Links 5/8/15

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Dear patient readers,

There have been serious nasties in the bond markets in the US and abroad. Contacts who are neither alarmists nor pro bank (as in not sympathetic to Wall Street whining) are troubled. Because I’ve been traveling I have not been able to get enough readings but this could be a harbinger of serious stress.

Antarctica is melting faster than ever before — and the result will be devastating Business Insider (David L)

Savings groups allowed on mobile money platform ITWeb Africa

China Exports Unexpectedly Fall in April Wall Street Journal

The Chinese Art of the Crowd Atlantic

Investors hit by eurozone bond volatility Financial Times

What Has Caused Europe’s Bond Rout? Forbes

Bill Gross Wasn’t Short Enough German Bonds Matt Levine, Bloomberg

UK Election

Conservatives Set to Win Largest Number of Seats in U.K. Parliament, Exit Polls Say Wall Street Journal. Live blog.

Results point to Conservative election victory Financial Times

Cameron on track to remain prime minister after electoral triumph Guardian

The queen of Scotland Politico (Richard Smith)


Greek bailout talks near ‘drop dead’ moment Financial Times

Defiant Greece rehires public staff despite bailout talks BBC

REPORT: Putin says Russia may fund Greece’s energy projects Business Insider. Note this won’t affect the bailout negotiations.

INTERVIEW-Austria’s Schelling warns Greece of dangers of default Reuters

Latvia, the miracle of 10 per cent population shrinkage Bill Mitchell (furzy mouse)


Ukraine SITREP May 07th, 2015 Vineyard of the Saker (Chuck L)

The New York Times does its government’s bidding: Here’s what you’re not being told about U.S. troops in Ukraine Salon (Chuck L)


Syrian rebel training has started in Jordan Associated Press (Carol B)

Big Brother is Watching You Watch

N.S.A. Collection of Bulk Call Data Is Ruled Illegal New York Times

Trade Traitors

A Trade Pact in the Corporate Interest Huffington Post (Bob H)

Abe administration backpedals on granting lawmakers access to TPP draft text Japan Times

Ex-military chiefs press Congress on trade Financial Times

Obama Is More Hostile Towards The Press Than Any President In History George Washington

We Don’t Know Jack About Joe – and for Good Reason Gawker (Gabriel)

House Oversight Committee asks for FOIA horror stories Politico (TF)

New York Gov. Andrew Cuomo Gave Bond Deals To His Wall Street Donors, Despite Federal Rules International Business Times


Advisory firm ISS attacks Jamie Dimon’s cash bonus Financial Times

Oil Price Recovery May Be Too Much Too Soon OilPrice

The tremors from the US tight-oil boom Financial Times

Bank of America and JPMorgan Chase Agree to Erase Debts From Credit Reports After Bankruptcies New York Times

Los Angeles sues Wells Fargo over opening extra accounts to hike sales quotas Los Angeles Daily News (Harry Shearer)

Class Warfare

How’s a $16 minimum wage sound? Reuters

Debt hangover ruins the American dream Gillian Tett, Financial Time

St. Louis Residents Fight to Keep Spy Agency From Taking Their Homes Intercept

Are Rising Home Prices Leading to Greater Inequality? Wall Street Journal

The Price of Nice Nails New York Times. Solid investigative reporting. The super low price of manicures, combined with the price of retail store rents, has been a long-standing indicator that the wage rates are below minimum wage, either explicitly or by being piecework based. But this is even worse than I had imagined.

Antidote du jour:

pretty bird links

See yesterday’s Links and Antidote du Jour here.

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  1. Ned Ludd

    The astonishing nature of the result was partly due to the exit poll being so far out of line with national opinion polls that had showed the two main parties neck and neck, and if anything Labour benefiting from a late surge.

    Does anyone remember the lysine price-fixing conspiracy, which actually included “three international price-fixing conspiracies”? Maybe media executives (or executive editors), similarly, sit around a conference table and decide things in concert, including plot twists to keep their audience tuned in. Labour surge! Cameron victory!

    In the lysine conspiracy, the companies also colluded to create a façade of competition, with each company taking a different line on prices (albeit all predetermined by the group) and meeting periodically to change them.

    The simplest explanation is that everything is fixed, from lysine prices to polling results to election outcomes.

    1. Brooklin Bridge

      The simplest explanation is that everything is fixed

      I suspect we will see that applied to Hillary’s coronation as well.

    2. Ed

      I came to the conclusion some time ago that elections in the US either were fixed, or could be fixed if the two big parties agreed. This is because the people who supervise the counting of the votes are local election commissions, which are staffed by representatives from the Democrats and Republicans. So in most cases, if the two local party machines agree to fix an election, there is nothing preventing this.

      Jorge Castenda, who was Mexican Foreign Minister for a time, had a good article (an appendix to one of his books) explaining how the 1988 presidential election in Mexico was fixed. Essentially actually rigging the vote tally, as was done in 1988, is done by political machines only as absolutely a last resort, there are other methods they try first, but yeah they will rig the vote tally if they absolutely have to.

      However, systems that use paper ballots counted in public, with multiple parties contesting the election and having observers, are probably not fixed. Going through the UK results, it seems they can be explained by increased tribalism/ polarization by the electorate (lots of voters in England and Scotland voting for their respective nationalist party, the Tories are now mostly an English nationalist party), plus the Conservatives had very good tactics or got very lucky with the marginal seats, their raw vote totals and percentages being essentially unchanged from the last election.

      1. James Levy

        I don’t think the UK vote was rigged. It’s a lot tougher there than in most countries, what with the very large number of seats per capita and the traditional hostility of the political parties for each other, and the fact that they still use paper ballots. What happened was that people very likely panicked and handed the Conservatives a majority just so they didn’t have to live through the tsuris of a minority government and a quick call for a new election. Basically, I think they wanted to get it over with and handing the country back to the people who own it anyway was the easiest, lest stressful way of doing that. The English also, I’m sure, didn’t want the Scottish National Party to be king-makers, which they would have de facto been given any minority government. It all bodes very badly for the people over there, but that’s what happens when your first-through-the-post system turns 37% of the vote into a fanatically disciplined majority in Westminster.

      2. fresno dan

        Oh, I don’t think its fixed….in the sense that you will get a fair flip of the coin, heads or tails, Jeb or Hillary. Now, don’t just expect that that will lead to policies that result in fair enforcement of laws for the banks or 0.1% – you get a fair coin toss, of heads or tails – – – heads you lose, tails banks win.

      3. Jason Ipswitch

        In the small population rural Western US state I spent most of my life in, ballots were carefully tracked and handled by multiple pretty impartial election judges, watched by representatives of both the major parties. Rigging an election there would be roughly as difficult as rigging one in the UK. I was shocked a few years ago to find out that many states do not have such scrupulous practices.

