Advertising masked as science? Nature News
Contractionary Fiscal Contraction, Quantified: European Edition Menzie Chinn, Econbrowser
German Vote on ESM Fails; Still Not Ratified by Germany, Austria, Belgium, Estonia, Slovakia, Netherlands; Political Football Over Financial Transaction Tax Michael Shedlock. I take exception to some of his commentary, but the news wrap is useful.
Debt crisis: Germany signals shift on €2.3 trillion redemption fund for Europe Ambrose Evans-Pritchard, Telegraph
Crédit Agricole Girds Greek Unit for Greece Euro Exit Wall Street Journal
Dread and Uncertainty Pervade Life in a Diminished Greece New York Times
China giving up on rebalancing? MacroBusiness
Democrats fear Obama may lose Christian Science Monitor
Obama seeks to claw back economic agenda Financial Times
Obama’s Hollywood problem Ed Luce, Financial Times
U.S. Health Care Vote Pivots on Kennedy Bloomberg
The Indictment of NATO Protesters on Terrorism Charges Kevin Gosztola, Firedoglake
Sanders Releases Explosive Bailout List RSN. This is good to send to people who aren’t aware of how bad the bailout-related conflicts of interest were.
Rakoff Denial of Motion to Dismiss by Brian Stoker in SEC v. Stoker. Tom Adams via e-mail:
As Rakoff noted in his Citi/SEC settlement decision, the SEC’s case against Stoker has important additional detail about Stoker’s knowledge of the fraud (see footnote 4, on page 4). In particular, Rakoff notes that Stoker knew the CDO would be hard to sell if investors knew Citi was also shorting it, which is why Citi hired Credit Suisse to be the deal manager.
In addition, Rakoff notes that Citi learned about the idea of shorting its own CDOs from Magnetar (ie, the creator of the Constellation CDOs) and many other hedge funds who believed that the subprime MBS market was going to blow up.
As far as I know, this is the strongest information out there, so far, that confirms what we’ve said about Magnetar and the CDO market: 2006 and 2007 CDOs were built to allow hedge funds and banks to short them, and banks to unload otherwise unsaleable MBS bonds. In order to accomplish this, the banks needed to hide what they were doing.
It’s not a surprise that this is what happened, but it is surprising to read it in an actual court opinion. Rakoff accurately describes the facts as a straight forward fraud complaint. Yet, other than the cases against individuals like Stoker and Tourre, the SEC is unwilling to act on this information. It is mind boggling that the SEC didn’t bring charges against the trading desk chief or Stoker’s supervisor, both of whom are referenced and implicated but unnamed.
Jamie Dimon Is Taking Your Phone Calls on Foreclosure Paperwork Problems Dave Dayen, Firedoglake
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D – 86 and counting*
“Really, if the lower orders don’t set us a good example, what on earth is the use of them?” –Oscar Wilde, The Importance of Being Earnest
Occupy. “The New York chapter of the American Civil Liberties Union has released an Android application allowing mobile-phone users to easily capture police patdowns on video, which is then automatically uploaded to the rights group’s servers.” “Chicago Tribune sues Occupy Chicago over occupiedchicagotribune.org.” Hey, maybe Rahm will weigh in on the side of free speech!
Montreal. Debt: “The Quebec government’s plan to improve the loans and bursaries programs will only put students from middle-class families deeper into debt, two of the province’s largest student associations charged on Wednesday.” Corruption: “[Jacques Duchesneau,] initially tasked by the Quebec government to probe corruption in the province wasn’t given a budget or even a computer and was relegated to ‘squatting’ for office space.” Hey, maybe Eric Schneiderman’s got a spare! “We uncovered that the idea of healthy competition didn’t exist. People tried to work around the system,” [Duchesneau] said. “A system of collusion was in place … to get around the public tendering process.” Red squares: “Culture Minister Christine St-Pierre found herself in hot water last week when she said the red square was a symbol of violence. She made the comments after Fred Pellerin, a poet, storyteller and singer, declined his invitation to become a member of the Order of Quebec, refusing due to what he called a democractic crisis in the province and reiterating his support for the student movement by sporting the red square. Today in the National Assembly, St-Pierre said that if people were hurt by her comments, she was sorry.” A non-apology apology! Elections: “In the wake of such a brutal message from the people [in the Argenteuil by-election], nobody can see Premier Jean Charest calling an election for mid-September, the next window available to him after the student crisis botched his plans for spring. PQ MNAs said it’s clear Charest’s attempt to associate Marois’s support for the students and her decision to wear the red badge with violence and intimidation did not fly with voters.” Charest: “Madame Marois is the street.” Wow. Letters: “An end to the crisis that is beneficial to the whole of Quebec society must pass, first of all, by way of a citizens’ forum (or “Estates-General”) on our universities.” “Now you have retired cops and criminal experts providing colour commentary on police actions during student demonstrations, as if they were hockey games.” Canadian Civil Liberties Assocation: “What we are witnessing is the replay of the same police techniques. We’re talking about so-called preventative arrests, where people who haven’t done anything are being arrested just because police think they could be dangerous. It’s very troubling. This conduct is excessive and illegal.”
