They publish all the best of the political and regular humor monthly.Cartoons, columns, jokes, etc.

Just got a new issue in today's mail, and that was the cover cartoon.

Didn't know there was such a thing as a subscription to it. But they did always seem to have good stuff.

http://www.zerohedge.com/contributed/2012-06-18/will-doj-investigate-if-jp-morgan-used-lchclearnet-front-tank-mf-global-and-t

It looks like Eric Holder's dogs at the Department of Justice are doing the CME Group a favor by investigating their largest derivatives swaps competitor, LCH.Clearnet, under Federal antitrust provisions. But are they also going after the large banks, and JP Morgan in particular, in roundabout fashion? And just where does the omnipresent MF global connection fit in? From Reuters today:



The Role of LCH.Clearnet

As followers of the MF Global saga may recall, it was LCH (among others) who delivered crushing margin calls on MF Global during its final week, $211 million of which in cash and securities was ponied up to LCH alone. However, it was the final $310 million call that sent its UK affiliate into Special Administration (similar to US bankruptcy), since it was also on the hook for collateral calls on these trades. From Trustee Giddens' June 6, 2012 report:



Lies Before the Bankruptcy Court

As Daniel Collins writes for Futures Mag (disclosure: quoting our own work):

The original sin in the MF Global debacle is how the firm was allowed to be split — the futures commission merchant/broker dealer (FCM/BD) MF Global Inc. (MFGI) into a SIPC liquidation and the parent MF Global Holdings Ltd. (MFGH) into a Chapter 11 proceeding — with a shortfall in customer segregated accounts.



Just Who Was the Ultimate Counterparty to the Corzine Trade?

While the broker unit Trustee and prior press reports have cast LCH's role in the repo-to-maturity trades as that of simple clearing agent, a February 2012 London court filing by MF Global UK's Special Administrator, KPMG, gives a tantalizing clue that it might just have been LCH affiliates themselves who were the ultimate counterparties (thus, the trades would have been prop, not flow, as has been assumed). From the filing:

The Repo to Maturity claim (“RTM Claim”)

"

Soros Profits, Customers Lose

Further, it's instructive to recall that LCH, with permission from KPMG, liquidated the $14.7 billion gross portfolio at reportedly below market prices to George Soros and others. From the Giddens' report:



Yet we know from KPMG reports that the margin that the US broker entity paid, and which ended up at LCH, was used to cover the loss on the firesale of the portfolio, per UK laws that are similar to US bankruptcy laws.

Now that the Department of Justice is involved, we would urge them to consider if LCH.Clearnet, acting under the sizable influence of JP Morgan, was simply a front for a scheme to defraud MF Global customers of their money in the final (and, lest we forget, "chaotic&quot days of the firm.

* * *

We received a note shortly after original publication by Francine McKenna of ReTheAuditors, who said she had contacted several sources who advised that LCH.Clearnet does not engage in proprietary trading. If that is indeed the case, then KPMG flubbed the disclosure and the ultimate RTM counterparties remain at large. LCH.Clearnet did not respond to McKenna's inquiry regarding ultimate counterparties.

http://www.telegraph.co.uk/finance/financialcrisis/9334550/IMF-urges-Europe-to-help-refinance-Irish-bank-bail-out.html


The International Monetary Fund on Friday urged Europe to help Ireland refinance its crippling bank bailout and consider taking equity in state-owned banks to help Dublin return to bond markets and avoid a second bailout next year. Dublin, which signed up to an 85 billion euro ($108 billion) EU/IMF bailout in late 2010, aims to return to long term debt markets later this year to help it prepare for the ending of official funding next year and meet borrowing needs of up to 20 billion euros in 2014.

The IMF, one of the country's "Trokia" of lenders along with European Union institutions, said Ireland would need a "substantial improvement" in market conditions to achieve a planned return to bond markets to avoid a new bailout when the current one expires at the end of next year. Growing market turmoil is increasing the importance of addressing the huge burden of 63 billion euros of debt taken on to bail out the country's banks, the IMF said in its quarterly report on Ireland...

One avenue would be for Europe to soften the terms of Ireland's bank bailout by replacing 30 billion euros of high-interest IOUs given mainly to the former Anglo Irish Bank with another instrument that would lengthen their maturity and cut their interest rate. The government has been lobbying its European partners for months, but has yet to secure any concession.

"Extending the term of the promissory notes and the associated Eurosystem funding, and placing banks' legacy assets in a vehicle that does not rely on market funding, would much enhance the prospects ... for the Irish sovereign to return to the market," the IMF said.

The fund also backed Irish government calls for direct financing of European financial institutions by Europe's bail-out funds. The idea has so far been rejected by European leaders, who last week insisted that the Spanish government backstop a 100 billion euro bailout of the country's banks.

