Matt Stoller is a fellow at the Roosevelt Institute. You can follow him on twitter at http://www.twitter.com/matthewstoller.
China Eclipses US as Top IPO Venue (Financial Times) American banks sad. Aww.
Euro Swan Dive Splashes Santa (Credit Writedowns) American banks even sadder.
Successful Italy bond auction lifts mood (Financial Times) American banks happy again! Cocaine for everyone!
Why America Can’t Afford Its Military (Counterpunch) h/t May S
MF Global Scrutinized on Money Moves (NYT Dealbook)
Rare Asian Bird Takes “Wrong Turn”, Lands in Tennessee (Reuters h/t May S)
Putin Softens Stance Towards Protesters (Financial Times) Someone’s taking active listening courses. Vladimir, is that you?
Middle-aged borrowers piling on student debt (Reuters, h/t Robert)
Big Funds Build Case for Housing (Wall Street Journal) Some big hedge funds are beginning to bet on a housing turnaround. Calculated Risk notes that residential investment was a net positive to GDP in 2011. And I’m seeing more and more pretty charts on the interwebs showing that there has been population growth and no home building for three or four years, so maybe there’s pent up demand ready to rock and roll. On the other hand, there was essentially no homebuilding from 1931 all the way to 1945, which is, let me see, 14 years (I can add, take THAT economists.) And then pent up demand really exploded, but that was also because of the massive new liquidity of the American middle class and rising wages. It’s not just new household formation, guys. But then, you knew that, else you wouldn’t be billionaire hedge fund managers, right? Except for you, John Paulson. Go sit in a corner.
Lure of Chinese Tuition Squeezes Out Asian-Americans (Bloomberg) Foreigners are paying a ton to study at American universities, crowding out space that should go to Americans. Wow, where to start? There’s so much wrong with [head explodes]
US shells out record for peanuts (Financial Times) Yeah, that headline is perfect. I can now die and say I lived a full life.
Why Is Finance So Complex? (Interfluidity) I don’t really agree with the premise, but it’s interesting and that is one of my absolute favorite blogs.
Why You Shouldn’t Curse at Work (Bloomberg Businessweek)
The 99% Choir Goes Christmas Caroling (Firedoglake)
Rick Santorum Support Triples in Iowa (The Guardian) And auction 2012 continues…
The Same Picture of Dave Coulier Every Day (Tumblr) Not political or finance-related, just hilarious.
Chavez: U.S. May Be Behind Leaders’ Cancer (Bloomberg) Apparently a bunch of Latin American leaders have been getting odd forms of cancer.
“Fidel always tells me, ‘Chavez be careful, they’ve developed technology, be careful with what you eat, they could stick you with a small needle,’” the Venezuelan leader said today. “In any case, I’m not accusing anyone, I’m just using my freedoms to reflect and issue comments on very strange events that are hard to explain.”
What a passive aggressive way to accuse the US of giving you cancer! Come on, you can do better than that as foreign policy villain du jour. Oh wait, today that’s the Iranian mullahs. Never mind, you’re just an amusing sideshow. Chavez, you are adorable! You just stamp your wittle feet and blame your cancer on the American State Department or CIA or whoever.
The Fat Trap (New York Times)
Next up for sale in Florida: the naming rights to public school cafeterias? (The Buzz) I grew up in Florida, and I’ve always been impressed by the level of both greed, incompetence, and tackiness the state’s politicians can cook up. This one’s right up there. You go Florida, hold your head up high.
Spanish mortgage market continues to collapse (Trust Your Instincts) At this point austerity is like a guy who says “GuyWhoWantsToBePunchedInTheFaceSaysWhat”. And of course you say what. And by “you”, I mean all of Europe. And by, ok, this is a terrible metaphor. Let’s move along.
20% of Irish mortgage holders behind on their payments (Trust Your Instincts) More proof that austerity works, this time with a cute Irish accent. Don’t tell me you are super-depressed and behind on your mortgage, sing me a limerick!
January 16, Occupy Plans to Honor Martin Luther King by Occupying Federal Reserve Banks (OWS News)
The Era of the Ron Paul Newsletters Isn’t Even Past (Rortybomb)
Alan Grayson Speaks Up for… Mitt Romney? (Dailykos)
Caught On Tape: Clerk Punches, Knocks Out Armed Robbe: Clerk Then Makes Suspect Clean Up His Own Blood (WYFF 4) Ewww. But you will click.
