Links 9/15/14

McKinsey’s airy platitudes bode ill for its next half-century Lucy Kellaway, Financial Times. Kellaway rises to the occasion when presented with a worthy object.

A Porpoise Ensnared by Criminals and Nets New York Times :-(

Google Driverless Future Vision at Odds With Automakers Bloomberg. Just think, no more car commercials selling sex and windswept vistas. The ad agencies must be besides themselves.

Here’s The Most Educated Town In Every State Business Insider. Haha, my mother lives in a town that is more educated than the top town in higher-education-heavy Massachusetts.

“Volunteerland” is Almost as Big as China, Says Bank of England’s Chief Economist WSJ Economics. So are we going to start including it in GDP, the same way Italy has started including sex workers?

Expats Left Frustrated as Banks Cut Services Abroad Wall Street Journal

Australia’s house prices second-highest in world: BIS Sydney Morning Herald (EM)

China GDP in Second Half 2014 May Come in Below 6%!!! Global Economic Intersection

47% of Chinese Billionaires Want to Leave China Within 5 Years, Only 6% of US Billionaires Seek to Leave US Michael Shedlock (furzy mouse). One must note despite our supposedly oppressive taxes.

The TTIP deal hands British sovereignty to multinationals Guardian (furzy mouse). Even more so than in the US, the officialdom has managed to keep the Transatlantic Trade and Investment Partnership, the ugly twin sister of the TransPacific Partnership, under the radar.

British Growth is Best in the World – Since When? Pieria


Queen urges Scots to take ‘care’ over vote Financial Times

It begins: Clegg backs plan to devolve power to English cities (Chuck L)


Former BP chief warns on Russia sanctions Financial Times. From an oil company’s perspective, this sounds like Br’er Rabbit’s “Don’t throw me in that br’er patch!” Companies engaged in exploration and development would love oil prices to be higher.

Dutch Stage Gigantic, Messy Tomato Fight to Protest Russian Sanctions Gawker

Return of the Magyars: Hungary’s President Calls Out the US as Morally and Financially Bankrupt Vineyard of the Saker (Chuck L)

Western delusions triggered this conflict and Russians will not yield Financial Times. The FT has been pretty hard core party line on Russia, so interesting to see this op-ed.


Coalition set for IS talks in Paris BBC

ME Diary – 14 September 2014 Sic Semper Tyrannis (ex-PFC Chuck). “The Coalition: Kerry is blowing smoke up our collective fundaments.”

Imperial Collapse Watch

China’s ‘creeping invasion’ on the global order Washington Post. Threats in the Middle East! Threats in Eastern Europe! Threats in the Pacific! What’s a hegemon to do?

Earth: 248 armed conflicts after WW2; US started 201 (81%), killing 30 million so far. Arrests are when now? George Washington (DF)

Big Brother is Watching You Watch

Tech chiefs in plea over privacy damage Financial Times. Schadefreude alert: Snowden backlash to lead to loss of an estimated $22 to $45 billion in cloud revenues in next three years. Ed Harrison and Wolf Richter called this early. Tech CEOs in denial and at most thinking about very targeted fixes in specific European markets.


NSA/GCHQ/CSEC Infecting Innocent Computers Worldwide Bruce Schneier (furzy mouse)

All these effing geniuses: Ezra Klein, expert-driven journalism, and the phony Washington consensus Salon (Brindle)

How Democracy Dies American Conservative (Chuck L). Important.

The Senate Just Voted to Keep Big Money in Politics. Three Reasons to Celebrate Anyway Yes Magazine. Um, this is straining to find a silver lining. This was a symbolic vote and everyone understood that.

Should Oil Barons Like David Koch Be Funding Our Museums? Vice. A little late to be asking that question. The time was 25 years ago when museum funding was going under the axe.

James Heckman: Early Interventions Lead To Higher IQs INET. Important and too often forgotten.

Homeowners steamrolled as Florida courts clear foreclosure backlog Center for Public Integrity. The rocket docket has been going on in Florida for years, and Dave Dayen and your humble blogger, among others, have written about it. Nevertheless, good to see Someone Official take notice.

Workers in Maine Buy Out Their Jobs, Set an Example for the Nation TruthOut (furzy mouse)

Caesars’ Debt: A Game of Dealer’s Choice Gretchen Morgenson, New York Times. Shows how private equity firms work against the interests of their investors, in this case CalSTRS, in this case by trying to push through a debt restructuring that favors some bondholders over others and may violate both bond indentures and the Trust Indenture Act. Normally, bond investors don’t sue because the losses aren’t large enough in the context of the entire portfolio to justify litigating (plus there is typically a massive free rider problem, in that only at most a very few of the wronged parties are willing to fund a lawsuit). But one of the reasons for investors suing Apollo and TPG is that if this sets a precedent, it would be very detrimental to bond investors generally.

‘Flipped’ Bankers Aid U.S. in Foreign-Exchange Probe Wall Street Journal. Good to see this here, but why not with other bank abuses?