    3. PlutoniumKun

      I don’t think the polls actually were that far out – total votes were more or less in line with predictions. What was not predicted was the way in which every marginal swung one way – to the Conservatives. One of the many anomalies of a first past the post system is that it only takes a comparatively tiny number of voters to swing to change a result – so long as they swing in the ‘right’ place geographically. Ultimately, it might just have been a few thousand people who were going to vote UKIP or Lib Dem in key places to Conservative who caused such a massive swing in terms of seats (the same thing of course happens with the US presidential election). This does of course imply that if there is fraudulence, it doesn’t take a lot of fake votes to make a big difference, but I honestly don’t think you need to have conspiracy theories to explain what happened.

      Ultimately, Labour were doomed as soon as they refused to challenge austerity. I don’t mean this in terms of ‘they should have been more left wing’. Its a simple practical matter that in first part the post systems, the winner is always the party that ensures the arguments take place on their field of choosing. For the Conservatives, its the economy and tax, for Labour its health, education and public investment. In conceding austerity, Labour could not bring the argument onto their ground, there was no way for them to justifiably argue that they could spend significantly more on public services. Since the argument is then all about competence, not policy, undecided swing voters will always swing in the direction of the more experienced party (i.e. the one in power).

      Ultimately, Labour lost because they took a short term tactical decision to ‘neutralise’ the issue of public spending, which was disastrous strategically. It was obvious that once they did this, they could never get the arguments around to their grounds of choosing.

      1. PlutoniumKun

        Just as an addendum to the above – I haven’t seen a full breakdown yet of voting, but I think I’m wrong in saying there wasn’t a major difference in the overall vote and the polls – it does seem there was quite a significant last minute shift to the Conservatives, outside the margin of error predicted by nearly every poll (I say a swing, because I very much doubt that all the polls could have been so inaccurate, it does seem that a significant number of people just changed their mind at the last minute).

      2. James Levy

        How much of this is the English in particular, and British in general, dislike of being screamed at? I have felt that Labour leaders since the 1983 debacle have feared and loathed being mocked and insulted in the media. I sense their need not to be ridiculed. At every turn they, like Obama, seem psychologically unprepared for attacks of all kinds and attacks on them as people specifically. Am I misperceiving something here, or does that strike UK readers (I lived there when I got my Ph.D. but am not a subject of the Crown) as an accurate reflection of this past generation of Labour politicians?

        1. PlutoniumKun

          I’m not British either, but I have always found it baffling that British politicians, Labour in particular, accept the vile attacks from the media without response. They are obsessed with certain newspapers (in particular the Daily Mail, to a lesser extent the Sun), and can behave like an abused puppy, cravenly looking for a kind word or petting. I’d always wondered why they never took the offensive (right wing politicians are never afraid of taking the offensive against the BBC). I’d always assumed this was based on focus group advice (it did work for Blair after all), but I suspect you may be right that there is something cultural going on. Its impossible to believe that the sheer relentless assault by the main popular newspapers doesn’t have an impact on the electorate.

  2. Timmy

    The potential for significant illiquidity in bond markets has been observed widely over the last couple of years. Wall Street banks are among those that are concerned and they are the ones with the best data. While we’ve been taught that you shouldn’t trust the banks, in this case, they are probably right. There is also an important potential second order impact and that is that the banks that are concerned are also widely promoting ETF’s and mutual funds for their retail businesses. As folks pile into these, they run the risk of not being able to leave. ETF’s in particular, pose risks. Because 1) their security-specific holdings are public; and 2) they must trade in the underlying security when they receive net buy or sell orders, they are subject to risks of being gamed by Hedgies that identify specific securities (individual corporate or high yield bonds, NOT the ETF’s themselves) which are particularly illiquid and then building short positions in those securities in anticipation of a sell off. Should the decline come, the liquidity consumed to establish the short will exacerbate overall market volatility as retail investors bail out of funds and ETF’s. Even with the Fed raising flags on illiquidity, banks continue to recommend both funds and ETF’s that are exposed to the risk. Retail investors are always the last in the queue.

    1. Yves Smith Post author

      I’ve been skeptical about dealer whining about bond market liquidity, since heretofore it has been about corporate bonds. Corporate bonds have never been liquid but no one ever had a problem with that. You can easily grid out what the prices should be on trading of a few liquid benchmark issues. One can also argue that that supposed innovation of CDS served to move price discovery for corporate bonds to the CDS market, reducing liquidity of cash bonds. So for market participants to cry about liquidity in corporate bonds is like a child who has killed its parents asking for sympathy for being an orphan.

      The other whine has been about lack of collateral. That really is not about lack of collateral. That is really about too many OTC derivatives, since demand for safe collateral is driven largely by the need to collateralize OTC derivatives exposures. No idea what is driving demand. Low vol making derivatives cheaper for users, hence increasing demand?

      But I am now hearing that there are liquidity issues even in T-bills. That is a completely different kettle of fish.

  3. Ulysses

    From the NYT article linked above:

    “She would work for no wages, subsisting on meager tips, until her boss decided she was skillful enough to merit a wage.

    It would take nearly three months before her boss paid her. Thirty dollars a day.”

    This sort of thing happens all the time with labor laws actually in force here in the U.S. Imagine how much worse off we’ll be when the TPP regime insists that our labor laws not be any stronger than those of Vietnam, where the legal minimum wage was just dramatically increased in January to $100 per month, in a labor market where people are routinely denied any meal or restroom breaks during their 12 hour shifts, and 6-day weeks??!!

    This is the brave new world our dear leader is marching us into. Investors in the MIC won’t have to worry about a lack of foreign wars when the wonderful TPP regime starts to establish itself here in the land of the free:

    “a Nike contractor in Indonesia allegedly went to extreme measures to bring some workers in line, according to a new report from the U.S. nonprofit Educating for Justice.

    The report claims a shoe factory in Sukabumi, Indonesia, which produces Nike products allegedly hired high-ranking Indonesian military officers to force workers to agree to work for less than the country’s minimum wage, which had just gone up. The military officers allegedly intimidated reluctant workers into signing a petition saying that the Nike contractor did not have to pay the new minimum wage.”

    Plenty of future work for mercenary subcontractors here in a few years– keeping the sons and daughters of people– who used to make more than $30/hr. building cars, televisions, etc.– from expressing any discontent over doing the same sort of work for less than $30/week!!

    1. PQS

      If the details of the TPP are so bad they wouldn’t even pass through a corrupt Congress without total screcy then they must be truly awful.

    2. Marianne Jones

      I’m impressed the NYT went to the effort of translating the article into the languages of the women who would most benefit from reading it, Korean, Chinese, and Spanish.

    3. nihil obstet

      The U.S. judicial system has already ruled fairly consistently in favor of arbitration clauses in contracts in which the employee or customer agrees that grievances against the company will be settled by binding arbitration at a tribunal selected by the company. These, you see, even in adhesion contracts are voluntary. The effect is to allow companies to opt out of enforcement of commercial and contract law. The TPP will complete the utter gutting of customer and employee protections.

