Links 11/22/11

Dear readers,

Despite some grumblings, which were probably made worse by my failure to alert you to Lambert Strether acting as guest DJ last weekend via a separate post (as opposed to in Links), my impression is that the response was on the whole very positive. This is a promising start. I’d very much like to have him play this role going forward (say one or two weekends a month so I can get my life in a bit better order). As he gets more feedback from readers in comments, I am certain he’ll be able to tailor his work here to the appetites of the NC readership.

I’m still not back to regular programming. A brutal but very useful weekend at a continuing legal education course (to become a more credible amateur lawyer, more on that soon) + an OWS alternative banking group meeting + travel + non-recreational personal demands mean I’ll be a bit heavier on cross posts than normal through at least tomorrow night.

Faster-than-light results queried BBC

How much tech can children take? PC Pro

Why Doesn’t No Mean No? Joe Nocera, New York Times. I’ve beaten up on Nocera on those occasions when I’ve thought he was off the mark. His recent pieces have been really strong.

Egypt activists urge mass protest BBC

Egypt’s Cabinet Offers to Resign as Protests Rage New York Times

Why France will be forced out of the eurozone Ed Harrison, Credit Writedowns

Hungary turns to IMF as stress mounts in Eastern Europe Ambrose Evans-Pritchard, Telegraph

Eastern Europe in the gun MacroBusiness

Germany’s Finances Not as Sound as Believed Der Spiegel (hat tip Mark Thoma)

Behind Deficit Panel’s Failure, a Surprising Outcome New York Times. WTF? The fact that the deficit cuts would be worse in the absence of a deal was not widely understood. Not only did Krugman assume otherwise, but so did Mr. Market (the market decline of Monday was apparently based on the belief that a pact was necessary for cuts deep enough for the bond vigilantes to come about) and Fitch (which had said it was inclined to lower the US bond rating if a deal did not come about. I sincerely doubt that that is because Fitch is on board with the idea that deeper cuts are more deflationary and in the aftermath of a major financial crisis, make debt to GDP ratios worse)

Bastards Susie Madrak (hat tip Doug Smith)

Live Blog for #Occupy Movement: The Fallout from Pepper Spraying of UC Davis Students Kevin Gosztola, FireDogLake

We Won! No Pepper Spray

Support for Occupy Wall Street Unchanged Since Late Month Jon Walker. This is despite an increase in media efforts against the movement (the Dem hackocracy has officially gone cool to negative following the crackdown). I’m in Alabama, listening to my mother sputter about the trustee appointed to the Jefferson County bankruptcy (clearly cherry picked to be really creditor friendly). She has declared the US to be “United Banks of America”.

The Left-Behinds Michael Hirsh, National Journal

Big Banks Flee Reverse Mortgages, Leaving Industry Void American Banker

MF Global shortfall doubles to $1.2bn Financial Times. Holy shit. If someone isn’t arrested, and soon, this may finally lead investors to wake up about the need to do something about regulatory and legal complacency. Jesse is horrified too, of course (he’s been on this story relentlessly). And the records apparently suck (how convenient). Separately, this proves what I have long believed, that the success of many people at Goldman is much more due to the quality of the infrastructure, internal discipline and information flows than “talent”.

Jefferies: lies, damned lies and the anonymous hedge fund who tells them FT Alphaville

Antidote du jour:

And in case you wondered what I was up to this weekend: Your humble blogger with Judge Arthur Schack, who sadly is all to rare among judges who handle foreclosures, in that he looks at the banks’ documents to see if they make sense (needless to say, they don’t all that often):

Print Friendly, PDF & Email


  1. dearieme

    “The German government is also reintroducing the full Christmas bonus for civil servants, to the tune of €500 million.” Santa Angela blewing Other People’s Money. If I were Portugese, or Irish, and on the receiving end of endless righteous sermons from the Kraut, I might be a bit miffed at that.

    1. LeonovaBalletRusse

      Quite in the Teutonic Pagan spirit of “O Tanenbaum”–the *Christmas Tree* promulgated from Victorian England unto the New World as the *symbol of Christmas*.

    2. bmeisen

      Of all the things to get huffy about …

      The country hasn’t fully recovered from the days when virtually all railroad and telephone workers (and yes there were hundreds of thousands of them) were Beamten, i.e. effectively undisicplinable. There are a few of them still lurking around in heartless Telekom and DB offices. The Post is about 30% Beamten/70% Tarif (normal) employees, and frankly I don’t mind Beamten in the Post Office – there are very very few incidents over here of mailmen “going postal”.

      There is abuse and some outrageous bennies that rarely get out to the public, but basically the Prussians got it right – the government has a very very important role to play. This is a country where public education remains a mandate with wide public support. Public school teachers are coddled and they can’t be fired and in a profound way they still the backbone of the nation.

  2. Foppe

    A dutch newspaper writes that tomorrow the EC will most likely propose a rule change that will “in extreme cases” make it possible to deny EZ countries who are not “fiscally prudent” (come hell or high water, recessions are no excuse) access to EU subsidies (such as from the agriculture and structural development funds). (Supported by NL, Germany, Austria, Finland.)

    1. sidelarge

      Wouldn’t it be funny if it turns out that Germany (or any other “core” country) is among the first country to be denied the access in the future?

      Their enthusiasm for putting themselves in a corner like that is a little disconcerting. Let’s see if they really have guts to let the banks just die, cut back on all the expenses likely to be caused by the economic slump, and impose austerity on the citizens who by and large think they have been indeed “prudent”.

  3. Max424

    YS: [Mom] has declared the US to be “United Banks of America”

    That’s pretty close, Momma Pseudonym Smith, but really, it’s more like the United Banks of America … AND Europe.

    I don’t know the exact figures (Who does? Brave Ben? Doubt it), but I bet my bottom greenback the Fed is spending as much time and American fiat currency propping up Europe as it is fortifying our insolvent banks and our “Who Gives a Shit About the Real Economy” stock exchange.