Market Structure and Political Law: A Taxonomy of Power Zephyr Teachout and Lina Khan. Discusses how traditional frameworks for discussing market structure fall short by omitting the role of raw economic power.

Class Warfare

Give the Homeless Homes New Yorker. An obvious answer yet hardly ever done. New York City, which came into the possession of a ton of homes in its fiscal crisis and still had a lot of inventory in the 1980s, had a variant of this idea, which was homesteading: people could get a home for free if they could show they were able to bring it up to code (in many cases, the homes had decayed while vacant). You could add to the sweat equity program by having some financial and practical assistance for the homeless and setting aside a certain percentage of housing units for them.

Student Loan Debt Burdens More Than Just Young People New York Times

Letting the Rich Take All The Money masaccio, Firedoglake. Today’s must read.

Antidote du jour (furzy mouse):

links pretty bird with babies under wings

See yesterday’s Links and Antidote du Jour here.

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  1. skippy

    Determinism, Free Will, Newtonian thingy, Dualism, et al, catch me I’m falling~

    Quantum Mechanics, Physics. Quantum Mechanics: Orthodoxy of Copenhagen Interpretation may be replaced by Pilot Wave Theory

    skippy… lovely comment – barnes

    Cool as fits into the projection pattern “history repeats” and the “action to outcome” stuff et al as this makes the why visible…as in why we as a species are acting in the most ignorant manner when it comes to resources, hierarchy, ego maturity – as in next step please!

        1. craazyman

          The Dirac Sea.

          The moment I heard about it I thought to myself “Now THAT makes sense” Surf’s up!

          boy talk about wasting time utterly. laying around thinking about this stuff and making up equations in your head. it’s even more lassitudinous than drinking red wine watching Adele on youtube with xanax

          1. Skippy

            Eeeep… reference to the anime Neon Genesis Evangelion Dirac sea – anti matter…

            skippy…. only question is who gets to be Rei, tho’ the old SciFi one sleepy brain waking up and playing with the reality knob – as it crawls up out of the post sleep Jacuzzi phase, is a good’un too…

    1. Gaianne

      Pilot waves are interesting because they bear on the meaning of quantum mechanics: What is the reality that quantum mechanics represents? For the first 3/4 of the twentieth century this question was ignored, because satisfactory answers were hard to find–so it was considered better to just not ask. By the turning of the 21st century we had not just the relatively favored Copenhagen interpretation, but at least eight interpretations of quantum mechanics–including the the many worlds hypothesis–but no way to test among them and rule any of them in or out. We only knew they were compatible with the physics quantum mechanics describes.

      Pilot waves are both a conceptual model and an approach to the mathematics. They have been under development for decades, but only recently has the theory been developed far enough to provide competition with standard approaches. If successful–if pilot waves prove to go farther than standard approaches, they would start to limit the interpretations–the possibilities of the reality we live in.

      The things that make quantum mechanics seem weird are not about to change, however, pilot waves or no. For example, entangled particles can affect each other directly, unconstrained by space and time. This is not just theory, but laboratory fact, and pilot waves will not change experimental results. Nor is this a surprise, for the pilot waves themselves are unconstrained by space and time–it is inherent in their definition.

      What is the medium in which pilot waves might travel? A good question. But ever since Minkowski introduced the idea of space-time in 1906–following on Einstein’s paper of 1905–it has been apparent that “empty space” may well have a structure, perhaps a very complicated one. In one way or another the “aether” of 19th century electromagnetism may be coming back. The problem then was to find a way to make the theory consistent–the idea will be revived if a consistent way is found to make the aether fill in the missing explanations.


  2. NotSoSure

    McKinsey: “Technology, globalisation, and ageing”, I bet if you turn any off the shelf machine learning algorithms on a bunch of economic and business articles, they too would come up with those three.

  3. abynormal

    after links :(…today’s antidote returns balance :)

    Mother birds communicate with their developing chicks before they even hatch by leaving them messages in the egg, new research by a team from the Department of Zoology, University of Cambridge, has found.

    By changing conditions within the egg, canary mothers leave a message for their developing chicks about the life they will face after birth. In response, nestlings adjust the development of their begging behaviour.

    If chicks get a message that they will be reared by generous parents then they beg more vigorously for food after hatching. But chicks that are destined to be raised by meaner parents end up being much less demanding.

    By attending to messages in the egg, nestlings gain weight more rapidly because they match their demands to the parents’ supply of food, and can avoid either begging too little or wasting effort on unrewarded begging.

  4. Jim Haygood

    Some of Business Insider’s ‘most educated towns’ ain’t actually towns. Lost Creek TX (in Travis County outside of Austin) and Oak Hills Place LA (In East Baton Rouge Parish) aren’t towns at all; they’re ‘census designated places’ that most folks who actually live in them states has never heard of.

