Links 5/27/12

Stray dog completes 1700km China race BBC

Let’s Talk Turkey About Greece Ian Welsh. Could Russia use a warm water port? Da?

A Very-Useful Chart To Prepare You For The Next Greece Election Chart from Credit Suisse Business Insider

Harsh Language from Lagarde: “IMF Has No Intention of Softening Terms”; From Head of Deutsche Bank: “Greece is a Failed Corrupt State”; Purposely Inflammatory Statements to Force Greece Exit Mish

Germany Walks Away From Greece Testosterone Pit. Reading the Lagarde tea leaves.

Beware hidden costs as banks eye ‘Grexit’ Gillian Tett. Party like it’s 2007…

Europe’s biggest fear: A run they cannot stop Schumpeter, Economist (RS)

Hard cash for tough times FT

Drug money saved banks in global crisis, claims UN advisor Guardian. Oldie but goodie!

Gentlemen prefer bonds

COSCO Seeks Gov’t Funds after Huge Losses, Sources Say Caixin. China’s biggest state-owned shipping firm.

J.P. Morgan replaces prime brokerage chief: report Reuters

Bank Regulators Under Scrutiny in JPMorgan Loss Times

JPMorgan: Jamie Dimon and the horse he fell off Jack and Suzy Welch. Yeah, but what about the horse he rode in on?

Former Lloyds head of fraud and security Jessica Harper charged over £2.5m fraud Telegraph (RS)

Lunch with the FT: Paul Krugman. Give the Booker Prize to the Maastricht Treaty!

Reddit’s Alexis Ohanian And Activists Aim To Build A “Bat-Signal For The Internet” Forbes

Economics Is Not Math The Institute for New Economic Thinking

Humbler horizons Free exchange, Economist. The new normal…

PG&E Violated Pipeline Safety Rules, Investigators Say WSJ

Killings, cancer, corruption and Azerbaijan: Eurovision in the Islamic Republic of BP Greg Palast

From Baku, With Love (And Intolerance) Slate

You can identify poor neighborhoods from space Grist

Next to U.S. firing range in Afghanistan, a village of victims WaPo

Cable theft delays Proastiakos [commuter rail] services Ekathimerini

Vatican in chaos after pope’s butler arrested for leaks, bank president ousted for negligence WaPo

The Imperial Mind Glenn Greenwald. Fake vaccines for Pakistani childen [all so Obama can whack OBL in an election year –lambert]

Egyptians ask why a Mubarak holdover like Shafik did so well McClatchy

Protest in the streets despite downpour and tornado warning, 1 arrest Montreal OpenFile

What are Lawn Removal Parties?

Night Thoughts in Hagsgate Archdruid Report

Antidote du jour (hat tip reader Lidia):

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Jim Haygood

    From The Economist article ‘Europe’s Biggest Fear’:

    The logical solution is to set up a joint deposit-guarantee scheme, in which euro-zone states pool resources to provide credible reassurance that depositors across the zone will get their money back, up to a harmonised threshold of €100,000 ($125,000). To get around the redenomination risk, the guarantee would have to be a promise to repay the original value of the deposit in euros.

    The Economist seems blind to the moral hazard such a scheme creates. If Greeks, for instance, were guaranteed reimbursement of their deposits in euros, then that particular cost of drachma redenomination would be borne by the rest of Europe. Free ride, let’s do it!!

    There is a horrible, insoluble mismatch between the timescales to which Europe’s policymakers work and the timescale of a bank run. A run is most likely within the next few weeks. And if a run starts, Europe’s governments will have to reassure within a matter of hours.

    NEVER do I recall the Mainstream Media predicting — even inciting — a bank run, at a quite specific time.

    Simplistically, one might suppose that the City in London would benefit from flight capital out of the euro.

    But one has to wonder whether our global overlords have a larger scheme in mind. Maybe they’ve decided to kick over the human anthill, and watch the little critters skitter.

      1. LucyLulu

        I’m with you on that one. I’m gradually replacing areas of lawn in my (intentionally small) yard and my long-term goal is to have a 100% mow-free yard of mostly native plantings/gardens, groundcovers, and softscapes. And it IS hard work to dig up the grass and to work the heavy clay, tree root laden earth down to 12 inches, time consuming, and not cheap either, it’s not going nearly as quickly as I’d like. Does anybody ever have rich and loose, well-draining loamy soil naturally? My vision is for a $50,000+ design, complete with miniature bridge (a la Bridge of Lions in St. Augustine, FL). I’m on the 30 yr DIY plan. :) Next step……… rototiller pushed by young muscular male member of species.

