Yearly Archives: 2011

JP Morgan Markets Its Latest Doomsday Machine (or Why Repo May Blow Up the Financial System Again)

By Richard Smith

Readers of ECONned will be very familiar with the name of Gary Gorton, author of ‘Slapped in The Face by the Invisible Hand’, which explores the relation of the so-called shadow banking system to the financial crisis. His work is pretty fundamental to understanding some of the mechanisms which made the crisis so acute. Now he’s done an interview, which I would like to have a growl at.

It also happens that JP Morgan, originators of those not unmixed blessings, Value-At-Risk and Credit Default Swaps, are also thinking hard about how to get rehypothecation going in the grand style. They know a volume business with a cheap government backstop when they see one; they are on a marketing push, and presumably they have the systems and processes that go with it. That would be a Doomsday Machine…

NJ Public Pension Slugfest Reporting Omits 15 Years of Governors Stealing From Workers

If you live in the world according to the mainstream media, the row between state executives and unions is all about (by implication) greedy unions trying to preserve their perquisites when budget “realities” demand that they suffer. Consider this excerpt from a recent article New York Times article about the fight in New Jersey:

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy.

And how exactly did the crisis “reveal” that some pension funds were close seriously under water? A more accurate rendition would be that, at least in New Jersey, the state has been raiding the pension kitty for over 15 years.

Links 1/6/10

Vaccine Blocks Cocaine High in Mice: Approach Could Also Stop Addiction to Other Drugs, Including Heroin and Nicotine Science Daily (hat tip reader John M)

Military set to develop smart, robotic cameras NetworkWorld

Army’s “Spiritual Fitness” Test Comes Under Fire TruthOut (hat tip reader May S)

Would You Be Bullish About A Country with Five Years of Negative Real ROE?

Hat tip reader Michael Q:

HuffPo: Fed Reverses Position, Prepared to Rein in Mortgage Abuses

I don’t want to jinx it, but the age of miracles may not be past. Huffington Post has been reporting on the split between the FDIC and other regulators on getting tough with mortgage, more specifically, securitization, abuses. The FDIC has been serious about putting serious securitization reforms in place; it launched a well-thought-out proposal […]

Guest Post: To Bee Or Not To Be?

Bee populations are rapidly declining … we’ve got to figure out why.

Fed Plans to End Tough Sanction Against Predatory Lending

Not only has the gutting of regulation made it hard to win criminal prosecutions for financial fraud, but the Fed plans to eviscerate a key sanction against predatory lending. If you somehow still had any doubts as to whose interests are really being served by banking regulators, look no further than this latest largely under […]

Guest Post: Humans Have Intentionally Modified Weather for Military Purposes and Climate Control for Decades

In a little-known historical fact, the Pentagon Papers also blew the whistle on the military’s weather modification program.

Links 1/5/11

Ancient island bird went clubbing BBC Birds fall from sky again, this time in Louisiana Agence France-Presse A Chinese Stealth Challenge? Wall Street Journal Yet Another Sign Of How China Is Twisting Itself In Knots To Beat Inflation Clusterstock War Is a Drug Tom Engelhardt William Daley Reportedly Being Considered By Obama To Be New […]

Is a Tainter-Style Collapse in Our Future?

Gloom, doom, and apocalyptic musings seem to be a permanent feature of modern society. But we’ve had more in the way of dystopian movies and talk of imperial decline in the last ten years than in the preceding ten.

Quite a few readers have taken to mentioning Joseph Tainter’s classic, The Collapse of Complex Societies, in comments, a sign it might be worth discussing formally.

StopServicerScams Petition Featured on Dylan Ratigan

Reader Doug T took note of the mention of the StopServicerScams petition on the Dylan Ratigan show today (a bit after the two minute mark):

Attorney General Tom Miller Reneges on Promise to Prosecute Mortgage Fraud (Updated)

I’m not exactly surprised at the bait and switch by Iowa’s Attorney General Tom Miller, who is leading the 50 state investigation by state attorney generals into mortgage abuses. Less than a month ago promised that he would “put people in jail” Now he’s apparently decided to adopt a “move along, nothing to see here” posture. Per Bloomberg (hat tip reader Duncan B, who also sent a copy of a stinging e-mail to his state AG):

Auerback: Drinking the Austerity Kool Aid in 2011

By Marshall Auerback, a portfolio strategist and hedge fund manager; cross posted from New Deal 2.0

What’s coming in 2011? We asked thought leaders to share their perspectives on the biggest challenges for the year ahead, along with the changes they’d like to see and the hopes they cherish. Marshall Auerback explains how misguided attempts to reduce the deficit kill jobs, squeeze the working and middle classes, and inflate crude oil prices. And a corrupt political system doesn’t help.

The beginning of the year always seems a good time to lay out some broader themes which could develop throughout the year, good and bad, so here goes:

Links 1/4/11

Ancestor faced sabretooth threat BBC Floods completely cut off Rockhampton Sydney Morning Herald (hat tip reader Skippy) Where Do Bad Ideas Come From? Foreign Policy (hat tip reader May S) Holly Petraeus To Be Elizabeth Warren’s Pick For Top Post In New Consumer Protection Agency Shahien Nasiripour, Huffington Post Strained States Turning to Laws to […]

Amherst Securities: Investors Underestimating Severity of Housing Problem

Amherst Securities, whose mortgage research is well respected, published a new article on Monday which gives a sobering reading of the prospects for the housing market. It gives a detailed analysis of default rates among performing and non-performing mortgages, and concludes that the outlook is far worse than most investors assume.