Links 6/8/15

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Hillary Clinton will stage her first major campaign rally this weekend, June 13, on Roosevelt Island. If you planned to attend or were thinking of attending, please ping us this week. We’d love to get impressions of attendees.

Video: What the Brain says about Machine Intelligence Numenta (David L)

Man Calls 911 To Resolve 3-Hour Standoff With Angry House Cat Huffington Post (Li). FWIW, my older cat, Blake, chased two adult men out of an office that was then his territory.

Morgan Freeman Building A Huge Bee Habitat On His Ranch True Activist (furzy mouse)

Global Diabetes Rates Are Rising as Obesity Spreads New York Times

Korean Robot Makers Walk Off With $2 Million Prize New York Times

How Google Adsense Is Censoring WeAreChange and Independent Media ForbiddenKnowledgeTV (furzy mouse)

Mexico’s first independent Candidate leads in Exit Polls New York Times (Ryan R)

CBC Feature Programs: Human Harvest (2015 Peabody Award Winner) CBC (Bob H). On organ harvesting in China.

China trade shrinks amid slowing demand Financial Times

Unprecedented levels of activity in China’s equity markets Walter Kurtz (furzy mouse)

Shunning Beijing’s infrastructure bank was a mistake for the US Financial Times.

Turkey’s Ruling Party Loses Parliamentary Majority New York Times

Turkish currency plunges on shock election result Telegraph

In Distorted European Markets, Negative Rates Pose Risks WSJ MoneyBeat (furzy mouse)

Deutsche Bank Co-CEOs Resign Over Weekend Reuters (Gary B). Finally, some scandal casualties, although the Libor/FX/money laundering etc. fines weren’t the only reason for their defenestration.

Priorities for euro area governance reforms Bruegel. Despite the anodyne title, this created quite a bit of consternation on Twitter, and for good reason. From comments: “Are the authors really aware of what they are proposing? Override the decisions of national parliaments? Are they mad?”

Obama and Merkel make nice Politico

How US students get a university degree for free in Germany BBC (Jeff W)

Iceland ‘to end capital controls’ BBC


Two dismal economic plans for Greece Wolfgang Munchau, Financial Times. A fine post on the mess of each of the proposals.

Greece Faces Diplomatic Push as G-7 Unites to Demand Resolution Bloomberg. As @billmon1 tweeted: “The incredible shrinking “progressive” — Obama lines up with the watchdogs of neoliberal austerity in Europe.”

European Leaders Voice Frustration With Greece in Debt Crisis New York Times

Juncker warns Greece that time is running out on bailout Financial Times

‘Grexit’? Not a problem – France’s Sapin FXStreet. Ouch. And remember, early on, Sapin was Greece-friendly.

Greek and German finance ministers meet as crunch week begins – live Guardian. Mirabile dictu….BTW Lagarde is at the G-7, protecting her turf.

Greece – Deal or no deal? Parameters of a decision LSE. Useful, but ignores the possibility of a default with no Grexit.

Greece and Creditors Head for the Brink Simon Nixon, Wall Street Journal. A very good overview of the positions of the parties. Also contains a factoid I had missed:

Last week, the IMF appeared to buckle under pressure, signing off on the deal presented to Mr. Tsipras even though it contained no promise of future debt relief. Managing Director Christine Lagarde later appeared to harden her stance, perhaps reflecting concerns from both emerging-market members of the IMF board and IMF staff.

Europe has about 1/3 of the votes on the IMF board and the US, 16.7%. It would be hard for her to buck the Eurozone lenders unless she got some EU countries that were not creditors (like the UK) or the US on her side. But my sense is she’s enough of a bureaucratic infighter that she might be able to pull that off if she was motivated enough.

Greece updating proposals it sent to lenders in hope of clinching deal ethathimerini

Wenn Mutti zum Telefon greift FAZ (Dimitri). I’ve asked some German-speaking readers to look at the German press to see if there were any signs of messaging meant to soften German views of Greece. I was looking for op-eds saying that the Eurozone must be kept together even if the costs are high and the Greeks have been badly understood. This piece, framed around Merkel and Tsipras, goes some way in that direction. But it also treats pensions as an issue where Greece has to make concessions, and also says that Merkel can push the Bundestag only so far without risking her own Chancellorship. Can any German-readers give a sense of the reactions in the comments section?


Life in Ukraine’s grey zone: Dangerous and desperate Financial Times

Russia Wields Aid and Ideology Against West to Fight Sanctions New York Times



Why business is booming under Islamic State one year on Telegraph

Profit as an Incentive for Israeli-Palestinian Peace New York Times (furzy mouse)

Big Brother is Watching You Watch

Why the new USA Freedom Act is worthless Japan Times (furzy mouse)

Government-Granted “Freedom” Peter Tenenbraum (Chuck L)

Obama administration stops work on immigrant program Washington Post

Condescending Hillary Clinton tells autograph-seeker to ‘go to the back of the line’ on campaign trail in New Hampshire Daily Mail (Li)

Hillary Clinton endorses fight for a $15 minimum wage Washington Post. Read the fine print first…

As G.O.P. Courts Iowa, Party Debates Relevance of State New York Times (Li)

States Confront Wide Budget Gaps Even After Years of Recovery New York Times (reslic)

For New Mexico’s Chiles, The Enemy Isn’t Just Drought But Salt, Too NPR (David L)

Toll contract could hinder new free lanes on Interstate 77 Charlotte Observer (cheryl)

Banks’ post-crisis legal costs hit $300bn Financial Times. Ed Kane has estimated that the value of ZIRP to US banks is $300 billion per year. So they’ve come out ahead.