        1. Lambert Strether Post author

          I’m going to try to weedblock everything, sod included, then sheet mulch in the fall, then throw a layer of earth over the whole thing in the spring, and sow with wild flowers.

          If you think of the soil as including a nervous system (the mycelial mat) you become leery of tilling.

          Also, better to let worms do the work of breaking up the soil, than do it yourself….

      2. LucyLulu

        I’ve been meaning to ask you. How many layers of newspaper do you use for weed-blocking mulch?

        1. Lambert Strether Post author

          Lucy, basically, two at the miniumum. It doesn’t need to be thick, and the advantage over cardboard is that newspaper follows the ground contour.

  2. smartest guys in the cellblock

    Nice advice from Welch. Tomorrow Mike Milken will post and give Jamie some excellent advice on lawn care and how to look your best without a wig.

  3. Ned Ludd

    If Greece exits the euro, and the monetary authorities try to destroy it, one simple thing that Greece could do is legalize marijuana. Euros and tourists flow in, cannabis flows out.

    1. MyLessThanPrimeBeef

      Better to take on tiny Monaco than Holland.

      They can legalize gambling.

      1. different clue

        Holland is moving to outlaw foreign tourists from using marijuana in Dutch “coffee shops” . That means a Legal Marijuana Greece would not be competing with Holland anymore, since Holland is moving out of that aspect of the tourist bussiness.

        1. ambrit

          Dear MLTPB;
          The stats here on the Mississippi “Gamblin” Gulf Coast point to the primary revenue stream from ‘ordinary’ gaming establishments as being from roughly ‘local’ middle and lower middle class day trippers. In other words, yet another regressive tax scheme. Add to that the tendancy of upper and middle management to be from ‘somewhere else,’ and you have a siphoning effect on the local disposable income. Visit one of the ‘downscale’ gaming ‘destinations’ and take a trip along the back roads surrounding same. Jersey Shore meets Tobacco Road would describe it best.

      2. They didn't leave me a choice

        Why not do both? After all, when you’re a pariah, why not go the whole way? Legalise /all/ drugs and remove all patents and put up a government run corporation to produce the entire scale from recreational stuff to the currently way overpriced due to patents stuff on the cheap.

  4. spooz

    I love the OCC quote on the FT JPMorgan piece:

    “I know in college they teach you everything is black and white,” one official said in response to hypothetical questions about creating the perfect hedge. “But it’s not that way in the real world.”

    And I bet Jamie Dimon assured them there was no need to be concerned about the shades of grey. As Ritholtz says, “once you define everything as a hedge, well then, nothing is a hedge.”

    1. MontanaMaven

      Good comment on the Ritholtz piece:

      Jim67545 Says:
      May 14th, 2012 at 8:03 am

      Interesting interview with Prez of Toronto Dominion on Bloomberg. Basically he advocated more capital and banks “sticking to their knitting.”
      As banks grow in size they take on risks that are different from those “knitting.” Markets multiply and become so numerous they may not be able to understand their risk. What the housing crash showed is that lenders engaged in securitizing were seemingly blind to the effect of many lenders pumping out the same stuff.
      It reminds me of an incident when I was a kid. A local tour boat almost capsized because, on a very hot day, first a few, then ALL passengers on the boat moved to the side in shade. Each individual’s decision made sense given their overheated condition and was not, they thought, of any risk. But, in aggregate, the crowd’s action almost overturned the boat.
      This is why regulations and limitations are needed. Otherwise there is nothing to prevent a number of systemically important banks from making simulataneously what seems to them to be individual ordinarily risky actions and capsizing the financial boat.

      1. Susan the other

        Also the article by George Washington in Zero Hedge @ how the Fed is backstopping all the derivative exchanges that are “systemically important.” Wouldn’t that be all of them since writing derivatives is the same as credit creation? Anyway, a thought intruded: Let’s backstop our brains out:

        If all possible risk (value) is hedged in layers of derivatives and the total is 1.2 quadrillion, then currencies are automatically stabilized by the ubiquitous guarantee of the hedge. Currency insurance. And then because the taxpayers of the world will have essentially united by owning the means of everything, aka “leverage”, we will have – ta dah! Communist Capitalism.