CO. D Peter Hart Focus group, 27-year-old health care consultant: “I got duped. I fell under his spell. What he’s done with the car industry is the only real success. I feel like I was somewhat lied to.”
FL. Voting: “Last night, The Daily Show destroyed — destroyed — Florida Gov. Rick Scott and all of his recent voter suppression schemes.” Back-scratching: “When a politically connected company was in danger of losing a $9.4 million no-bid contract with the state, Sen Pres Mike Haridopolos came to the rescue of the [Evidence Based Associates] — a firm that employs his good friend and political benefactor as a lobbyist” with $6 million more.
IA. Diane Bauer (again) on Romney’s visit to her cafe: “My dad’s picture, an emblem my dad gave me, it got broke. Those aren’t things you can replace.” Ron Paul: “A team [of regulars] is pushing to send a different set of Iowans to the national convention, not the at-large slate selected by Paul backers. They hope to round up enough votes for a ‘unity slate’ to override the Paul activists at this weekend’s state convention.”
MD. Dirty tricks: “Political consultant Julius Henson was sentenced to 60 days in prison Wednesday for his role in sending automated robocalls to curb D voters from heading to the polls” in 2010. Tasers: “Shortly after he was jolted a second time, county police say Johnson, 48, lost consciousness and was later pronounced dead at a hospital. He became the second person to die after being Tasered by a county officer in the past three years.”
ME. Angus King: “The DSCC chairwoman] wouldn’t say which candidate she’s backing in the race to replace retiring Sen. Olympia Snowe (R).” That is, a D or Angus King (I).
MI. Democracy: “[Protect Our Jobs], supporters of a ballot proposal to enshrine collective bargaining rights in the state constitution today turned in [650,000 signatures] to put the measure on the November ballot.” Less than 323,000 were needed.
MN. “Despite Bio Wood Processing being hit by a fire and an explosion in the first three months of business this spring, county and fire officials say they aren’t concerned with the safety of the facility.”
ND. Measure 3: “The 82-word amendment, formally titled the Religious Liberty Restoration Act, stated that ‘a sincerely held religious belief’ is sufficient grounds to disobey a law deemed contrary to that belief.” It lost, 64% to 36%.
NH. House speaker tries to douse email flame wars.
NY. Fracking: Cuomo pursues a plan to limit fracking to counties along the PA border — primarily Broome, Chemung, Chenango, Steuben and Tioga — with local approval. The administration had initially expected to allow 75 hydrofracking permits in the first year, but now expects to reduce that to 50. “In New York, while more than 100 communities have passed moratoriums or bans on fracking, a few dozen in the Southern Tier and in western New York have passed resolutions in favor of the drilling process.” “Sandra Steingraber, founder of New Yorkers Against Fracking, characterizes the places where drilling would be permitted on a trial basis as ‘sacrifice zones.‘”
OH. “Today the Ohio House passed and the Senate agreed to SB314, legislation that further reduces oversight of [JobsOhio, the privatized economic development agency] and hands more unfettered power to Kasich Jobs Czar, Mark Kvamme.”
PA. “Here we were, traveling the area often called ‘The Rust Belt.’ where the dedicated and determined educators we met were representative of the nation’s majority of college faculty. By that, I mean that they were all part-time, low-wage, struggling people; every one of them had several jobs in order to make ends meet.”
UT. “[Fred Karger], a gay Republican running an issues-based campaign to change attitudes within the GOP about same-sex marriage, took his efforts last week to Utah.”
WI. Rick Perlstein on the Barrett slap: “And therein hangs a tale: about grassroots Democrats who act like activists, who hold that slaps are sometimes what it takes to get the political job done, and Democratic leaders who act like you can solve all political problems with a hug. Which, pretty much, was Tom Barrett’s entire election platform.” The Unity Pony! Walker brat fest: “‘First step’ was a phrase legislators from both sides employed repeatedly.”
Grand Bargain™-brand Catfood watch. Thumbsucker by Walter Shapiro. Toward the middle: “Both Obama and Romney have so far failed to prepare voters for the epic economic reckoning that is slated to occur during the 55-day lame-duck period between the election and the end of 2012.” Teeing up the narrative!