    Shouldn’t have cut geography class, dudes! No journo left behind …

    1. cwaltz

      What I found interesting about the article is the fact that they use percentages of the population as justification for the title of Most Educated. Places like Lost creek may have 86.3 percent of their population with Bachelor’s degrees but they only have a population of 4,358. It seems that the system they use would penalize larger places by virtue of using a percentage system and award smaller places(even though I did notice they set the floor at 1,000)

      1. MyLessThanPrimeBeef

        When one travels around the world, one often finds the nicest people in the least educated places.

            1. Skippy

              I think this is the part where knowledge and cunning diverge… for largely hyper individualistic [atomistic] reasons… because da market thingy…

    2. FMartinus

      I had to stop and look up Ladera, CA …… which is actually a slice of Portola Valley on the other side of I-280 from Stanford (more specifically SLAC). It may be a census-designated place but dollars to donuts the folks who live there say they live in Portola Valley.

  5. Carolinian

    Thomas Frank on the idiocy of expertise: Right on, +100, double good. Just to quote one bit there’s this

    Allow me to drop a single, disturbing data point on this march of science. You might recall that Democrats controlled the House of Representatives from the early 1930s until 1994 with only two brief Republican interludes. What ended all that was not an ill-advised swerve to the left, but the opposite: A long succession of moves toward what is called the “center,” culminating in the administration of New Democrat Bill Clinton, who (among other things) signed the Republicans’ NAFTA treaty into law. Taking economic matters off the table was thought to be the path of wisdom among expert-worshipping Washingtonians, but it had the unforeseen consequence of making culture that much more important for a large part of the population. Democrats were eventually swamped by all the crazy grievance campaigns of the right, which has splashed back and forth in the mud of the culture wars ever since.

    In 2010, the two parties repeated the act, with D’s embracing the extremely unpopular Republican bailout strategy (and a more modestly unpopular Republican healthcare program) and R’s pretending to be some kind of ’30s-style protest movement waving signs in the street.

    The Dems led by those Ivy Leaguers who hope to soon reoccupy the White House discarded decades of grass roots knowledge and took on the fancy theories of the neoliberals. It’s been all downhill ever since. At least the Republicans aren’t so dumb that they don’t recognize populism as a powerful political force. The Dems simply declare their own reality and give up on states like my own. Educated to be stupid.

    1. fresno dan

      Well…exactly. If you have two parties that get their Treasury secretaries from Goldman Sachs, than the only distinction between you and the other fella is who loves guns and “Merica more! Indeed, to stay competitive the dems have to appoint even more Goldman Sachs employees than the repubs….(why, they even had to arrange a marriage between the dem King and Queen’s daughter and a Goldman Sachs prince….)

  6. Diceman

    On Caesars, this is only 1 of 4 lawsuits against the company from lenders and bondholders. Other debt investors in different parts of the capital structure are suing for fraudulent conveyance and self-dealing. This is likely going to bankruptcy, and look for a highly publicized, lengthy and contentious process.

    1. Yves Smith Post author

      Thanks for that addition. That’s important because PE has increasingly played on both sided of these deals when they get in trouble. Yet (so far) there have been few suits when PE bankrupts companies for fraudulent conveyance (basically ripping out too many fees while driving it into the grave) and no uptick now that they’ve been playing games that often look like self dealing to avoid bankruptcies.

  7. fresno dan
    What the history of something is kinda depends on how wide a view you have….
    I remember reading in the early 1990s for example a very interesting book about the US “long depression” of the 1880s and 1890s that began with the September 1873 crash in the NY Stock Exchange. The book explored the roots of the crisis in the railroad boom of the 1860s and wonderfully invoked the famous attempt by Jay Gould and James Fisk to corner the gold market in 1869. There was however almost no reference to events outside the US except in describing how the New York crisis subsequently affected British banks. It seemed that for the authors, events in the US pretty much explained everything that happened in the US economy before and after the 1873 crisis.

    It wasn’t until a few years later when I read Charles Kindleberger’s brilliant book, A Financial History of Western Europe, that I realized that the 1873 crisis was a global crisis, and that it didn’t even originate in the US. It actually began in May, 1873, with the collapse of the Vienna stock market, which spread to Berlin and London before it hit New York. I also learned that the roots of financial instability included the 1866 collapse of Overend, Gurny, a major London bank, and that stock markets around the world had soared shortly after Barings had financed the huge French war indemnity forced upon France after the 1870 Franco-Prussian War. One of Kindleberger’s great insights was that the recycling of massive payments, such as the French indemnity, often leads to liquidity-driven speculative frenzies in stock, bond and real estate markets.
    It is possible for Spanish economists, to take another fairly obvious example, to engage in a furious and highly politicized debate about the domestic policy distortions that “caused” the country’s savings deficit that exploded shortly after it joined the euro (one side blames lazy workers for high wages and the other side blames greedy bankers for dumb lending) without acknowledging that both high wages and risky lending might be, and in this case certainly are, the consequence of policies in Europe which the Spanish economy was unable to absorb in any other way. You cannot talk about savings distortions in one country without discussing the opposite distortions in another, and yet economists do it all the time. They usually prefer to base their explanations on an attack on their ideological enemies or a defense of their ideological friends than on the very obvious arithmetic of the balance of payments.