Calpers to Cut External Money Managers by Half Wall Street Journal. Not sure that this helps them as much as they like to tout, save administrative convenience. They sure don’t use what leverage they have in PE!

New Housing Headwind Looms as Fewer Renters Can Afford to Own Wall Street Journal. Josh Rosner discussed how demographics had nasty implications for housing prices in the later part of this decade years ago, but few pay attention to long-range forecasts.

Class Warfare

Economists Warn New Graduates May Have To Tough It Out For 5 To 6 Weeks Before Landing Dream Job Onion (David L)

More auto title lenders are snagging unwary borrowers in cycle of debt Los Angeles Times

Life in Lockup: An In-depth Look at Reasons for Incarceration in the U.S. Criminal Justice Degree Hub (Andrew S)

Address poverty by raising standards for UC contractors Sacbee

Antidote du jour. Chet: “I thought you might enjoy my photo of backyard gardening (bellflower).”

chipmunk wth bellflower links

See yesterday’s Links and Antidote du Jour here.

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  1. lolcar

    “Russia Wields Aid and Ideology Against West” – With a total federal budget roughly equivalent in size to that of the Netherlands or Australia, one finds it hard to believe that the Kremlin has the money to “buy off and co-opt European political forces … throughout Europe”.

    1. Jef

      Being the largest producer of FFs in the world means they have the money to do absolutely anything they want.

  2. No one in particular

    Re: Soften German opinion on Greece.

    The article did not go down well with the commentariat – from “Merkel is the only one left in Germany not wanting Grexit”, “Cannot call her Mutti, because it would be an insult to all mothers”. “Merkel is not in control any longer” “Merkel does Obamas bidding, not acting in German interest” “Backfisch [teenage girl fallen for a man] Merkel”; almost every comments claims that has not protected German interest for a long time” Merkel without empathie, works against the interest of the German interest.. “Merkel is wasting German money to save herself” .. and so forth.

    The commentators are rediculing the newspaper, the author – and if they had a vote, I guess you had about 90% for impeaching Merkel.

    If it was an attempt to soften the opinion, it backfired, quite effectively.

    1. D. Galanis

      Whatever the commentariat says Merkel does not want the EU while she is running the show.

      1. Yves Smith Post author

        Not true. She is running a coalition. Even this apparently-meant-to-be-friendly article says she is putting her chancellorship at risk if she pushes too hard for Greece. It is is all over the German papers that she and Schauble are at odds. The German press has said that she needs Schauble’s support to get a Greek deal passed (any bailout deal requires Parliamentary approval, and she did have his support for the February Eurogroup memo, he helped sell it in Parliament). His merely not going to the hustings would be enough to stop it. And Peter Doyle (ex IMF, and for reasons that reflect well on him) said early on that if Schauble were to resign, it would create a political crisis in Germany. Scahuble is what, 71? It’s entirely plausible that he might resign if Merkel went for a deal thought was bad for Germany (and since one of his nicknames is “Austerity Ayatollah,” his view of what is “good” is pretty narrow).

        Put it another way, just as Tsipras is constrained in Greece by the Left Platform, Merkel is constrained by her fellow MPs and how much heat they are getting from voters over Greece (apparently anti-Greece calls and messages are coming in at a high level).

        1. Oregoncharles

          And yet you disagreed with me when I thought a Grexit was “obviously” – meaning structurally – inevitable, regardless of participants’ intentions.

          I was referencing your own analysis.

          Granted, default within the Euro is an alternative – but it also leads to an exit unless everyone shows vast forebearance,which we haven’t seen so far.

          Financial question: is this and the likely turmoil it would cause accounted for in the markets? That would not be obvious to me, but should be to those who know more.

          1. Yves Smith Post author

            A Grexit is not inevitable by a LONG shot.

            The Greek government does not want it. The Greek people do not want it. The Eurozone political leaders and Eurocrats don’t want it.

            Greece loses very large EU agricultural subsidies upon a Grexit. Greece takes an immediate, large GDP hit. It has an uncompetitive export sector so most economists that have looked at Greece’s export mix think they won’t get anywhere near the textbook level of improvement. Varoufakis is of this view, and also stresses that a Grexit will poison the pool in which Greece swims, as in Europe.

            Moreover, as other commentators point out, the textbook models assume a reasonably well functioning government. Greece does not have one an a Grexit makes that worse too.

            The only party that could force a Grexit is the ECB by suddenly yanking the ELA and not offering Greece any alternative to nationalizing it banks, imposing capital controls, and issuing drachma. That means it would be a choice, and again is not inevitable.

            1. Sanctuary

              Why can’t a choice be inevitable if the negotiation stances of two parties are diametrically opposed to one another with no overlap? Neither party can politically accept a deal that is acceptable to the other party. Each party is primed to follow the more extreme course at every stage of the negotiation because of this inability. So why isn’t that choice inevitable?

              1. Robert Dudek

                Even in this case, the likely result is a default within the Eurozone, with only the ECB having the power to de facto force a Grexit.

                So if the ECB plays ball we could see an extend and pretend default while haircut negotiations start up and the Greeks acquire some fiscal breathing space to get their economy going again.