Inside Baseball. Game of thrones: “Turns out one of the many heads on a spike decorating King’s Landing belonged to ex-president George Bush.” And the Quebecois are worried about Banane Rebelle guidant le peuple? Dimon testimony: “Dimon was seen with the seal cufflinks visible. The seal reads ‘Seal of the President of the United States’ and includes the arrow-carrying eagle, [flashing] a not so subtle message to the lawmakers that the boss has his back.” Daniel Kahneman, study: “[P]eople who were aware of their own biases were not better able to overcome them.” Military rape awareness-raising slogan: “Ask her when she’s sober!” Black misleadership: “[T]he Obama administration in 2009 granted Southern Companies $800 million to underwrite the construction of two nuclear reactors next to a pair of leaky existing nukes in a poor, mostly black GA town where almost every family has a cancer case or two. But who would raise the cry? The Southern Christian Leadership Council, perhaps, based in nearby Atlanta? No way. The CEO of Southern Companies headed up SCLC’s building fund, raising millions to pay for its Auburn St. headquarters.”
Policy. HCR: “[U]nder a Romney presidency, there would be no federal prohibition barring health insurers from discriminating against pre-existing conditions.” Petrostate: “The rent goes up, the democracy goes down, or so they say. [Qatar] is what political scientists refer to as a rentier state, generally defined as a government that receives at least 40 percent of its revenue from the export of primary products, often fuel.”
“The Economy”. ABC Poll: “The economy by far is the top issue in the 2012 election, and, after more than three years on the job, Obama had a 55 percent negative rating for handling it. Nonetheless, he and Romney were essentially tied in trust to handle it.” The Ds are like the doctor who won’t tell you you’ve got cancer. The Rs will tell you, but they want to cure it with chanting and magic herbs. Bruce Bartlett R (!):”A big economic speech that clearly lays out his economic philosophy and ties together the seemingly disconnected strands of his policies would help him electorally and plough the ground for additional and more effective stimulus.” Bartlett then astonishingly goes on to trash the trope that government is like a family, and recommend Keynesian (and even, without mentioning the name) Krugmanian solutions. “The numbers are beyond the president’s control. [T]he campaign can be as efficient and on-topic as it pleases, but in the end (all together now), it’s the economy, stupid.”
The trail. Gingrich: “[E]lections are ‘rigged, frankly, in favor of the wealthy.” Film at 11! Money: “[The AFL-CIO] will redeploy funds away from political candidates smack dab in the middle of election season.” “How far does $77,000 get you nowadays? It would get you invited to two top notch fundraising events with Barack Obama, and a picture with him thrown in.” The decimal point won’t move with Romney. Defining the opponent: “If the Obama campaign hopes to lock in voters’ minds an unflattering and anathema-to-swing-voters image of Mitt Romney, as the Bush campaign did with Sen. John Kerry in 2004, it’s time to pick up the pace.”
Libertarian Party. NH: “On May 31, Gov Lynch signed SB 236 into law. It says that newly-qualifying parties must identify their nominees in June, even though the petition to qualify that party is not due until August. The bill takes effect immediately. The only party that is adversely affected this year is the Libertarian Party.”
Robama vs. Obomey watch. Romney: “His rhetoric will be soaring and eloquent, but I suggest you look at his record, not his words.” True! (And a Rovian strength into weakness ploy.) Obama: “I am telling you, I want you all to pay attention over the next five months and see if they’re offering a single thing that they did not try when they were in charge, because you won’t see it.” Also true! Comedienne and E! fashion guru Joan River: “They’re both idiots.”
Romney. “But Romney’s friends on K Street, who include not only fundraisers but an inner circle of well-placed strategic and policy advisers, are reaping their own rewards. The top bundlers, many of whom Romney has not identified, enjoy weekly telephone briefings with the campaign, VIP entry to exclusive receptions and retreats and, in some cases, the chance to bend Romney’s ear on policy issues.” Film at 11!
Obama. Upcoming economy speech in Cuyahoga County OH, Jay Carney: “The president believes that we have made progress. The president believes that we have made not nearly enough progress. There’s been positive economic growth.” NOTE: Cuyahoga tops OH in fracking in 2011 (good local detail). “Whatever a mandate is, Obama won’t have one.”
* 86 days ’til the Democratic National Convention feasts on Tasty Kakes on the floor of the Bank of America Stadium, Charlotte, NC. Agent 86 was played by the great Don Adams.
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Antidote du jour: