Links 10/16/13

Thanks again to the many of you who contributed to our fundraiser! I am sure I can speak for Lambert in saying that we both deeply appreciate your willingness to support our efforts to cut through the noise and the propagandizing in the media (in fairness to journalists, they are up against very sophisticated spin machines that make it hard for them to get to the bottom of many stories in a normal news cycle). And even if you weren’t in a position to contribute this year, we hope you’ll be a part of our community. We are dedicated to doing what we can to promote a more just social order. While we may not have answers, we believe that asking the right questions and identifying the critical leverage points is a promising place to start.

London Zoo’s first Sumatran tiger cub in 17 years found dead next to pool Independent (Chuck L) :-(

At 28, Writer Is Youngest to Receive Booker Prize New York Times. Kiwi female novelists do well with the Booker. I liked The Bone People.

Extreme weather ‘keeps people poor’ BBC

Apple Is Said to Cut iPhone 5C Orders Wall Street Journal

Look Out Amazon: More Shoppers Browse Online, Then Purchase in Stores Time

Growing Old in Sweden CounterPunch (Carol B)

The ‘Luxury Bishop’, the bath, and the €31m palace: Free-spending German cleric summoned to Vatican – Europe – World Independent (Chuck L)

Merkel Left to Seek SPD Alliance After Greens Drop Out Bloomberg

ECB’s Draghi: Knowing Too Much About Our Big Banks Could Set Off A Panic Wolf Richter (Chuck L)

Nobel Winner Robert Shiller Demolishes UK’s Help-To-Buy Scheme Ilargi

Shutdown Showdown. Ooh, this is getting ugly!

Debt Talks in Disarray as House Balks New York Times

No Plan B as deadline approaches Politico. Kiss the recovery, such as it was, goodbye.

Who controls the House GOP? No one. Washington Post

Warring GOP factions sink John Boehner plan Politico. He didn’t whip the proposal?!?!

US rating put on negative watch on default fears Financial Times. Subhead weirdly run the empty “Senate leaders optimistic” cant and stock futures are up 7 points. If that isn’t enough to confirm the stock market is unhinged from reality, nothing will. Even if the solons patch up a deal in double plus quick time, the damage of the shutdown, direct and to confidence, is already substantial, and the negotiations have been so ugly that it bodes badly for the next phase of budget talks.

Wall Street puts its money on 1 Nov Guardian. As we’ve been saying….

CME raises deposit on US rate swaps Financial Times

Watch what China does with US debt, not what it says Ambrose Evans-Pritchard, Telegraph

The default has already begun Felix Salmon

Viewing U.S. in Fear and Dismay New York Times

Declare Debt-Default Extremists “Enema Combatants” CounterPunch (Chuck L)

Short-term debt deal won’t mask big barriers ahead Associated Press

Big Brother is Watching You Watch

On the Prospect of Blackmail by the NSA ACLU (Chuck L)

A Court Order is an Insider Attack Freedom to Tinker

Judge defends Fisa court practices Guardian

There’s an International Plan to Censor the Internet in the Works — Let’s Stop It in Its Tracks Alternet

Glenn Greenwald to leave Guardian Guardian. We put up a short post when the story broke. Go Glenzilla!

Obama admin. projected strong health plan signups Associated Press

The NYPD: Making New York Safer By Spying On Bicyclists, Relief Efforts And Republicans TechDirt (Chuck L)

Geography affects what drugs seniors prescribed Associated Press

Amazon Slapped With Suit by Employees for Unpaid Security Searches NBC 10 Philadelphia (Carol B)

JPMorgan agrees to $100m CFTC fine Financial Times. This was a LOT lower than I expected.

Goldman Must Turn Over Female Employee Complaints in Suit Bloomberg. Wow, is Goldman trying to wear the plaintiffs out. A 2010 suit and they are still fighting over discovery? I read the complaint and the allegations were credible and detailed.

Bodies Double as Cash Machines With U.S. Income Lagging: Economy Bloomberg. We said during the worst of the crisis that paid blood (plasma) donations were an indicator of how bad things were, but now we’ve had years of grinding desperation….

Antidote du jour (furzy mouse):


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  1. Massinissa

    The default is on the 17th right?

    My god. I expected this shit to be finished by now.

    Lets hope the markets are expecting some kind of 11th hour schtick and dont go ballistic before the deadline. Maybe Boehner should go send all the Fortune 400 companies emails telling them it will be ok? Not that they would trust him anyway, lulz.

    Its clear to all observers that Boehner has lost control of his snarling hounds. They smell blood.

    1. MyLessThanPrimeBeef

      The real kabuki is when Big Money orders the Dow to drop a few thousand points before swooping in to ‘buy low.’

      Someone has to profit from this – can’t let a good opportunity go to waste.

  2. David Lentini

    The Draghi story—horrific but not surprising—perhaps demonstrates why theoclassical economics can’t stomach the inclusion of banking operations beyond simply a place to park money. Banks require a huge amount of trust to operate, since they can’t risk having their depositers making a run on the bank. But that trust, as we see over and over again, is easily and profitably abused (as Bill Black has so ably explained). And yet, our economy depends critically on banking operations; so here we have our key public officials deliberately perpetrating frauds on the market in order to “save” the economy.

    Which brings me to the point of the recent phony-Nobel economics prize, which is really given by the Swedish central bank and not Nobel’s trust. Theoclassical economics is nothing but a cover for banking fraud! By pitching the banks-are-really-harmless-innocent-bystanders in the market place, i.e., writing them out of the economic theories in order to tell the fairy tale of efficient, free, and fair markets, economists allow the banks to operate all sorts of frauds on their innocent customers. When the frauds blow up, the economists all cry “shock” and “contagion” to bail out the banks.