The coming war on general computation (28C3, h/t BoingBoing)
Iran unlikely to block oil shipments through Strait of Hormuz, analysts say (Washington Post)
Pentagon trimming ranks of generals, admirals (Washington Post)
Women Laughing “Alone” With Salad, the Halloween Costume (The Hair Pin)
My Political Prediction for 2012: It’s Obama-Clinton (Bob Reich) – Yeah, ok, Bob. Reich’s one of those people I call “bad good guys”. He seems like he’s on your side, but his work in the 1990s to push NAFTA through was absolutely devastating to the middle class, and the roots of his thought are essentially neoliberal in nature (especially the globalization crap). I could be persuaded otherwise on Reich, but I’ve never seen him admit his support for NAFTA was wrong.
And the antidote du jour
re Successful Italy bond auction lifts mood
that was the short debt…the 10 year was just off near 7% & is now north of 7%…(banks sad again)
ALL IS WELL!!!!
Banks very moody, methinks.
If only the ECB would give unlimited 1% 10 year loans instead of the 3 yr variety. They’re such Scrooges! :)
Antidote picture is a rerun of recent Dec 20 image
Absolutely stunning antidote pic, thanks.
Fixation with Financial Times fish wrapper makes
dismissing links easy. FDL now #1.
“What” aint no country I ever heard of – Juels
Let’s ask Yushenko if it’s ridiculous to suggest Chavez was poisoned.
Yeah, the CIA wouldn’t stoop to assassination plots against foreign leaders. That’s totally unthinkable. Well, successful ones, anyway. Is trying to give someone cancer any weirder than exploding cigars and poisoned toothpaste?
The US is on record as having contemplated many crazy dirty tricks against Castro, and has been meddling in South American politics for over a hundred years. At the very least, Chavez is absolutely right to ask the question.
Ok, I’ll try to make my jokes clearer in the future.
But seriously, why can’t we brainwash them into eating more fast food – ‘two birds with one stone’ tactic whereby we take out the bad guys and increase our exports (creating jobs too)?
I’d settle for slightly humorous
I really like the new commentary.
Guess I can unleash my inner snark, then. No more Mister Nice Guy…
Definitely a sassier tone here than we are used to … sort of like Yves Smith with a biting, oxycodone-fueled edge.
I love the snark too. very funny and sometimes usefully informative
You believe Florida’s politicians are impressive. That’s undeniable.
The reality TV show I’d like to see:
I suspect many dreadful politicians and dreadful laws from all US state legislatures could compete with Florida. Imagine a show that offers three short case studies each episode. Then it asks: Who F***ed Their State, Their Voters, the Most? A winner is chosen and awarded a cash prize. The cash prize is awarded in a press conference on the respective state capitol’s steps. The outrageous could be made outrageously entertaining if the program’s writers had your talent for snark.
Does anyone else suspect such a program could become a steady funding source for an appropriate good-government non-profit?
That’s a good idea.
I could identify a bunch of non-profits in my state that would contribute segments. Think tanks, advocacy groups, service organizations, etc. The leader of each non-profit could narrate/host/explain the segment. The research is mostly done. They’ve fought those battles.
no, please, the mix is good. your new england reserve is a great foil to the floridian’s flora. (as they say, one should strive not to be more like another, but more like oneself.)
both bring a nice break from the usual, and for the usual this reader remains stuck on the familiar, straightforward and direct, inimitable yves smith.
and now if another links wrangler is to enter the naked ring, i hope it will be a girl.
on second thought, “no more mr. nice guy,” as attempted by lambert strether, could be quite amusing.
go for it!
Back in the day, oh, in 2003, I was funny and almost gentle. A lot has happened since then. Maybe I’ll try to up the reserve; extremes meet….
I remember those days fondly, back when putting Ds into power would solve everything.
Occupied Media Interview – Virtual Teach-In with Lawrence Mishel (president of Economic Policy Institute)
Patrick Magee almost killed Margaret Thatcher with a 30lb bomb he planted behind a bathroom wall in the Grand Hotel – 24 days ahead of the Conservative Party conference. Instead of a bomb, a machine that produced unhealthy levels of radiation could be installed near a bed or maybe even in the bed frame, set to switch on at night.
The South American leaders who have gotten cancer are the ones who travel around the most to international conferences and meetings. So it could be increased radiation exposure from flying. Or, it could be something waiting for them in their hotel rooms. I’d recommend boat trips and motor homes, just to be safe.
How expensive are radiation detection devices? I agree that, like any world power (China, Soviet Union), the CIA is constantly researching ways to neutralize other world leaders. But I just can’t see low-intensity radiation poisoning as an effective way to do so.
The Ds still want to think they’re the good guys, and, more importantly, they want us to think that. But they aren’t. Vote for Mike Check!