  4. abynormal

    “I don’t know what the NGA does exactly,” added Taylor, “but it sounds bad.” …laff n shiver
    ““GEOINT has a great advantage in our current environment because it’s the most transparent of the collection disciplines,” Clapper said last spring at the GEOINT Symposium in Tampa, Florida.”
    “NGA has taken a lead role in the broader intelligence community’s technology-integration plan—known as ICITE—and in spearheading activity-based intelligence, the agency’s bid to harness the power of big data.”
    “I want us to leverage the big data revolution, the geospatial information services that are blossoming, the startups that are happening in New York and California and around the world … We don’t need to reinvent that material or that piece of software. We need to figure out how to leverage it.”

    who builds before choosing a site?

    July 2014, the NGA announced six sites were under consideration, but now only four are still in the running: Fenton, Mehlville, Scott Air Force Base, and the old Pruitt-Igoe site in north St. Louis.

    1. abynormal

      hmmmm…my research is cutoff. i crossed ref. from glassdoor site for locations of NGA and they are building or expanding on the 6 sites they were considering. i won’t bog down the thread w/a repost.
      back under the radar friends…Great Friday Yall and travel well Yves

      “Study after study has show that human behavior changes when we know we’re being watched. Under observation, we act less free, which means we effectively *are* less free.”
      Edward Snowden

  5. Ben Johannson

    Fear of rising oil prices is likely a significant factor in bond volatility given long-term yields are a reflection of inflation expectations. The Fed’s continued waffling on the Fed Funds rate is also in play as no one wants to be caufht holding lower yield second-hand securities. Frim my perspective when this is coupled with mixed economic data it creates a stronger incentive to hold cash.

    1. MyLessThanPrimeBeef

      We are progressing towards a cashless society.

      Holding (paper) cash will, then, not be an option.

    2. MLS

      good comment, and to it I would add that weak economic data in the US during March/April effectively pushed out rate hike expectations from June to September, so there’s been an unwind of an extremely crowded long dollar/short Euro trade. All else equal this would lead to lower Bund yields, not higher, but central bank perversion has inverted the long-standing spread of US bonds to German counterparts, so the rise in yields in the US pulled German yields higher.

      Today we got better employment data and US and German yields are down, and the dollar is up.

  6. fresno dan
    When Morgan finally opened his business, the harassment continued. Cops would show up at his garage and cite his employees for operating without a business license. Morgan has a license; his employees didn’t need one. But to get the citations dismissed, Morgan and his employees would have to go to court, which was held once a month, at night.
    A good example of why some are skeptical of government. First, it is pretty obvious, it is done to simply oppress blacks. Second, the lack of any accountability – are any of these citation issuers who can’t enforce the law fairly or correctly demoted or fired for their incompetence? Any acknowledgement of the cost and harm done to people hauled into court who aren’t actually guilty of anything? What does that say about the moral caliber of the judges who sit on these benches??? The whole corruption of society when courts/state become part of a system of oppression?

    Finally, the whole “self correcting” through election model sure doesn’t seem to work, as this appears to have been going on for decades. And when it happens in New York, Baltimore, or Missouri, it seems to be something deeply, deeply embedded in this society. How is it that legislators, whose supposed job is oversight of the government, weren’t aware of these abuses? I think the answer can only be that they were aware, and this doesn’t happen inadvertently.

  7. rhonda lieberman

    Here’s brother Bruce Dixon’s take on Bernie Sanders as Hillary’s ‘sheepdog’.

    “The sheepdog’s job is to divert the energy and enthusiasm of activists a year, a year and a half out from a November election away from building an alternative to the Democratic party, and into his doomed effort. When the sheepdog inevitably folds in the late spring or early summer before a November election, there’s no time remaining to win ballot access for alternative parties or candidates, no time to raise money or organize any effective challenge to the two capitalist parties.”

    What say my NC comrades of Dixon’s read?

    1. Fool

      I say it’s an excessively cynical view, even for this blog. In theory, this would make any person to the left (or right) of center that’s running in a primary campaign a “sheepdog”. I mean, yeah, Sanders will galvanize leftists and so bring them “back into the fold” of the party before 2016 — as Huckabee will get the Bible people to rally behind whomever the Republican nominee is — but as a rule political parties want any political stimuli/circumstance to augment their agenda. This, however, is independent from Sanders himself and what he stands for.

      1. Ed

        Sanders though of all people should be running as an independent/ third party candidate, as he is not a Democratic and has run as an independent before in Vermont elections.

        Its never been fully explained to me why fringe politicians with some visibility prefer to run in Democratic and Republican presidential primaries, getting the same 1% to 4% of the vote in primary after primary, as opposed to running in the general election as an independent and getting the same percentage. For example, I don’t see what Ron Paul gained in his runs in the recent Republican presidential primaries that he didn’t running as the Libertarian nominee in 1988. The usual explanation is that ballot access laws are particularly rough on non-Democrats and non-Republicans. I suspect that there is some sort of campaign financing explanation.

        1. Fool

          He’s not a “fringe politician”; I can’t of any his positions that are out “the fringe”, as it were. Perhaps he’s less about visibility than he is about accomplishing his objectives. But to answer your question, Ralph Nader circa 2000 is a reason not to run as an independent.

          1. Jackrabbit

            If you view the purpose of the Duopoly as serving corporate and monied interests, then Saunders is fringe, and his candidacy furthers those interests because he will inevitably fail. He has already said that if (read ‘when’) he does fail, he will support the Democratic candidate for President.

            H O P

            1. MyLessThanPrimeBeef

              Is that like Greece declaring she would not leave the Euro before the start of negotiation?

      2. Katniss Everdeen

        It’s pretty much impossible to be too cynical in this regard. Cynicism was off the table when money became speech and corporations became (sort of) people.

        If Sanders “stood for” anything, he’d run as an independent from the get go. He may not have the “gravitas” to be elected president, but he could demand a spot on every state ballot and get it, disabusing many newer voters of the idea that there can always ONLY be two “real” candidates, and it is one’s civic duty to pick one or the other for a vote to “count.”

        He could also demand, and get, a place in the national PRESIDENTIAL debates, where all voters, not just democrats, could hear what he has to say. He could take on hillary as well as the republican. By all accounts, the ranks of independents are growing, and he could very well upset the carefully calculated two-party electoral apple cart.

        But he won’t.

        Dixon nailed it.

        1. Fool

          The Democrat primaries are live-tweeted even on Drudge. Everyone will hear what he has to say. Hell, I only watch politics on TV during Republican primaries season, if only for the entertainment value.

          By all accounts, the ranks of independents are growing, and he could very well upset the carefully calculated two-party electoral apple cart.

          -In political and social terms this is practically impossible. You can’t potentiate a political agenda towards its critical mass without some degree of caucusing…

          1. hunkerdown

            We complain about short-termism then pretend that any poll or election metric which is more than 24 hours old is irrelevant to anything.

            You don’t fix a broken, complex, deliberately mis-engineered system by watching the temperature gauge.

        2. Yves Smith Post author


          You are unrealistic as to what it takes to get on the ballot in 50 states. Lambert has discussed this REPEATEDLY in comments. Sanders is not carrying the Democratic party’s water and most assuredly not Hillary’s. To claim he is is wrongheaded as well as meanspirited.