    If banking was seriously included in economic theory, then bank fraud and the inevitable collapses, would have to be accounted for and therefore addressed publicly. But that would destroy trust and invite regulation and scrutinly, which would ruin the party for the bankers.

    Now we know why the eonomics prize is not referred to as the Swedish Central Bank Prize in economics.

    1. Montanamaven

      Stephen Zarlenga weighs in on this and, once again, suggests HB 2990 to solve the problem. Of course, that would mean changing our monetary system to make sense i.e. money as money and not money as debt. Again, he wisely talks about “usury” which few want to address. Why do we have a debt let alone a debt ceiling?

    2. fresno dan

      I agree.
      I might quibble and say that you can’t divorce politics from finance, and that it is a system founded upon fraud/corruption and that there is no “market” – the elephant in the room that “serious” economists just won’t address.

  3. babaganush

    Re. Sweden. take anything about the wonderfulness of Sweden with a pinch of salt. While it is still a very decent place to live relative to many other places, it seems like the welfare state is slowly crumbling e.g. school results are declining, quality of healthcare systems declining, elderly care scandals, corruption/incompetence abound in the public sector etc. The Swedes have a “better and more moral than thou” self image which makes it hard for them to tackle diffcult questions head on. Also, the press is notorious for self-censoring so many Swedes live in ignorant bliss about the true state of affairs.

    More importantly, that long necked antidote was used a couple of weeks ago if I am not mistaken.

    1. rusti

      I’ve lived in Sweden for several years now. Americans have a tendency to read those online happiness / satisfaction surveys where Scandinavian countries always do well and assume it’s some sort of mystical utopia in Northern Europe free from crime, poverty or corruption.

      Your criticisms about deteriorating services are mostly valid, and there is a sort of unspoken attitude of moral superiority, but self-censorship of the press or ability to address difficult questions are about a million times better than the US. It’s following a similar curve of deterioration as most of the Western world, but at a slower pace.

    2. MyLessThanPrimeBeef

      If you look, in the back of the antidote, it says, expires in 2099.

      So, it’s still good.

      I have no problem taking that antidote.

  4. judabomber

    Reading through some of the comments on Yves’ debt ceiling/shutdown post yesterday had me a bit flabbergasted.

    The AEP article is a must-read for those of you drumming the “China is going to dump our debt and move away from the dollar” drum. And what currency are they going to move to the is deep and liquid enough to support their needs? The Euro? Please. Check out Barry Eichengreen’s recent book Exorbitant Privilege for more on this.

    I guess I assumed most folks reading this blog subscribed to and understood MMT. But I assumed wrong.

    Basic macro 101 says a country that runs a perpetual current account surplus will have trouble issuing the reserve currency/assets of the world. This is a basic accounting identity.

    The Chinese capital account is for all intents and purposes, closed (unless you are connected in which case it is negotiable). And even if it were open the implication is the PSC has decided to relinquish control over the currency. Newsflash: this is not going to happen anytime in the future.

    Of course just because the Chinese have tightly controlled to value of the $/RMB fairly tightly in nominal terms, in real terms their currency has gotten much stronger vis-à-vis the dollar over the last many years. Go to the FRED database and graph the exchange rate adjusting for the aggregate price level in both countries.

    1. Yves Smith Post author

      Thanks, I didn’t have time to address this yesterday!

      The Chinese love whacking the US verbally every time we do something stupid, which seems to be often these days. But we’ve said forever, independent of MMT, that the idea that the Chinese FX reserves are an investment is barmy. They came about as the result of currency manipulation. They are better thought of as tantamount to export subsidies. And if the Chinese were to try selling Treasuries, they’d be selling dollars and their currency would go to the moon, which is the last things they want.

      1. MyLessThanPrimeBeef

        The propaganda in China for millennia has been that China is self sufficient.

        Thus, some conjecture, the Ming Confusianists dismantled all the Treasure Boats, even as they continued the tradition of importing jade from Hotian, which for the most part was never part of China, or cobalt from Samarra or Sumartra.

        Now, that kind of idea doesn’t really go away, as ideas, no matter how bad, never die. There will always be believers.

        How would today’s autarky believers go about things?

        Would they, after buying up more gold than we have at Fort Knox, after getting all the technologies they ‘think’ they need, crash the Dollar, write off their US Treasuries and use the new strength of Yuan to dictate to the rest of the world?

        1. ohmyheck

          “Would they, after buying up more gold than we have at Fort Knox, after getting all the technologies they ‘think’ they need, crash the Dollar, write off their US Treasuries and use the new strength of Yuan to dictate to the rest of the world?”

          I get the general argument by Yves, but I have been very much wondering about all the gold China has been buyig up in the past few months. I would love to hear others’ thoughts on that particular matter.

          1. craazyboy

            They are also setting up bi-lateral trading agreements with real trade partners. In that case each central bank just swaps their local currencies – no dollars or gold needed.

            1. MyLessThanPrimeBeef

              My guess is that a lot of the ‘primitive’ monarchies in the Gulf would like to see gold if China wants to make Petro-Yuan popular and you can’t blame them.

              Here is something from Wiki, about Gaykhatu, meaing surprising/amazing in the Mongolian language:

              n 1294, Gaykhatu wanted to replenish his treasury emptied by royal extravagance and a great cattle plague. In response, his vizier Ahmed al-Khalidi proposed the introduction of a recent Chinese invention called Chao (paper money). Gaykhatu agreed and called for Kublai Khan’s ambassador Bolad in Tabriz. After the ambassador showed how the system worked, Gaykhatu printed banknotes which imitated the Chinese ones so closely that they even had Chinese words printed on them. The Muslim confession of faith was printed on the banknotes to placate local sentiment.