Aren’t you afraid someone might decide to interpret that to mean His Royal Highness, the Permanent Mayor?
The war on computation: yes, that’s why I hang on to analog devices when I can: older car, cameras, bike, cash, etc.
This Holiday, FDA Ignores Public Health and Wishes for Miracles to Solve Antibiotic Resistance. More change we can believe in.
From a lengthy but worthwhile transcript of a radio interview with Walter Isaacson — the biographer of Steve Jobs — conducted by Adam Lashinsky of Fortune:
HUH?!! Isaacson writes a best-selling biography — presumably with sales in the hundred thousands — and the publisher doesn’t even disclose the sales volume to him?
Oh sure, thanks for the royalty check … never mind about the accounting details, I trust you folks!
Arghh … Isaacson’s comment must be the best unintentional advertisement for self-publishing since the invention of print-on-demand and e-books. How are tree-killing dinosaur publishers gonna stay in business, while treating their authors like mushrooms in a dark closet? UFB …
All it means is that the Jobs bio hasn’t been out long enough for Isaacson to see a royalty statement. Publishers don’t do real-time reporting, and the book was released *this* quarter.
Plenty of reasons to think that publishers are thieves in green eyeshades (record labels and movie studios certainly are), but not receiving a monthly royalty statement is not one of them.
As of October, publishers (including Isaacson’s) DO offer real-time reporting:
Is Isaacson blowing smoke, or did he really not bother to log in to ‘My Sales’?
Presumably, an author who goes to the trouble of doing a cross-country book tour would care!
Isn’t it strange that box office sales of movies are reported on a next-day basis, while sales of books remain shrouded in mystery?
Nifty. I did not know that. Well, who the heck knows, then.
My guess is, Mr. Isaacson is affecting not to care about such grubby details of commerce, secure no doubt in the knowledge that his AGENT is all over S&S for every nickel owed.
much of what goes on behind the scenes in trade publishing is rigorously kept behind the scenes by everyone involved, as it is in the interest of no one involved for the public to really know how books get written and sold.
unfortunately, the public’s lack of understanding of how authoring, editing, and publishing of books take place is leading to the demise of all three, as the internet generation (just like their predecessors, but with more dangerous toys in their hands) have no idea how much labor it actually takes to produce a decently written book, or who actually does this work, and strongly hold the false belief that art (music, literature, painting, and the like) will sell well enough in the marketplace to earn its makers a living if the product is deserving.
as the public always has been, they are simply clueless about what really goes into the making of art and about how rarely works of art actually supply their makers with a livelihood even for a short time. their naivete is touching. watching them collaborate in finishing off institutions of whose building over centuries they are completely ignorant is painful. well yes the old order must fall, sooner or later, and be replaced by what, no one can really predict. a whole new cycle will begin and many lessons will have to be painfully relearned.
the manic glorification of the few who “succeed” leads so many to fantasies and efforts that will never hit pay dirt. the battlefield is littered with sad “losers” who have failed to realize their dream and have no other source of self-esteem in our parched culture. ah the american dream in its purest form–the “successful” artist.
i do hope the american dream does expire this century, and something a bit more moderate and sane arises from its ashes.
I hate to be a pest here, but this is the second day this blog has gone absent in my in-box. Is there a glitch, and the photo of the Zen Lemur[?], is apropos, as in patience, all good things come to those who wait?
Do you normally get posts by posters other than Yves emailed as well? (e.g. Ed, Richard Smith, Lambert?)
E-mail subscribers get whatever was on the site in the past 24 hours e-mailed at 7 AM Eastern. At least in theory, and in fact most of the time.
There was a problem with some of the HTML in one of Stoller’s post. Don’t ask me why it would throw off the daily mail, but it did. I guess this happened again. Will have to have tech guy talk to Stoller.
As a former American attorney who has been living in Venezuela for the last four years, I am appalled by Stoller’s childish slurs against President Chavez, which smacks of ignorant American xenophobia unexpected at nakedcapitalism.com.
“What a passive aggressive way to accuse the US of giving you cancer!… Never mind, you’re just an amusing sideshow. Chavez, you are adorable! You just stamp your wittle feet and blame your cancer on the American State Department or CIA or whoever.”
CIA records document at least 52 of their failed assassination attempts against Cuba’s Fidel Castro, including exploding cigars and infected scuba-diving suits. Then there is the murky assassinations of President Kennedy and his brother,Robert, then a presidential hopeful.
Presidents Hugo Chavez, Cristina Fernandez, Paraguay’s Fernando Lugo, Brazil’s Dilma Rousseff and former Brazilian leader Luiz Inacio Lula da Silva all been diagnosed recently with cancer. All of them are leftists.
