Yearly Archives: 2011

Partial Meltdown Underway at Two Reactors in Japan; 200,000 Evacuated (Updated)

Details from the Washington Post on the partial meltdown at the Fukushima Daichi complex number 1 reactor:

Tokyo Electric Power Co., owner of two heavily damaged nuclear power complexes near the center of Friday’s earthquake, told Japanese regulators Sunday that it faced a new emergency at one of its 10 reactors, even as it struggled to bring several others under control.

Earlier, the big electric utility took the unprecedented step of pumping seawater mixed with boric acid into the core of Fukushima Daiichi’s unit 1 reactor to tame ultra-high temperatures from fuel rods that had been partially exposed….

Links 3/12/11

Polar ice loss quickens, raising seas BBC

With hacking, music can take control of your car ITWorld

Minister: China pollution remains ‘very serious’ PhysOrg

Twitter ordered to give WikiLeaks data to US AlterNet (hat tip reader furzy mouse). Be sure to read to the end for yet another example of craven Obama behavior.

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Administration Acts on Mortgage Fraud Against Military, Yet Denies It Exists Anywhere Else

We have yet another example of media cravenness. You would assume that when official positions presented in the media contradict each other, it would represent an obvious opportunity for reporting, and an intrepid young journalist would take up the task. But since the job of US news outlets is increasingly to distribute propaganda, they manage not to notice.

We’ve had a stenography masquerading as reporting on the result of the recent Foreclosure Task Force “review” of servicer practices. When it looked at 2800 severely delinquent loans, it found only some operational shortcomings and no unjustified foreclosures. Given that all that this cross agency effort did was to have tea and cookies with the servicers while reviewing their documents, as opposed to doing any validation of their data, this means the “exam” was a garbage in, garbage out exercise.

Similarly, today the Fed made the similarly ludicrous statement that there were “no wrongful foreclosures” based on a review of a mere 500 loan files. Given that there are 14 major servicers, that means it looked at 36 files on average per servicer. Heck of a job, Brownie!

Aside from the fact that there have been numerous reports of colossal errors that should be impossible in a system with any integrity (homes with no mortgages or where the mortgage had been paid off, where borrowers had been given letters that they had been approved for permanent HAMP mods being foreclosed upon), there are also numerous accounts of servicer-driven foreclosures. As Karl Denninger noted:

Guest Post: Japanese, Russian and Indonesian Volcanoes Erupt … 5 Japanese Nuclear Reactors In Danger … 1 Is Leaking and May Melt Down Within 24 Hours

Update: It’s possible that a meltdown may already have occurred at one nuclear power plant.

This Is How QE Really Works

QE2 Is Equivalent to Issuing Treasury Bills. In actual fact, all QE2 does is drain the real economy of interest income by swapping an interest-bearing government liability for a non-interest bearing government liability. This decreases aggregate demand in the economy. So the real economy effects of QE are to slightly lower aggregate demand. This is offset by changing interest rate expectations, which alter private portfolio preferences and risk premia, leading to credit growth, leverage and speculation, forces which should pump up the real economy. The Fed had intended to lower interest rates via the lowered risk premia. To date, the Fed has lowered risk premia. But this has also provided the tender for speculation and leverage. Moreover, the Fed has also raised inflation expectations to boot, causing interest rates to rise and working at cross-purposes with the lowered risk premia. Thus, QE2 has only been successful insofar as it has increased business credit and raised asset prices. In my view, QE2 has been a bust as it adds volatility to the system and will have negative unintended consequences down the line.

Links 3/11/11

Big Data mining: Who owns your social network data? InfoWorld

Calm Man Successfully Buys TV And Denies Walmart Receipt Checkers Consumerist (hat tip reader Skippy). I have to confess that (aside from the shopping at WalMart part) this is the sort of thing I would do, except perhaps with less sangfroid.

Japan’s earthquake Financial Times. Updated frequently, liveblog style

Watch NHK in English for more earthquake news (hat tip Clusterstock)

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A New “Whocoulddanode” Defense, This Time of Coddling Banksters in the Crisis

I hate shooting the messenger even when he lets us know that he is a tad invested in the information he is conveying, but sometimes it is warranted. Floyd Norris now tells us that maybe it wasn’t such a good idea to have been so generous to the banks during the crisis. He cites the usual reasons: the recovery is shallow, the officialdom missed the opportunity created by the crisis to restructure the financial system, sparing bondholders created moral hazard, and we are now stuck with banks in the driver’s seat. His lament, as the headline accurately summarizes, is “Crisis Is Over, But Where’s The Fix?”