    1. fresno dan

      I left out the most important part:
      “There are really only two ways to increase household consumption sustainably. One is to force a redistribution of income from the richest Americans to the rest. The other is to impose trade tariffs or, what amounts to the same thing, to tax foreign purchases of US assets, especially US government bonds, in order to drive down the current account deficit and so allow the US to retain a larger share of what has become the most valuable commodity in the world: demand. Needless to say it is hard to imagine either political party, or anyone associated with either the supply-side or the demand-side ideology, signing up to the whole program.”

      1. James Levy

        Domestic politics and Political Science both tend to view the nation-state as a monad, an independent black box that churns out “policies”. The utter interdependence of the global capitalist economy, which goes back centuries, is always downplayed by national actors who love to present themselves as being powerful and autonomous and not beholden to actions outside the nation-state (other than to occasionally use the actions of “pernicious outsiders” as a rallying cry for internal order and discipline, the way the Reaganites used the Japanese “threat” to screw over American workers and make them imagine their screwing was a patriotic act). Yes, the 1873 crash had a ton to do with real estate speculation in Vienna (a bubble that burst and took the banking and stock markets with it), at that financial contagion spread to Hamburg, Frankfort, London, and then the USA. The dominos of counterparties existed even then. But politicians will always prattle on about these issues as if they are hermetically sealed within national boundaries, except when they can use the international economy as a cover for their own malfeasance or impotence.

  8. Ulysses

    Masaccio’s post at FDL, linked above, is a clarion call for us to stop the accelerating global trend of upward wealth concentration in the hands of ever fewer kleptocrats. I was particularly struck by the comment of Shutterbuggery:

    “‘I don’t believe this is a “race between rich and poor”, it’s a race between truth and lies.’

    Its a race between those wealthy and influential enough to survive the collapse and those who are now considered expendable.. excess baggage to be cast off, no lifeboats, no flotation devices, no hand reaching down to help.

    When enough people see that, things will change. Abruptly.”

    This comment’s metaphor captures the zeitgeist extremely well. People in steerage feel like they are coming up fast on colliding with the iceberg. A small handful of 1st class passengers has paid the crew to point guns at them, and keep them away from the lifeboats. The 1st class passengers have also paid clever charlatans to provoke discord among the steerage passengers, successfully getting many of the “lower orders” too busy fighting amongst themselves to even notice what’s happening with the lifeboats.

    What’s needed is for enough people, including at least some of those holding the guns, to recognize that there are enough lifeboats for everyone, even if they’ll have to endure the discomfort of sitting on each others laps, and sharing water from communal canteens in order to stay afloat and survive.

    1. Paul Niemi

      Awhile ago, I wrote about how to make money off inflation: borrow a large sum at zero interest, invest half in an asset and the other half as a hedge, then pay back the loan with inflated currency. I think oil is falling because such activities by the big banks since 2009 have kept the price artificially high, despite weak demand, because oil is one of the assets involved. Oil has been hoarded all over and in rented tankers at sea. Some may have thought the high price of oil was a social good, but that’s another story. Now, supporting the high price did involve bringing in other investors to buy into the dips, but price support programs, whether by governments or big banks, become more expensive over time. This is because new production ramps up to respond to the artificially high price, and it takes a few years to get going. Pretty soon hedging becomes more expensive. Now we are seeing the implied price supports for commodities starting to fail, prices of gold, silver, copper, and oil, and corn falling, and real estate is not far behind. I think the big banks are sitting on a time bomb, they are the drivers of all this, because increase in private sector leverage has exceeded income globally for several years as money has been plowed into speculation. Call it a global bubble. The writing on the wall is the end of Fed QE and the response construction of assets to take advantage of that, and the implied end of ZIRP. As interest rates increase, bonds issued with low rates will decline in value, and the holders will have depreciated collateral for their loans. It might have all been held together if the global economy had recovered from 2008, but it didn’t. To me, it is somewhat satisfying to know that the wealthiest of the wealthy, who have gotten richer in these lean times, are the ones most exposed to this latest financial bubble’s collapse. It wasn’t all the banks’ fault, governments encouraged or directed the speculative lending in the private sectors, so we will have to rethink those policies completely.

    2. Brindle

      Yves, any chance masaccio doing a guest spot/column here?
      I get the sense readers here would certainly be open and appreciative of her/his work.

      Gets to the (or a) crux of the matter:

      —The most obvious thing about Akerloff and Shiller is that neither discusses the role of raw economic and political power in the creation of the current morass, not just here but around the world. The interests of the rich have always dominated, but from time to time, their rapacity was tempered to some extent by the forces of democracy or in earlier times, by noblesse oblige. That has rotted away.—

  9. abynormal

    not enough jobs to go around?…i know let them chase a deadly disease while justifying weaponry supply/demand with high risk/returns, on the walking dead. Win Win

    The US military is set to join the battle against an enemy other than ISIS: the Ebola outbreak that has killed thousands in West Africa. President Obama is expected to outline what officials describe as a “scaled-up” response to the outbreak this week, reports the Wall Street Journal, which notes that while the chances of the disease spreading to the US are considered low, the chances of the virus mutating to become more infectious increase with every new human infection. There are currently eight US military service members working to contain the outbreak, and the stepped-up military involvement is expected to include much-needed logistical help, though not hospital ships, which officials fear could end up being swept by infection. Ellen Johnson Sirleaf, president of hard-hit Liberia, has appealed for American aid as the disease spreads exponentially, Reuters reports. “Without more direct help from your government, we will lose this battle against Ebola,” she wrote to Obama, warning that Ebola treatment centers are being forced to turn away patients and “at this rate, we will never break the transmission chain and the virus will overwhelm us.” In neighboring Sierra Leone, a fourth doctor has died of Ebola after a failed attempt to send her out of the country for treatment, reports the AP. The country, which was desperately short of doctors even before the outbreak, asked the World Health Organization for help evacuating Olivet Buck to Europe, but the request was declined.”

    1. Eclair

      Why do I keep thinking, “small-pox infected blankets?” As well as measles and STD’s, some of the diseases that decimated, conveniently, the Indigenous populations of the American continents, leaving the survivors’ communities disoriented and disheartened. Easy prey, ripe for plucking by the European colonial settlers.

      I am not suggesting that the Ebola virus was deliberately introduced but … why let a great opportunity to destroy all those inconvenient, differently-colored ‘natives’ go unused. Think of all the African continent’s natural resources …. with a few more turns of the epidemic screw, they can be ours. If we can beat out the Chinese.

      1. abynormal

        could Austerity blowback be weighting down on the 1%’rs balance sheets? doesn’t make $en$e for them to ‘carry’ the majority too much longer. of course ebloa is tricky, being nondiscriminatory…greed before brains eventually creates its own physical Austerity.

        To greed, all nature is insufficient. Seneca

    2. NoDictators

      Who profits, who pays, for the anti-Ebola “vaccinations” of the troops, officers, the intel studs, the blackops specialists, the transporters, the Merchant Marine, sundry Mercenaries, the camp followers, etc, etc, etc, shipped into the Ebola Maelstrom raging in coveted “Afriterritory” — and which Dynasts of the .01% have the monopoly on the patent and “voting” class of shares/stock in the Pharma-Winner-Take-All “Corporation” that is the Sole Source Provider of the anti-Ebola vaccine to be dispensed&injected by Law of Force?

      More guinea pigs furnished by Uncle Sam to enrich Global Croesus by any name?
      IG Farben Cartel: “DarkRootsBrusselsEU” — again. Sieg Heil!

    3. ewmayer

      But will we “follow the Ebola virus to the gates of hell”? Anything less sounds wishy-washy at this point.

      1. Joe

        One can only hope that he who uttered that phrase (Biden), would follow something or someone to the gates of hell and then go on in in when they open wide for him.

  10. MyLessThanPrimeBeef

    Chinese billionaires (at least those 47% polled) take note.

    US dollars are for facilitating global trade. You should leave your money abroad and not bring it here; otherwise, we will have to start the ‘more imports in order to put the global reserve currency in circulation’ scheme all over again.

    1. Johann Sebastian Schminson

      How about this: No country will take you in, until you have nothing but $100 in assets. Give the money away, buy your way into a non-defiled place, or stay the F in your own “homeland.” Your choice.

      1. MyLessThanPrimeBeef

        What China needs is a better developed campaign contribution system so one can safely bet on a party (or in their case, a party faction) without worrying about losing one’s head when the bet goes wrong.

        That way, the Chinese billionaires can stay home stress-free, just like our comfortable billionaires here…because our Justice Dept does not look party affiliation when it comes to prosecution of financial crimes.


        1. MyLessThanPrimeBeef

          Viewed that way, one can give victory to China for scoring 47% versus the measly 6% by the Americans.

          (One more thing the Chinese are better at!!!)

          We’ve made it too comfortable for the billionaires here.

          One day, when all the billionaires want to leave the US for another country, (and not migrating to, say, another planet), it’s a sign the 99.99% are doing better.

  11. RUKidding

    Would love to see Yves or Lambert comment on this. Guess I saw this coming from 10,000 miles away. Now Obama is proposing to change the rules concerning ROTH IRAs and force withdrawals beginning at age 70 and half. Other changes proposed for other investment vehicles which will, per usual, very negatively impact the ever-dwindling Middle Class, plus a tiny slice of what remains of the somewhat more prosperous working class.

    Needless to say, Billionaires and their corporations need not pay one thin dime in any taxes ever under any circumstances because unfair.

    1. cwaltz

      I’m not an expert(disclosure: I oppose the stock market being utilized as a retirement vehicle) but most of those rules don’t seem particularly awful to me. Then again, I personally think that “investors” have had it overly easy and are largely responsible for the fact that our economy is as crummy as it is. I think, and the evidence supports this, that shareholders have undercut labor and have basically gotten more than their fair share of the profits businesses make. So I guess I have a hard time crying for the fact that after Junior inherits daddy’s Roth that he’ll only have 5 years to withdraw the money and that he can’t keep deferring taxes on it indefinitely or that the investor who has been making money off the backs of McDonalds workers only gets to keep 3.2 million tax in tax deferrals. The only thing I saw particularly horrible is that the “rules” would be changed midstream. However, I don’t know why investors think they should be special snowflakes when DC has been discussing changing rules on retirement for the working class.

      *shrugs* Again, I’m not an expert although I also noted that these proposals were suggested last year and never happened so I also think the hyperventilation may be over nothing.

      1. RUKidding

        I understand your comments, and what you say has some merit. That said, the ROTH IRA is often used by those in the middle & somewhat more prosperous working class as a retirement vehicle. I don’t love using the stock market for retirement savings, myself, but our options are limited. That said, one can invest, for ex, in a Credit Union CD (still lousy interest rates, but better than banks & reasonably secure), which is one of things I’ve invested a ROTH in. If I have the ability to set aside some paltry savings for my retirement, it would be helpful if the govt stuck by the rules of the original investment vehicle.

        It may seem like “no big deal” to you, but for many of us lucky enough to have such investments, being forced to take a min. distribution from a ROTH IRA at 70.5 can result in some crummy tax consequences for those us least able to absorb the hit.

        Yeah yeah, wealthy people blah blah blah… a lot of the negative consequences will be felt, per usual, in the ever-dwindling middle & more prosperous working classes. Yet again another kick in the teeth & pants to those of us who were able (and chose) to be frugal. If I keep working past 70 (my goal at this point bc I’m likely to have to support family members & have the kind of job where it’s feasible I can keep working), being forced to withdraw from a ROTH IRA will not be pretty sight either for me or my family.

        We’re not rich, and that’s for darn sure.

  12. direction

    Last night the tip of Baja was hit with the strongest hurricane it’s had since the 1960s. The population in Cabo San Lucas has been exploding over the past few years and there will probably be 1,000s of displaced people and a real mess this morning, but the link I wanted to share was a short video somebody took through a telescope of the waves hitting Land’s End, the famous arches that tower up out of the water at the tip of Baja. You can’t see the arch, but the waves are so huge that it looks as if it was taken in slow motion. These rocks are as tall as the massive cruise ships that usually sit nearby (about 10 or 11 stories high).

      1. direction

        Thanks for your concern as well. If I hear from anyone down there, I’ll post back here, but internet and cell service are probably down for days. We could not reach anyone on the phone yesterday. Many of my Mexican friends live in small houses without glass windows, and the palapa roofs would not withstand 135 mile/hour winds so I have no idea what last night was like for them. Hopefully there were enough roofed houses in town for people to gather together and today everyone is probably walking around picking up the pieces. Moving things to keep the water running off the mountains from washing it all into the arroyos.

        1. abynormal

          Thanks, if you don’t hear anything till tomorrow or the next day go ahead and post your information on that days ‘NC Links’ thread. Agree the washouts look to be the worst battle…from there disease etc. Damit, i hope your friends were able to get to safety ahead of time!

  13. Johann Sebastian Schminson

    Giving the homeless homes would deprive them of the soul-enriching experience lifting themselves by their own bootstraps (assuming they have managed to finagle bootstraps, in the first place). We can’t have that — it would create a moral hazard.

  14. pretzelattack

    that idea of letting homeless people “homestead” abandoned houses makes way too much sense; where’s the profit to the banks in that?

    1. HotFlash

      I know, I know! Get the ‘tenants’ to fix the places up and keep them maintained until you cn resell them profitably,, then swoop in and claw them back for trivial contract ‘violations’! Do I get hired now?

  15. afisher

    Business Insider: Educational map. It is a what could possibly go wrong: North Dakota currently has the best economy and the lowest education rating.

    If as it is speculated that the Fracking is a relative short term play – this is a bubble waiting to burst.

    And then what?

    1. hunkerdown

      They have a state bank, too. The only value in a college degree to an employer is that it shows you have bills to pay and can be manipulated easily.

  16. Brindle

    re: ” Ukraine..”

    This is an article from a pro-rebel site on how the rebels get many of their weapons, so the obvious slant, but also nothing this in depth would ever show up in the NYT or Wapo.

    —-A steppe village by Novokaterinovsk endured three hours of war. And now, no matter where you look, war stares back at you. The bridge is jammed with the wreckage of rusty armour. The roadside fence is adorned with red tourniquets: someone had been trying to staunch the bleeding. A bright blue ZiL truck lies upended: someone had fled in a panic, without even having thrown the sacks of cow-feed from the truck.—

    1. Banger

      If this is put in place then I will urge all people I come in contact to boycott all government agencies and schools. It is now time to revolt–that really is going too far. When are we going to understand that both political parties intend to transition us to a full-scale totalitarian state even worse than the inverted totalitarian state we currently live in?

      1. Ulysses

        Thanks for the comment, Banger.

        I think a lot of people are starting to understand this. For some of us we take news like this as a spur to redouble our efforts to fight back and push for dramatic changes that will prevent the continued tightening of totalitarian control. Yet, sadly, many good and decent people are so frightened by the more openly Orwellian atmosphere these days that they desperately start to censor themselves to avoid even the appearance of being “extreme.” For example, it’s socially acceptable in a “blue” state to rail (in a vague sort of way) against the Koch Brothers, but denouncing Verizon, GE or Apple will have people thinking you’re some kind of pinko oddball.

        It’s no accident that the Gay Pride Parade’s biggest sponsor in Providence– a few years back– was Bank of America. All of the “progressive” orators at the splendid occasion praised this enlightened company, with nary a word spoken about foreclosures or any other such unpleasant subjects. TPTB put us into a very small veal pen in which we are allowed to exercise our 1st amendment rights, on a small number of subjects. Now the first choice to silence bourgeois critics of the status quo is co-option. Tomorrow, who knows? Thom Hartmann still has free reign to openly criticize the greed and destructiveness of kleptocrats, as long as he abides by the unspoken agreement to maintain the fiction that only Republicans are furthering their agenda in D.C.

        You and me are still allowed to preach to a fairly small choir here on the intertubes. Yet I know from bitter experience that such outspokenness is dangerous to my health on the city streets, or outside the military base’s gates. I encourage the entire NC commentariat to learn all they can about samizdat techniques if they wish to continue open discussions of critical issues in the coming years.

        Let’s hope the internet remains a relatively open forum for a long time. Don’t count on it, though. Do you like something that Yves or Lambert wrote here? Print it out, seal it in a vacuum bag, and bury it– if you want your children or grandchildren to ever read it! I wish I were joking, but I’m deadly serious.

      1. ambrit

        We knew a policeman in Louisiana who was the “Officer Friendly” of his local police department. He did the D.A.R.E. program in the local schools. He looked the part and has a good personality. One afternoon while shopping in the health food store, (he takes his health seriously,) he mentioned to us that the D.A.R.E. program was “worse than useless.” (A covert part of that program, at least as practiced by local cops, was the “if you see mommy or daddy doing anything like what we’re showing you, tell an officer, they need help.”) If this program is run as well as D.A.R.E. was, well, God help us all.

  17. Brooklin Bridge

    Google’s self driving automobiles – the ostensible purpose being efficiency – is about as relevant to efficiency as the US invading Iraq after (supposedly) being hit by al-Qaeda. It’s totally fuc*ed up to pretend that taking control of everyone’s automobile has anything whatsoever to do with efficiency, congestion, energy or any such nonsense. If that were the case, the total emphasis would be on a streamlined public transportation system, not on having implicit control of where you go and explicit control of how you get there.

    But of course that’s not the case. This is about the new model, pay-as-you-breath. It’s about Google acquiring a monopoly on people’s movement and liberty of movement that it can extract rent for and lease out to the government at times of stress or special need such as during elections where a non establishment candidate has somehow gotten involved. Financial types love the idea for obvious reasons; the monopoly friendly stability and efficiency of monthly revenue streams. Politicians love it for obvious reasons; incredible potential control. People will be wildly for it if you listen to them via media and will loath the idea if you speak to them in person. Who will win in our pure pure form of Democracy?

    1. Brooklin Bridge

      When one asks about a given technology: what would be the best model for investment friendly maximum rent extraction, any given technology along with the related propaganda starts to make sense.

  18. optimader

    “47% of Chinese Billionaires Want to Leave China Within 5 Years, Only 6% of US Billionaires Seek to Leave US Michael Shedlock (furzy mouse). One must note despite our supposedly oppressive taxes. ”

    The BS alarm is flashing relative to the notion that Barclay’s would get 1,500 billionaires to answer a survey, let alone honestly.

    For the actual billionaire that may have responded, you can be sure 100% would answer in a manner they perceive is to their advantage rather than reveal a close held strategy. The notion 47% of the Chinese billionaires would broadcast that they want to punch out in the next 5 years?? If that was the plan, that would be THE LAST THING THEY WOULD CONFIRM.

    And 6% of American billionaires seek to leave the US? Why should they? Aren’t those that want to be already “global citizens” with layers of protected assets around the world? I assume they seasonally reside wherever the heck they want, and pay US taxes on only a percentage of their assets that keep their IRS identifiable pieplates spinning on the sticks.

    Back to the Chinese, “Better health care and social services”???? Oh PALEAASE give me a break..

    Isn’t it patently absurd that 78% of Chinese billionaires have the urge to “move” (please define move) for “better educational and employment opportunities for their children”?? I safely presume they are already send them abroad to receive western educations w/ the objective of managing ongoing family business affairs and for wealth preservation and are distributing asset chess pieces around the Global safe haven board. A Chinese billionaire can run the daily Gulfstream shuttle wherever the heck they want, it’s an insignificant cost.