                That would be the best possible result at this stage so I am fervently hoping that the current negotiations FAIL completely.

    2. MyLessThanPrimeBeef

      It’s interesting that in any conflict, or soccer match, between two nations, say, Argentina vs. Great Britain, or China vs. Vietnam, or Pakistan vs. India, etc, etc., the majority, likely vast majority, of the people in each country will be for their country and view the situation similarly.

      It’s similar to the situation where if a country is largely, say, Manicheans, the generation will be largely Manicheans. It’s highly unlikely for the next generation of that country to be, say, largely Zoroastrians.

    3. Linus Huber

      The most recommended comments contain roughly the following content.

      1. Everybody knows that Greece is bankrupt except Mutti Merkel who does not seem to be interested to keep harm from German’s population and electorate. (667 hands up)

      2. Questions why not one critical word against Merkel is stated.

      3. What is the purpose of this moronic article? Merkel failed! (FAZ should not take readers for fools)

      4. It is Troika’s fault. But the comment is inconsistent considering Merkel to be insane.

      5. How much more should to German tax payer shoulder for Merkel’s image? Call for tough decisions.

      6. Criticizes FAZ as the article seems to consider the readers to but simple trolls.

      7. Merkel shows a lot of understanding for Tsipras, much more than most Germans do should better read that Merkel shows more understanding for Tsipras than for most Germans.

      8. Merkel is neither naive nor unscrupulous – she simply does not care for the fate of the German population – a typical power seeker.

      9. I thought swearing the oath of office contained the sentence to keep harm from the German people. (420 hands up)

  3. Jim Haygood

    Ralph Nader delivers the eulogy for Hillary Rotten’s campaign:

    “I think Hillary is not the Hillary of when she was 30 years old. She made peace with the power structure, and she is a deep corporatist and a deep militarist. One can almost forgive the corporatism. She moved to New York with Bill because that’s where the power is and Wall Street. But her militarism is absolutely shocking.

    “This is the problem of women trying to overcompensate in becoming more aggressive and macho so they are not accused of being soft on the need to kill and war, right? Instead of taking the tradition of women of peace, and turning it into a muscular waging of peace, of conflict prevention, she [Clinton] did the reverse, and [Madeline] Albright did the reverse and Anne Marie Slaughter did the reverse and some of Obama’s advisers did the reverse.

    “We have to be transcendent on this. We have to really go right to the core of what people are standing for, fighting for and fighting against.”

    It’s OVER. For the detailed post-mortem, consult my forthcoming book Twilight of the Hildebeest: From Wellesley to Washout.

    p.s. Don’t ride them cattle cars to her Roosevelt Island campaign rally, unless you can swim. Attendees will be cornered rats.

    1. Katniss Everdeen

      “We have to be transcendent on this. We have to really go right to the core of what people are standing for, fighting for and fighting against.”

      And how would we KNOW? These “candidates” are like obamacare–you have to elect ’em to know what’s in ’em. May I remind all that Guantanamo is STILL open.

      Having said that, I must agree that hillary seems determined not to let what’s left of her lady bits get in her way. Which doesn’t bode well for issues such as equal pay and women’s reproductive “rights” aka abortion.

      Not that the rest of the girls will make the connection before they install and joyously celebrate the first “woman” president.

    2. Carolinian

      Wow Ralph’s courting some backlash from certain feminists with his (quite possibly correct) psychoanalysis. In gender fairness it should be said that lots of men in our political elite also seem to have a strong case of macho envy. My senior senator comes to mind.

        1. Carolinian

          Lindsey did at least serve in the military (as a JAG lawyer). Many of the other armchair bombardiers have spent all their time on campuses.

          1. JTMcPhee

            “serve in the military.” long past time to put that notion to death. The military does not do “service.” Even the “humanitarian” stuff is just a justification for all those bases and aircraft carriers. The military can’t even “win” any of the wars they get involved in, any more, but maybe that that’s just a function of how “victory” and “success” and “Winning” are defined, in the popular imagination, and in the gritty reality… “Seal Team Six” is now a global “hit squad…”

            But hey, they do a good job of increasing the “velocity of money…”

            1. optimader

              “serve in the military.” long past time to put that notion to death
              That bromide is so done you don’t need to stick it with a fork.

              Served in the military:
              an excuse to be a militarist –(McCain);
              provide a thematic basis for venial attacks on character –(Kerry);
              A challenge for unpatriotic Americans that lack empathy to forgive a stage in life where mistakes were made, –some drugs and likker may / may not have been involved –(GWB);
              and in the end it’s irrelevant because who pushes back on I had other priorities, who’s fkn ask’in, I’m on it now –(Cheney)

              Even the “humanitarian” stuff .
              Which is the degeneration of the mission of Military to provide backhand justification for endless military growth.

              The military should be nothing but an infrequently if ever used insurance policy to backstop failed diplomacy.

              1. Carolinian

                Served in the military and therefore probably knows more about what serving in the military consists of than either of you. Or me either for that matter. Reportedly Graham’s last assignment as a lawyer was briefing departing soldiers on the laws of war. He has now resigned from the reserves.

                Once again a simple factoid sets off a tizzy. The statement that he served in the military is not an endorsement of his opinions but rather to point out that he at least knows more about it than some of his neocon compadres.

                1. optimader

                  He lied about his military service, that’s all I need to know about Lindsey Graham’s character and any Appeal to Authority related to at least he served in the military

      1. Carolinian

        Also it should be said that Hillary’s foreign policy actions may have less to do with macho envy and more to do with the cattle futures side of the dynasty. Lines of influence to wealthy contributors and business interests must be maintained.

        “If you want to understand who the real power behind the [Honduran] coup is, you need to find out who’s paying Lanny Davis,” said Robert White, former ambassador to El Salvador, just a month after the coup. Speaking to Roberto Lovato for the American Prospect, Davis revealed who that was: “My clients represent the CEAL, the [Honduras Chapter of] Business Council of Latin America.” In other words, the oligarchs who preside over a country with a 65 percent poverty rate. The emerging understanding, that the powerful oligarchs were behind the coup, began to solidify, and the Clinton clique’s allegiances were becoming pretty clear. If you can believe it, Clinton’s team sided with the wealthy elite.

        1. montanamaven

          Yeh, I agree with Carolinian that “war is a racket” and there is money to be made. But I’m also not on board with the old conventional wisdom that women, in order to rule, have to show that they are as blood thirsty and militaristic as men, but in private love peace and hate war. Her reaction to Gaddafi’s death, “We came, We saw, he died” with the laugh was chilling. One of her mentors, Ms. Albright was pretty hard-hearted about the 500,000 dead Iraqi children and her remark about the military “What’s the point of having this superb military that you’re always talking about if we can’t use it?” is darn scary. (Read more at

          1. Carolinian

            Unlike Nader I wouldn’t begin to try to understand Hillary’s psychology but the great NC post today on the geopolitical “Great Game” could be a good start. HIllary has said she admires the old war criminal Kissinger and perhaps views him as a role model. Killing thousands is therefore ok as long as it’s for a “strategic purpose.” Hillary and Bill also have a paw in the Ukraine mess as Vineyard of the Saker has documented.

            Luckily Haygood may be right about her dim electoral prospects.

    1. frosty zoom

      you are correct. we need to focus on ms. clinton’s bloodthirsty lust for carnage.

      1. Inverness

        Bingo. Anyone can look look a jerk without context. There are genuine political reasons to fear Hillary. But feeding into this superficial news culture, where filmed moments (and there are so many filmed moments, since almost everybody sees fit to surveil everything) are too abundant, and just contribute to a mood where everybody is a target for frivolous commentary. When you’re constantly under surveillance, it’s easy to cherry pick memes.

    2. Jesse

      I am certainly no fan of Hillary, but one has to maintain a certain respect for what is true versus what feeds our own opinions and biases if they are going to be a valid critic or reformer of the process. And these days the opportunities to repeat slogans, ad hominem nonsense, and out of context propaganda are abundant.

  4. Katniss Everdeen

    RE: Address poverty by raising standards for UC contractors Sacbee

    Well, DUH!

    How, exactly, did these brilliant “policy makers” think this “contracting” thing worked?

    How did they think that sticking a whole new “company,” with overhead and PROFITS, in between the provider of a service and the consumer of that service would make that service CHEAPER? Magic?

    And they may want to take a look at the effects of sticking an insurance company between a patient and a doctor or an “educational management company” between a student and a teacher. The principle is the same.

    Those that can’t do, become middle men. The concept has been around for decades.

    1. MyLessThanPrimeBeef

      In related news, Calpers is to cut external money managers by half.

      Social Security Trust Fund invests in Treasuries, I think. And people are against privatization that will force them into equities. Not even passive index investing… individually, I believe.

      Maybe it’s a different story if the Trust Fund itself, collectively, invests in an academics-approved optimal mixture of bond index and stock index, and if it comes up short (of defined benefits, like many pension funds, Calpers, for example), it is made up for with government new money.

      That will set the stage for Single Pension Plan, and will also eliminate most of the internal and external human money managers, save one or two robot money managers to occasionally rebalance the portfolio.

      1. JTMcPhee

        To all the folks who want to “improve” the Old Age And Survivors Insurance: Keep yer cotton-pickin’ nasty “academics-approved optimal mixture of bond index and stock index” off my already puny and threatened SS “retirement account.” And don’t be telling me that because YOU (generic smug persons, not particular commenter who may have had deadpan tongue n cheek, or not) were skilled and lucky and prudent enough to have put aside sufficient for a very comfortable “retirement,” it’s my own damn fault that I was bubbled and 401k’d and mutual funded and financially advised into my current largely impecunious, hand-to-mouth state.

        Which “academics” ought to be making the choices on how to bridle and hobble and Judas-goat us up into the knacker’s wagon of “indexing,” which of course is perfect-market behavior constrained and not subject to rent-taking, hmmm? Some “economist Ph.D Nobel Laureate experts?” Not sure — do the Greeks have a “single pension plan?”

        I and my employers have been obliged to pay in 13-odd percent of my wages, REAL earnings from real actual work as ordinary people understand it starting in about 1958, into an “account.” That money has been credited to the general spending of the US of A, as I understand it, ever since Reagan sold the notion that a credit was a debit, and poof! $2.7 trillion, maybe $4 trillion now, heck, just the cost of one of our Imperial war ventures, gone into mostly what, war toys and business subsidies and other idiocies? How “we” are led to think and believe it all works?

        Where the “money” is now? Here’s where the f___heads want to put it, to stop the “drag on the economy and promote job growth”?

        And since Hope was the last of the plagues on humanity that Pandora was propagandized into releasing from that mortal box, there’s this dated message from CBS (c) — Was that written before the invention of “bail-ins” from depositors’ savings accounts to make bondholders “whole?” And other stuff like that?

        Aaaah, I feel so much better now…

        1. MyLessThanPrimeBeef

          It’s dark alright. But I am not giving up. I am a fighter. I’m a survivor. I hope to live off Chinese antiques when I retire…as soon as I can afford to write off all the fake ones in my collection.

          Then, that genuine Yuan dynasty blue and white (or under glaze red) dragon vase will find its way to me and that should be good for a few decades of relatively comfortable retirement.

  5. diptherio

    Apropos of the conversation yesterday on the Activism and Citizen Democracy article, I’ve been reading a new book entitled Making Other Worlds Possible: Performing Diverse Economies, and came across this in the chapter on the Midcoast Fisherman’s Association (MFA), a grassroots group of fishers who came together to create an alternative plan to the state’s (Maine) new “catch shares” scheme which had the effect of privatizing the fishery commons. Their cooperative proposal was rejected by the state authorities and, as Upworthy would say, you won’t believe what happened next:

    Members of the MFA came up with an alternative means of achieving their vision for fisheries management in the face ofthe council’s approval of “catch shares.” They would, as Glen Libby has said, “work outside the [regional fisheries management] council process and get such broad public support that our voices will be heard.” The Libby brothers enrolled local NGOs for their technical assistance and staff support(e.g., the Northwest Atlantic Marine Alliance, or NAMA, and the Island Institute,…)as they led the MFA through a process of developing a new strategy. Enrolling other actors with different capacities and scope of operation allowed the MFA to amplify its own capacities to achieve its goals. The new plan used a market strategy and branding, but did so to address the matters of concern from which the MFA emerged: “We realized that, if we could devise a way to offer fishermen an incentive to fish more sustainably, within the law, we would not need to ask the government for permission. From this discussion, the idea for the ‘Port Clyde Fresh Catch’ was born”.

    This is the moment where the fishers of Port Clyde turned away from engaging with the government, with the fisheries regulatory body and its limitations relative to their concerns, and turned toward the market as a means by which they might realize their goals both economic and environmental. The MFA, formed as a nonprofit education and outreach organization, created a for-profit cooperative called the Midcoast Fishermen’s Cooperative (MFC) as the legal entity that would develop the Port Clyde Fresh Catch brand of seafood.

    The Fresh Catch brand is linked into two systems of distribution and sales developed by the MFC: direct sales to local restaurants committed to the cooperative’s project, and a CSF [community supported fisheries] initiative. In both cases, the MFC needed to improve the quality of the fish they landed and to find ways to distinguish their fish in the marketplace…

    In the winter of 2007/8 the MFC and NAMA worked with Rockland’s Universalist Church on the community-supported fisheries effort, where church members bought shares of shrimp that were delivered weekly to the church. The pilot season for the CSF was a success.

    So, what we have here is people organizing cooperatively to protect a commons and their local fishing communities, coordinating with nonprofit and faith groups, and using innovative strategies to provide better alternatives for fishers. No gubmint required…

    This is the kind of “political action” that I think we’d do well to put more energy into.

    1. Jef

      I don’t know for sure but what it looks like up front (I am partnered with several fishing boats out of oregon) this is an effort to “sustain” profits and income for the fishing community not for the fisheries/environment.

      1. diptherio

        The mission of both the Fisherman’s Assoc. and the Community Supported Fishery is to protect the environment and the community way-of-life, to provide stable, sustainable jobs for future generations–not to get rich. These fisherman, like many, recognize that their continued ability to fish requires that the fishes habitat be protected. There is no necessary contradiction between economic and ecological sustainability, and these guys recognize that. There are a few hold-out curmudgeons, it sounds like, but the CSF has gotten modern, more enviro-friendly gear on almost all of the boats in the local fleet. The book is worth buying (Univ. of Minn. Press) for this and many other success stories that otherwise we would never hear about.

        1. Jef

          Yo dip – What I didn’t say in so many words but what I meant is … when it comes down to it the fishermen will yank that fish out of the water regardless of ANY conditions if they need the money that the fish will provide them. Same is true with ALL professions. No Money=You Die!

    2. David

      Another neo-liberal “success” story.

      Fishermen don’t like government’s (society’s) restrictions on “their” resources. They go around the rules with “education and outreach”, “non-profits”, and “community-support”.

      We’ve seen this movie before.

      1. Mel

        As opposed to the neoliberal success story where lobbyists use a crisis to convince government to create a regulatory framework where only the large, rich, and well-connected can survive.
        We will not sort questions like this out with rational left-hemisphere thinking.
        If we know who the MFA are, who they talk to, how they spend their weekends, then we will get a picture of the way they fit into Maine society, and the good or evil they’re doing there. That they’re partnered with a congregation of the Universalist Church, and not with High-Liner is an interesting point.

      2. diptherio

        Uh…no. You’ve got it all sorts of twisted.

        The government’s policy to try to maintain the fishery was to institute “catch shares” which entitled the owner to a certain poundage of fish. Those shares can then be sold on the secondary market. Result: a few big guys end up owning all the shares and the family fisherman is put out of business. The government’s solution was to privatize the commons.

