoured journos to promote a US government position. Dick Cheney was masterful in orchestrating “leaks”, and as well cunningly clever in directing investigations against those who “leaked” info contrary to government policy – not secrecy, mind you, but policy. Well, the O-man and his national security team is no less vigilant in bringing the hammer down on “renegades” who shine a 300-lumen LED flashlight on disgraceful and illegal government conduct. Do please read this, as those who still claim Obama is the best on offer surely should rethink their position.

  24. Union Member

    Gov. Scott Walker Gets Checked, Mic Checked! Is the coolest. It’s Zero Degrees Kelvin Cool.

    For Wall Street the goal may be to smash and grab as much as is possible, with impunity; but for the political side of it all – the public storyline of the same nightmare – the end game is austerity. More money siphoned from the system, and political power subverted from the people.

    Gov.Walker Gets Mic Checked, is the best Press Conference Scott Walker ever had. He didn’t get to say anything, but Chicago and the people of Wisconsin get to hear something: substance, clearly stated, addressing authentic concerns. It answers a lot of questions, without actually saying that much.

    When you think of all the vapid press conferences and the inane presidential debates, and bullshit analysis forced on the public…this little video is more informative than them all.

    The former banker mayor of Chicago and our former community organizer President oughtta sit down together and watch it. They can see what democracy looks like. Send pizza. Invite Bloomberg.


  25. MichaelC

    Here’s one for tomorrow’s links:

    CFTC’s Chilton: lessons learnt from MF Global

    I’m working my way through the Volcker rule. CFTC regulated entities are immune till CFTC signs on. That’s not good.

    The timely irony: If you’re regulated by the CFTC,Dodd-Frank (and Volcker) are non-events.

    From the article:

    ‘A 2004 ruling by the CFTC allows companies to complete internal repurchasing transfer agreements (repos) using segregated customer funds in certain situations. Last year, the CFTC proposed a new rule to ban internal repos and received comments from market participants, including MF Global, who did not want the rule to go into effect.

    Due to MF Global’s situation, however, Chilton said yesterday that the CFTC should move forward with the rule, voting on it at or before its December 5, 2011 meeting. “That’s $595 million we’re still looking for,” said Chilton, referring to the fact that the rule is coming too late to prevent the MF Global situation.’

    I agree, the CFTC should ban ‘internal repos’ before 12/5.

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