          1. Oregoncharles

            1) The Green Party will be organizing and building ballot access regardless. The stray lambs will be welcomed into the fold when they catch on.

            2) “Walk and chew gum at the same time”. Let’s hope the Bernie supporters aren’t completely clueless. They need to be building a backup. That means you give to the Greens as well as Sanders – looks like the money will mean a lot more to the Green Party than to Sanders.

            The role you’re accusing Bernie of is called a “stalking horse” – a candidate who’s really a stand-in for someone else. I rather doubt that’s his intent, but it’s likely to be his effect; apparently he’s promised to “support the Democratic nominee” – a traditional requirement.

            And again: I’m just grateful he won’t be splitting the left-wing vote in November.

            Hope I really did forget to post this.

            1. Fool

              …That means you give to the Greens as well as Sanders – looks like the money will mean a lot more to the Green Party than to Sanders.

              Will it though? Sanders, at the very least, will force Hilary left on certain issues (verbally, that is, like Hopey-Changey Obama in ’08, but I digress). In terms of actually effectuating political and social change — and having nothing to do with the positions of the Green party, most of which are very sensible in theory — I always thought giving to the Green Party was sort of the equivalent to flushing money down the toilet (at least in a national election).

          2. Oregoncharles

            With $2 million, he has a pretty good start on all that ballot access. Name recognition helps, too.

            However, I agree that Katniss underestimates the difficulty. It’s the Green Party’s biggest challenge; a couple of states are essentially impossible. That’s probably un-constitutional, but a court case like that takes money, too.

            None of that prevents him from being a stalking horse for the right-wing Dems, though. It’s pretty much built into the structure. If we want to make a difference, we go after what the Bernie supporters will do AFTER the nomination. I can’t imagine the Dems giving it to someone who isn’t even a member of their party, and the party has major defenses against insurgent campaigns, built after the McGovern campaign.

            Actually, that would make a good article: there appears to be a firewall between the national party and most of its members. What is it? I’m not an insider and can’t tell, but I bet someone could be found who is.

            1. Lambert Strether

              I hate to say this, and I understand that the Greens are decentralized and differ in each state. And I say this as someone who consistently gives Greens like Howie Hawkins, Ursula Rozum, and Asher Platts links and coverage.* But in my experience, the biggest problem the Greens have is the Greens. I know what it means to work for a dysfunctional non-profit, and that’s what the Green Party available to me looks like. All I can say is that I hope the Oregon Greens are like the NY Greens.

              * And of course Bruce Dixon!

              1. Oregoncharles

                We do OK.

                I think the biggest factor is lack of money. The major parties buy unity and functionality. Peoples’ jobs depend on getting along – and that isn’t true of us.

                People are often also complaining about the brute fact that it’s a mostly-volunteer organization. We do what we can do. If people want us to do more, they’re going to have to pitch in. But I often see this used as an excuse for not participating – not by you, mind.

                There is a more intrinsic factor: it’s a dissident party, and for some reason, there’s a lot of dissidence in it.

          3. Katniss Everdeen

            “Unrealistic,” wrongheaded” and “meanspirited” though it may be, I STILL think Dixon nailed it.

          4. Fool

            Yves, This is the most optimism I’ve seen from you yet. I’m convinced: another $20 to Bernie.

            1. Yves Smith Post author

              This is more about moving the Overton Window than expecting to win, but moving the Overton Window is a necessary condition for getting policies that restore some measure of social justice.

    2. TedWa

      If Bernie Sanders is the sheepdog against Hillary, then Obama was the judas goat and still got elected. Give me a sheepdog anytime. I’m happy Bernie is challenging Killary as no democrats seem to have the b@lls to. There are no real democrats anymore, none that stand up and stand out anyway. Bernie is getting donations from me until he wipes Hillary off the map.

      These comments knocking Bernie only help to support the growing monarchy of Bush and Clinton. Enough is enough. Bernie is the only way we can take back this country from the kleptocrats. He’s not a liar nor has he ever been one. A man of character surrounded my puppets, oh my. Think if Elizabeth Warren would be his vice-president he’d win?

      1. Katniss Everdeen

        ” Bernie is the only way we can take back this country from the kleptocrats”.

        And how, exactly, does this happen?

        1. TedWa

          To Fool, that’s why I said it with an @, But, point taken.

          Democrats or Republicans, they’re under the control of the kleptocrats. Do we logically really have any other option? If he can do just 10% of what he wants to do, this country will change dramatically. Just getting rid of trade agreements written in secret would do wonders. Reining in Wall St abuses, I’m fine with that. Raising the cap on SS so that it lasts into the next century – very good. Work to make college more affordable, oh yea. Rein in big Pharma and big Ag? All for it. These are things Bernie stands for and, more progressive ideals than dreamt of by most democrats that are in a money induced coma.

          1. hunkerdown

            Well, Sanders has stated his intent on running as a Democrat. Which presumes that, if he’s not under the control of the kleptocrats yet, he will be as soon as he’s in a position to do any damage.

        2. TedWa

          And if somehow he wins, it will pull the Democrats left. His entry into the race cannot be casually disregarded by Democrats or Republicans. The more power Bernie has and the more of a threat he becomes, the more politics will have to move left and progressive. Bernie is a wedge between the democricans and the republicrats.

    3. MLS

      I’d say it’s life imitating art, for those familiar with the most recent season of House of Cards.

    4. Benedict@Large

      Sanders’ record is as open as it is long. The idea that he would collude with Hillary is absurd. If Dixon (who I respect a good deal) thinks that there is someone whose candidacy might be derailed by Sanders, name one. I just don’t see it. Even the Greens, who have been at this game for many years and probably have as good a platform as we are likely to see, have yet to get any steam going in their campaign.

    5. curlydan

      I’ve been reading Black Agenda Report for the past 5-6 years, and I’ve noticed a pattern. They take a position that seems really out there, cynical, and radical. At first I dismiss it, but 2-3 years later that position seems like the total freakin’ truth that only they could see at the time.

      So now with my past reading in mind, Bruce Dixon is right, and the cynicism is warranted. The following paragraph from the article explains what needs to happen.
      “Currently the law keeps Greens and others off the ballot in more than half the states. Precise details vary according to state law, but if a third party candidate after obtaining one-time ballot access receives about 2% of total votes, a new ballot line is created, granting ballot access to any potential candidate from school board to sheriff to US congress who wants to run as something other than a Republican or Democrat. That, many participants agreed, would be a significant puncture in the legal thicket that now protects Democrats against competition on the ballot from their left. But a nationwide trans-partisan ballot access campaign to create a national alternative to the two capitalist parties is something left activists must begin serious work a good 18 months before a November election, essentially right now.”

      Stop enabling the Democrats, or you’ll spend the next 4 years regretting it.

      1. MyLessThanPrimeBeef

        Fooled enough times, one not only begins to feel no shame, but becomes so used to it, one craves for it.

      2. Fed Up

        Is Dixon’s assessment cynical, or realistic?