              Gaykhatu interrogates Shingtûr Noyan, ally and cousin of Arghun.
              The plan was to get his subjects to use only paper money, and allow Gaykhatu to control the treasury. The experiment was a complete failure, as the people and merchants refused to accept the banknotes. Soon, bazaar riots broke out, economic activities came to a standstill, and the Persian historian Rashid ud-din speaks even of “‘the ruin of Basra’ which ensued upon the emission of the new money”.[5] Gaykhatu had no choice but to withdraw the use of paper money.

              He was assassinated shortly after that, strangled by a bowstring so as to avoid bloodshed.[6] His cousin Baydu, another puppet placed by Ta’achar, succeeded Gaykhatu but only lasted a few months before himself being assassinated. An alternative story of Gaykhatu’s death claims Baydu made war on him because of his introduction of paper money and subsequently killed him in battle.[1]

            2. MLTPB

              My guess is that a lot of the ‘primitive’ monarchies in the Gulf would like to see gold if China wants to make Petro-Yuan popular and you can’t blame them.

              Here is something from Wiki, about Ga*khatu, meaing surprising/amazing in the Mongolian language:

              n 1294, Ga*khatu wanted to replenish his treasury emptied by royal extravagance and a great cattle plague. In response, his vizier Ahmed al-Khalidi proposed the introduction of a recent Chinese invention called Chao (paper money). Ga*khatu agreed and called for Kublai Khan’s ambassador Bolad in Tabriz. After the ambassador showed how the system worked, Ga*khatu printed banknotes which imitated the Chinese ones so closely that they even had Chinese words printed on them. The Muslim confession of faith was printed on the banknotes to placate local sentiment.

              Ga*khatu interrogates Shingtûr Noyan, ally and cousin of Arghun.
              The plan was to get his subjects to use only paper money, and allow Ga*khatu to control the treasury. The experiment was a complete failure, as the people and merchants refused to accept the banknotes. Soon, bazaar riots broke out, economic activities came to a standstill, and the Persian historian Rashid ud-din speaks even of “‘the ruin of Basra’ which ensued upon the emission of the new money”.[5] Ga*khatu had no choice but to withdraw the use of paper money.

              He was assassinated shortly after that, strangled by a bowstring so as to avoid bloodshed.[6] His cousin Baydu, another puppet placed by Ta’achar, succeeded Ga*khatu but only lasted a few months before himself being assassinated. An alternative story of Ga*khatu’s death claims Baydu made war on him because of his introduction of paper money and subsequently killed him in battle.[1]

              1. MyLessThanPrimeBeef

                Here, our Ilkhanate ruler failed to realize the house might be in charge of dealing cards, but it doesn’t mean he could get all the cards he wanted and not play by the same rules as everyone else.

                If you are in charge of printing paper money, as a private contractor with printing presses in a big warehouse, for example, for the US Treasury, it does not mean you have that money.

                The same with the government regulating money supply. That’s not to be confused with saying the government has as much to spend as it wants. These are 2 different things.

                1. craazyboy

                  China knows it has a slow slog ahead encroaching on the petrodollar-military protection umbrella in the ME.

                  But Russia, Brazil and Iran have oil….and they have made some progress already in those places. Been chipping away at the rest of S. America and Africa too.

                  1. MyLessThanPrimeBeef

                    More or less following the sea routes first travelled by admiral Zheng Ho, who, according to one British naval officer/write, first ‘discovered’ America.

                    You can go visit one of his wrecked ships off the island of Bimini.

    2. Bank of Yap

      Why the fanatical fixation on this “China is going to dump our debt and move away from the dollar” strawman? It has the demented rigidity of those old guys with the continual letters to the editor denouncing flag-burning. Uh, nobody’s burning any flags. My theory is, this is Democratic debt-ceiling posturing and Dem lumpen are parroting it left and right because everything you say presses their propaganda buttons.

      There’s a fallacy of composition here that has the telltale smell of party propaganda. The issue is not that country A can’t dump the dollar, country B can’t dump the dollar, country C can’t dump the dollar, &c. &c. &c., Q.E.D. The issue is whether A and B and C will converge on a basket that can adapt to the dollar’s dwindling importance over time.

      China already manages its currency against a basket. They have a lot of freedom to fiddle with their basket – China’s international reserves are not especially large by the standards of countries that have cast off pegs and floated up (there’s a 2010 Eichengreen and Rose paper on it.)

      When Medvedev wanted to needle the G8, he didn’t wave a ruble or a yuan. He minted himself a shiny new supranational currency. Soros, Stiglitz, Pettis: are they pushing the RMB as numeraire? No, a basket. Well, then, is it China that’s pushing it? No. They just want to be in the SDR basket. And the IMF is considering just that.

      That’s the threat.

  5. dearieme

    “Nobel Winner Robert Shiller Demolishes UK’s Help-To-Buy Scheme”:
    what a laugh. You can read “Blog commenter Dearieme demolishes UK’s Help-To-Buy Scheme” if you like. Or “Everyone’s Grandma demolishes UK’s Help-To-Buy Scheme”.

    P.S. It’s not a real Nobel he got, it’s the counterfeit one from the Swedish Central Bank. I’ll believe that economists are interested in the truth in general when they start insisting on the truth in this matter.

    1. MyLessThanPrimeBeef

      Fake Nobel.

      He got a Buddhist Nobel, as they believe nothing in the world is real. This is all maya.

      I can imagine the Dalai Lama with ‘This Peace Nobel is not just an illusion!’

    1. Bruno Marr

      If stating that you’re not ready to reveal the full context of your next professional step is “complaining”, it sets new bar.

  6. skippy

    Stuff from econ boards…

    Tealiban dimwits H/T DG

    These wrecking ball Tea Bagger rats want a default with it dire consequences. They want a financial crash and ensuing recession.