Minimally, that is very odd, as Chavez pointed out. Stoller’s childish attack on Chavez, disrespects not only Chavez but Venezuelans. The people here support Chavez because he is a humanist visionary, whose programs have improved the daily lives for the vast majority of Veneuelans a hundred fold.
Chavez’s socialist government is providing free health care, public education to the university level,and new housing for two million families, and subsidized necessities for all, among 32 social development missions since 1998.
The recent extension of social security to the previously excluded, seniors, the disabled and children living in poverty, is a model which the U.S. needs to follow, not ignore.
No, Chavez didn’t go to Harvard, he was raised by a poor family. He can be blunt and freely shares his honest views with the public regularly, part of his popularity here. But his socialist vision for a just and equitable society is being put made into reality here. Something no honest U.S. intellectual should ignore, much less besmirch.
I wasn’t mocking Chavez, I was mocking the “villain du jour” mindset of American foreign policy.
Of course American agencies have killed leftist foreign leaders.
Excuse me, for someone who was not “mocking Chavez” your childish words belie your intent:
“Never mind, you’re just an amusing sideshow. Chavez, you are adorable! You just stamp your wittle feet and blame your cancer…”
Like the Republican presidential candidates, it might be helpful to first educate yourself about the person you are slamming. I recommend that you read Rosa Mirium Elizalde and Luis Báez’s book, “Chávez Nuestro” (“Our Chavez” in English), a series of interviews about Chavez from people who knew him well covering his childhood, through his election, the 2002 coup and oil industry shut down, and concudes with an interview of Chavez himself.
“Our Chavez” available from: http://www.amazon.com/Our-Chavez-Rosa-Miriam-Elizalde/dp/9592103755
Several Spanish language editions of “Chavez Nuestro” can be downloaded for free from: http://www.google.co.ve/search?q=Chavez+Nuestro%2C+Elizalde&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a
Me thinks you need to have your Snark Meter taken in for repair, it is really broken.
Justina, did it occur to you that Matt might be mocking the the tone of the mainstream press, and not Chavez?
‘The people here support Chavez because he is a humanist visionary, whose programs have improved the daily lives for the vast majority of Veneuelans a hundred fold.’
Wow, I guess stories like this one are all just lies of the norteamericano yanqui media:
It takes a serious ‘reverse Midas touch’ to engineer a shortage of coffee, when it’s grown right next door in Colombia. But price controls will do that!
I’ve got half a mind to pop down to Caracas and enter the smuggling biz, humping Colombian coffee over the border in giant burlap bags.
Juan Valdez Haygood, at your service, Señora Abogado!
Your source (CNN) is not a credible one.
You can’t even get decent coffee in Colombia. It’s Nescafe and terrible slop since they export the coffee to get foreign earnings.
Funny how there are shortages of goods when you go against the Wall Street Houston Axis of Capitalism.
I’d much rather live in Venezuela than Colombia, where government-sanctioned death squads will gun you down if you champion progressive causes.
Well, duh, that’s how you make mass medical care affordable. No meat, no coffee, less chronic expensive illnesses and “conditions” that have to be managed with expensive treatments imported from abroad.
Re foreigners squeezing out American students and Middle-aged borrowers piling on student debt
California Governor Brown has signed the California Dream
Act which is a localized version of the
National Dream Act.
More like the California Nightmare for poor and Middle Class University, college and community college students
as they now get to “compete” for precious classroom space,student grants, student loans and scholarship money with any illegal alien that has managed to graduate from a California high school.
All a bright Central American has to do is get his backside into a seat in California just before graduating high school and he has at his disposal what was once the greatest public university and college system in the
nation –and get charged in state tuition too!, versus say a tenth generation American who was born in one of those foreign locales like Oregon or Nevada. They have to pay out of state tuition.
Think of the millions more Californians who will now have to go into perpetual debt servitude to the bankers. Wow,
those Democrats, starting with Clinton and his NAFTA, really are good for business. And we thought the Rethuglicans were a bunch of shortsigted greedsters. The Democrats have a long range plan alright.
“The state is not a fully reliable partner in funding anymore,” said Scott Waugh, the provost at UCLA, where foreign enrollments have quadrupled since 2009.
“If we’re going to give California residents the education they want and deserve, we need non-Californians to help pay for it.”
Illegal immigrants in California already have been allowed to attend UC, CSU and community colleges…and since about 2001, illegal immigrants have been allowed to receive state-resident tuition subsidies (which cost the state $25,000 to $50,000 per student for four years of college).