        He’s based his opinion on Sanders’ declaration–he didn’t invent it out of whole cloth (that Sanders will support the Democratic Party nominee).

    6. Oregoncharles

      1) The Green Party will be organizing and building ballot access regardless. The stray lambs will be welcomed into the fold when they catch on.

      2) “Walk and chew gum at the same time”. Let’s hope the Bernie supporters aren’t completely clueless. They need to be building a backup. That means you give to the Greens as well as Sanders – looks like the money will mean a lot more to the Green Party than to Sanders.

      The role you’re accusing Bernie of is called a “stalking horse” – a candidate who’s really a stand-in for someone else. I rather doubt that’s his intent, but it’s likely to be his effect; apparently he’s promised to “support the Democratic nominee” – a traditional requirement.

      And again: I’m just grateful he won’t be splitting the left-wing vote in November.

    7. cwaltz

      It completely overlooks the fact that leftists can support as many candidates as they wish all the way up until the election. There is positively nothing stopping me from signing a petition to get a third party on the ballot and supporting Bernie’s call for single payer, tuition free college or to defeat the TPP. Heck, there isn’t anything that stops me from voting for a third party if Bernie was to lose the election and Hillary was the nominee. The only way I might have to worry about making a decision is if Bernie were to win the primary and I had to choose between him and the third party candidate I petitioned to have on the ballot.

      I have faith that the left CAN walk and chew gum at the same time.

  8. MyLessThanPrimeBeef

    Latvia, the miracle of 10 percent population shrinkage.

    Wars have done more than that (people killed, maimed, families destroyed, production facilities ruined) and nations have recovered to become very prosperous, including the victors.

    And so, history is written…by the victor. And history is filled with, let’s see, how do we put this…just wars. Yes, just wars.

    Unless those in charge are incompetent, we should expect to be educated about ‘just austerity.’

    And we will be so grateful we celebrate those ‘just austerity victories.’


  9. financial matters

    Ex-military chiefs press Congress on trade Financial Times

    This would be easier to take if we didn’t have our 4 star generals in the revolving door with contractors such as with ‘General Jack Sheehan (below left), a former US NATO commander and now lobbyist for the Bechtel construction company’.


    And Eric Zuesse had this interesting commentary.

    ‘Obama told graduating West Point cadets, on 28 May 2014: “China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums.” In other words: part of these future military officers’ jobs will be to help make sure that the BRICS, and other countries that have lower per-capita wealth than in America, stay poor, so that America’s aristocrats can send jobs there instead of pay America’s own workers to do it — in other words: get America’s workers competing against ones in poor countries, rather than get America’s investors competing against ones in poor countries. He’s telling America’s military that they are soldiers in this international class-war, paid by the public, but working actually for America’s plutocracy and not for the public, but against America’s public — to drive down their wages, food-safety, etc.

    This is the way toward a certain type of world government by the super-rich for the super-rich, keeping them and their appointed heirs in control over the assets of the entire globe — both its natural and its human resources — and using as the local agents throughout the world the local aristocrats, who will be the people who will keep their local publics in line and working for the ever-increasing intensification of the planet’s wealth, in the hands of, first, the global plutocracy, and, second, America’s plutocracy as being the globally dominant plutocracy.’


    There has been talk about currency manipulation and China is willing to address this by making the yuan a more prominent part of a global basket of currencies. (not the only currency)


    It seems that if our foreign policy wasn’t so neoliberal oriented and oriented toward inequality that we could be more accommodating in a mutual beneficial way.

  10. Jim Haygood

    From the NYT article above, on B of A and Chase:

    ‘The lawsuits accuse the banks of engineering what amounts to a subtle but ruthless debt collection tactic, effectively holding borrowers’ credit reports hostage, refusing to fix the mistakes unless people pay money for debts that they do not actually owe.’

    This is the very essence of racketeering. It’s bad, and it’s nationwide.

    B of A and JPMorgan Chase should be RICO’d into nonexistence.

    Nobody would miss them.

  11. Inverness

    Re: nail salons. There is a “Three Ways to Be a Socially Conscious Nail Consumer” response written by the same journalist

    One of the means to make sure your manicurist is not exploited is to “interview your manicurist.” Yet, the original article makes it clear that workers are under constant surveillance (including camera surveillance) and probably aren’t going to volunteer their complaints to a paying customer, from whom they are hoping tips. I suspect the reporter felt pressured to provide solutions to readers who aren’t ready to give up their sweat-shop spa treatments, and need their guilt alleviated.

    1. Katniss Everdeen

      Um, not to rain on any bootstrapping immigrant’s entrepreneurial parade, but there are health issues here. There’s a reason for those jars of green liquid with combs sticking out that you see at Supercuts right below the license with photo that’s taped to the wall, and you just ASSUME is legit.

      So let’s see. You have untrained, illegal, non-English speaking, nervous “manicurists” with “shaking hands” living in squalid conditions, lugging their “manicurist” armamentarium with them on the van ride to their latest unpaid “manicurist” gig. They are using sharp instruments to clip and cut customers’ SKIN. OK.

      Isn’t it sovaldi that “cures” Hep C for $96,000 a course? Since I don’t believe too much cynicism in this day and age is possible, I’m thinking that maybe Merck or Pfizer or whoever has the patent on sovaldi has a secret “micro-loan” program to get these parties started.

      A $10 “manicure” could wind up being the most expensive “manicure” in the history of “manicures.” Stranger things have happened.

      1. fresno dan

        I have to say, that is some exceptional cynicism….or amazing Realism….
        A+++ (hmmmm – should that be C+++???)

      2. Yves Smith Post author

        I suggest you go to a NYC manicurist before you make assumptions.

        In salons in Manhattan, the manicure implements are autoclaved in sealed bags. Each customer sees the manicurist open the autoclaved bag in front of them. This is a long standing requirement and is so widely observed that I suspect that the relevant licensing department has mystery shoppers or has enlisted lots of regular customers to report violations.

        You can have heavily surveilled underpaid labor and have health standards met.

        If you want to worry about health risks, worry about all the chemicals in normal nail polish removers, which the manicurists use and inhale all day. Or about tattoo salons. Something like 20% of the HIV cases in Australia came via tattoos.

        1. Katniss Everdeen

          I think I’ll skip the NYC manicure after reading the article.

          “Manicurists are also required to be licensed, but this is another area where enforcement is lax. There are nearly 30,000 licensed nail technicians in the state, according to the New York Department of State, but numerous manicurists work without licenses. Licenses are frequently fabricated, bought and sold.

          Manicurists say that even when government agencies do check on their employers, evasion is easy.

          Lili, a manicurist from Ecuador who is picked up every morning in Flushing near Ms. Ren, laughs when she recalls the time state inspectors visited the Westchester County salon where she works. Spotting them, her boss barked for all the unlicensed workers — there were 10 — to hustle out the back door.”

          The part about “enforcement” being LAX would seem to bear repeating.

          Just as an aside, there’s more to “autoclaving”/infection control/sterilizaion than “watching” someone open an “autoclaved” bag. And really, Yves, “mystery shoppers” and tattoos???

          1. kareninca

            Years ago, the only person I knew who had her nails done regularly was a very rich friend who went on such outings with her mom. She was also the only person I knew who had nail fungus. From her I learned of “tea tree oil”, which wasn’t a household word 23 years ago. Before that I had had had one manicure in my life (in rural New England as a teenager, in a costly salon that employed people from the same swamp I’m from). I decided to forego any future “treats” of that sort. I really don’t think that seeing something that has been purportedly autoclaved, taken out of a plastic container, proves much, in a world where TB medications (including their packaging holograms) are counterfeited and honey is adulterated. I’m sitting here looking at my plain nails, and they look just fine to me thanks.

            1. Yves Smith Post author

              I hate to tell you, everyone is exposed to nail fungus. Not at all uncommon for people to get in on their toenails. Some people get it, some don’t. The person I know who has the worst case I’ve ever seen is a man that I can guarantee never set foot in a salon.

              As you will see, the risk factors have nothing to do with salons:



              1. kareninca

                Oh, I know that it is common for people to have it on their toenails. I should have specified: she was the only person I knew who had it on her fingernails.

                I looked through the list of risk factors on the Mayo clinic site and my old friend didn’t have any of them that I know of (not old, didn’t perspire a lot, not male, didn’t work in humidity, socks not relevant since on fingernails and barefoot part not relevant, none of the listed ailments). I don’t see how having one’s nails done in an infected situation could not be a risk factor – I thought that was one of there reasons why there were all those laws requiring sanitation. FWIW, she thought it was clear that she had gotten it from the nail outings; not proof of course but she thought she saw a direct correlation.

          2. Yves Smith Post author

            The report covered the five boroughs. There are four other boroughs besides Manhattan.

            I do not get manicures very often, but over the years, I’ve used at least 8 different salons. I’ve never seen a manicurist in Manhattan not use autoclaved tools. I was just in a salon in Dallas where the premises looked nice and was recommended by a friend, but they plunked the tools on the table. I had no idea whether they’d gotten anything more than a fast rinse under the tap.

            I’ll take a manicure here all day, with no-acetone polish remover, which you can bring yourself if the salon doesn’t have that. Most salons will also let you bring your own tools which they keep in a box with your name on it.

            1. kareninca

              They can have an autoclave, and put the tools in clean packs in the autoclave, but not bother to run it. It looks like that might not be a rare thing.

              From a detailed account by a nail technician in Texas (the whole thing is worth reading if you want to gag):
              “At Salon 2, their autoclave was out in customer sight and their nail techs even went so far as to wash their tools with hot soapy water and then package them in a clean pack and put them in the autoclave. It appeared to the customer that they had gone to get a ‘fresh set of tools’ to use on them. Sadly, this was not the case. Again, it was never once run except by me after hours.” (

            2. kareninca

              They can have an autoclave, and put hand-washed tools in new plastic packages in it, but not bother to run it. It looks like that may not be a rare practice.

              The account of a nail technician in Texas (the whole thing is worth reading if you want to gag):
              “At Salon 2, their autoclave was out in customer sight and their nail techs even went so far as to wash their tools with hot soapy water and then package them in a clean pack and put them in the autoclave. It appeared to the customer that they had gone to get a ‘fresh set of tools’ to use on them. Sadly, this was not the case. Again, it was never once run except by me after hours.”

  12. lyman alpha blob

    RE: Los Angeles sues Wells Fargo over opening extra accounts to hike sales quotas

    A natural consequence of making employees pay dependent on the marketing they do for the bank, something they don’t tell you when you are interviewing for the job.

    I worked at WAMU for a couple years before they went belly up as a branch employee in a big office building in Seattle. We were paid a fairly low base wage, ~ $10/hr to start if I remember correctly, but received a monthly bonus based on the overall profits our branch generated. (Turns out the main driver of the bonus was profits from new mortgage loans which WAMU was churning out as fast as possible. We all know how that ended, but I digress). The bonus was often equivalent to an extra paycheck per month and without it, it would have been very difficult if not impossible to make ends meet.

    They didn’t just hand it to you though – to receive a full share of the monthly bonus employees were required to market new ‘products’ to customers – we had to fill out little slips of paper documenting that we had discussed various new types of accounts with customers and at least attempted to get them to sign up and then hand in a certain number to our managers each month. When I complained that we had largely the same regular customers every day who worked in the neighborhood and that they really didn’t want to hear me droning on about new accounts every time they came in the withdraw some lunch money just so I could reach the paper slip quota to receive the bonus I needed, my manager told me that he was pretty sure I was bright enough to figure out a way to meet the quota, ie fake it and just fill out the paperwork whether I’d really done any marketing or not.

    But we only had to try to sign people up, or pretend that we had. Seems like the banks may have decided trying wasn’t good enough. This article makes it sound like a few bad apples were opening accounts without the customers’ knowledge however I suspect that doesn’t tell the whole story. Your average teller or new accounts person in a bank branch isn’t very highly compensated at all. I wouldn’t be surprisedl if the banks made opening a certain quota of new accounts per month a condition of employees receiving full pay.

    1. fresno dan

      Wow – thanks for that.
      I had an account with Wells Fargo when I first relocated to CA when I retired a couple of years ago. Of course, I got a big marketing sell on why I needed an extra account (for safety – even though my cynisense** – kinda like spidey* sense, but applies to anything related to money in America – was tingling like crazy, because if checking accounts at Wells Fargo are so insecure, why would I want more of them???)
      So long story short, I ended up with an extra checking account that Wells failed to have my retirement check deposited into. Actually, after this fiasco they failed to have my money deposited anywhere… Lots of bounced checks :(
      that after much strum and drang were straightened out. Wells had instigated a new checking account for me, issued me another account, sent me checks, but didn’t actually assure that my automatic deposit was being DEPOSITED….ANYWHERE.

      ** fresnodan’s sense that no matter how corrupt and self dealing you initially think people are, once you learn the entire story of “incentives” you’ll see that people are much, much worse…

  13. vidimi

    business insider reports putin laid off almost 20 generals, including sergei lavrov.

    i can’t find this story anywhere else so it must be contrived. it would have been quite the shock were putin to get rid of one of his triumvirate.

  14. JEHR

    This article in Canada’s Globe and Mail caught my attention so I was not surprised that Yves senses “serious stress.” Our last liquidity crunch was during the recession and the government bailed out our banks to the tune of $114 bn plus the Fed Reserve loaned out money to Canadian banks also.

    “Should another bout of liquidity turmoil arise, we will be ready,” senior deputy governor Carolyn Wilkins vowed in remarks prepared for a speech to the Board of Trade of Metropolitan Montreal.

    The various changes, slated for implementation later this year and in 2016, are an effort to ensure that the risks of financial transactions are “priced more appropriately” in the market, Ms. Wilkins said.