    They should be impeached, tried and hung for treason under the 14th Amendment which precludes Congress from repudiating our national debt or from acting so as as to raise a question about its validity. Treason in turn is defined as —

    1. A violation of allegiance toward one’s country or sovereign, especially the betrayal of one’s country by waging war against it or by consciously and purposely acting against it.
    2. A betrayal of trust or confidence.

    H/T KC

    Skippy… there’s more… a lot more… soft middle class democrats / non GOP sorts… starting to wake up.

    1. real

      tea partiers are doing soemthing good..when liberal media starts foaming at mouth and runs multi billion smear campaign for almost 4 yrs with zero effect-you have to understand tea partiers are doing something worthwhile..

      1. skippy

        I never thought it was possible to be – both – foaming breathers and nihilists at the same time.

        Skippy.. I guess that could be considered philosophical synthetic a priroi quantum event… snicker~

          1. real

            who cares about philosophy and latin words?nobody understands spare me,i got to watch miley cyrus

    2. real

      The ‘Luxury Bishop’, the bath, and the €31m palace: Free-spending German cleric summoned to Vatican

      The rewards of heaven will be harvested after death..a man has right to enjoy some luxury on earth..i see nothing wrogn with this

    3. Chris Rogers


      Much as I hate the TeaParty zealots in your country, they are actually doing the USA a great service, namely; undermining Congress and the President, and hopefully, the corruption that goes with DC and Wall Street.

      Why do I, a UK Socialist say this/ Quite simple, at the time of the bank bailouts in September 2008 I supported this move to prevent a greater economic catastrophe and subsequent global depression.

      Well, have a guess what, I should have supported the fringe Austrian movement that was wholly against the bailouts, believing the whole rotten edifice should collapse and we should begin afresh.

      Alas, genuflection is a wonderful thing, and economically speaking, we the tax payers bailed out the banks, we still got a depression/recession and the bankers and wealthy, not have they been brought to heal, rather they have continued on their merry way and got richer, whilst we the 99.6% get poorer and poorer.

      So, instead of being opposed to the TeaParty zealots for threatening the US and global economy, we should actually spur them on, not because we support their lunatic aims, but rather to bring a swift end to the whole rotten neoliberal socioeconomic edifice once and for all before its too late.

      Go figure, but lets not loose sight of the potential benefits – indeed, many can’t lose much more as it stands because they already have nothing – so time for those holding loads of debt as wealth to suffer some pain, which a US default and consequent economic crisis would surely achieve.

      1. fresno dan

        I think your correct.
        If your a third class passenger on the Titanic, you might accept that you and your family go into the icy water, even though the rich women and children will be saved.
        But if you see rich men being saved, you might think it better that no one survive and upend the lifeboats.
        (I understand that some wealthy people on the Titanic behaved gallantly in the face of doom)

        1. Trent

          “I believe we have a crisis of values that is extremely deep, because the regulations and the legal structures need reform. But I meet a lot of these people on Wall Street on a regular basis right now. I’m going to put it very bluntly. I regard the moral environment as pathological…

          If you look at the campaign contributions, which I happened to do yesterday for another purpose, the financial markets are the number one campaign contributors in the U.S. system now. We have a corrupt politics to the core, I’m afraid to say, and no party is – I mean there’s – if not both parties are up to their necks in this. This has nothing to do with Democrats or Republicans. It really doesn’t have anything to do with right wing or left wing, by the way. The corruption is, as far as I can see, everywhere.

          But what it’s led to is this sense of impunity that is really stunning and you feel it on the individual level right now. And it’s very very unhealthy, I have waited for four years, five years now to see one figure on Wall Street speak in a moral language.

          And I’ve have not seen it once. And that is shocking to me. And if they won’t, I’ve waited for a judge, for our president, for somebody, and it hasn’t happened. And by the way it’s not going to happen any time soon, it seems…

          The final point, of course, is separating the politicians from the crooks, but maybe that’s so close together that they can’t actually be separated. Maybe it’s just the same community.”

      2. jrs

        Of course. You know if we lived in a sane world, we move away from reliance on economic growth that destroys the planet, we’d fix the corruption, not let the 1% quite literally steal everything, and protect the most vulnerable in the meantime as we transitioned.

        Since we don’t live in any such world, since economic growth means doom of the biosphere, since the U.S. being powerful economically means it bombs brown people everywhere, since propping up the economic system just means the 1% get everything, and everyone else is left with less and less every year. Uh yea …

        1. MyLessThanPrimeBeef

          I may be naïve, but I believe, under GDP sharing, people will be able to pursue what they are really passionate about and we may actually see more happiness and yet less ‘economic growth (less dooming of the biosphere).”

      3. jrs

        It will make an interesting epitaph: even though some centrists mostly of liberal persuasion tried to appeal to people to save the system, tried to make a reasonable case against chaos, disorder and destruction for their own sake -everyone had been so screwed every which way by the system, seen too much corruption and evil, seen everything they lived for threatened and degraded and spied on, that nobody gave a @#$# anymore. Noone was left to fight anymore for a system noone could see being reformed and that had already hurt just about everyone in some way.

      4. JGordon

        I have been saying this all along: I endorse corruption and I support the corrupt Obama regime. I say let these incompetent morons do everything they like; it’ll just bring down this putrid system so much sooner. I don’t really believe that those who support propping up the current financial/political system have done a complete cost benefit analysis of the situation; much like someone who is against having his gangrenous leg amputated hasn’t.

      5. Roland

        This Canadian leftist was cheering the T.P. through the whole show, although I knew the deal would be worked out to make the Debt Ceiling as mythical as the Fed Taper.

  7. Jim Haygood

    Yield on T-bills maturing Oct. 31st reaches 0.62% this morning — so much for ZIRP!