"Temporary European equity participation in state owned banks would greatly reinforce these benefits, by weakening bank-sovereign linkages, immediately enhancing debt sustainability, and improving prospects to attract private owners," the IMF said.

http://www.nytimes.com/2012/06/18/business/global/worried-banks-pose-threat-to-push-for-financial-union.html?hpw

The seemingly endless series of euro zone crises has European officials pushing for a banking union that would watch over and bind together the currency group’s faltering financial institutions. But for Europeans, there seems to be little appetite for such a compact right now. In fact, banks and their national regulators, anxious about the Greek elections and Spain’s hastily arranged bailout, are behaving more parochially than ever. That poses a threat to the interbank lending across borders that is crucial to maintaining liquidity — the free flow of money that is the lifeblood of the global financial system. French and German banks have clamped off much of the lending to their counterparts in Italy and Spain, which in turn are primarily giving loans to their own debt-laden governments. And in Madrid, even after European finance ministers agreed to a 100 billion euro, or $125 billion, rescue of Spain’s failing banks, the always proud Spanish government is insisting that it — and not Brussels bureaucrats — will take charge of how and where the funds are deployed...

“Why do you think European banks won’t lend to Spanish banks?” asked Karel Lannoo, chief executive of the Brussels-based Center for European Policy Studies and an expert on bank regulation in Europe. “Because they do not trust Spanish regulators. Has Citigroup stopped lending to California? No. What we need is a single banking supervisor and a single settlement system like in the United States. And we have no time to lose.”

...Mario Draghi, the head of the European Central Bank in Frankfurt — right now the closest thing the euro zone has to a banking coordinator — said Friday that he and top European Union officials in Brussels would present a master plan for the euro project in a matter of days. A blueprint is only that, however. Substantial changes that would affect banks and national budgets would probably require treaty changes and voter approval. That process could take many months and there is no guarantee of success. As part of the push, the European Commission published proposals this month that would include creation of a Europe-wide banking supervisor whose oversight powers would trump those of local regulators. And to discourage the flight of bank deposits from weaker countries, a problem that has plagued Greece and now Spain, the European Commission proposed a deposit insurance fund for the entire euro zone, analogous to the Federal Deposit Insurance Corporation in the United States. Individual euro zone member nations already have deposit insurance. But the Spanish fund, for one, is nearly insolvent. Under the Brussels proposal, a new banking regulator would also have the authority to share the financial pain of bank bailouts by forcing some holders of the bonds of bailed-out banks to absorb losses....

http://www.truthdig.com/report/item/see_you_at_the_club_fed_fat_cats_dip_into_the_till_20120614/

...On Tuesday, Sen. Bernie Sanders, acting under authority of the Dodd-Frank financial regulations, released the conclusions of a Government Accountability Office report showing that ” ... during the financial crisis, at least 18 former and current directors from Federal Reserve Banks worked in banks and corporations that collectively received over $4 trillion in low-interest loans from the Federal Reserve.”

One of those Fed directors, Jamie Dimon, chairman and CEO of JPMorgan Chase, who has been on the New York Fed board since 2007, testified before Congress on Wednesday that he was sorry his company lost billions in risky trading even after all of the warnings concerning too-big-to-fail banks.

Dimon—whose company last year paid him $24 million, compared to the $45,800 median U.S. family income—testified that the bank could manage its own affairs. But that is hardly reassuring given that the Fed provided JPMorgan Chase $391 billion in total assistance as well as paying the bank to administer the government’s emergency lending program. It was the Fed that back in March of 2008 made $29 billion available to Dimon’s bank so it could acquire beleaguered Bear Stearns; the Fed also agreed to purchase Bear Stearns’ most toxic assets before the merger.

Such sweetheart deals are the norm, and they are further illustrated by the case of Stephen Friedman, chairman of the New York Fed board, on which Dimon serves. Friedman simultaneously was a director at Goldman Sachs when the N.Y. Fed allowed Goldman to become a bank holding company and thereby become eligible for cheap Fed loans. Thanks to a plea by then-New York Fed President Timothy Geithner that Friedman be granted a waiver from conflict-of-interest rules, he continued to own and buy additional Goldman stock. Friedman ended up with $13 million in stock whose value was bolstered by Fed assistance to Goldman totaling $814 billion. And Geithner ended up becoming President Barack Obama’s treasury secretary...

AND THERE'S SO MUCH MORE...SEE LINK

http://www.alternet.org/story/155856/joseph_stiglitz%3A_what_are_your_chances_of_economic_success?page=entire


...A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights). Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.

It might not be so bad if there were even a grain of truth to trickle-down economics – the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off – with lower real (inflation-adjusted) incomes – than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top. Defenders of America’s inequality argue that the poor and those in the middle shouldn’t complain. While they may be getting a smaller share of the pie than they did in the past, the pie is growing so much, thanks to the contributions of the rich and superrich, that the size of their slice is actually larger. The evidence, again, flatly contradicts this. Indeed, America grew far faster in the decades after World War II, when it was growing together, than it has since 1980, when it began growing apart.