    While the measures would make funding “marginally more expensive,” she suggested it’s a “small price to pay” to avert another crisis.
    …The changes unveiled Tuesday would also see the bank create a new “contingent term repo facility” available to primary dealers, such as Canada’s big banks, and other institutions, in the event of a “market-wide” liquidity crunch.

    See also:

  15. Editor of the Fabius Maximus website

    Climate reporting is like game of telephone, with the last & least accurate version being the most sensational & gets the most attention. It need not be like this, since finding the original source takes only a little work but rewards with more accurate information.

    The abstract of the study says ” We determine the geographic pattern of ice mass change in Antarctica between January 2003 and June 2014 … The Antarctic Peninsula shows slightly accelerating ice mass loss …”. They rate of melting is slow but could increase to dangerous levels.

    The Princeton Press release says: “Gravity data show that Antarctic ice sheet is melting increasingly faster” — losing the modifier.

    Popular Science goes for the clicks by making stuff up, saying “Gravity Data Confirms: Antarctica Is Melting Faster Than Ever Before” — “A massive melting problem”.

    Business Insider reprints the PS article. Exaggerate and mislead to get the most clicks!

    This is exactly the same technique used on the RIght, generating so many of the headlines found at The Instapundit and his imitators. A little more skepticism and effort and the information highway can work for us!

    1. Editor of the Fabius Maximus website

      The second half of the excerpt from the study’s abstract didn’t paste correctly. Here it is:

      “Ignoring GIA model uncertainty, over the period 2003–2014, West Antarctica has been losing ice mass at a rate of −121±8 Gt/yr−121±8 Gt/yr and has experienced large acceleration of ice mass losses along the Amundsen Sea coast of −18±5 Gt/yr2−18±5 Gt/yr2, doubling the mass loss rate in the past six years. The Antarctic Peninsula shows slightly accelerating ice mass loss, with larger accelerated losses in the southern half of the Peninsula. Ice mass gains due to snowfall in Dronning Maud Land have continued to add about half the amount of West Antarctica’s loss back onto the continent over the last decade. We estimate the overall mass losses from Antarctica since January 2003 at −92±10 Gt/yr−92±10 Gt/yr.”

  16. optimader

    Russian President Vladimir Putin and his Chinese counterpart, Xi Jinping, oversaw the signing of 32 different contracts, one of the most important being the granting of a $6-billion (5.3- billion-euro) loan to build a high-speed railway link between Moscow and Kazan.

    The Russian government website said the project was “a priority and utterly important in creating a high-speed transport corridor between Moscow and Beijing.”

    1. MyLessThanPrimeBeef

      In a way, one can say that loan is financed by American consumers consuming dragonboat-loads of stuff, among them laminated flooring.

      “With enough imperial currency, one can begin to act like, sound like, quack like, the hegemon.”

      1. cwaltz

        Heh, China’s taking a page out of OUR book. It took the world awhile to realize that trading in dollars was essentially financing our imperialism but they did figure it out. I wonder if the American consumer will be faster or slower on the uptake.

    2. Emma

      The Chinese are financing the project with a low interest rate just the way they intend to do with other infrastructure construction projects within the emerging markets. They’re already seeing substantial success with their investments in Africa, thanks in no part to maintaining the same low environmental standards they keep at home – likewise with labor. This rail project is also very interesting given the recent move by Russia too, to be a founding member of the Asian Infrastructure Investment Bank (AIIB) in China. With the new rail network in place, it dramatically improves the SCM of Chinese goods into Europe. Plus it’ll be way cheaper than relying on either air or sea transportation. IMHO, the US urgently needs to change tack with its’ foreign policy to maintain its’ dominant position.

  17. JTFaraday

    re: Antidote du jour

    That is an impressive bird. But whatever in the world is it trying to accomplish?

    1. Oregoncharles

      I believe it’s a kingfisher. They dive into the water after small fish. I’ve seen them a couple of times around here – but our species is mostly blue.

  18. docG

    re: Antarctic ice melt.

    OK, first: this finding is not new, it was first reported some time ago.
    Second, I don’t know of a single knowledgeable person who believes the melt will have a serious impact on worldwide sea levels any time in the near future.
    According to the most recent research, the melting in the West Antarctic sheet is mostly due to geothermal effects, not “global warming.” According to NASA the problem most likely began thousands of years ago, and will most likely continue for at least hundreds of years into the future.
    Finally, whatever the cause, and whatever the timetable, there is absolutely nothing anyone can do to slow this down or stop it. Che sera sera.

    1. giantsquid

      “According to the most recent research, the melting in the West Antarctic sheet is mostly due to geothermal effects, not “global warming.”

      While an excess of heat has been detected from the bedrock in some parts of West Antarctica, that excess heat is measured in milliWatts/meter^2 (the Thwaites Glacier catchment in W. Antarctica has a minimum average geothermal flux of ∼114±10 mW/m^2 with areas of high flux exceeding 200 mW/m2 compared to mean heat flows of 65 and 101 mW m^2 for the continents and oceans, respectively). The Earth absorbs about 240 Watts/meter^2 from the Sun alone, or over 1000 times the maximum produced by the West Antarctic bedrock. Some of the energy absorbed from the Sun (mostly in the form of shortwave visible and UV light) is re-radiated as long-wave energy that can be trapped by greenhouse gases in the atmosphere. The excess heat from the bedrock might have some small effect on the rate of ice melt at the glaciers’ base, but it is hardly responsible for most of the melt observed in the West Antarctic sheet. Again, this excess heat is caused by an energy flux of on the order of 10 to 50 milliwatts/meter^2; thousands fold less than is absorbed from the Sun and hundreds fold less than is caused by extra greenhouse gases that have accumulated in the atmosphere over the last couple of centuries due to human activity.

    2. optimader

      Actually when the Pine Island Glacier (PIG) uncorks, and it is melting at a faster than previously expected rate, it is what holds back a good part of the western ice sheet. Should be good for several feet of sealevel change. A friend that works various Antarctic camps during the sience seasons is not a big booster for FL coastal realestate.
      This is why PIG is being intently studied. One of those boiling frog stories that isn’t news until it’s spectacular news.

        1. docg

          If “glacier melt” were not part of the “climate change” hysteria syndrome, this would never be a news story.

          1. Skippy

            AGW is a multifaceted problem set of which glacial ice is only one data point [yet still complex], not to mention all the other glaciers on the planet still in decline.

            Skippy… BTW data does not do emotive states, the push and shove from denialist camps [re-branded skeptics] and groups or individuals that concur with the data highly suggests – has more to do with ideology [mostly religious or hard core libertarians] than anything else.

  19. JTMcPhee

    “One can never be too cynical,” reaffirmed just by today’s posts and comments.

    On the other hand, there is this nice reporting in Bloomberg at the moment:

    The Betrayal of Brazil
    As a massive corruption scandal unfolds, Brazilians are facing some stark truths: The powerful and connected are still dividing the country’s riches among themselves. The past decade’s economic miracle was in large part a mirage. And the future is again on hold.