        On the other hand, the fisherman’s assoc. wanted to institute a system where they didn’t fish at all during part of the year to allow the fish to recover, and to not trawl on hard-bottom which is where the fishies spawn. In the face of a neo-liberal de-facto privatization of the fishing commons, these guys got together and created a better, more sustainable way of doing things. Sorry to burst your liberal bubble, but government regulation is not always the best solution. Turns out, resource users can often manage resources better than bureaucrats. Look up Elinor Ostrom.

        1. David

          Sounds to me like the Fisherman’s Association is a different type of privatization. You’ve just put it in a “local is better” wrapper.

          If we are going to let users manage resources, why not let whalers manage the whales, coal users manage coal production, etc.

          Did the Fisherman’s Association use Ostrom’s seven design principles to set up their system? Do they have a web site where I can see their results?

      3. tiresoup

        Government=society? Wow, you really need to stay in more. By that I mean stay in and read up and who and what government is and what it does and who it does it for. Hint: it ain’t “society,” unless you mean high society.

  6. bayoustjohndavid

    Sorry to repeat a question that I’ve asked before, on an issue that you may have addressed elsewhere, but…

    Since you frequently include a comment next to links to articles that you disagree with, or have reservations about, can we assume that you at least mostly agree with items that you link to without comment?

    I wondered about this Saturday after reading the open letter on the digital economy* and have to wonder about today’s link to a “condescending” Hillary Clinton refusing to let someone cut in line. A conservative British paper picks up on a hit piece by an conservative (Koch-funded, I believe) American outlet, and Naked Capitalism links to it without comment? If I ever find myself waiting in line to get an autograph from a candidate for anything (can’t imagine that will happen), I’ll be extremely disappointed if he or she rewards anyone for cutting in line ahead of me. But a bunch of right wingers decided she was being “condescending,” so there you have it. FWIW, I will not be voting for Clinton.

    *I didn’t see any comments on the digital economy letter as of midday Sat. I read it as an endorsement of TISA, TPP, and TPIP.

    1. Mojah

      Apologies in advance if I misconstrue what you said, but I’m fairly certain NC is highly oppossed to those giant “trade” bills.

      1. bayoustjohndavid

        That was kind of my point. However, rereading the open letter, I see the objectionable part was in a link within the letter — that could be worded better on my part, but I’ve got a short lunch break. From the open letter:

        “First, we recommend a set of basic public policy changes in the areas of education, infrastructure, entrepreneurship, trade, immigration, and research. There’s a strong consensus that these can quickly improve America’s economy and the well-being of its workforce.”

        Nothing objectionable there, but the within the letter:

        “Trade. The US has a strong competitive advantage in high-technology goods and services. The markets for these products are growing rapidly around the world: in the future most of the growth in demand will come not from the US but from the rest of the world. Trade agreements that liberalize cross-border trade in these products will promote competition, entrepreneurship and high-skill jobs and will create net benefits for the US economy. ”

        Most NC readers would say the trade deals don’t do that, but I doubt the average Sunday morning talk show watcher, or NPR listener, or other “high information” voters would get that.

    2. Yves Smith Post author

      We have a very clear anti multinational enrichment scheme mislabeled as tread deal position. I don’t think we need to spell that out.

      Moreover most of the stories we put up, like it or not, are news, like Obama making some pronouncement or move or markets reacting.

  7. Skippy

    Its getting frisky thereabout… just banned from MacroBuisness for linking Yves comment –

    And have responders rhetorically – obfuscate – philosophize – about everything except the grist of what Yves provides as historical events, even one commenter that proclaims to be post Keynesian saying Bill Black is full of shit.

    “Rusty Penny
    June 8, 2015 at 3:16 pm

    One man’s word is not the word of Jehovah, even if it fits yours biases like a glove skip.

    I’ve read the likes of Bill Black, and I reject it. I understand the notion of “you too can make a motza” is an easy sell, moreso when the populace rejoices in being anti-intellectual bogans. One of the assumptions of predatory lending is the lack of fiscal sophistication of the customer. That notion is reinforced by the cultural zeitgeist

    Simple arithmetic demonstrates everyone leveraging in an attempt to move out of exerting themselves for productive vocational activity cannot work. Not simple enough for the bogan ehh? The bogan failed to stop and even understand this echange, how it works. They don;t have the curiosity to want to know how anything works. They’re at blame because they wanted to absolve themselves of any personal responsibility.

    And that’s why I reject Bill Black, because I believe he diminishes the aspect of agency of the individual. That government is to extend its reach even further to reduce personal agency.

    Government has a place and that’s to have a safety net when personal agency delivers averse outcomes.

    Now, as far as accusing me of being part of the cheering squad for bank regulation, are you pulling dogma out of your arse? I’ve never been anywhere near the kind. I’m also a big proponent of the banks not being too big to fail, and have in the past cited game theory and personal experience with bankers dating back to 2006 to explain my position.

    Lastly about who enabled banks to behave in a destructive manner? Here, it was the bogan.

    The NSDAP (Godwin’s, I know) and a collective of brown shirts weren’t able to goosestep into Poland and western Europe, they were enabled by a broader group, namely the sizable chunk of the electorate.

    For all that has happened, too little resistance was offered by the bogan, because of the goodies being deliver, and with scant regard to who it was harming. That sentence is pretty much everything that describes the disastrous Howard years of government.

    There is no better way to make someone pay, if they don’t know they’re paying. In this case it was the producer (who should crucify Heather Ridout for her inaction during the build up), the renter, the saver, the young and the future tax payer.”