This shouldn’t come as a surprise, once one understands the sources of inequality. Rent-seeking distorts the economy. Market forces, of course, play a role, too, but markets are shaped by politics; and, in America, with its quasi-corrupt system of campaign finance and its revolving doors between government and industry, politics is shaped by money. For example, a bankruptcy law that privileges derivatives over all else, but does not allow the discharge of student debt, no matter how inadequate the education provided, enriches bankers and impoverishes many at the bottom. In a country where money trumps democracy, such legislation has become predictably frequent.

But growing inequality is not inevitable. There are market economies that are doing better, both in terms of both GDP growth and rising living standards for most citizens. Some are even reducing inequalities. America is paying a high price for continuing in the opposite direction. Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset – its people – is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential, because the rich, needing few public services and worried that a strong government might redistribute income, use their political influence to cut taxes and curtail government spending. This leads to underinvestment in infrastructure, education, and technology, impeding the engines of growth. The Great Recession has exacerbated inequality, with cutbacks in basic social expenditures and with high unemployment putting downward pressure on wages. Moreover, the United Nations Commission of Experts on Reforms of the International Monetary and Financial System, investigating the causes of the Great Recession, and the International Monetary Fund have both warned that inequality leads to economic instability.

But, most importantly, America’s inequality is undermining its values and identity. With inequality reaching such extremes, it is not surprising that its effects are manifest in every public decision, from the conduct of monetary policy to budgetary allocations. America has become a country not “with justice for all,” but rather with favoritism for the rich and justice for those who can afford it – so evident in the foreclosure crisis, in which the big banks believed that they were too big not only to fail, but also to be held accountable. America can no longer regard itself as the land of opportunity that it once was. But it does not have to be this way: it is not too late for the American dream to be restored.

***************************************************************************************

Joseph Stiglitz, a Nobel laureate, is a professor of economics at Columbia University. His new book is 'The Price of Inequality: How Today's Divided Society Endangers Our Future.'

http://www.alternet.org/story/155732/don%27t_despair%3A_consider_some_radical_approaches_that_have_worked_in_a_country_almost_the_size_of_ours?page=entire

I am going to share lessons from Brazil that could change our futures, that, once learned, can bring new meaning to our lives. And techniques that, when practiced over time, can increase our strength, improve our creativity and help hundreds of thousands of people trapped in unhealthy relationships free themselves from those who have power over them. Who knows--maybe one day crazy bank executives will be reined in by bank workers sick and tired of their bosses getting rich crashing the global economy. To understand the context for these lessons, a little background on Brazil is useful. Until 1986 it was ruled by a military dictatorship. Now, Brazil, with 300 million inhabitants, has just passed the United Kingdom to become the 6th largest economy in the world. It is governed by the Workers Party and its immediate past president, Luiz Inacio Lula da Silva, was a former metal worker and union leader. Dilma Rousseff, Brazil’s current and first woman president, was part of the student movement that opposed the military dictatorship and had been jailed and tortured by the military in her youth.

How is it that Brazil has moved from a military dictatorship to a vibrant democracy where jobs are being created, wages are rising and bold action has been taken to combat poverty? How did Brazil go from a country were demonstrations were suppressed, and protesters arrested, tortured and murdered to a country were a former autoworker could become president? Rita Berlofa, a leader of the Brazilian bank workers union, described the change this way at the recent SEIU convention in Denver:



The dictatorship was forced from power by a powerful social movement driven by students, community-based organizations and unions. Since 1979 the MST, a movement of landless workers, has occupied and seized abandoned and underutilized land across Brazil. The unionized banking sector, meanwhile, has prevented Brazil's banks from some of the worst excesses of those in the U.S. The history and present in Brazil offers some lessons for Americans about how we should think about challenging the increasingly tyrannical power of the superrich and out of control corporate power here in the United States.

1. Workers don't have to adopt a submissive position

In Brazil, 19 percent of all workers are members of unions. (A much higher percentage are covered by collective bargaining agreements, but are not dues-paying members.) Within the major Brazilian labor federation, the CUT, unionization and membership levels range from 34% in some parts of the private sector to a whopping 55% in banking. Over the last 8 years, Brazilian purchasing power has increased by 22.2% in real terms. In comparison, in the United States only 11.9% of U.S. workers are represented by unions and only 6.9% of private sector workers are in unions. As union membership has declined, economic inequality and corporate power have increased in the United States. While we are all experiencing stagnation and decline in living standards here in in the U.S., in Brazil the opposite is happening. The combination of a growing labor movement and the increasing power of the Workers Party has led to 40 million Brazilians moving out of extreme poverty. Workers don’t feel they have to submit to unfair treatment and employer demands to keep their jobs.