    The ECB finds it hard to print for various reasons (rules, cowardice, inflation, etc.), so they act as the European clearing house for the Fed’s generous overseas printing operations.

    What we are witnessing, basically, is a Marshall plan that benefits strictly bankers, corporations, and the rest of the — we skip across the pond in private jets — AmerEuro elite.

    1. tyaresun


      The NC readership will greatly benefit if your mom posts once in a while. I am begining to see how how the Yves we see on NC came to be.

    2. lambert strether

      To the 1%, the United States is a place they fly over on the way to someplace else.

      They only live here (some of ’em, some of the time). They regard American citizens as “human resouces” from which the maximum in rent is to be extracted, using any means necessary.

      To them, a more perfect union, justice, domestic tranquility, the common defence, the general welfare, and the blessings of liberty are of interest purely as marketing constructs in service of rental interests.

      1. JTFaraday

        I actually think that over the past decade or so, with the drive to offshore labor costs and to extract value for the executive class (and secondarily, shareholders), along with the heavily cultivated perception that value is only added by elite finance and managerial classes, American rank and file employees stopped being human resources and became pure drag on the bottom line.

        ie., Rank and file employees are non-productive welfare recipients, who happen to (momentarily) be drawing off employer resources they haven’t actually earned. This may fly completely in the face of so-called productivity rates, but the rates aren’t what matters, it’s the framing they place around the numbers. (ie., The management consultant and MBA taskmasters drive productivity from the top down anyway, don’t they?)

        This ideological reframing is a huge part of the 1% story.

        Being perceived as a productive, value adding human resource would be a step in the right direction at this point.

        Maybe I’m just too cynical, but I don’t think so.

  4. Middle Seaman

    The reason I stay away from Lambert’s home blog is the lack of constructive approach to the on going American disaster. It’s rather pointless to ridicule the 1%, Obama and his gang and the bottomless unfairness in our social life.

    After reading the first paragraph, the same frustration with Lambert’s entry comes back to haunt me and I stop reading. There is no need to feel superior to others; it doesn’t buy even a cup of coffee at Dunkin Donuts.

    1. albrt

      I am a fan of Lambert’s work, and would like to see him continue as an occasional guest host. What he does is different from what Yves does, but the cross pollination seems helpful to me.

      In direct response to Middle Seaman, I think Lambert’s approach is highly constructive, with a focus on constructive activities as disparate as non-violent protest and gardening. These activities don’t provide an immediate fix for our high level structural problems, but I don’t see anyone else coming up with a realistic fix at that level either.

      Unfortunately, I have to agree with Lambert that the current system will require a lot of deconstruction before we can find any solid ground to build on.

    2. tom allen

      Indeed, Yves. I thought you would recruit a Very Serious Person to substitute for you. Instead I see you have found someone who is instead entertaining, thought-provoking, and largely correct. The very idea! :-)

  5. Foppe

    Nice article in the Boston Review:

    The Egyptian uprising that began on January 25 has been rightly celebrated as a momentous event. Eighteen continuous days of mass protests forced the end of Hosni Mubarak’s three decades of strongman rule.

    A revolution is inherently romantic, so it’s no surprise that Egypt’s has inspired exceptional narratives. Journalists saw something fundamentally novel in the eighteen days and the subsequent small-scale protests—“a new culture of street demonstrations,” said USA Today. The uprising became the defining event of Egyptian politics, a turning point separating before and after. Before, a brutal dictatorship maintained fear and silence. After, liberated citizens poured into the streets to exercise their freedom.

    Against this temptation to cast the uprising as a watershed is the equally attractive idea that Egypt was ripe for revolt. In this telling, various public ills—rising food prices, unemployment, government corruption—are strung together into a neat chain that leads inexorably to social explosion.

    But neither story does the revolution justice. The first erases the uprising’s pre-history; the second overdoses on the role of the past. Both conceal the very real contingency of the event, neither inevitable nor entirely alien to Egyptian politics.

    Egypt’s was no cartoon dictatorship that indiscriminately banned protests. For at least a decade before Mubarak’s ouster, Egyptians were doing their politics outdoors. Citizens assembled daily on highways, in factory courtyards, and in public squares to rally against their unrepresentative government. Mubarak’s regime responded with a million-man police force that alternately cajoled and crushed the demonstrators. The goal was not to ban protests, but to obstruct any attempt to unify different groups and prevent sympathetic bystanders joining them.

    Egypt’s uprising happened when three distinct currents of protest—labor, professional, and popular—finally converged. That convergence transformed a routine political demonstration calling for reforms into a nationwide cry for regime change. Together, the protesters defeated a formidable police force and brought down a tenacious president. Now they are shaping the politics of post-revolutionary Egypt, resisting the military rulers’ efforts to take them off the streets.

    1. MyLessThanPrimeBeef

      Ousting Mubarak, defeating a formidable police forc – these are highly visible yang manifestations.

      Change takes time.

      The opposing forces are wily, amorphous and, above all, patient. They know the foreign reporters will fly in for the party and go home soon enough for them to regroup. Your opponents, they think not in hours nor days, but decades, centuries and millenia.

      1. Darren Kenworthy

        I have been tacitly thinking the global oligarchy an overwhelmingly yang oriented phenomenon. I have been aware of the importance of dissimulation and misdirection in “leadership” but never considered this as a manifestation of yin energy. This deserves consideration, and has strategic ramifications. Thank you.

    2. LeonovaBalletRusse

      Indeed, Foppe, it is always best to avoid the *romance* of the revolution, which can lead to dissolution or to *romantic fanaticism* akin to *religious* or *cult* mania:

      Peter Viereck: “META-POLITICS: The Roots of the NAZI Mind” (New York, Alfred A. Knopf, Inc., 1941; expanded [& rev.] edition: New York, Capricorn Books, 1961): Chapter II: “‘Romanticism’ and the Cult of ‘Life’: an Attempt at Definition.”