    Yeah, maybe it’s just a brief distortion, and the sweet nirvana of zero interest for banksters will return when the fix is in.

    But sometimes, so-called glitches end up being prophetic. The market believes (cuz the Fed said so) that short rates should be nailed to zero into 2015. But today, the yield curve is steepening … and the guiding hand of the Bernank is nowhere to be seen.

  8. Dino Reno

    On the Prospect of Blackmail by the NSA.

    I’ve got nothing to hide. Nothing, nada. Move on, nothing to see here.

    Sounds suspicious, even to me.

    1. real

      oh the dreaded ACLU…Promoetd by elite liberals to divert attention from their stealing and trampling over individual rights..
      Liberals remind me of those commies in russia in 1920s…Then they were sent to Gulag en masse and finished..
      The simple rule i learnt is neevr to be too near power siuld be accesible to you but you shouldn’t becoem thorn in eyes of TPTB.

      1. AbyNormal

        real, foaming: the spelling mistakes in your last 3 post

        “Neither comprehension nor learning can take place in an atmosphere of anxiety.”
        Rose Kennedy

      2. ambrit

        “…then they were sent to Gulag…” Yeah, they were, by a Russian version of Ronnie Reagan no less! A right wing paranoid! Plus, for extra s—s and giggles, Comrade Stalin was a good old boy from Georgia!

        1. real

          it is bit too can’t compare lovey dovey softy US politician ,who got his seat because of speech making and acting skills, yo great mighty stalin..Ronald regan was an actor for modern republican party…
          Stalin was what every liberal craved in a leader..and he delivered them in gulags.
          Compared to regan,stalin actually fought russian govt,built organization,managed to get top position in politburo,ordered to kill some 40 million of non russians and russians…
          so how many people regan ordered to kill? any genocide regan ordered?

          1. ambrit

            Dear real;
            Got to toddle off to work soon but, check out Reagans wars in Central America. Not up to Comrade Stalins quantity, I’ll admit, but every bit as good as far as strategic goals and accomplishments go. Plus. as far as double dealing goes, Reagans machinations regarding the timing of the Teheran Hostages release is as slick a political trick as anything the Great Leader pulled off. Anyway, in both cases, the goals were the same; the collection and control of political power. Both did quite well, didn’t they?

            1. Skippy

              Aw he just dreams of a real conservative like the post commie dudes were, you know city’s built on the bones of labor which to have birthday marches on … Good times!

      3. Massinissa

        Its true Liberals are no friends to individual rights, but if you think the republican party is any better youre sadly mistaken…

        1. hunkerdown

          Rights without the power to defend them are in fact ephemeral privileges that will be withdrawn at the pleasure of those who grant them. “Master may I” is not a good model for gaining enduring rights.

    2. pro bono

      “Nothing to hide” is a variant of the old police ruse of telling a suspect that if they didn’t do anything wrong, they should waive their 5th Amendment rights and tell the police everything they know. Eventually the suspect winds up incriminating themselves about something.

      In other words, “Nothing to hide” only “works” when the NSA says it.

      1. MyLessThanPrimeBeef

        Unless you are a nudist and you go around naked, we all wear something to hide our bodies.

        Everyone (except nudists) hides.

        Just look at layers and layers of clothes (and makeup) politicians wear.

  9. real

    The default has already begun Felix Salmon

    link gives database error
    may be reuetrs removed article as per NSA’s instructions

  10. real

    Despite fear monegring by liberals and fake conseravtives,US currency is going to stay as a reserve currency for future..
    just pay attention to quality of imports from foreign countries.
    If foreign countries start exporting low quality goods(like coffee,meat,fish,timber);assume US has defaulted.

      1. real

        it will take too much time to explain but there aren’t any real conservatives in world.They will make come back after few decades,not now.

        1. hunkerdown

          Oh dear, a true Scotsman… Yves/Lambert, anything interesting about real’s IP address, or are they more likely volunteering?

    1. ambrit

      “…low quality goods…” Have you ever taken a good look at those goods China does export to the West? Where I work, the bulk of the manufactured goods we sell that originates in China perfectly fits the definition of cheap, shoddy merchandise. Even when the prices charged are high. Plus, since China is in the middle of a basic industrialization movement, do not expect the exportation of any raw materials at all. Rather, watch how high they are willing to bid on the “open market” for said raw materials. Everything is relative, as my ‘Uncle’ used to say.

      1. MyLessThanPrimeBeef

        The rule is one should never buy Chinese export blue and white…Nanking blue & white nor Canton blue and white.* They were and are for barbaric foreign devils.

        All the good stuff, they kept and are keeping in China.

        *Note, I am not sure about VOC blue and white pieces.

      2. real

        chinese good are always low quality.
        I am mostly talking about farm produce.US and west gets the best quality farm goods.Once you start noticing low quality imported food products like coffee,meat,fish-assume US has declined

          1. optimader

            Strictly speaking an iPhone is not an indiginous Chinese product. They are an American products w/ parts sourced globally and assembled in Chinese sweatshops to exploit legislated tax advantages and unsustainable labor practices.

            Aside from this distinction

            1.) In the strict sense, if “quality” is Conformance to Requirements, an iPhone is adequate “quality”.

            2.) In a difference sense, if you mean “quality” to be synonymous with a product constructed for longterm reliable (maintainable) service life, an iPhone is a Big Fail. Every important element of it is designed to fail and be unmaintainable.

            1. optimader

              In the example of an iPhone
              A random search on iPhone and Chinese and content

              …But my iPhone is far from 100 percent Chinese. It was assembled by Chinese workers, but Chinese labor added only about $10 to the final cost. The iPhone’s battery, chips, touchscreen, and other components came from an array of global suppliers in Europe, Asia, and the United States. My iPhone was also “Designed by Apple in California” and U.S. workers were responsible for most of the software development, product management, and marketing. Ultimately, Apple and its U.S. employees captured over half of the iPhone’s value….