Nothing illustrates this better than the story of Foxconn, the company that makes iPads and iPhones for Apple. While mistreatment in China has led to workers committing suicide, Foxconn's unionized workers in Brazil make twice as much as those doing the same work in China, all while working shorter hours. A combination of a vibrant labor movement, supported by labor laws far more supportive of unions, demonstrate that workers don’t have to adopt a submissive position in the face of giant global corporations. Workers organizing powerful unions are an essential ingredient of any movement committed to winning economic justice and democracy.

2. Bank and financial workers can do it too

3. It is good to have your own party--when you are on top you can help take care of other people’s needs

Since the Workers Party came to power, they have increased government spending on social programs and lifted 40 million people out of extreme poverty. Brazil’s response to the economic crisis of 2008 was to increase government spending instead of adopting self-defeating austerity programs. Brazil demonstrates that having a political party committed to workers’ rights and economic justice and equality matters.

4. You need global protection to stop low wage infection


DETAILS AT LINK--A PUPPY-LIKE ENTHUSIASM

********************************************************************************
Stephen Lerner is a labor and community organizer and the architect of the Justice for Janitors campaign.

We know Republican dogma, that the economy runs from the top down, is wrong because it's failed so many times before.

http://uk.reuters.com/article/2012/06/19/uk-spain-debt-idUKBRE85I0AX20120619

(Reuters) - Spain's short-term borrowing costs rose to their highest level since 1997 in a debt sale on Tuesday as investors worried the country will soon be forced to ask for international aid.

The euro zone's fourth-largest economy has become the focus of the regional debt crisis, with the country struggling to overcome recession and a costly banking sector restructure.

Yields on Spanish 10-year bonds have been trading above 7 percent, a level seen as too pricey for shaky public finances in the medium term by creating a self-full filling spiral like ones that have forced other euro governments to seek help.

The rise in Spain's longer-term interest rates put the sale of 3 billion euros (2.40 billion pounds) of bills in the spotlight ahead of a bond auction on Thursday.

http://finance.fortune.cnn.com/2012/06/15/italy-eurocrisis/

...The 100 billion euro Spanish banking bailout announced in Madrid last weekend was supposed to bring calm to the markets and help lower borrowing rates across the continent. But the poorly constructed plan did not fool the markets – borrowing rates in Spain and in other eurozone countries went up instead of down.

Now there is growing concern that the unelected technocrat government in Italy led by Mario Monti isn't moving fast enough to implement economic reforms that would help put that cracked economy back together again. There is also concern that any positive reforms Monti ends up making will simply be reversed once he returns control of the government back to Italy's notoriously corrupt political parties, which could occur as early as the spring of next year.

It has certainly been a tough week for Italy. First there was the gloomy economic data release showing that Italy's economy shrank 0.8% in the first quarter of the year, marking the third consecutive quarter of negative growth for Italy. Later in the week, the Italian Treasury watched in horror as it had to pay a whopping 4% yield on its one-year sovereign bonds to attract investors, up from 2.3% last month. At the same time, Italian 10-year bond rates rose to 6.2% on the open market, up from just 4.8% in March. Then yesterday, Maria Fekter, the outspoken Austrian finance minister, shocked the markets when she said that Italy may be in need of a bailout. This caused Italian yields to shoot up again with investors demanding a high 5.3% yield to buy Italian 3-year bonds, up sharply from the 3.9% they garnered just last month.

The jumps in yields were partially related to the troubles going on in Spain, but the bulk of the concern was centered squarely on Italy's own internal problems. With a debt-to GDP ratio of 123% (and rising) and a total debt load quickly approaching two trillion euros, Italy is in some serious trouble.

Investors are demanding the extra yield because if Italy experiences problems there is no way the European bailout fund can come to its rescue. Both the EFSF and ESA have a combined firepower that is half that of Italy's total debt load – and that's before counting bailout commitments already made to Ireland, Greece, Portugal and a possible future bailout of Spain.

http://hosted.ap.org/dynamic/stories/E/EU_SPAIN_STOLEN_CROPS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-19-04-28-12

SANT CLIMENT DE LLOBREGAT, Spain (AP) -- Drop those cherries, you're under arrest. Crops and cops are converging along Spain's journey through economic crisis: People enduring hardship are stealing the earth's bounty from farmers to help get by from day to day.

Police have added the patrolling of farmland - sometimes on horseback - to their list of daily tasks. Farmers in some areas are teaming up to carry out nighttime patrols on their own.

In villages near farming areas, several thousand paramilitary Civil Guards, regional and local police are even setting up checkpoints to sniff out not drugs or drunken drivers but stolen fruit or farming equipment, like copper wire used in irrigation systems. The Civil Guard says sometimes its officers mount "cage operations" - sealing off whole villages to check cars and trucks for, say, pilfered pears.

The stolen goods are mainly for resale: The food ends up in small roving street markets and the metal goes to scrap dealers. Last year alone more than 20,000 thefts were reported at Spanish farms. The Interior Ministry says it has no comparative figures from other years, or for so far in 2012. But authorities and farm groups blame the thefts on Spain's economic crisis and say they are a big enough problem for the patrols, which began last season, to stay in force this year.

BTW, copper and other metal theft to sell for scrap has been a significant problem for a good while, here, from what I've heard.

(I first wrote, "Goddess protect us, what is happening?" - which I then erased because I know what's happening (at least "I know" more-or-less) - it's just I had a moment of total over-whelmedness. How long are we going to stand for this? "The center cannot hold...)

William Butler Yeats (1865-1939)

THE SECOND COMING

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.

The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

Ozymandias

by Percy Bysshe Shelley

I met a traveller from an antique land
Who said: "Two vast and trunkless legs of stone
Stand in the desert . . . Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed:
And on the pedestal these words appear:
'My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away."

And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

- and I mean that literally. A shiver all down my spine. I was in High School - have never forgotten the moment. And it does the same today - even more so.

He never even drops in to say Hi!

Do I have to do my Jewish mother imitation?

"He never calls, he doesn't write..."

How many Jewish mothers does it take to change a light bulb?

"Don't mind me, I'll just sit here, in the dark...."

Thank you, I will NOT be here all week, because tonight is (unfortunately) a Board Meeting night...and I'm thinking of bringing wine just to make it shorter, at least for me, when I put my head down on the table and start snoring and drooling...and I was going to have veal, but I don't feel like cooking...

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-19-06-42-15

BERLIN (AP) -- Concerns about Europe's heavily indebted economies sent a closely-watched survey of German investor confidence plummeting in June.

The ZEW institute reported Tuesday that its monthly confidence index dropped by 27.7 points to a level of minus 16.9 points - its strongest decline since October 1998.

ZEW president Wolfgang Franz says the financial market experts who were surveyed are clearly warning against an over-optimistic assessment of Germany's economic prospects this year. Germany's export-oriented economy ships a lot of its goods to countries where the crisis is weighing on the economy.

"The risks of a pronounced decline in economic activity in countries with close trade ties to Germany are very clear," Franz said.

http://www.guardian.co.uk/business/2012/jun/18/global-economy-perfect-storm



Labourers pour molten iron at a foundry in Xiangfan, China. A Chinese slowdown is likely to drag down emerging and developed markets. Photograph: Reuters



Dark, lowering financial and economic clouds are, it seems, rolling in from every direction: the eurozone, the United States, China, and elsewhere. Indeed, the global economy in 2013 could be a very difficult environment in which to find shelter.

For starters, the eurozone crisis is worsening, as the euro remains too strong, front-loaded fiscal austerity deepens recession in many member countries, and a credit crunch in the periphery and high oil prices undermine prospects of recovery. The eurozone banking system is becoming balkanised, as cross-border and interbank credit lines are cut off, and capital flight could turn into a full run on periphery banks if, as is likely, Greece stages a disorderly euro exit in the next few months.

Moreover, fiscal and sovereign debt strains are becoming worse as interest-rate spreads for Spain and Italy have returned to their unsustainable peak levels. Indeed, the eurozone may require not just an international bailout of banks (as recently in Spain), but also a full sovereign bailout at a time when eurozone and international firewalls are insufficient to the task of backstopping both Spain and Italy. As a result, disorderly breakup of the eurozone remains possible.

Further to the west, US economic performance is weakening, with first-quarter growth a miserly 1.9% – well below potential. And job creation faltered in April and May, so the US may reach stall speed by year end. Worse, the risk of a double-dip recession next year is rising: even if what looks like a looming US fiscal cliff turns out to be only a smaller source of drag, the likely increase in some taxes and reduction of some transfer payments will reduce growth in disposable income and consumption.

http://www.zerohedge.com/news/spain-sells-1-year-bills-record-post-euro-yield-ing-says-spain-need-%E2%82%AC250-billion-more-german-ze

morning, folks!

http://www.telegraph.co.uk/comment/9337911/Dithering-Europe-is-heading-for-the-democratic-dark-ages.html


Greece's election has produced a confused result Photo: Reuters

It is one of the tragic delusions of the human race that we believe in the inevitability of progress. We look around us, and we seem to see a glorious affirmation that our ruthless species of homo is getting ever more sapiens. We see ice cream Snickers bars and in vitro babies and beautiful electronic pads on which you can paint with your fingertip and – by heaven – suitcases with wheels!

Think of it: we managed to put a man on the moon about 35 years before we came up with wheelie-suitcases; and yet here they are. They have completely displaced the old type of suitcase, the ones with a handle that you used to lug puffing down platforms.
Aren’t they grand? Life seems impossible without them, and soon they will no doubt be joined by so many other improvements – acne cures, electric cars, electric suitcases – that we will be strengthened in our superstition that history is a one-way ratchet, an endless click click click forwards to a nirvana of liberal democratic free-market brotherhood of man. Isn’t that what history teaches us, that humanity is engaged in a remorseless ascent?

On the contrary: history teaches us that the tide can suddenly and inexplicably go out, and that things can lurch backwards into darkness and squalor and appalling violence. The Romans gave us roads and aqueducts and glass and sanitation and all the other benefits famously listed by Monty Python; indeed, they were probably on the verge of discovering the wheely-suitcase when they went into decline and fall in the fifth century AD.

Whichever way you look at it, this was a catastrophe for the human race. People in Britain could no longer read or write. Life-expectancy plummeted to about 32, and the population fell. The very cattle shrunk at the withers. The secret of the hypocaust was forgotten, and chilblain-ridden swineherds built sluttish huts in the ruins of the villas, driving their post-holes through the mosaics. In the once bustling Roman city of London (for instance) we find no trace of human habitation save for a mysterious black earth that may be a relic of a fire or some primitive system of agriculture.

http://elpais.com/elpais/2012/06/18/inenglish/1340020727_565297.html

The result of the elections held on Sunday in Greece did little to buoy the European markets on Monday, despite an early rally.

While the result of the polls has cleared up some of the uncertainty over the future of the single currency — the Greeks won’t become the first nation to abandon the euro zone, at least for the moment — there was only short-lived euphoria among investors, given the growing doubts about Spain’s solvency.

Monday morning saw yet another dramatic rise of the risk premium — the spread between yields on Spanish debt and the benchmark German 10-year bund. After starting the day on 543 basis points, it fell to 529 at the start of trading before rising once more, and breaking all previous records to reach 589 before closing at 574.

The yield on the Spanish 10-year bond reached 7.139 percent on Monday, yet another new euro-era high and a critical level, given that it will, without a doubt, send borrowing costs shooting up at the Treasury’s upcoming debt auctions.

http://elpais.com/elpais/2012/06/19/inenglish/1340108447_157921.html

Just a week has gone by since Mariano Rajoy tried to present the rescue plan for Spain’s banks as a great success, assuring Spaniards that the “credit line,” as he called it, was a victory for the euro and would clear up all doubts about the future of the single currency. But since then, the markets have continued to punish Spain’s sovereign debt, among other reasons because the 100-billion-euro bailout is not going to be pumped directly into the banks, but rather through the government’s Orderly Bank Restructuring Fund (FROB), meaning that Spanish debt levels may rise as high as 90 percent of GDP.

On Tuesday morning, at the Treasury’s first bond auction since news of the bailout broke, Spain’s borrowing costs jumped on 12- and 18-month paper. The government managed to raise the 3.04 billion euros it was aiming for, but at a yield of 5.1 percent. A similar debt sale in May saw a rate of three percent.

In the secondary market, Spain’s benchmark 10-year sovereign bond hit a record high of 7.1 percent on Monday. Rates higher than seven percent are widely seen as being unsustainable.

While Rajoy was denying it last week, Spain has been pressing for direct help for its banks. But Germany and other countries refused, and insisted that the bailout be implemented via the state fund.

Source: Reuters

Analysis: Regulator seen conflicted in Nasdaq's Facebook mess

By Suzanne Barlyn
NEW YORK | Tue Jun 19, 2012 1:25am EDT

(Reuters) - It is not every day that a company bungles something so badly that it has to turn to a regulator for help to clean up its mess. But that is what the Nasdaq stock market has done with the Financial Industry Regulatory Authority following its blunders in Facebook's $16 billion initial public offering.

The move is causing raised eyebrows because of the long and intertwined relationship between the exchange and Wall Street's industry-funded regulator.

Market makers say Nasdaq OMX Group Inc owes them at least $115 million and probably much more because of costly delays in processing orders when Facebook Inc made its debut on the exchange on May 18. Nasdaq has only offered $40 million in compensation for the losses, and most of that is in rebates on trading rather than in cash.

Nasdaq, which says software glitches caused the delays, has asked FINRA to review the client transactions and claims. But some industry lawyers and compliance experts on Wall Street disapprove.

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Read more: http://www.reuters.com/article/2012/06/19/us-facebook-nasdaq-conflicts-idUSBRE85I05Q20120619

More like incestuous.

Eugene. Happy Tuesday, or whatever day today is! (I sometimes lose track. . . . )

/... http://oxforddictionaries.com/definition/corruption?q=corruption

http://www.zerohedge.com/news/europe-launches-ban-all-policy-criticism-scrapping-use-rating-agencies





Uhhhhh.......

When you don't like the diagnosis, you shoot the doctor....

I'm sure that Monday morning's foray without food or sleep did not help...it's putrid out there. We need a cold front and 2 inches of rain....

AND I'm sick of Europe....trying to have it all ways at once for the rich, doing jackshit for the working people, coddling the banks like they owned them, when in fact they are owned by the banks, and only because they have that sado-monetarianism thing going on...

AND I'm not too pleased with the US, either. So, just stay out of my face today, okay? And somebody get some ice and chocolate...

And while you are at it, turn off the delusion machine on Wall ST? That's a dear....