    2. Up the Ante

      OCC: Since it’s in the public’s interest for banks to charge higher fees, it’s also in the public’s interest to cover banks’ bad bets.

  5. MontanaMaven

    The Greek crisis seems a cause made for Occupy. An Occupy air lift to bring in supplies. The cry, “We are all Greeks now!” I can’t believe I still see people spouting the “Greeks are lazy” myth. They work on average a longer week than average EU worker. Well, the average Greek works. The lazy ones seem to be the 1%. Oh, I know, I know, looting is hard work too. Just ask Dimon and friends.

    This is pure “Shock Doctrine” happening and the usual suspects are at the IMF.
    See Ian Welsh for more suggestions on what the Greeks should do.

    1. Eureka Springs

      Yes, However our neoliberals in certain bipartisanship would most certainly deem this type of humanitarian aid a terrorist act. Just as sure as they (SOS Clinton) did so against activists preparing to boat from Greece to Palestine with food and medicines.

      1. MontanaMaven

        Yes, I thought of the attempt to bring in supplies to Gaza when I wrote this. I guess if you are air lifting because of godless commies as in the Berlin air lift, then it’s OK. You are right. They will paint the Greeks as godless commies. So Ian’s suggestions are better. I like the marijuana idea too.

        Oh, it is interesting that HBO will air “Gellhorn and Hemingway” on Monday night with Nicole Kidman and Clive Owen. As Spain also is in dire straights, it might be wise to look back on what went wrong in Spain in the 1930s.

        1. Susan the other

          Germany could use that warm water archipelago of ports and smuggler’s havens even more than Russia. Ian should have included this suggestion: Germany and Greece should leave the EU together, form a trading alliance using their own currencies and let the rest of Europe muddle through to an eventual fiscal union.

          1. Susan the other

            Or it would be more logical to make the pact a triad of Russia, Germany and Greece, making the map look like open jaws taking a bite out of Europe.

          2. MontanaMaven

            Wow, Susan the other and Ian ought to team up. Their suggestions are strong and not the usual “woe until us” kind of posts. Very refreshing.

          3. ambrit

            Dear StO;
            The other side of that arguement is if Turkey cobbles together some sort of Entente Cordiale with Iran. Two big armies, warm water ports on two seas, probable nukes, ‘friendly’ relations (based on oil) with the PRC. The list goes on. They might even try to work out some ‘modus vivendi’ on the Sixth Imam issue. Fun for all!

      2. different clue

        That assertion seems a little silly, does it not? What legal comparisons exist between Greece and Gaza? Is there any law against humanitarian boatlift relief to Greece? If not, then the experiment deserves to be tried. Will NATO member navies really embargo ships from reaching NATO member Greece? If they really tried that, that would radicalize a lot of people right there.

        Maybe in response Greece would leave NATO and join the Shanghai Co-operation Council. How special would THAT be?

        Realistically, I hope Greece figures out the most disruptive way possible to exit the Euro in the most chaotic way possible so as to cause the maximum collateral damage all over the The Financiasphere. Since the biggest Greek debt is owed to predator banks, perhaps a hard-crash exit could exterminate those banks? Perhaps the extermination could spread to those banks counter-parties? Including their Wall Street and High Street counterparties in The Anglosphere? Oooooooo I hope so.

      1. MontanaMaven

        Yes, I missed your second listing and double linked. And, yes, Ian doesn’t mess around. His idea of the Greeks offering Russia a nice warm water port is quite naughty.

  6. Ned Ludd

    Regarding the Credit Suisse chart, Syriza’s senior economic policymaker said that they are not going to pass legislation to cancel the memorandum.

    There were indications that Syriza could even be preparing to roll back its opposition to the second bailout as it comes closer to playing a role in government.

    Yannis Dragasakis, the party’s senior economic policymaker, said in an interview on Thursday that if Syriza came to power, it was not planning to legislate against the bailout. “We are looking at a political, not a legal, denunciation of the agreement,” he said.

    “Unilateral cancellation of the programme” no longer seems to be on the table for Syriza. As far as I know, only the KKE (which is polling at about 5%) is calling for an exit from the euro.