The Dream Act will now allow illegal immigrants to receive Cal Grant A and B Entitlement Awards, which can pay over $5,000 a year at CSU, over $12,000 a year at UC, and over $9,000 a year at private universities.
The Dream Act will also allow low-income illegal immigrants to get tuition wavers at California’s community colleges (they won’t have to pay $42 per unit).
The Dream Act will cost California’s taxpayers an estimated $65 million a year. California’s current budget crisis is enormous. Our state is slashing K-12 budgets (reducing the minimum number of schools days to 168, down from 180 days). The affordability of our public universities is at risk as tuition at CSU and UC colleges has been increased at alarming rates. (Tuition at UC is now about 300% more expensive than a decade ago….and UC regents are warning that they may have to raise tuition by as much as 81% over the next 4 years — to $22,068 per year).
Got hypocrisy? Californians do in the form of the state
I have been told here that people get education not to be enlightened, but to have a career.
Education is sort of like an economic weapon, in that sense.
As a weapon, it ought to be controlled by the government. It shouldn’t be readily available to foreigners, even if they would pay more for it.
On Chinese tuition, I imagine only the 1% Chinese could afford American higher education.
Basically, it will strengthen their dominance over the 99% Chinese when they return.
Hmmm. I dunno about that. I’ve had some experience with 1% Chinese students at the high school level, and I can tell you the boys aren’t fearsome competitors. Fearsome bullies, yes, not necessarily dumb, but basically frivolous and inattentive to the world around them. Pretty much the stereotype of the third-generation rich kid who goes on to lose the family fortune. The girls, on the other hand, were generally focused and hard-working. Luckily their culture represses them. College level may be different.
What I have learnd from previous comments here is that school is where you make connections, even if you don’t get your education.
So, that sounds about right. The 1% boys will go home to further their dominance with better and wider connections
From “America Can’t Afford Its Military”:
“The deficit Americans worry most about is not fiscal; it’s a national deficit of integrity and reason.”
And not just about the costs of our Global Empire, either.
Like the links, but can we ease off the snarl pedal a bit? It’s starting to sound like any number of other websites that mistake sarcasm for wit.
being SOS is a killer of a job
read once where one year Condi spent 300 of 365 days on a plane/out of the country
aside from Hilary likely saving Obama particularly if Mitt to save himself puts an evangelical/Amercan taliban type on the ballot as his VP
it tees up the 2016 run for her should she want it
also Biden could either do SOS he was chairman of Senate Foreign Relations for years or even go onto SCOTUS as prior to that he spent years on and chaired Senate Judiciary and is most importantly confirmable as a former member of the club
If she wins her senate race and does a good job it is Elizabeth Warren in 2016(assuming the Dem nomination is worth having by then). 2008 was Hillary’s chance, she did not make it and to her credit she knows it. She has been part of the Obama administration and owns all of its disasters.
Giving somebody cancer is not too far off. Just look up the history on Fort detrick, SV40 virus, XMRV in prostate cancer, Dr. Shyh-Ching Lo and mycoplasma.
Also considered who founded Fort Detrick. Henry Kissinger(healthy as as OX) and Merck under the highest level of secrecy.
The housing story seems like wishful thinking. It also reminds me of Say’s Law and supply side economics that if there is supply then it will create demand. But Say’s law is easily refuted. You can have all the supply you want, but if people don’t want or can’t afford your supply or if what you have is overpriced, then there will be no demand. As I pointed out yesterday, even with housing prices still declining as per the Case-Shiller index they remain twice what they were in the mid 1990s. And of course there is the depression that much of the country remains in, 29 million disemployed, increased poverty, and millions facing loss of their homes. You really have to wonder what the people pushing this story are smoking.
Speaking of what are they smoking, the latest Iran buzz has been completely overblown. It’s another example of reporters acting as unthinking stenographers and then a few days later the “crisis” they reported just sort of evaporates back into the ether.
To many reporters, writing is just arranging, often re-arranging, words.
Your increasing cynicism, while understandable, is really getting me down. It’s reaching toxic levels here.
I miss the brilliant writing of several years ago.
Yves is reflecting the national mood, the numbers and the facts.
If you want happy face, check out the talking dog video.
The writing is still brilliant and now is more to the point.
Happy New Year
I would say this:
Many topics diverge on this site. And I – I will read or post on the ones less commented on. And that will make all the difference.
Your increasing cynicism, while understandable, is really getting me down.
Not cynicism, but pessimism. I’m an idealist. If I were a cynic, I’d pretend like everything is fine.
Yves isn’t writing the links. Matt Stoller is why Yves take a holiday.
I’d say realism, not cyncism.