As it so happens, none of the major investment banks really view this weekend's election results out of Greece as having much impact on whether the country will exit the eurozone or not. Citi leaves their odds of a Greek exit between 50 and 75 percent over the next 12-18 months. Jurgen Michels wrote earlier today:

Morgan Stanley still has the chances that Greece leaves the euro at 35 percent over the next 12-18 months, but that could change. Cross-asset strategist Greg Peters writes in a note today:



Credit Suisse still has the chances of a Grexit this year pegged at 20 percent, and that includes a 10 percent chance that the entire eurozone breaks up. Credit Suisse analysts published a note this morning saying the following:



Read more: http://www.businessinsider.com/wall-street-greek-exit-predictions-2012-6#ixzz1yGOaruu5

http://www.marketplace.org/topics/world/easy-street/day-after-greek-relief-euro-mockery

Going into the weekend, all anyone could worry about was that Greece would be the next Lehman. But what would be the next Greece? European leaders, desperate to believe that their countries are different, are determined to box themselves into a safe place and lock all the doors against the maelstrom outside.

The important thing: Don't be the next Greece. Or the next Ireland. Or the next Portugal. Or the next Spain.

The funny thing is, the attempts by different European countries to distinguish themselves only point to one thing: they're all in this together. Hat tip to Anthony Peters at Swiss Invest for flagging this wry collection of quotes from a report by London investment bank Fairfax:

http://www.alternet.org/story/155915/5_reasons_greece_and_the_rest_of_the_eurozone_are_on_the_road_to_hell?page=entire

1. Pretend Politics. Prior to the June 17 vote, Greek voters were intimidated with a massive number of threats from Germany and elsewhere of what would happen if they didn't vote "the right way" (i.e. anybody but the "radical leftists" in Syriza who would have negotiated harder with the financiers). The conservatives barely led the vote count from their main anti-austerity rival. Yet New Democracy leader Antonis Samaris suggested in his victory speech that the results reflected a vote for "growth." There is more than a touch of Orwell at work when you can redefine the kinds of programs the Greeks will be forced to swallow as "growth policies." Germany's suggestion to cut the minimum wage, for example, will only take more money out of the pockets of regular people, which, as Keynes taught us, further weakens the economy.

But it looks like the Greek government will continue to plug away at austerity. And the "Troika" -- the three organizations that have the most power over Greece's financial future, namely the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB) -- will continue to pretend that such policies will ultimately lead to a Greek economic recovery. There will be some fake advertising about Europe making it easier on the Greeks, but it will be a "something" without substance.

Then things will get worse to the point where New Democracy leader Antonis Samaras might have to take a helicopter to flee the crowds.

From the Opposition Syriza's perspective this is not the worst outcome, since the third place Pasok (Greece's ostensible "socialist" party) is likely to join New Democracy (despite some posturing which suggested that they wouldn't join a coalition in the absence of Syriza's participation, thereby ensuring that all parties are tarred with these awful austerity policies). In that event, both Pasok and New Democracy will have to watch as Syriza leads the opposition and probably wipes them out in another election within a year. Maybe even, within the year...

4 MORE TO GO...GOOD READING

http://www.reuters.com/article/2012/06/19/us-investing-cash-eurozone-idUSBRE85I05N20120619

Cash isn't just king. For some money managers, it has become jack, queen and ace, too. With the Greek election failing to eliminate fears about the euro zone's stability and the Chinese and U.S. economies providing little reason for greater optimism, some major investors and their advisers have decided there is only one place to be - cash. Charles Biderman, founder and CEO of independent research provider TrimTabs Investment Research, has been advising big institutional clients, including hedge funds, to be exposed "100 percent in cash" since June 11.

"These days, a stock market decline of a few percentage points is enough to trigger calls for more 'accommodation, easing, firepower, and stimulus.' We are amazed at how many investors still believe additional liquidity will make the euro zone's debt problems go away," Biderman said.

Biderman said he doesn't believe that throwing money at a solvency problem will work in the long run. He is not alone in his assessment. David Kotok, chief investment officer of Cumberland Advisors in Sarasota, Florida, said his firm has a "temporary" cash position. Kotok said the range of cash holdings for the firm's 1,500 separate accounts that it manages for its clients is between 10 percent and 20 percent. In comparison, average cash levels in June stood at their highest since the start of the euro-zone debt crisis at 5.3 percent of portfolios, compared with 4.7 percent in May, according to a monthly global survey of 260 investors from Bank of America/Merrill Lynch.

"We've been fully invested since October, but we see evolving risks related to Europe," Kotok said. "That caused us to have some cash reserves."

Since the financial crisis of 2008, investors have had to navigate the global financial markets' manic mood swings. The volatility has fallen into a pattern. The fiscal or banking crisis gets worse in some parts of the world, usually Europe or the United States, sending markets into a tailspin. In response, governments and central banks launch bailouts and flood the markets with money. Once the euphoria has given way to a realization that the underlying problems haven't been solved, there is another selloff, and the process begins again.