  7. spooz

    So Krugman (Lunch with the FT) wants bigger and better QE and higher inflation targets to get the economy rolling. Seems like QE is running out of gas, having less and less effect on the structural problems that still exist in the economy. He thinks the old model is still good, just needs some more gas, that his being right on interest rates and inflation mean he’s got the inside track. He blows off the question about structural problems with a reference to The Onion.

    Globalization has had a negative effect on our economy and until we figure out how to counteract the negatives attached to it we will be spinning our wheels. Crony capitalism has been allowed to flourish as these multinationals help write the tax laws and regulations. How long before H-P, who just laid of 27,000, gets to repatriate overseas profits tax-free again like they did in 2004, and then use the funds for dividends and stock repurchase? The main stream media will sell it as a jobs program, again. Meanwhile, our expensive educational and health care systems end up increasing the effects of inequality as structural problems remain unaddressed and crony capitalism distorts rule of law and fairness. I don’t think austerity is the answer, but until we clean up the rot within, easing and stimulus won’t accomplish anything.

    Also, I have a sudden craving for salade nicoise, hold the anchovies.

  8. ohmyheck

    Victoria Grant, age 12, speaks the simple truth of Banking Fraud perpetrated on taxpayers. Please listen:

      1. LeonovaBalletRusse

        Yes, he turned out to be a world class grifter, and he’ll laugh all the way to the bank for the rest of his “securitized” life, however long that may be. His guides for action were Uncle Tom and Steppin Fetchit, re-figured for C.21.

      2. John L

        I tip my hat. I missed that post the first time around – thanks for the second chance.

  9. Lambert Strether Post author

    I want to give a fillip to the Arch Druid’s long form post before heading out to garden: “The witch who cursed Hagsgate was a thoroughly competent professional….”

  10. Guy_Fawkes

    The OCC as “regulator” what a crock!

    Let’s see….the OCC is funded by banks, their employees are embedded within the banks themselves….the OCC is housed within Dept of Treasury…but they aren’t overseen by Treasury. The only oversight of the OCC is provided by the Senate Subcommittee: Financial Institutions & Consumer Protection.

    I have thrown two OCC employees under the bus with this committee, so we shall see if they really provide any “oversight.”

  11. JTFaraday

    Stray dog completes 1700km China race BBC

    “Yong now hopes to adopt Xiaosa.”

    Oh no– what if he already has a home!

    1. LucyLulu

      Adding to link above, solar gaining recent improvements in technology:

      Company promises thinner, cheaper (more efficient) solar cells. Machines to be built in MA and MS.

      And…. Mississippi, of all places, luring Silicon Valley firms as home to manufacturing plants for green energy technologies, esp. solar energy. State loan rates, labor rates, state subsidies and job training, state corporate tax rates, U.S. infrastructure, make it attractive alternative to China.

      Also mentioned, start-up with technology to cut cost of purifying silicone

      If you want other links to green tech advances, I’ll try to find writeup on (less obnoxious) vertical wind turbines and promising breakthroughs in fusion.

  12. Susan the other

    Greg Palast on Baku. These are the stories that make me long for WW3. Not a hot war of bombs and slit throats. A war of citizen boycotts. No more oil. Period. Fuck BP. Let them drown in it.

    1. different clue

      Such a peoples’ war of economic resistance would take decades and the victory would be partial . . . and very far off. Would people prepare themselves and eachother to accept the long time horizons involved and the staying power committment needed? Let’s hope so. Its only a war if both sides are fighting and only one side is fighting right now.

      People and groups would have to start reducing their use of oil here and there and in stages. They would also have to try to conquer and take over various local and regional governments to use those governments to invest in oil-hostile life and survival infrastructures. You can’t take the train if there is no train to take. You can’t ride a bike where it is just too dangerous. It will take whole packs of people to entrench and increase train routes and train service . . . and bike routes and bike service.

      I imagine such an effort would get started first in localities which have no fossil fuel extraction primary industries of their own in their area or their economic support hinterlands. Such places would have no counter-lobby sabotaging their conservation and oil-banishment efforts from within. Since many so-called “Blue States” have coal or oil industries which keep their politics captive, perhaps people will have to sweat out the oil beginning in smaller Blue Zones.

  13. MyLessThanPrimeBeef

    Do gentlemen not prefer AAA bonds over AA bonds?