  6. Tony

    Glad to have you back! It was great that you got a break, but it felt like this blog got a little heavy on the deficit-fear-mongering while you were out.

    1. Yves Smith Post author

      I can say this here, as opposed to on the Das posts.

      Das did me a HUGE favor with my book. He read every chapter, and quickly, and I had no pre-existing relationship with him. He literally pinged me within twelve hours of my panicking while I was drafting and thinking: “Oh, shit, I’m writing a lot about deriviatives and my knowledge of tradecraft is pretty stale. I could really step in it.” I’ve never had someone look like they responded to a call for help over the psychic channels before (yes, I know that’s coincidence, but I’m sure craazyman will reassure me on this point if he sees this comment).

      I’ve thus published every guest post he’s submitted. Most have been really on target, even if sometimes a bit technical for a typical reader. But falls for conventional views on government debt (as I confess I did about three years ago before I did more study). I was swamped, stressed, and doing too much in haste over the weekend. I saw the post from Das in my inbox and forwarded it to Lambert unread. It’s a series of three, ugh. So this isn’t Lambert’s doing, it’s mine.

      I’m going to have to figure out a nice way to tell Das no posts on macroecomics. Saying no nicely is not a strong suit of mine.

      1. Darren Kenworthy

        I encourage you not to discourage him. It is valuable to have posts from a variety of viewpoints. It keeps readers on their toes and provides interesting teachable moments for comments to work from.

        1. Foppe

          If “sudden stop” events happen, it is because they wanted them to happen, not because they had to. But not to worry, they’ll turn MF Global into a bank holding company long before that happens.
          What would be nice, though, is for part of those wondrous “investors” to change allegiance. But the only way that will happen is if they’re cut off from the trough.

    1. Ron

      MF Global shortfall doubles to $1.2bn: The reality of leverage in future and equity markets has an unappealing result as customers accounts are frozen, funds/assets missing and repayment of customer funds are uncertain. Little discussion or none from the financial press has been raised on exactly what credit mechanism is employed by the broker to offer customer leverage/credit. The FED has used the future markets consistently to generate commodity price inflation along with pumping equity markets, its role in these situations are hidden from public exposure. Financial companies use of various leveraging/accounting procedures under the guise of pushing money velocity has dangerous side effects and little or no positive impact for the economy.

  7. ambrit

    Dear Esteemed Blogatrix;
    I had to laugh when I scrolled down and stopped at a picture of two Grizzly Bears with the apparent caption, “Your humble blogger with Judge Arther Schack…”

  8. Jim3981

    the “left behinds” was no accident.

    “Forty years ago this week, on August 23, 1971, Justice Lewis F. Powell, Jr., an attorney from Richmond, Virginia, drafted a confidential memorandum for the U.S. Chamber of Commerce that describes a strategy for the corporate takeover of the dominant public institutions of American society”.

    1. LeonovaBalletRusse

      Jim 3981, thanks for providing the link. Indeed, eventually “the truth will out.” “No secrets shall be hid.”

      This is true when the People become vigilant.

  9. Steve U

    I enjoyed lambert over the weekend. Slight change of pace, easy to read, as informative as ever. Made for a nice weekend while I was home alone with my 2 kids.

    Coming from an interested spectator, not someone involved in or very knowledgeable of the financial world. I’m learning lots from you.


    1. LeonovaBalletRusse

      hondje, is he in jail yet? Time will tell, but surely there must be *heavies* out there to dispense *lessons* from the high and mighty.

      This is beginning to look like a Greek tragedy. The *tragic flaws* will take their toll.

  10. ex-PFC Chuck

    Re the last link about the evaporation of $1.3B at MF Global, I followed a link at Jesse’s place entitled, “Farm Belt Outrage over MF Global Chills Markets.” Someone needs to work on connecting these folks with OWS.

  11. Skippy

    Thanks to Lambert for holding down things, nary a scratch and still gas in the tank, of this site.

    Good to see you enjoying your self Yves and thanks to Judge Arthur Schack also.

  12. rjs

    Occupied Media: Interview With Larry Mishel – Our most recent Occupied Media virtual teach-in is with EPI economist Larry Mishel. EPI is celebrating its 25th year fighting for the 99%. EPI was recently recognized by the Washington Post and Paul Krugman. Krugman had this to say about EPI and Larry Mishel:
    At this point EPI is the single best source for analysis of labor issues, one of the best sources of macroeconomic analysis, and in general a bastion of humane clarity. The institute’s success demonstrates just how powerful it is when you combine intellectual integrity with commitment, when you make a point of doing the math right, but also never forget that you stand for something…. Put it this way: I’ve had a number of meetings with senior officials along with other progressive economists, and I always feel that of the group, Larry Mishel is talking the most sense — and, whaddya know, agreeing with me.

    1. LeonovaBalletRusse

      Thanks rjs. “A bastion of humane clarity.” It doesn’t get any better than that in the *real* world.

  13. Cynthia

    If a massless particle, whether it’s a photon or a neutrino, were to travel faster than the speed of light, it would soon gain enough mass that it would collapse itself into a black hole. If this were to happen, the universe would be full of black holes. So it’s paramount that we have a speed-of-light limit to prevent any particles, including any massless particles, from overpopulating our universe with black holes. This is why I’m having a very hard time believing that any particle in our universe has the ability to travel faster than light.

    1. chad

      “This is why I’m having a very hard time believing that any particle in our universe has the ability to travel faster than light.”

      Everyone is having a hard time believing it but if the experiment is repeatable and verified, well, a fact is a fact.

    2. F. Beard

      Perhaps space is like Swiss cheese with the holes representing a space with a different speed limit? But then why only neutrinos?

      Any way, God’s Creation continues to amaze and confound. For example, where is the Higgs particle?

        1. F. Beard

          This Universe may be no more than a glorified baby crib. For one thing, we can know so much that we are encouraged to learn. But on the other hand, it continues to mystify and humble us.