Speaking only for myself, the occupations make me more hopeful than I’ve been since, oh, the dot com crash and subsequent theft of election 2000.
Political prediction for 2012.
Not sure about Obama-Clinton.
I could see an Anti-Bonus Army marching on Wall Street though, as part of #OWC movement.
Not another link about women ‘laughing’ alone with salad!!!
Let’s be frank. They (this could be said of men as well) are just sadistic serial vegetable killers.
How about this killer vegetable (it’s an alien!) http://amazingdata.com/mediadata6/Image/amazing_fun_featured_2458315780103830173S600x600Q85_2009072322130911186.jpg
This and more here…
The 30 Creepiest Vegetables on Earth http://amazingdata.com/30-creepiest-vegetables-on-earth/
More fun with vegetables…
Vegetarian zombies http://www.cartoonstock.com/newscartoons/cartoonists/msi/lowres/msin300l.jpg
The Little (Farm) Shop of Horrors http://www.cartoonstock.com/newscartoons/cartoonists/mmo/lowres/mmon683l.jpg
An environmentally friendly mutual fund http://www.cartoonstock.com/newscartoons/cartoonists/dpi/lowres/dpin1069l.jpg
It seems unavoidable there will be wars between humans and vegetables in the future.
It doesn’t help when warmongering Hollywood might be attempted to come out with movies called ‘Planet of the Vegetables’ and ‘Escape From the Planet of the Vegetables’ in order to brainwash, sorry, edcuate our kids and turn them into vegetable killers.
How could you forget this classic? Attack of the Killer Tomatoes!
It was a movie (1980), with a sequel (Return of the Killer Tomatoes 1988), and a Saturday morning TV cartoon show.
Theme song excerpt (1980 movie)
Attack of the killer tomatoes!
Attack of the killer tomatoes!
They’ll beat you, bash you,
Squish you, mash you
Chew you up for brunch
And finish you off for dinner or lunch!
They’re marching down the halls
They’re crawling up the walls
They’re gooey, gushy, squishy, mushy
Rotten to the core
They’re standing outside your door!
Those tomatoes, they can get you so many ways…by being rotten, for example.
I was going to cite “Day of the Triffids.”
“I could be persuaded otherwise on Reich, but I’ve never seen him admit his support for NAFTA was wrong.”
The root of the problem is that general equilibrium models assume full employment and balanced trade when in reality we haven’t had either for years (and both for decades). The single most effective step to achieving both would be to zero out the trade deficit, which is a huge demand leakage that invariably kneecaps the economy by draining private net savings anytime the budget deficit falls below trade deficit (for example in 2007 we had a $163B budget deficit and a $700B trade deficit).
Like Wynne Godley said:
the budget balance is equal to the difference between the government’s receipts and outlays, but it is also equal, by definition, to the sum of private net saving… plus the balance of payments deficit. If the private sector decides to save more, the government has no choice but to allow its budget deficit to rise unless it is prepared to sacrifice full employment; the same thing applies if uncorrected trends in foreign trade cause the balance of payments deficit to increase.
Since Congress is probably incapable of ever figuring out the necessity of keeping the budget deficit larger than the trade deficit, the most straightforward solution is to automatically balance trade with Warren Buffett’s import certificate cap and trade market (Byron Dorgan and Russ Feingold sponsored a Senate bill based on Buffett’s plan in 2006).
Is it correct that in hyperflation, you see a huge increase in private net savings?
Economists advise various solutions http://www.optimist123.com/.a/6a00d83451c0c869e2010536bdcfc9970b-800wi
“Big Funds Build Case for Housing”
The demand side requires the ability to pay which is missing for a large percentage of the population but the government via F&F will need a financial garbage disposal of sorts to find a place for the foreclosure houses piles which I am sure the Hedge funds view as some sort of revenue stream.
Recent housing data is showing a sudden drop in inventory which can easily be attributed to the large percentage of short sale home contracts. In Calif 57 percent of short sales fail and with 50 percent of the listings today being short sales its not hard to realize that inventory has been shifted into pending short sales but the reality is that inventory is still high its just called pending. This creates the illusion that RE sales are moving which both the RE industry and the government peddle as positive indicators.
If the MLS required that a pending short sale be a signed bank approval by the buyers then it could actually be a pending sale but 99% of the pending short sales are contracts between the mortgage holders and potential buyers rather then the bank which is why the data has become skewed and worthless.