      3. diptherio

        Two Nepali witticisms re Chinese goods:

        “Made in China: dui mahina.” Trans: “Made in China: two months” [as in it will last that long]

        “Made in China: aja chha, bholi chhaina.” Trans: “Made in China: here today, gone tomorrow” [lit. ‘today yes, tomorrow no’]

        1. MyLessThanPrimeBeef

          Didn’t they say that about Qianlong’s Manchu/Han Chinese soldiers in the 18th century?

          “Qing soldiers? Here today, gone defeated in 2 months”

      4. optimader

        Ambrit, absolutely ..
        Not only is it ALL without exception crap.
        I direct your attention to my Exhibit A: ANY F-ing Hose sprinkler hand piece made in China…
        All I want are plain old reliable twisty brass ones like from when I was a kid, and all the Bigbox stores (in my area) have are crappy leaky Chinese versions that feature a variety of spray profile alternatives, all of which suck and are not adjustable, and leak due to shitty or none existent packing.
        Then the pot metal handle snap off. grrr

        A friend bought a wine bottle opener at Bed bath and Beyond. Amazingly, the corkscrew was actually a cheap, soft wound wire terminated with a 10-24 stud that threaded into the body (because its cheaper to mfg) Bizarrely (and of course) the helix pitch was opposite the thread pitch so it would unthread as she tried to wind it into a bloody cork! Absurd, and obviously no Buyer actually tried using one before they bought their pallet(s) of them. Or.. the samples were a differ quality.

        The Chinese products used to obviously be crap, now they are insidious crap because they SPEND resources to produce consumer products that present as robust or at least adequate, but are underlyingly STILL CRAP that falls apart.

        Because I am eccentric I have actually now gotten to the point of purchasing various “vintage” (or commercial) appliances at a premium online. Who has a modern toaster that actually doesn’t take an inordinate amount of time to toast (real) bread?. I ended up buying a “vintage” circa 1960’s Sunbeam toaster that has large, heavy gauge exposed Ni-chrome coiled wire heating element and a real reostat. Looks like it was built in the post WWII retooled P-38 Thunderbolt factory. I can incinerate a slice of dark rye down to ash in this thing. No digital display, no multitude of bllsht buttons “Toast, Defrost, Bagel English Muffin blah, blah blah” –none of which apparently do anything.

        My latest frustration assuaged is my backup 60’s vintage kick-ass Waring Blender w/a REAL glass carafe. I Could blend concrete in it.. No shitty digital display, no fake rheostat(rotary know with crappy printed circuit contacts)–The only plastic maybe some bakelite pieces in the motor.

        I hate Chinese consumer products and will pay a premium for quality. I think that is the ultimate biz model failure of the bigbox stores. There is a market for higher quality stuff that doesn’t fall apart in 13 months for the frugally minded enlightened consumer

        1. craazyboy

          Lets see, what has walmart got me for so far…

          toaster oven – timer switch broke

          two coffee grinders – one broke switch, one broke w/ different switch design

          water filter w/ leaky plastic faucet

          two manual can openers – both unscrews itself when opening can. must tighten screw to finish attempt. (planning to try epoxy to fix this. in the mean time I’m using a 50 year old german can opener mom gave me when going off to college)

          melting plastic hamburger flipper

          ice cream scoop (cast or forged metal) that I snapped in two

          fortunately I don’t buy much stuff. coulda been much worse.

          1. MyLessThanPrimeBeef

            Toaster oven – raw food is better

            Coffee grinder – matcha is better. Use a tea leave stone grinder.

            hamburger flipper – see raw food above.

            water filter – hike a few miles to the nearest artesian spring source like our founding fathers used to do.

            Ice cream scoop – not sure what to do. Maybe we can re-
            fashion riot police batons used to beat up OWC protestors.

            These are what I suggest to break free of our Chinese junk addiction.

            1. optimader

              This is deflection from root cause analysis.

              You should be able to buy whatever the fck you want w/o the products functionality being misrepresented.

              Personally, I prefer my toast toasted, and that unremarkable task should not take more than 60 seconds.

            2. optimader

              water filter – hike a few miles to the nearest artesian spring source like our founding fathers used to do….

              Gee, if I did that I would be near

              I want Lake Michigan water, and I want to put it through a activated carbon and zeolite filter. YOu know why? Because that’s what I want!
              Fck the Founding Fathers and their phantom artisans wells, They all had brains enough to drink beer, wine and booze anyway –so they wouldn’t be poisoned.

              1. MyLessThanPrimeBeef

                Don’t fck the founding fathers.

                It’s not that serious a post.

                I am sorry if I was a little too lighthearted.

                1. MyLessThanPrimeBeef

                  Disclosure: I don’t eat raw meat that much, maybe raw fish but not raw meat and certainly not a lot of raw food.

                  1. optimader

                    sorry, in a frustrated mood.. Need to reboot Government and our compliant, superficial boobus americanus..

          2. optimader

            My most recent (last year) “Momentary Lack of Reason” and what put me over “The Wall” on buying crap Chinese tools/appliances at Big Box was the robust looking hand spade, by all appearances decent gauge metal and powder coated, The steel shank only penetrated the pliable rubber grid maybe ~ 25-30% of the grip depth. Pushed it into relatively loose dirt in a raised bed and the handle deformed in a very satisfying bend rather than the spade blade doing any actual work.
            That was it for me.

            1. craazyboy

              Didn’t know they still made ’em with cranks.

              Forgot to mention the broom w/ handle that falls off.