        2. psychohistorian


          Matter makes up, we think, about 4% of stuff in our universe. We only know some things about that matter stuff and little to nothing about the other 96% which we currently believe to consist of dark energy and dark matter.

          Lets just keep our eyes and minds open to all we don’t know.

    3. LeonovaBalletRusse

      Cynthia, aren’t they discovering that “the universe is filled with black holes?” *Facts is facts*, no matter how we react to them. Let’s establish what our *reality* is as best we can, then adapt accordingly (*adapt or die* is the law of organic evolution, is it not?). Fear not!

    4. Flying Kiwi

      Many intelligent people had a hard time believing in Darwin’s Origin of Species not because of religious dogma but because there was at that time no known mechanism to account for a sun that was required to burn at a steady rate for millions if not billions of years.

      Then, forty years later, along came nuclear physics.

      1. F. Beard

        I hate to break it to you but billions of years are not adequate either.

        Your only hope is to postulate an infinite number of universes and we just happen to be in a lucky one. Are those other universes detectable? Maybe but if not then it is faith against faith except that there is historical evidence for Miracles.

        1. Anonymous Jones

          Ummm, yeah, no…

          Every state of the universe (with its almost infinite number of variables) has a probability that has basically reached zero; yet the state of the world that exists in each moment of time actually exists even though the probability that it would exist is infinitesimally small.

          Your statement in no way diminishes the truth of our existence (i.e., the improbability of our existence is irrelevant because the improbability of every state of the universe is quite high).

          Try again. Your hokum and wishes don’t make anything true. What is is and what isn’t isn’t. What you have faith in (i.e., what you were indoctrinated to believe at an impressionable age) is great, but it’s not for me.

          1. F. Beard

            (i.e., the improbability of our existence is irrelevant because the improbability of every state of the universe is quite high). Anonymous Jones

            That’s like flipping a quarter 1,000,000 times, getting heads every time and then believing the quarter was not rigged. Yes, it’s possible but would you bet your soul on it? Really?

            Might not God rebuke you just for betting against very long odds? What will you say if He asks “Why?”

          1. Flying Kiwi

            You miss the point. Cynthia has a hard time contemplating faster-than-light particles because their existence demands a scientific explanation current knowledge can’t provide – and even contradicts. Many Victorians had a hard time contemplating Darwinian evolution because the million of years required to explain fossils simply wasn’t available according to the known science of the day. In fact the best estimate of the burning life of the sun as a solid body the equivalent of coal (their best parallel) was unfortunately close to the biblical Creationist’s 6,000 years.

            Perhaps in 40-years time there will exist a scientific explanation as unimaginable to us as nuclear physics would have been to Darwin’s contemporaries.

  14. CB

    Re: Goldman Sachs “talent.” There’s a world of difference between understanding how the system works and understanding how to work the system. Corzine and his ilk do understand how to work the system. That is as far as their understanding extends, but it’s made many of them very wealthy, which says everything you need to know about the state and health of the American economy.

    In one of those grand ironies of politics, I agree with almost all, perhaps actually all, Corzine’s policy positions, but I have never liked or trusted him and I think he’s dangerous. He strikes me as the epitome of obtuse and egocentric: he’s always right and if you disagree with him, you’re wrong, end of discussion. There is no good but Jon’s good. I voted for Bob Franks for senate and held my nose to vote for Corzine for governor. Had Cody run instead, even tho I have real issues with him, I would have voted for him and I’m pretty sure Christie wouldn’t be governor today. Corzine is a political dope. Speaking of “talent.”

    1. Cynthia

      A dim-witted ass named Corzine

      Launched a new money making machine

      He FED it, it grew

      Then one day it blew

      His clients required Vaseline

      H/T: The Limerick King

      1. Cal

        There was a man from Paramus,
        his balls were made of brass,
        in stormy financial weather,
        he’d clack them together
        and debt would shoot from his ass.

        Apologies to Ogden Nash

    2. LeonovaBalletRusse

      CB, you’re on it. One point: not “end of discussion” but “end of story” of Tony Soprano fame.

  15. Patrice

    “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum – even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.” – Chomsky, “The Common Good”, 1998

    1. Foppe

      Yes, and it shall be called “identity politics”.
      Having said that, I partly disagree with Chomsky: I would say that it is unnecessary to have (narrowly-circumscribed) debates on everything that could potentially fall under the aegis of politics. Because I would say that it has been much more effective to “cordon off” certain domains entirely — by “creating (the Washington) consensus” — while simultaneously heavily stimulating people to debate other — preferably cultural — issues, as these are far more salient to most people than discussions about questions of (institutional) economics — except, of course, in times of crisis. Because this way, people (especially those in the middle) forget that it is even legitimate to fight politically over distributional issues.

      1. Lidia

        “forget that it is even legitimate to fight politically over distributional issues”

        CNN clip courtesy of Digby: Sanders vs. Blitzer.

        Blitzer keeps trying to make Sander’s perfectly sane political stance sound like something that isn’t previewed by the process, and thus illegitimate. He tries eight ways from Sunday to rope Sanders into the approved CNN meme which seems to be that Ds must compromise because Rs won’t. Sanders manages to hold his own as Wolf gets increasingly nervous and shrill.

        It’s hard to see why an interviewer would behave like that without serious marching orders.

        1. sparks

          Many news folk like Leslie don’t need marching orders. They do it reflexively, as they are (or aspire to be) the 1%.

          1. Lidia

            I guess scenarios like this, while common to the point of being tiresome, raise the question of “what has this interviewer got to lose”?

            A douchebag like that… how many friends has he got? He already has millions of dollars of his own… doesn’t need to work another day in his life… why keep putting himself in positions where he has to either lie, bully the subject, be made to look foolish, or all three? He never seems comfortable in his own skin.

            He already is the 1%, but he spends his days polishing their boots and cleaning their toilets? Why doesn’t he just go play golf? Just a strange form of masochism to watch, imo…

    2. MyLessThanPrimeBeef

      One way for them to deal with free speech is to make yours one amongst a googol so that you speak but no one hears your.