The article on the complexity of finance is so annoying. So tired of all the bs about finance being so complicated and difficult to understand when the truth is that it is all a myth and has nothing to do with the premise of the article. Great example of person starting car dealership in agrarian society. This has nothing to do with finance but everything to do with filling needs successfully in a profit based system. Our world finance is trying to continue the notion that things are complicated so they can rip everyone off as usual and now they have government on their side.
please tell the truth people. stop trying to pretend financiers are any smarter than the rest of us. the financial system was build on simple compounding interest and banks making killings with other people money it hasn’t changed. why did the system collapse when there was mortgage trouble? all the other so called complicated things are just to rip off the public and try to confuse them while the fat cats pretend they are so smart but they are only acting as criminals
There is a book, or ought to be one, called “The Ninety-Nine Percenters’ Guide on Communicating with the One Percent.”
The lesson – Money talks.
So, don’t buy stuff from the 1%.
That’s how you (the 99%) communicate. You let you money talk by its silence, or more precisely, absence.
Dumbest Idea in the world: maximizing shareholder value:
Boy, is he fooled. They maximize value for the management team and their conflicted interests. Is there a Board without an investment bank rep? They simply say they are maximizing shareholder value as a smoke screen. The companies are managed as revenue streams, but not for shareholders.
Golem XIV: The Miracle of Solvency:
I think the risk manager waited too many years.
I suspect that much of the mortgage origination and processing paperwork has been lost in this way- piled up in broom closets, on backup tapes that maybe can’t be read, etc.
Considering America backed a coup attempt on Chavez I think he has the right to say what he feels. Not so funny what happened to him with the backing of the United States. Yuck it up funnybones.
A link I posted yesterday has been debunked. The ol’ Tarzan Chimp scam strikes again!
Claims of Cheetah the Chimpanzee’s Death Are Questioned http://online.wsj.com/article/SB10001424052970204632204577126404050399694.html?google_editors_picks=true
A similar claim about another chimpanzee that supposedly played second banana to Mr. Weissmuller was debunked in 2008 in a Washington Post story. …
Writer R.D. Rosen discovered that the primate, which lived in Palm Springs, Calif., was born around 1960, meaning it wasn’t oldest enough to have been in the Tarzan movies of Hollywood’s Golden Age that starred Olympic swimming star Weissmuller as the vine-swinging, loincloth-wearing Ape Man and Maureen O’Sullivan as Jane.
While a number of chimpanzees played the sidekick role in the Tarzan movies of the 1930s and ’40s, Mr. Rosen said in an email Wednesday that this latest purported Cheetah looks like a “business-boosting impostor as well.”
Neoliberalism is a disease for which there is no cure.
The Clintons are infected, regardless that Bill told banks to make loans to poor people with bad credit.
While Neoliberal Democrats manifest themselves differently than Republicans, the end result is the same.
One believes money starts at the top and stays there; the other, money starts at the bottom, trickles up and stays there.
We buy these in bulk to give to our local squirrels.
The price has hovered about $4.88 for a 5# bag for the last 2-3 years, and briefly jumped to over $6 a few weeks ago before returning to form.
Why Is Finance So Complex? DeFoe wrote the same thing in 1700. You have Projectors (the project) and Brokers selling the sure thing to the gullible (and not a little greedy). Melville wrote about the methods of the Confidence Man. Sombart wrote the Quintessence of Capitalism. The project needs complexity to be sold. Today it is using a computer to balance a portfolio, because computers are smarter than people. How could you resist.
There was a technology incubator at Enron. Many of their ideas are now making money on the internet. At the time they were accused of being scam artists.
I worked for Enron during the Cali energy crisis, and I can assure you they were scam artists. When my little startup was bought, we sat in a room and a bunch of corpo-types from Portland explained our new company. Three of those guys went to jail afterwards.
And, yes, they had tech incubators and in fact all kinds of incubators. If you wanted to start something, they backed you. I regret that I did not take the trip to Houston and see the headquarters. Damn fine art collection. My colleagues sat in the board room for a bit. “Sure, it’s your company.” Really!
The war on terabytes
Policymakers worry about attacks on America’s financial system
Dec 31st 2011 | NEW YORK | from the print edition
THE financial industry has done such a good job of bringing itself to its knees over the past four years that it is easy to overlook the threats it faces from outside. High among them is electronic attack. In 2010 Symantec, a cybersecurity firm, estimated that three-quarters of all “phishing” attacks, in which people are deceived into surrendering private details such as account numbers, are aimed at the finance sector. Bob Greifeld, the boss of NASDAQ, has described his bourse as being under “literally constant attack”.
Many of these assaults are carried out by hackers bent on mischief. Some are the work of organised criminal groups in pursuit of loot. But plenty of people fret that some attackers are aiming to cause more serious damage.