    What “employment opportunities” need they concerned about for their shorties?

  19. JGordon

    “Expats Left Frustrated as Banks Cut Services Abroad”

    I knew about it beforehand, but it still Fing sucks. Just as a philosophical question, if a state breaks the social contract, does a citizen of the state have any moral or ethical duty to abide the rules said state makes? Like if an illegitimate state makes some rule through whatever process banning certain types of possessions or certain ways of doing business, we’d be morally justified in circumventing and subverting those rules. Just throwing this out there, but you know some social and monetary theories require/assume a legitimate government for them to be logically workable.

    1. Irrational

      For example a US citizen working for a large European financial institute and saving for their “Pillar 3” pension (not state provided, not employer provided, but privately provided) was told to close his account.
      Does the US wants penury for its citizens daring to live abroad and save for their retirement?
      Oh, and, will there be Obamacare fines for the US citizens daring to live in countries with decent healthcare?
      Would sure be nice if the US could more to residence-based taxation like every other country bar Eritrea!

    2. MyLessThanPrimeBeef

      At least, the pain of banking abroad is probably shared equally among embassy visa-issuing workers, military private contractors, CIA operatives and regular people like you and me.

      1. ambrit

        Unless they’re being paid in gold or through the Jerseys.
        A foreign service officer can have an automobile shipped, free, to his or her posting and, as long as they use it for, I believe, two years, can then sell it to a local. (One of the first things a state Department functionary asks when told where they’re being posted to is; “What kind of cars do the richer locals like?”)

  20. fresno dan

    Google Driverless Future Vision at Odds With Automakers Bloomberg. Just think, no more car commercials selling sex and windswept vistas. The ad agencies must be besides themselves.

    Where in the hell are all those roads that only have the advertised car on them???????
    And there are few things more tedious than driving down I-5 in California….I fully regret I was born too late for driverless cars.

    1. MyLessThanPrimeBeef

      Driverless cars.

      What would people be doing in those cars?

      Brushing teeth on the way work?

      Taking a shower?

      Looking at other ‘passengers’ taking a shower?

      Getting drunk?

      Watching more TV?

      For many of these choices, you would need a bigger driverless car.

      One thing for sure – this will put the local traffic cops/driving schools out of business.

      1. ambrit

        Having been almost run off of the road several times in the last two or three years by texting, cell phoning, or I-pad perusing drivers, I can attest to the presence of driverless cars on the road before the infrastructure is in place!

      2. hunkerdown

        Probably the same thing they do on the train: work, chat with carmates or look lost.

        Or watch the world through Google Windscreen where billboards are overlaid with personalized adverts.

  21. HotFlash

    “Tech chiefs in plea over privacy damage”

    Hmmm. Under NAFTA and perhaps some other trade treaties, corps can sue govts for loss of potential profits. Google et al, sue away!

  22. ChrisPacific

    McKinsey Quarterly has always been worth what you paid for it, and it’s always been a marketing exercise. Gartner is the same.

    I do disagree somewhat with the part about management consultancies flourishing because of ‘mediocre underlings.’ The last time I checked, strategy was the job of the CEO. Strategy consultants will cease to prosper if and when boards stop hiring or promoting CEOs for reasons unrelated to their grasp of business strategy, and I don’t see that happening any time soon. Yes, the job can be done by anyone who has a brain, access to Google, and industry knowledge or the willingness to acquire it. That’s not the point. It’s never been the point.

    I am reminded of a quote by the Epicurean Dealmaker, talking about M&A but applicable to strategy as well:

    4) You want ideas as to which companies to buy and why. No. No, no, no, no, NO. If you are a Chief Executive Officer of a company who wants me to tell you which companies in your industry you should buy and why, you don’t need an investment banker; you need a new job. And your Board of Directors needs a new CEO. Are you fucking kidding me? That is your day job, buddy; you’re supposed to know this shit better than anyone.

  23. Bart Fargo

    Washington’s Blog, in the link listed under “Imperial Collapse Watch”, misinterprets the source research article used as the basis of the post. Washington claims that the US has started 81% of the post-WWII conflicts around the globe. While I’m not sure of the actual percentage of wars started by the US (or what the criteria would be for “starting” a conflict), the paper he cites merely says that the US launched 201 “military operations” between 1945 and 2001, not that it started 201 wars during that timeframe:

    “Since the end of World War II, there have been 248 armed conflicts in 153 locations around the world. (3) The United States launched 201 overseas military operations between the end of World War II and 2001, (4) and since then, others, including Afghanistan and Iraq.”
    William H. Wiist, Kathy Barker, Neil Arya, Jon Rohde, Martin Donohoe, Shelley White, Pauline Lubens, Geraldine Gorman, and Amy Hagopian. The Role of Public Health in the Prevention of War: Rationale and Competencies. American Journal of Public Health: June 2014, Vol. 104, No. 6, pp. e34-e47.

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