      It’s like doing zazen to empty your mind of thoughts. You can try to reduce your mind from many to 3 to 2 to 1 and hopefully zero thoughts (you would have done better than me), or you can overwhelm your mind with too many thoughts that it short-circuits itself and becomes incapable of any thought.

      So, life is paradoxical like that – you go west to reach the east, you let people speak so no one can be heard, or the most ardent communist also makes a great capitalist – in this case, the common denominator is the ego to be better than his fellow men. Today, he’s a radical. Tomorrow, he’s a guardian of the status quo. Whatever he is thinking now, the world must agree.

    3. LeonovaBalletRusse

      Is this not the tactic of every *Minister of Education*? Is this not the quintessence of *propaganda*?

      Jacques Ellul: “PROPAGANDA: The Formation of Men’s Attitudes” (translated from the French by Konrad Kellen and Jean Lerner, with an introduction by Konrad Kellen: New York, Vintage Books: Random House, 1973 [orig. New York, Alfred A. Knopf, Inc. 1965, 1968]) Still *the bomb* today.

      Also of vital import today is Ellul’s “The Technological Society” — just the antidote we need to *high speed trading* and *robotomania* in toto.

  16. Crazy Horse

    I tried bear spray (pepper spray on steroids) on my computer but it didn’t stop the bear market.

    1. tom allen

      So maybe all we need to get a bull market going is to apply more bullshit? I thought that had been tried?

    1. LeonovaBalletRusse

      Yes, Krugman is ever *on it* and a steady, compassionate leader of the *avant garde*. Thanks for the link.

      So why is it that Paul Krugman *cannot* be Democratic Presidential candidate in 2012 for *We the People:the 99%*?

      Paul Krugman 2012: If Not Now, When?
      William K. Black: Secretary of the Treasury

      I know “I’m a dreamer” – but “I’m not the only one.”

      1. Foppe

        I’m somewhat more hesitant when it comes to Krugman.. These are from the late 1990s. He seems to have changed his tune (gotten religion?) since, but it strikes me as a tad suspect that he could convince himself that this made sense back then.

        1. LeonovaBalletRusse

          Foppe – point well taken. It’s hard to know if someone has been converted or not, and I may be a fool (been there, done that), and I’d like to believe that that Krugman would be a true mediator into the real world we ALL must inhabit cooperatively in C.21, or die. In short, I believe that Paul Krugman is a compassionate man, originally of the 99%, a man who had demonstrated audacious love, deep fealty, and an egalitarian spirit for his wife, Robin Wells, for many years. I believe he is a just, modest, and honorable man, assimilated into *American* culture from a *minority* group that has known the despair of the despised *outsider* for centuries, who is not a religious fanatic, but a Professor of Princeton who earned his laurels, yet deigned to *break ranks* in order to address and teach the 99% from which he comes, as a Columnist and blogger for the Times (OK, New York City, finance, and all that).

          I see him as the the most plausible Mediator between warring political and social *tribes* who have lost our way and our humanity, and who are just beginning to grow up, “the hard way.” I see him not as a *David*, a King, but as *Samuel*, an ancient “circuit judge” of humble origins, who kept the peace through just guidance until old age, when the *tribes* insisted on *having a king” to rule them.

          This is why I make my plea to the 99%, We the People:

          PAUL KRUGMAN 2012: If Not Now, When?
          William K. Black: Secretary of the Treasury

          There is nothing certain. But this is the next best thing. Can we do better than to elect a JUST MAN and a great teacher as our President for 2012, as a Democrat replacing Barack Obama?

          I rest my case.

          1. Foppe

            Oh, I have no doubt that he’s a fairly well-meaning guy. The question is whether he can buck trends, and stand up for what he believes in even when he gets lots of pushback from the assortment of neoliberals running the world.

  17. MacCruiskeen

    On FTL neutrinos: it’s been reported that the OPERA team repeated their experiment with shorter neutrino bursts, to eliminate one possible source of measurement error, and got the same result. So, while a betting man would be fairly safe to stay on the side of Einstein, sorting out exactly where the error is is turning out to be a nontrivial problem.

    From Nocera: “Less understandable was the reaction from conservatives, who cast the F.D.A. decision as an example of the nanny state making decisions that more properly belonged to doctors and their patients.”

    Not entirely surprising. In the conservative world, the FDA shouldn’t exist, so any decision it makes is by definition a nanny-state decision. Does Nocera really think conservatives care if insurance companies pay for something useless and/or dangerous, no matter how expensive it is? (And I seem to recall someone here proffering insurance payment as evidence of the efficacy of acupuncture!)

    1. LeonovaBalletRusse

      Still, maybe Einstein’s Special Theory of Relativity applies to *our* universe, even if we are *not the only one*.

      Brian Greene, “THE HIDDEN REALITY: Parallel Universes and the Deep Laws of the Cosmos” (New York, Alfred A. Knopf, 2011);

      Richard Panek, “THE 4% UNIVERSE: Dark Matter, Dark Energy, and the Race to Discover the Rest of Reality” (Boston, New York, Houghton Mifflin Harcourt, 2011);

      Richard Tarnas, “COSMOS AND PSYCHE: Intimations of a New World View (New York, PLUME: Penguin Group, 2007 [2006]);

      Michael Shermer, “THE BELIEVING BRAIN: From Ghosts and Gods to Politics and Conspiracies: How We Construct Beliefs and Reinforce Them as Truths” (New York, Times Books: Henry Holt and Company, 2011);

      Ervin Laszlo, “Science and the Akashic Field: An Integral Theory of Everything” (Rochester, Vermont, Inner Traditions, 2004);

      Tamas Tamaki: “AGAINST RELIGION” (Melbourne, Scribe Short Books, 2007).

      George Lakoff, “MORAL POLITICS: How Liberals and Conservatives Think” (Chicago and London, University of Chicago Press, 2002 [1996]).