    Tho my personal favorite is –

    June 8, 2015 at 11:40 am

    I wonder where Yves stands on the two decade or longer indoctrination of the young. Every day being told their gonna fry, gonna burn to a crisp, the planet is doomed, some Professor last week warning the human race will end within 100 years due to environmental depletion and AGW.

    We have collectively committed a crime against our young people far more serious than a bit of corporate marketing here and there. How have we damaged their psyches, their dreams, their aspirations with all this constant doomerism?

    Little wonder surveys show most of the young don’t give a flying toss about AGW. A generation has survived to adulthood without a year of global warming, they’re simply not buying the alarmist spin. And good on them. Hope for humanity yet.”

    Skippy…. 50 shades of neoliberalism thingy I guess…. flexians…. whats a body to do?

    1. Bill Black

      Right, so if people are defrauded it’s their fault, and stopping the fraudsters denies the victims “agency.” The writer is rejecting the empirical reality shown in the behavioral finance lab experiments and in real life. He also must reject Stanley Milgram’s studies on “obedience to authority,” which demonstrated that it was easy for the authority figure — even a fake one in a white lab coat — to get lay people to follow his/her instructions. When the loan broker or loan officer says put X there on the form people will overwhelmingly put X on the form. You may hate that reality, but it is reality.

      Bill Black

      1. Skippy

        Thanks for popping up Bill.

        Isn’t it great when you can just say stuff in a vacuum contrary to all the physical data, yet bang on about how messed up things are….

        Skippy…. Making up as you go as it were… bias proceeds history, accurate observation, independent studies not tainted by industry demands, et al. Trapped in a prisoners dilemma of their own making, endless contortion, yet can’t let go of the assumptions [answers] which proceed everything…. mind blowing…

    1. Inverness

      Devastating. The young man was never charged with any crime. He was held in Rikers for three years, starting as a mere teenager. While in jail, he was beaten by a guard and other prisoners. After all of that psychological and physical abuse, he commits suicide.

  8. MyLessThanPrimeBeef

    Levels of activity in China’s equity markets…

    It was a former Shanghai stock broker in the 1920’s who later became the supreme leader of China.

    I wonder if that’s why they are all getting into stocks over there now.

    1. Chauncey Gardiner

      I also appreciated the link to Walter Kurtz’s article on China’s debt-fueled stock market Ponzi, furzy mouse. So many bubbles, so little time…

      Predictable outcome, but unpredictable consequences. An underreported and interesting aspect of this development has been the instant crashes of stocks of selected Chinese billionaires. Wonder why they are being targeted when there are so many candidates?

  9. RanDomino

    I said this in yesterday’s links but the Democratic Party of Wisconsin had the election for the new Chair on Sunday and, after a series of extremely shady crap*, went with someone whose big idea for turning Wisconsin around is…better messaging.

    *The progressives’ and activists’ favored candidate, Jeff Smith, offered Martha Laning, the eventual winner, a job if she would drop out. When word got out, he withdrew and directed his supporters to vote for her. The other major candidate was the former DPW Chair’s hand-picked heir. There apparently were no candidates who didn’t come from the good-old-boys network that has turned the DPW into a laughingstock.

  10. Jim Haygood

    War of the Permabears, comrades: Dr Hussman’s old nemesis, Bob Prechter, has emerged from his bunker in Gainesville, Georgia to predict a hair-curling crash:

    “If the 7.25 year cycle is still operating, the stock market is at high risk of a sharp collapse,” Prechter said. “Near term, we’re prepared to see the Dow make one more high. But it doesn’t have to happen.”

    Seven-and-a-quarter minutes to midnight, as it were. You have been warned.

    Prechter’s pronuniciamento brought to mind the most bearish call ever. One random day a few years ago was predicted by the astroeconomist Robert Hitt to be ‘the worst day in history.’ Maybe it was … for him.

    Now Hitt cackles to himself as he types deranged blog entries:

    The words!!!!… THE WORDS.. Oh My.. Needs to be played loud.. thunderous.

    “And I don’t need to see any more to know I can read your mind.”

    What can a friend say except BTFD?

    1. Skippy

      AstroEcon Financial Astrology and Technical Analysis?

      Skippy…. wellie its all a religion to some eh…. Jim….

    2. MyLessThanPrimeBeef

      I see something similar, and I don’t usually trust myself when it comes to things like this.

    3. MLS

      From reading the article, Prechter seems to be relying on the pretty well-debunked “Dow Theory”, which posits that a high in one index average (like the Industrials) needs to be confirmed by the other (like the Transports) or trouble lurks. Lately the Industrials have treaded water while the Transports are about 9% off their highs. Fortunately, the Dow Theory has predicted 35 of the last 4 corrections (or something like that, I’m going from memory). The article also notes that the “cycles” Prechter is talking about go all the way back to 1980. 1980, why that’s 35 years, let’s base our market-timing calls on a third of the historical data! Buried a little farther down in the article the author notes that over that 35-year time horizon, going to cash every time Prechter’s metrics flash a sell signal results in annualized returns of about 7%, far below the 11% annualized the markets have returned over that time. But he doesn’t let that horrendous track record stop him from making one bold call after another. After all, nobody remembers the ones you missed on, right?

    4. Chauncey Gardiner

      Re: … “What can a friend say except BTFD?”

      So the lead “Dip Buyer” hasn’t run out of ammo yet?… Golly, Whoathunk? And all now so well trained, too.