    In the world of bonds, small is beautiful.

  14. MyLessThanPrimeBeef

    Speaking of conflicts with Greece, let’s remind ourselves that the term ‘Pyrrhic victory’ was invented there.

  15. F. Beard

    re Hard cash for tough times FT:

    We should all use cash (actual physical currency) as much as possible since it means less reserves in the banking system to be leveraged against us.

    But what we really need are “National Mattress Accounts” run by the Federal Government where we can safely store and transact with cash outside the banking system.

  16. financial matters

    COSCO Seeks Gov’t Funds after Huge Losses, Sources Say Caixin. China’s biggest state-owned shipping firm.

    This article seem to deal primarily with shipping itself which is bad enough. I remember seeing something recently about shipping and other companies also being heavily involved in underground real estate loans. I wonder how much of the loss stems from that and is the beginning of a real estate ‘adjustment’ there.

  17. Hugh

    Lunch with Krugman reads like satire, two clueless Establishment types get together for lunch, no not at MacDonald’s or Chili’s. It’s upscale but not upscale upscale. They sniff at the lack of ambiance but still order from the French menu. They sniff too at the world’s problems. Nothing they say is true or accurate but it is all wonderfully self-validating. They truly are the smartest men in the room. Of course, the room is nearly empty, but then so are they.

    1. psychohistorian

      Damn Hugh, I like your way with words.

      Paul Krugman is clearly part of the problem while justifying the structures that keep the global inherited rich in control. He almost acts like he has a conscious but then he opens his mouth and more Shock Doctrine crap comes out.

      While Krugman makes sounds that seem to seem to be supportive of the 99% occasionally, his purported ignorance about where capital comes from and never any bad words about the owners of all that capital never come out of his mouth or squirt out his pen/keyboard…..keeping us all confused at the margins as he is so highly paid to do.

  18. Up the Ante

    This quote is worth sharing,

    “A decade and a half later, it’s instructive to see how those predictions turned out. The short form is that the peak oil researchers were correct while their critics were shoveling smoke. ”

    Night Thoughts in Hagsgate [haha]

  19. Up the Ante

    “What are Lawn Removal Parties? ”

    Before the AIDS crisis, they were truly THE purpose of life.


    1. LucyLulu

      They plan to begin removing the spent fuel from pool #4 next year from what I’ve read recently. It won’t be a trivial task to make the necessary preparations. Large cranes that run on tracks stored at pool level and above are used, and the equipment was all damaged in the accident. They must also have the casks to transfer the fuel rods and a place to safely store them. All this along with many other issues to deal with. It will be decades before the site will be cleaned up. The good news is that the spent fuel is no longer hot enough for the cladding to ignite, all being older than 180 days.

      Here’s something scary.

      Edano was the chief cabinet secretary, now trade minister, and the government spokesperson/man on the ground since the earthquake and tsunami. This idea was thrown out three days after the tsunami. Fortunately for us all, Edano vetoed the idea.

      Tokyo Electric Power Co. considered evacuating all workers from its Fukushima atomic plant after last year’s earthquake and tsunami, Trade Minister Yukio Edano told an inquiry yesterday.

      1. enouf

        Slightly different take on timeframes needed; concrete structures need to be built to support cranes; encapsulation, etc
        “This week Dr Caldicott welcomes back nuclear engineer Arnold Gundersen for yet another update on the stricken Fukushima plant which suffered multiple nuclear meltdowns in 2011. ….”
        (from May 18th, 2012)

        Also nice to know Hillary and her Japanese counterparts feel NO NEED to monitor radiation levels in the food.. isn’t it?


        1. enouf

          …and *not* very good other news all around either (groundwater leaching, oceanic dumping, very temporary and fragile cooling systems made of plastic pipes, etc etc).


    1. p78

      “European Capital […] want[s] Europe as a free hunting ground, as guarantor of financial rents, as the enforcer, especially in the Eurozone, of wage deflation and the shifting competition onto the working populations who have to compete against each other.”

  20. F. Beard

    re What are Lawn Removal Parties?:

    Ans: Polishing the brass on the Titanic.

    And where is the Society for the Prevention of Cruelty to Grass?

    But I got no dog in this fight. I’m moving back to Tucson where lawns are few.

Comments are closed.