    Where the Hope and Change are being managed by some pretty brave investigators, prosecutors and the judges who under that Code-based system conduct the immune-system regulatory functions. Looks like the whole Elite of that large nation (that is busily being destroyed as a decent political economy and looted by its Elite and a bunch of “trade partners,” including that huge jungle thing with all its trees and species diversity), might be doing a perp walk:

    By March 2014, federal judge Sérgio Moro had begun rounding up dozens of suspects. (In Brazil’s justice system, a judge formally charges a defendant, approves major steps in the investigation by police and prosecutors, hears the evidence, and then decides whether the defendant is guilty or innocent.) They were accused in Moro’s court of participating in a bid-rigging scheme of astounding proportions. For years, prosecutors have alleged in Moro’s court, a cartel of Brazil’s biggest and richest builders fixed a vast swath of the world’s seventh-biggest economy, subverting competition in the oil industry and, possibly, the huge public works programs that drive growth and employment.

    Brazilians are riveted by the scandal, nicknamed Operation Carwash because some funds were laundered through a service station. Moro has ordered more than a dozen dragnets so far, and the arrests of executives, bankers, politicians, and bagmen, marching some to jail past a phalanx of television cameras. One suspect took his private jet to Curitiba to turn himself in. Another spent his last hours of freedom in a hotel suite on Rio de Janeiro’s fabled Ipanema beach to avoid being taken from his home handcuffed. The arrested shared four holding cells in Curitiba police headquarters with unenclosed communal toilets. Some slept on mattresses strewn on the bare floor. A dozen have confessed to making or accepting payoffs and rigging contracts, some in videotaped testimony that is posted online.

    One former Petrobras manager, Pedro Barusco, described taking almost $100 million in bribes; he’s since returned most of the money in a bid for leniency.

    Since March 2014, prosecutors have accused more than 110 people of corruption, money laundering, and other financial crimes. Six construction and engineering firms have been accused of illegal enrichment in what is known as a noncriminal misconduct action. On April 22, Moro delivered the first convictions. He found Costa and Youssef guilty of money laundering, including the Land Rover purchase. Moro gave both men reduced sentences—two years’ house arrest for Costa and three years in prison for Youssef—for cooperating with prosecutors.

    All of that is something of a preview of the big show: Prosecutors say they may accuse some of Brazil’s largest builders with running an illegal cartel. “It’s been clearly proven in this case that there was a criminal scheme inside Petrobras that involved a cartel, bid rigging, bribes to government officials and politicians, and money laundering,” Moro wrote in sentencing Costa and Youssef. “There will be a cartel indictment,” says Carlos Lima, a lead prosecutor in the case. “I don’t like to get ahead of myself and say this will happen, but it will. It’s just a matter of time.” Ibid. There’s lots more there, there, apparently, and a little more fun reading in the rest of this article.

    Shall we hold our breaths and wonder if Loretta Lynch will conduct her own “Operation Carwash” in Washington, or will she just “Stand by her man,” or just spend her term trying to figure out what the DOJ’s motto means? That opaque thing, “Qui Pro Domina Justitia Sequitur,” helpfully not explained by DOJ itself at, that calls to mind the equally curious pyramid with the all-seeing eye atop it, on the $1 bills (REAL money?) in my wallet?

    The encouraging thing to me at least about the Brazil story is that millions of citizens in the street apparently help the truly dedicated public servants get it up to kick a__ and take names, and that maybe, MAYBE, some of the kleptocracy will get taken down. Though the cynic in me says yah, Bernie Madoff, but how about Mike Milken and the rest of the savings and loan gang, or the f___ers in the bowels of the Pentagram that have told the rest of us to go f___ ourselves if we think they have to account for the trillions in REAL MONEY we have “contributed to our defense…” Hiding in plain sight…

  20. just me

    Sharing this happy story that I followed all day yesterday, in particular watching the retweets and favorites climb on this tweet:

    Wouldn’t know which link as best to suggest, but (Toronto Star) Michelle Shephard’s Twitter feed had great pix to follow, also hashtag #khadr, and I know there are many news stories now too.

  21. mk

    How’s a $16 minimum wage sound? Reuters
    I was in the grocery store the other day, they had signs everywhere promoting a campaign to end child hunger, when asked if I would donate I looked around, said “I hope this will be recorded. Why doesn’t this grocery store (vons/safeway) support raising minimum wage to $20/hour so people can feed their kids?! No I won’t be giving to this campaign because after years of organizing these things, child hunger persists.)!”

    I say something like this every time I’m asked to donate now. Better than saying eff-you and the cashiers appreciate hearing it!

  22. Abigail Caplovitz Field

    Re: The LA suit against Wells.

    First, it is a sign of the corruption of our criminal prosecutors that this suit is not a criminal RICO case. Second, it a sign of distorted the world view of, well, most people that the abusive practice is called “gaming” instead of felony identity theft, and surely many other felonies as well. Third, the quota system is exactly the type of fraud incentive system that led to all of the “irresponsible” mortgages being funded.

    Consider this paragraph in the article:

    “Feuer’s lawsuit claims the bank’s managers and bankers engage in “gaming,” which consists of “opening and manipulating fee-generating customer accounts” in order to meet sales quotas.” (near the end of Yves link to

    Unpacking that sentence, Wells employees took the personal information of Wells customers, without their permission, and used it to open accounts that they then exploited for profit, personal (via the quotas) and Wells (via the fees.) The fees are a clear form of theft; taking money from someone without their knowledge, permission, or right to do so.

    Consider what DoJ says about identity theft:

    The Department of Justice prosecutes cases of identity theft and fraud under a variety of federal statutes. In the fall of 1998, for example, Congress passed the Identity Theft and Assumption Deterrence Act . This legislation created a new offense of identity theft, which prohibits “knowingly transfer[ring] or us[ing], without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law.” (like theft)

    18 U.S.C. § 1028(a)(7). This offense, in most circumstances, carries a maximum term of 15 years’ imprisonment, a fine, and criminal forfeiture of any personal property used or intended to be used to commit the offense.

    Schemes to commit identity theft or fraud may also involve violations of other statutes such as identification fraud (18 U.S.C. § 1028), credit card fraud (18 U.S.C. § 1029), computer fraud (18 U.S.C. § 1030), mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), or financial institution fraud (18 U.S.C. § 1344). Each of these federal offenses are felonies that carry substantial penalties ­ in some cases, as high as 30 years’ imprisonment, fines, and criminal forfeiture.


    Finally, consider (in plain English) what LA asserts happened:

    * Wells Fargo structured its employee pay structure so that employees were overwhelmingly incentivized to commit felony identity theft and related crimes,

    * Wells management knew the activity was happening (and such activity was an obvious likely result of the pay structure absent tremendous oversight by management, as management knew from the mortgage fraud era)

    *Wells profited from this organized felonious activity.

    So where is the criminal RICO? Is there a grand jury empaneled in LA? Will a young, ambitious prosecutor start at the bottom and flip people all the way up?

    Well, the odds are about as good as my one mega millions ticket paying off tonight. (I always buy one–only one– when the jackpot’s over $100 mil).

Comments are closed.