              Also too, Teflon pots and pans. Always bad, but got worse. Latest cookie sheet did not survive 1st bake of chocolate chip cookies. Had cookies w/Teflon coated bottoms.

              Also large water measuring cup which appeared to be pyrex and had brand name. Not pyrex – exploded on stove burner.

              Sandals, couldn’t have put more than a mile on those just walking to the pool and back. But soles wore out.

              Tennis shoes – only were $13, but wore those out in 5 hours on the tennis court. Did the math and found out $120 Adidas were cheaper. Plus you’re not limping home afterwards.

              Car steering wheel cover – smells like petroleum. There went the leather seat new car smell.

              If I think of anything else – I’ll post another quality alert bulletin.

              1. anon y'mouse

                and all of the above thread is merely proof that our consumer goods were better in the 60’s, and I have not imagined it.

                and it wasn’t just because they were made here. i’m not into the American Exceptionalism thing. we’d be making plastic junk here too if we had kept our manufacturing base. it just didn’t make good business sense to pay workers 25 bucks an hour to do that.

    2. Massinissa

      Secondly, I want to ask: Why is it that a person cant be a ‘real’ conservative without having faith in the dollar keeping reserve currency status?

      And when you say ‘liberals and fake conservatives’, thanks for excluding socialists like myself, since I agree with you that the world pretty much cant get off the dollar for the foreseeable future, even if the SHTF

  11. Hugh

    It is important to remember that it is not just the Tea Party Republicans who are pushing this default crisis. The Tea Party Republicans are a minority in the House Republican caucus. “Regular” conservative Republicans in the House are not standing up to them.

    More importantly, Obama could end this crisis and the risk of default at any time, by invoking the 14th Amendment, minting the platinum coin, or using consols or repos.

    The players in the default debate all act like there is nothing they can do. The fact is both sides could end this if they wanted.

    1. ambrit

      Dear Hugh;
      And you’ve got the figures to prove it, too!
      This is beginning to look like a perfect example of ‘choosing’ by not choosing.

    2. MyLessThanPrimeBeef

      Big Money could end this by dropping the Dow a few thousand points if It wants to end this.

      1. ambrit

        Dear MLTPB;
        I get the point, but events are now out of even the ‘Big Money’ players’ hands. Just like Der Fuhrer slipped the ‘imaginary’ leash his ‘Big Money’ funders thought they had him on in the 1920’s, so the Tea Party seems to have begun to get a sense of their own strength, and are testing the bounds of their independence.
        They are like Samson, in the quote from Milton’s “Samson Agonistes” I have trotted out before,
        “..eyeless in Gaza,
        at the mill with slaves.”
        Next up, Samson pulls down the Temple of the Philistines!

    3. Jim Haygood

      ‘… minting the platinum coin …’

      I’m all for this, because it’s so exuberantly, unapologetically batshit deranged.

      U.S. credibility, and the dollar’s reserve currency status, would be destroyed at a stroke.

      Let’s do it! We are wild and crazy guys!

      1. MyLessThanPrimeBeef

        Among the pros and cons of the silver bullet, one can say it does stop the pain for those who are suffering now and also that the empire and status quo lives on.

      2. diptherio

        Why would minting the coin lead to the destruction of US credibility, when the Fed’s creation of trillions of dollars through QE has yet to do that? Would it be because the coin might be used to improve the financial position of pensioners, instead of lining the pockets of financiers, like QE dollars do?

        1. MyLessThanPrimeBeef

          I wonder if they ‘created’ this crisis to precisely achieve that goal so that in the future they will continue to ignore the pensioners as they are doing now, but use that fount of shining new coins to achieve all their imperial aims.

      3. Hugh

        Yes, because it makes ever so much more sense to pay hundreds of billions a year to banks, foreign countries, and the rich to finance deficits that don’t need financing. All the platinum coin does is repatriate a power to the Treasury which was illegally and unconstitutionally taken from it in 1913 with the creation of the Fed.

        1. MyLessThanPrimeBeef

          Did they have problems with the Treasury in 1913 to go along with their imperial plans and thus the need for the Fed and if today, with the Treasury totally infiltrated, there is no need to panic should the authority be returned to that department?

  12. MyLessThanPrimeBeef

    Banking: Knowing too much setting off panic.

    I have been trying to remember which philosopher was it who said one should never discuss philosopher in front of servants, but to keep them downstairs.

  13. Butch In Waukegan

    This article has many insights into the now forgotten story of the DC shooting of several weeks ago: Why We Should Not Forget Miriam Carey CounterPunch. Here’s one:

    Questions need to be asked before the adrenaline rush kicks in and the shooting becomes inevitable. One question that should have been asked is whether it would be wise to allow Miriam Carey a little room to calm down. In Europe, they’ve discovered that easing up on rigid rules can ironically contribute to a sense of cooperative order. For example, easing off on the fear-up harsh cop bellowing could be constructive.

    1. fresno dan

      “She bumped into a White House barrier and ignored police commands to stop”

      The fact that “bumped” is equated with “rammed” is the problem. The fact that any hypothetical can be used as an excuse for any over reaction is accepted is the problem.
      Orwell and permanent war – but I have to give them credit – using a tactic (terrorism) instead of a country does make it endless…

        1. Roland

          Most college students in N. America have at some point been assigned Orwell’s “Politics and the English Language.”

          Lots of those educated people work in corporate and government ranks today.

          The trends described by Orwell continue unabated. Apparently his warnings were taken as instructions.

  14. fresno dan

    And my view of doctors:
    “And then he called his doctor. Who referred him to an oral surgeon. Who didn’t believe him.