      Plinio Correa de Oliveira, “NOBILITY and Analogous Traditional Elites in the Allocutions of Pius XII: A Theme Illuminating American Social History” (York, PA, The American Society for the Defense of Tradition, Family and Property (TFP): a registered name of The Foundation for a Christian Civilization, Inc., 1993);

      Elizabeth Fox-Genovese and Eugene D. Genovese, “THE MIND OF THE MASTER CLASS: History and Faith in the Southern Slaveholders Worldview” (Cambridge, New York…, Cambridge University Press, 2005), and

      —- “FRUITS OF MERCHANT CAPITAL: Slavery and Bourgeois Property in the Rise and Expansion of Capitalism” (Oxford, New York…, Oxford University Press, 1983).

      “Everything connects.” (Gregory Bateson)

    1. LeonovaBalletRusse

      Finance Addict, thanks for the link. “significant but not material.” Right, says who? *We got trouble, right here…*

  18. Up the Ante


    “.. a lethal currency mismatch .. Hungary is in a classic foreign debt vice. ”

    Looming debt slavery to the U.S.-sponsored IMF.

    Facets to the Eurozone problem, they’re known as ‘countries’.

    And to think Corzine had been considered as Treasury secretary.
    Surely by now the state of New Jersey has something to add?

    1. LeonovaBalletRusse

      Up: *Obama for Corzine for Treasury* – You got a problem with that? You lookin’ for some other gift from Joisey?

      1. Up the Ante

        Jersey always delivers something.

        I would like to see Hungary do the clever thing and tell the Eurozone to go pound sand.

  19. Slim

    I have been thinking recently about ways to save time and money.

    Just curious – Could we have Pepper Spray considered for vegetable status in our schools?

    I think it would save time and money, if each “serving” that our local police dispense could be considered one serving of vegetables. I am sure the Republicans have done some work on this.

        1. LeonovaBalletRusse

          Reagan-Omama special: *ketchup with ricin* this will *keep down crime* by teenaged proles.

      1. chad

        heh if it’s so harmless then spray some on your tacos at lunch. Concentrated capsicum isn’t to be toyed with.

      2. chad

        Just saw this on Wikipedia

        “In California, the container holding the defense spray must contain no more than 2.5 ounces (71 g) net weight of aerosol spray”

        That bottle was bigger than 2.5 oz, I guess the police are exempt?

        1. LeonovaBalletRusse

          Chad, that ain’t no stinkin policia: those are our *Homeland Security Heroes*. Friend them on Facebook.

      3. Slim

        Fox news… Wow. No point in being sarcastic anymore I guess. I give up. Going back to the rock I crawled out from under now.

          1. LeonovaBalletRusse

            Sock – It’s the set-up for 1% monopoly control of water. Water is for the 1%. For *hydration* purposes, the 99% can recycle their ****. If it’s good enough for *our heroes* in the desert, it’s good enough for hoi polloi.

    1. F. Beard

      First I thought you were referring to the grizzly bears in which case the griz on the right represents Yves’ intellectual combat effectiveness.

  20. psychohistorian

    Frankly Yves, I encourage you to continue to post a wide range of views on our political economy because we need to expose ourselves to different/broader ways of thinking.

    IMO, much of the public is mediaized (softer than brainwashed) into thinking about our society in fairly narrow constructs. Searching for solutions to our problems within those narrow social constructs will not serve us well going forward.

    What continues to gall me and fires my responses to postings is the nibbling around the edges approaches that externalize the architecture of our class based society. I have and will continue to demonize approaches that ignore or obfuscate the hierarchical structure of western “democracy”……a Tobin tax will not change the ethics of the participants and MMT may be a wonderful theory but it says nothing about how it is fairly implemented in our horribly skewed class based and owned world.

    1. LeonovaBalletRusse

      Recall: Thorstein Veblen, “The Theory of the Leisure Class,” for crystal clear, apposite *talking points*.

      1. scraping_by

        Available for download from Project Gutenberg. Fast, free, and enlightening. Three ways better than most dates.

  21. Susan the other

    About deficit cutting by default. There is still a year to fight it out. It won’t go into effect until January 2013. There will be a large faction of Rs and Ds fighting to prevent the Military from its scheduled 600B cut. Makes me think how ironic it is all going to become. But the Military is such a massive enterprise. It is us whether we like it or not. It might be smartest to put it to good use. Like a worldwide mission to green the planet. Who better? And what better way to bring economies back? And what a great gotcha on the austerity loonies of the right.

  22. sidelarge

    Oh my. Has this been posted yet?

    Our beloved chancellor at UC Davis turns out to be a former Athens Polytechnic student who was right there back in 1973, in that famous uprising. And now, in 2011, she is one of the advisory board that recommended to the Greek government the abolition of the university asylum law, which HAS been abolished.

    Maybe this is old news, but I’m astonished. Or maybe not really, because on many levels, this is very typical, considering how many of those who participated in the uprising have turned into guardians of the status quo in Greece today.

    1. MyLessThanPrimeBeef

      Makes you wonder how many of the 99% will turn into the 1% tomorrow.

      Interesting the UC David chancellor is a woman. So is the police chief.

      They maybe anatomically women, but to make it in our society, they have been forced to disproportionally display their male energy. The problem here is that our system is a yang-system. In a yang system, it’s all about taking, being aggressive, competition, ranking/categorizing, rational, etc. Women can never be equal to men in such a system, just like men can never be equal to women in a ying-system. So, it’s not about women getting less pay now and needing to be paid more going forward, but it should be about bringing more ying energy into our existing system so that there is more balance, so that ying qualities like nurturing, sharing, intution, yielding, etc are appreciated. In such a system, pay is less valued and you don’t worry about who is getting less pay. And women won’t have to be forced to suppress their ying energy.

      1. MyLessThanPrimeBeef

        By the way, I think the chancellor and the police chief should go.

        I would also comment on the students chanting ‘you use weapons and we use voice.’

        Technically, your voice is a weapon. Be proud of using a weapon.