  11. Katniss Everdeen

    RE: Toll contract could hinder new free lanes on Interstate 77 Charlotte Observer (cheryl)


    “Some area officials were surprised that under the contract with I-77 Mobility Partners, the developer would likely collect damages if the state added two new general-purpose lanes from Exit 28 to Exit 36 at the lake.


    “Poole of the Reason Foundation said a drawback to public-private partnerships of highways is a loss of control by the government.”

    I suppose it’s too much to hope that SOMEONE makes the connection between TPP et al. and this. Nah, never happen.

    1. Carolinian

      Atlanta has already converted many of their carpool lanes to Lexus lanes. The express lane concept–that was originally designed to cut down on pollution and oil consumption–therefore becomes yet another opportunity for private capital to rent-seek the economy. However I believe the Atlanta arrangement is more of a management contract on behalf of the Georgia DOT. If memory serves Atlanta also tried to privatize their water system but had to buy it back because the results were such a disaster. Reality sets in for many of these schemes and they turn out to be more of a short term grift using the law as a club.

  12. MyLessThanPrimeBeef

    Shunning Beijing’s infrastructure bank.

    If the purpose is to help developing nations, I think it’s not too late to set up our own infrastructure bank and we have the global printing press to do it too. Money is no object.

    And we may also think about a world colonialism reparation fund.

    Maybe even a global neoliberal victims reparation fund.

  13. timbers


    Michael Dukakis and his wife were at an event we catered yesterday. He was standing next the bar and free for a moment. I said hello, and:

    “Many of us would like to know what is in the TPP trade deals. If you have any influence with a Congressman, it would helpful if they could read it on the floor of Congress as is their right.”

    Dukakis: “I like to know what’s in it. Liz Warren should do it.”

    1. Oregoncharles


      I wonder why she and others don’t. Has there been a coup we don’t know about?

      1. different clue

        I have read that the TPP/TTIP papers are in a secure room with guards. Are the guards armed?
        If so, are the officeholders afraid that the guards will shoot them if they try to grab the papers and run out of the secure room?

        If a big-enough critical massload of officeholders decide that they all collectively want to take the papers and publish them and read them out loud on CSPAN and etc.; then perhaps they should all secretly co-ordinate a plan to all wear body armor and all carry camera-cellphones. Then the most body-armored officeholder could grab the papers and try running out the door while all the other officeholders are realtime cell-camming the armed guards. Just so that the guards know if they shoot any of the officeholders, they will be on Candid Camera.

        1. Yves Smith Post author

          There is apparently more than one guard. A Congressional staffer (one who is gutsy) said it would be “stupid” to try to remove documents. I think that means the guards are armed.

  14. Katniss Everdeen

    RE: Global Diabetes Rates Are Rising as Obesity Spreads New York Times

    Between 1990 and 2013, the rate of diabetes in the US increased by 71 percent!!!

    But all is not lost:

    “On balance the burden is coming down — it’s better to be alive, even if you have disability,” he said. “But the downside is that it requires much more health system resources to treat people with these chronic problems.”

    While a country with a “world-class” “healthcare” system might call this abject failure, a country with a “robust” diabetes “industry” would call this economic growth.

    Anyone waiting for a “cure” should probably abandon all hope.

    1. erk

      The cure is the same as the cause, diet and lifestyle. Of course, there is no money for the healthcare industry in that “cure”.

      1. different clue

        I notice the NyTimes saying that the obesity is causing the diabetes. But what if a deeper cause is causing the obesity AND the diabetes? And what if that deeper cause is indeed refined starch and sugars intake?

  15. HotFlash

    Sweet taste stimulates insulin production (eg But if artificial sweet, not real sugar, then insulin has nothing to do. Would pancreas eventually overload and blow up? Maybe, not aware of any research on this topic. But diabetes on the rise (eg and pancreatic cancers are predicted to rise ( Money for research into this? Not much ( Once diagnosed, treatment consists of surgery and some drugs, but average life after diagnosis is so short that there is not much scope for profit, I guess.

    1. Steve H.



  16. Katniss Everdeen

    “Experts worry that ‘phony numbers’ are misleading investors:”

    Gee, ya think?

    “Boston Scientific, a maker of medical devices like stents used to prop open arteries, had adjusted profits of $3.6 billion in the five years through 2014, according to analysts’ calculations. But if you include a write-off for a failed acquisition, various “restructuring” charges and costs stemming from layoffs and lawsuits, it’s a different picture entirely: $4.9 billion in net losses.”

  17. flora

    re: NYTimes – States Confront Wide Budget Gaps

    Yesterday the KS Senate passed a budget plan that leaves intact all the tax cuts for businesses and the wealthy, but has significant sales tax increases, eliminates a large of part of home mortgage deduction, eliminates sales tax rebate on food purchases for low income, elderly, and the disabled (yes, KS charges sales tax at the grocery store) , eliminates sales tax deductions for non-profits, and more. This is exactly the shift from business income tax to sales/consumption tax that Brownback and his wealthy Libertarian backers want.
    Budget bill is currently in negotiation in the KS House.

    1. flora

      and the bill will create new sales tax (where before none existed ) on rent, utility bills, WIC and Meals on Wheels purchases, purchases made by non-profits including the state, schools, cities, counties, libraries, hospitals…. you get the idea.
      Tax cuts for business owners and the wealthy remain intact. Those tax cuts caused this problem.

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