In this section
»The war on terabytes
The bonds that tie
Hose and dry
Charting the year
How to get a date
Leon Panetta, America’s defence secretary, has suggested that a cyberattack on financial markets, the power grid and government systems could be “the next Pearl Harbour”. In a move that received surprisingly little attention, Barack Obama signed an unprecedented executive order in July declaring the infiltration of financial and commercial markets by transnational criminal groups to be a national emergency. It also pointed to “evidence of growing ties between [these groups] and terrorists”. In a sign that Congress, too, is twitchy, its latest appropriations bill calls for a report into the risks posed by financial terrorism.
Officials’ anxiety has grown amid circumstantial evidence that malefactors helped to exacerbate the market turmoil in late 2008. A report on the risks of economic warfare by Cross Consulting—which was written in 2009 for the Pentagon’s Irregular Warfare Support Programme (IWSP) but which surfaced only in 2011—cites a paper prepared for law-enforcement officials by a group of anonymous moneymen who were alarmed by trading patterns around the time that Lehman Brothers failed.
The paper analyses trading data from American exchanges. It shows that a handful of small and midsized regional brokers saw their market share in equities trading skyrocket in 2008 to the point where some were, for a while, doing more business than giants such as Goldman Sachs and JPMorgan Chase. The brokers’ business was conducted under multiple trading symbols, the market-making identities used in electronic trading so that counterparties know whom they are dealing with.
The bulk of the trading appears to have been “sponsored access” agreements, under which established brokers can in effect rent their identities to other traders so that the latter do not have to jump through the usual regulatory hoops. There is no suggestion that the brokers in question were doing anything wrong. They say they were doing business with regulated entities, including other brokers, but the report raises questions about the trades these sponsored entities were conducting.
These trades were heavily concentrated in big, troubled stocks such as Citigroup and Wachovia, the survival of which was seen as critical to the stability of the financial system. They were mostly short-selling, the paper concludes, and a good deal of the shorting may have been of the illegal “naked” kind, where the short-seller does not bother to locate and borrow the shares first. (Borrowing a broker’s identity could have made this easier, since marketmakers were exempt from the ban on naked shorting in certain circumstances.) Supporting this conclusion is a huge spike in trades that failed to settle at the time—in Lehman’s case, the number shot from tens of thousands to tens of millions. One cause of “fails” is naked shorting, because you cannot deliver a share that you have not really borrowed.
Sponsors not being thanked
Trading data alone are insufficient to draw firm conclusions about motives, but the anonymous paper raises red flags. If the brokers were inadvertently greasing the wheels for bear raiders, then who was doing the raiding? The obvious suspects are hedge funds looking to make a killing. But rumours persist of involvement by those with non-economic motives.
Regulators have been tightening the rules. In November America’s Securities and Exchange Commission (SEC) voted through various restrictions on sponsored access, which Mary Schapiro, the SEC’s chairman, had previously likened to handing car keys to an unlicensed driver. In private, SEC staffers worry that some of the driving might be deliberately dangerous. Not every jurisdiction is moving as fast as America. In an October report, the International Organisation of Securities Commissions (IOSCO) expressed concern that some countries’ monitoring of sponsored-access agreements was inadequate.
Sponsored access is not the only way that a determined assailant could create havoc. The “flash crash” of May 6th 2010, in which American equities spectacularly nosedived, showed the damage that can be done by high-speed algorithmic trading. It is much easier to drag markets down when they are already reeling, by the use of such things as short-selling, options and swaps, points out James Rickards of Tangent Capital, an expert on financial threats. This is what the military would call a “force multiplier”.
Just how much danger America’s financial system is in from deliberate attack is hard to judge from the outside. What is clear is that politicians, regulators and the industry have struggled to forge a coherent response. The Financial Services Sector Coordinating Council (FSSCC), an industry group that works under the auspices of the US Treasury, has developed a “threat matrix” in consultation with a group of financial regulators with an equally snappy name, the Financial and Banking Information Infrastructure Committee. But information is not always shared promptly. Banks were miffed that regulators did not tell them about a big attack on NASDAQ in 2010 until more than three months later.
Within government, responsibility is fragmented. In America the Treasury, other financial regulators, the Department of Homeland Security, the Pentagon, the FBI, the National Security Agency and others all have a hand in financial cybersecurity. Dots are not always joined even within departments. The Treasury has been keenly focused on combating the financing of terrorists, for example, but appears to have given less thought to how they might use that money to undermine banks and markets. That is unfortunate. As policymakers wrestle to protect finance from its own instability, they shouldn’t neglect the potential for threats from outside.
from the print edition | Finance and economics