        We are all primates, and I imagine our primatologists would say, among chimps, for a group of them to be shouting and screaming at another group, it would be considered belligerent and hostile (as the human researchers perceive it).

    2. LeonovaBalletRusse

      Agents for the Global 1% have been placed strategically in every pie. Where is our Dickens today?

  23. polyblog

    I’m happy to read Lambert Strether wherever I can find him. Something is still wrong with his home site, but I think he has RL issues right now (battening down the hatchs for winter), so I’ll bother him about it later.

    Yves, I really think he’s a good guest for this site. For someone like myself who has only learned (and continues to try to grasp)finance through blogs and current books, it’s nice to have some relief. My brain gets full fast!

    Thanks for all you do.

  24. MontanaMaven

    Happy to have you back, Yves. Thought Lambert did a great job especially covering the big pepper spray story at UC Davis from the positive perspective of the brilliant use of the people’s mic. Full disclosure: I blog regularly at his webs site It’s down right now, but hope it will be up soon.

    I was disappointed to hear Susie Madrak yesterday on Mark Thompson’s Sirius Left radio show at first eloquently voice her outrage at the president and the feckless Congress democrats. But then she goes on to say that she will vote for all Democrats for Congress and then give them no excuses to gut Social Security and M and M. Huh? We tried that in 2006 and 2008. We stayed home in 2010. No difference. Occupy and stop talking about voting. Voting never got anybody anywhere. (Maybe that’s because late last night I read “Anarchism: A Very Short Introduction” by Colin Ward.”

    1. LeonovaBalletRusse

      True, MontanaMaven. Hasn’t it been said that it is *psychotic* or something like that to keep doing the same thing, hoping for a different outcome?

      I guess we are all *anarchists* now, in the best sense of the word: 1776.

  25. Forrest Gump

    White person arrested on anti-immigration charges–Alabama governor gets involved.

    TUSCALOOSA, Ala. (AP) — A German manager with Mercedes-Benz is free after being arrested for not having a driver’s license with him under Alabama’s new law targeting illegal immigrants, authorities said Friday, in an otherwise routine case that drew the attention of Gov. Robert Bentley.

    Tuscaloosa Police Chief Steven Anderson told The Associated Press an officer stopped a rental vehicle for not having a tag Wednesday night and asked the driver for his license. The man only had a German identification card, so he was arrested and taken to police headquarters, Anderson said.

    The 46-year-old executive was charged with violating the immigration law for not having proper identification, but he was released after an associate retrieved his passport, visa and German driver’s license from the hotel where he was staying, Anderson said……..

    1. LeonovaBalletRusse

      Thanks for the update on what’s happening to the German swell in Tuscaloosa.

      Please see the the article by William K. Black, of 21Nov11, re Germany within the EU frame, AND the comment by “Dr.Dr”–relating the article to a yet larger frame of reference, at:

      At issue is the frame of 1940-41 and of 1961 constructed by Peter Viereck in his “META-POLITICS: The Roots of the Nazi Mind” (New York, Alfred A. Knopf, Inc., 1941; expanded [&rev.] edition: New York, Capricorn Books, 1961), valid today. “Plus ca change….”

      This fits well into disussions on NC today.

  26. LeonovaBalletRusse

    Yves, despite your exhaustion, isn’t it wonderful to know for a certainty that you are *uniquely important*, and your input quite necessary, to a sector of the global population that *really, really* wants to make radical change for the better happen?

    Thank you for humoring your base today. Welcome home, if only for a day.

  27. Z

    The successes of the employees at goldman sachs are due to the fact that goldman/government sachs rigs the markets to their advantage.


  28. Hugh

    Without France, there would be no “Eurozone”. All you would have is a glorified Deutsch mark. Of course, you could argue that’s where the euro went wrong in the first place, that it essentially was a glorified Deutsch mark.

    Re Egypt, some of us pointed out at the time, that while the Tahrir Square movement could be credited with ousting Mubarak, the turning over of power to the military during the transition put the revolution at risk of abortion by the military, its leadership being made up of Mubarak men.

    As another commenter noted, Denninger sees the ballooning scope of MF Global as undercutting the credibility of brokerage houses, that MF Global was not a one off and that money held at such institutions isn’t safe, as the inability of depositors to get their money back shows. It is this question mark that it puts over the entire industry that makes MF Global potentially systemic in nature.

        1. LeonovaBalletRusse

          L S, There are two still photos, and a *video still*–the still photo appearing before you click on the video. Several figures comprising the *audience* on the right side (from our point of view) have the strange placement and *haloes* characteristic of photo-shopped work. Even on the left side (our POV) the grouped persons seem not quite natural as *part of the crowd*. This is what I meant.

  29. kravitz

    Obama’s folks are still trying to strong arm California.

    States moving on smaller U.S. mortgage probe deal

    It’s a smaller deal, since California is excluded in this version. Same article states there’s no real deal. Hmm…

    “But it would also keep the banks exposed to legal claims in that state’s large, distressed market.

    For homeowners, it could mean that California residents do not get relief as quickly, as the state tries to strike its own deal.”

  30. Foppe

    Janet Takavoli on MF Global (h/t Jesse) has a nice explanation of the accounting shenanigans MF Global pulled, and which sound absolutely bizarre to me. But hey, I don’t earn millions a year.. Anyway:

    MF Global’s problematic trades were different from AIG’s, but they were also derivatives, in fact, they were a form of credit derivative. The “repo-to-maturity” transaction was just a form over substance gimmick to disguise this fact. Specifically the transactions are total return swaps, a type of credit derivative, and the chief purpose of these transactions is leverage.

    A total return swap-to-maturity includes a type of credit derivative. It allows you to sell a bond you own and get off-balance sheet financing in the form of a total return swap. Alternatively, you can get off-balance sheet financing on a bond with risk you want (but do not currently own so there is no need to sell anything) and take the risk of the default and price risk. (Price risk can be due both to credit risk and/or interest rate risk.) This is an off-balance sheet transaction in which the total return receiver (MF Global) has both the price risk and the default risk of the reference bonds. In this case, MF Global had the price risk and the default risk of $6.3 billion of the sovereign debt of Belgium, Italy, Spain, Portugal, and Ireland. As it happened, the price fluctuations of this debt in 2011 weren’t due to a general rise in interest rates, they were due to a general increase in the perceived credit risk of this debt.