    Referring back to the paper: “Upon presenting the oral surgeon with photographic evidence (Figure 1A and B) and a detailed description and preliminary diagnosis of gongylonemiasis, the surgeon disputed the patient’s self-diagnosis, claiming this was simply normal discoloration of the skin.”

    Referring back to my notes: “My jaw just dropped,” Allen said. But he couldn’t change the surgeon’s mind. “I said, ‘Look, I study these things for a living’. And he said, ‘Well, I look in people’s mouths every day.” The scientist and surgeon did not part on a happy note. “I paid my co-pay and left. It was totally depressing.”

    As someone who has had cancer, and dealt with doctors who thought I didn’t (merely because I “was too young to have cancer”) I can only give this advice: you know your body better than any physician. Be prepared to fire your doctor. Get other opinions… or learn how to sterilize instruments and do self surgery.

    1. Bruno Marr

      There are good and bad doctors. The bad ones nearly killed me. The good ones, literally, saved my life. Ask questions, demand clear answers, hire a patient advocate (doctor, nurse,… whatever you can afford) for every day you are ever in a hospital.

      1. hunkerdown

        Three words: “medical case management”. Yes, there is an entire industry devoted entirely to advocating for patients who need it. It might not hurt to contact one and see what they can do for you, but you might need a referral.

        (Disclaimer: some of my best clients are vendors to CMs)

  15. MyLessThanPrimeBeef

    I haven’t been in New York in a while now, but it’s good work for NYPD to spy on Republicans.

    Just curious though. Why are they not spying on Democrats? Are they all in jail already?

  16. P.M.

    I wanted to share a brief story with everyone something that struck me as yet another indicator that our economy has not yet recovered and our country is in decline.

    A friend of mine, a PhD in computational biology, sent along a job post she found. It was for an unpaid volunteer researcher position, part time (15-30 hours/wk). The individual must have a PhD *plus* 2-3 years of post-graduate research experience.

    She lamented that both the academic world for science PhDs AND industry are really difficult right now, and the pay is just lousy. She said there are a lot of individuals out of work who might actually take an unpaid position like this one, due to the stigma in the research world of having a resume gap. It saddens me that even highly skilled individuals struggle to get meaningfully paid work. Other countries appear to value their scientists much more than we do, and I just have to wonder what that means for the future competitiveness of our country.

    1. Bruno Marr

      See yesterdays “On Point” (Tom Ashbrook)discussion with recent Noble science award winners. Funding for basic science looks bleak.

    2. ambrit

      Dear P.M.;
      It means that you end up with cases like the young man I work with in the D.I.Y. Boxxstore. He helps run a department in the store, and quite well too, even though he has a Masters in Theoretical Physics and can explain Quantum Theory so that even this middle aged retail plumber can understand it. It helps also that he knows even more of the lyrics to “The Philosophers Song” than I do.
      What I wish we could enclyster into our political classes is the idea of “The Public Good.” That, or defenestrate them.

  17. Susan the other

    Wolf Richter on Draghi’s comment. The true balance sheet of a big bank. One thing I’d like to know about is the final iteration of all that defaulted third world debt back in the 80s and 90s. A book published in the 90s (Greg Palast I think) said it just kept being rolled over as an asset on the books of US banks. Sort of a cargo-cult asset. And that already it had reached 4.5 trillion. What happened to that?

    1. craazyboy

      There may have been some unlucky banks that got stuck, but the LatAm and 1994 Mexico crisis were bailed out by either or both the USG and the IMF giving money to the affected countries so they can give it to US multinational banks. Same thing during 1997 Asian Crisis.

      Multi-national banking has been very, very, expensive for the US taxpayer. And getting much, much worse.

  18. ScottS

    Snowden leaks: David Cameron urges committee to investigate Guardian Guardian

    Speaking at prime minister’s questions on Wednesday, Cameron said: “The plain fact is that what has happened has damaged national security and in many ways the Guardian themselves admitted that when they agreed, when asked politely by my national security adviser and cabinet secretary to destroy the files they had, they went ahead and destroyed those files.

    Cameron must also think mugging victims are quite generous.

  19. diptherio

    Frances Coppola has a good debunking of current austerity measures on Pieria:

    Market monetarists’ argument that a determined central bank can always generate inflation is turning out to be wrong in practice. The fact is that no central bank anywhere has yet succeeded in deliberately raising inflation. Nor can they, when their efforts are constantly being undermined by fiscal authorities hell-bent on austerity regardless of the economic circumstances, not to mention campaigns by pressure groups complaining about the effect of loose monetary policy on asset returns. Depressing the value of money is incredibly unpopular, and central banks are not immune to public opinion.

    And that brings me to the unfortunate conclusion that we do not have monetary dominance in developed countries. What we actually have is fiscal dominance – but not as envisaged by Sargent & Wallace.

    1. MyLessThanPrimeBeef

      Really good news would be fewer cars sold and yet the workers in Europe get bigger shares so that they actually take home bigger paychecks.

      1. Brick

        Be careful what you wish for. From the article:

        “According to the same institute (German) Ford Europe loses over €850 with each sale (EBIT per car) and Opel/Vauxhall €414. Both PSA and FIAT also lose money.”

        On the other hand. BMW, Porsche and Audi actually do that. BMW payed 2.5 additional monthly wages in 2013.
        (German link sorry)

          1. Brick

            Well, I doubt it since the Quant (own I think 47.7 % of BMW) family just gave 690.000 euros to Merkel’s CDU. That caused quite the uproar here. It is simple: You produce a good product with good workers if you pay them more they are more likely to stay, and you will attract other good workers.

            It is the most capitialistic thing to do. Only companies, which are just middle men like Walmart base their business model on low wages. Companies which need to produce good products just can’t do that. The management, of course, consists primarily of engineers, who get this. Economists often have real problems understanding the principles of capitalism.

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