The problem is that his account is larded with a rationalization of the decisions made at the time to treat major financial firms with soft gloves:

At the time, rescuing seemed more important than reforming. The world economy was breaking down because of a lack of financing. Trade flows collapsed, and companies and individuals stopped spending. It seemed clear that halting the slide was critical…

A surprising citadel of that second-guessing is at the International Monetary Fund, where researchers this week concluded that the rescues “only treated the symptoms of the global financial meltdown.”

“Second guessing” is simply misleading.

Powerful Earthquake Hits Japan; Tsunamis Expected to Hit Indonesia, Australia, Hawaii, Mexico

When a smaller earthquake struck near Tokyo a couple of days ago, I wondered if worse was on the way soon.

Japan has been overdue for a major earthquake, given their historical frequency. Perversely, there was much more worry about the impact of a major quake on Japan when it was an economic force to be reckoned with (perhaps a subconscious wish to cut the seemingly unbeatable Japanese down to size?). While the horrific death count that resulted from the last great quake in 1923, led the Japanese to impose vastly tougher building codes and continue to improve upon earthquake-related technology, events like this too often have a nasty way of defeating careful planning. But this tremblor, which registered a formidable magnitude 8.8, was off the northern coast, but still has produced serious disruptions in Tokyo. There are no good reports of the damage yet. From the New York Times:

Adulterous failed banker Sir Fred Goodwin obtains superinjunction

…So the UK press aren’t allowed to call him a banker (!), or mention his infidelity with a married colleague.

However, since MP John Hemming mentioned the case under parliamentary privilege, you can get part of the story from the Telegraph:

He said: “In a secret hearing this week Fred Goodwin has obtained a super-injunction preventing him being identified as a banker.

6 Reasons Markets Are Taking A Beating Today

There are several factors that are influencing the markets today. Yes, there is still a great deal of worry about the upcoming “Day of Rage” that will be occurring tomorrow. But beyond this, the media has been making it a point lately to state that the current markets are under pressure due to the high price of crude (now trading at $102).

Yet, with Crude down by more than 2%, why are sellers stepping in (with big volume) and taking down markets?

Spiralling into the Moussaka

From the morning links

Explosive growth of unemployment recorded in Greece, with a total number of unemployed is at 733,645, according to data from the Greek Statistical Authority (ELSTAT) that were released Wednesday.

The percentage of registered unemployed reached 14.8% in December 2010 an increase of one percentage point compared with November.

Quelle Surprise! Fed Issues “See No Evil” Report Using Bogus Methodology to Defend Servicers

We commented earlier this week on bank defenses of their foreclosure practices:

I’ll spare you several paragraphs of the “but they were deadbeats and no one was hurt by robo-signing and all our foreclosures were warranted.” Well, if you normally operate as judge, jury, and executioner, and it’s too costly for borrowers to counteract predatory servicing, in your little self-referencing world, everything will look hunky-dory and challenges to your authority will be deemed to be improper and unwarranted.

As we have indicated repeatedly. lawyers fighting foreclosure estimate that 50% to 70% of the cases they represent are ones where the borrower is in foreclosure as a result of bank fee pyramiding and other improper fees (note there is sample bias here; contrary to bank spin, most borrower attorneys fight foreclosures when they think the case has merit). But they just about never argue in court on those grounds; the cost of hiring an expert witness and doing the forensics on full details of the banks’ overcharges is too costly.

But of course, the Fed is throwing its authority behind the banking industry spin that all foreclosures are warranted.

Drop in Foreclosure Filings Reveals Operational Mess at Servicers

The level of complaints about servicer screw ups in the HAMP program and more recent horror stories from borrowers not seeking loan modifications confirms something we’ve noted on this blog: that servicers fee structures aren’t set up for them to handle the workload associated with high volumes of foreclosures. Accordingly they devised processes like robosigning, […]

Links 3/10/11

Kangaroo bounce mechanics snapped BBC. The article explains why this is worth studying.

How the penis lost its spikes Nature (hat tip Richard Smith)

Recent Earthquakes in Central US (hat tip reader bob). You tell me…

Text messages to replace stamps in Sweden The Local

Dalai Lama ‘Retiring’ The Diplomat (hat tip reader furzy mouse)

Interrogator in the Assange case friend with woman accusing Wikileaks founder Expressen (hat tip Clusterstock)

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