    Repo transactions are on balance sheet transactions, but they don’t draw as much scrutiny from regulators. There was just one little problem. MF Global wanted the off-balance sheet treatment of a derivative, a total return swap, but it didn’t want to call it a total return swap, so it used smoke and mirrors. Even if MF Global engaged in a wash trade at the end (if there is no default in the meantime) to buy back the bonds, MF Global would receive par on the bonds from the maturing bonds. The repurchase trade at maturity is a formality with no real (or material) economic consequence.

    In other words, the “repo-to-maturity” exploits a form-over-substance trick to avoid calling this transaction a total return swap. Accountants paid by the form-over-substance seekers and asleep-at-the-switch regulators will sometimes, at least temporarily, go along with this sort of relabeling.

    The fact that MF Global was exposed in a leveraged way to default risk and liquidity risk because of these transactions and that the risk was- linked to European sovereign debt was disclosed in MF Global’s 10K for the year ending March 31, 2011, a required financial statement filed with the SEC. The CFTC and other regulators had the information right under their noses, but it appears they didn’t understand that they were looking at a leveraged credit derivative transaction that could lead to margin calls that MF Global would be unable to meet.

    The result is that yet another large financial institution has been felled when it couldn’t meet margin calls due to the credit risk of fixed income assets combined with high leverage in an off-balance sheet transaction. The ugliest part of this story, however, isn’t that MF Global got in over its head, it’s that the bankruptcy trustee estimates customers’ money to the tune of $1.2 billion or more is still missing.

    1. Foppe

      Nice touch:

      Jon Corzine resigned as Chairman and CEO of MF Global on November 4, just days after the October 31 bankruptcy announcement. As a matter of corporate governance, holding the position of Chairman nad CEO meant that Corzine had a lot of concentrated power with little oversight. Many question the wisdom of a corporate structure that allows officers to hold this dual position. (Ken Lewis, the Chairman and CEO that merged Bank of America into the poorhouse held this dual role, too. Lewis defended this practice at the Federal Reserve Bank of Chicago’s Bank Structure Conference in 2003.) Corzine was the former governor of New Jersey and had been out of the active markets for twelve years. Prior to that, until 1999 he had been the CEO of Goldman Sachs.

      The Financial Industry Regulatory Authority Inc. (FINRA) gave Jon Corzine a waiver from his Series 7 and Series 24 exams when he took the helm of MF Global in March 2010. The former is required for anyone involved in the investment banking or securities business including supervision, solicitation, or training of persons associated with MF Global, and that included Corzine. As an officer of MF Global the latter was required for Corzine, since he had been out of the business for around 12 years or more than six times the 2 year expiration date for reactivating these qualifications.

      1. LeonovaBalletRusse

        Foppe, thanks for this. “a WAIVER from his Series 7 and Series 24 Exams” – incredible, but true; and why?

        1. Foppe

          (Sorry, can’t link to the pdf, as the site keeps eating my comments when I do, but you can find it at Takavoli’s website)
          Anyway, by way of an answer to your question:

          Tip-Offs for Some Customers?
          In August, customers started pulling billions of dollars out of their segregated accounts with MF Global. It was the biggest outflow of funds since January 2009. The bankruptcy trustee may clawback transfers of funds from MF Global as it was teetering, because it is likely that employees within MF Global were well aware of the problems and tipped off key customers.

          Yet Gary Gensler, head of the CFTC, did not investigate or begin transferring accounts out of MF Global before the bankruptcy, and that is unprecedented for the CFTC. Given that Gary Gensler was a protégé of Jon Corzine at Goldman Sachs, one should question why Gary Gensler didn’t act and why he should be allowed to remain head of the CFTC.

  31. LeonovaBalletRusse

    Mighty smug is the dissemling attitude of Michael Hirsch, author of “The Left Behind” cross-posted from LINKS today.

    I read all 6 pages of this *APOLOGIA* for the Global Reich’s Late Stage Capitalist *globalization* putsch since Reagon, in order to enrich further the 1%, at the devastating expense of the 99%. He begins his conclusion:

    “Let’s face it–the United States is not about to adopt a socialistic or even a European-style industrial policy.”

    Who butters Michael Hirsch’s bread, I’d like to know? Nevertheless, we can guess the answer by his smug declaration above.

    Why should we be listening to Michael Hirsch, who has decided OUR future for us with a round contempt so typical of the 1% and their privileged henchman?

    We the People are *Occupiers* with a long American tradition: We’re *gonna get on the bus, Gus. We ain’t gotta discuss much.” We’re gonna set ourselves *free*.

    We don’t have to “face it” — i.e. face the *inevitable outcome” according to your sermon, Mr. Hirsch. Any member of the NC flock is *free* to question conventional authority, which is all that you appear to offer. I assert that your smug conclusion is a *tell* that reveals your intention to keep the *status quo* in place.

    Real *free speech* via *freedom of the press* will bring the *inevitable outcome* to us in the quantum world we inhabit. NC permits us to *talk back* freely, so that legitimate *dialogue* between the 1% and the 99% can take place. Welcome to our world, Michael Hirsch. Become a *Winter Patriot* and join us.

    1. F. Beard

      “Let’s face it–the United States is not about to adopt a socialistic or even a European-style industrial policy.” Michael Hirsch

      That’s the least of your fears, Mikey. Some of us are neither fascist nor socialist. Unlike you, we believe in genuine freedom, not pseudo-capitalism.

  32. M.

    Schack’s one of the best: Fair and intelligent. What more can you want?

    Been before him a couple of times. Win or lose, he’s one of the best.

Comments are closed.