For example, in early June, Federal Reserve Chairman Ben Bernanke said the U.S. central bank was closely monitoring "significant risks" to the U.S. recovery from Europe's debt crisis. There are now some expectations that the Fed might take some further action to increase the markets' liquidity as early as this Wednesday. The Federal Open Market Committee will wrap up a two-day policy meeting on Wednesday.

But Biderman of TrimTabs wonders: "What happens when market manipulation by global central bankers no longer works?"

Of course, not all investors are giving up on equities entirely...

http://www.alternet.org/newsandviews/article/981517/somber_words_from_robert_reich%2C_marcia_angell_md%2C_and_more%3A_life_after_the_health_care_ruling/#paragraph5

Within the next two weeks, the Supreme Court is expected to hand down its decision on the Affordable Care Act. If they accepted jurisdiction, the justices could uphold the law entirely or strike it all down, or they could zero in to reject the most controversial aspect, the mandate that individuals must have health insurance.

What would the future hold if the individual mandate were struck down?

There are nine brief opinion pieces from a group of very prominent health policy advocates with myriad points of view.

I suppose if there's a consensus it's that the mandate is bad policy.

Dr. Marcia Angell, the former editor in chief of The New England Journal of Medicine, and a big single payer champion writes that the requirement to buy a defective product (for-profit insurance) is bad public policy, which won't begin to solve our immense healthcare crisis.



Wishful thinking?

But the requirement to cover pre-existing conditions has proven to be so popular with the public that Congress will be reluctant to scrap it.



I'll leave you with the warning of a doctor, Kevin Pho, MD.



Amen. I urge you to read all this expert commentary, rough days are imminent.

SEE ALSO:

Life After the Health Care Ruling

http://www.nytimes.com/roomfordebate/2012/06/17/what-will-change-after-the-supreme-courts-health-care-ruling

the post-world-war-II baby boomers. We are a huge cohort, and the first of us, those born in 1946, have just started to enter Medicare eligibility age. Many of the rest of us, who are in our late 50s or early 60s, are far enough away from Medicare that unless we fall under one of the more "desperate" catetories, we will never be covered by the AHCA, because most of it will not go into effect until after we reach 65. By the time it does, however, many of us will have age-related pre-existing (and often life-style related) conditions, such as high blood pressure, heart disease, diabetes, cancer. These will put us into high risk pools, making mandated insurance prohibitively expensive, especially if due to current economic conditions we are on early (reduced) social security benefits or have used up our life savings and liquidated assets trying to weather the economic downturn until we reach that age.

While I applaud the effort that resulted in SOME benefits to SOME people as a result of the AHCA, I can't help but recognize that there are oh so many people who ultimately may never benefit at all from it. That's been the complaint since the beginning -- that there was so much cheering because for SOME it was better than nothing, but for many it was. . . . nothing. It's really difficult to cheer something on and on and on and on in the face of no personal benefit at all, but only unaffordable personal cost.

The problem with the mandate was that it held that huge potential for constitutional challenge, and that meant it was almost certainly doomed. That great segment of the population that looked with some hope to the effective date of the mandate and the opportunity to buy what would always be limited insurance coverage with deductibles and co-pays and so on that might or might not be affordable and with the rights of the insurance companies to deny coverage for whatever they chose not to cover -- that segment of the population may very well have their three years of hope dashed. The more I think about it, the more unconscionable that makes the administration's failure on this issue. The administration and the then Democratic majority.

My contempt for them grows every single day.

http://fdlaction.firedoglake.com/2012/06/18/health-care-reminder-the-true-power-of-the-bully-pulpit/

With the Supreme Court likely to decide on the Affordable Care Act next Monday, Pew Research has a poll of voters’ reactions to some of the possible rulings. As expected there is a huge partisan divide, with Republicans wanting the whole law thrown out and Democrats wanting the whole law kept. What I find amazing is that a majority of Democrats would be unhappy if the Court only threw out the individual mandate but kept all the “good” provisions. From Pew:





It is amazing that the Democratic base claims they would be unhappy with getting everything they supposedly wanted from the new law (subsidies, ban on recession, ban on pre-existing conditions, Medicaid expansion) just because the Court eliminated only the highly unpopular individual mandate.

It is important to remember that exactly four years ago then candidate Obama was running against the idea of an individual mandate. The individual mandate to purchase private insurance was a traditional, Republican/Conservative idea opposed by many Democrats and liberals (who presumably preferred more universal public programs). The Court striking down only the mandate would actually make the Affordable Care Act more, not less, like the health care reform program Obama originally promised. Yet apparently making the law more like the health care program Obama promised would still leave most Democrats unhappy.

The mandate went from something Obama said he strongly opposed, to something Obama said he reluctantly supported to get a deal, to an essential element of the law Obama is desperately trying to protect at any cost. In their Court argument, his Administration even put the ban on pre-existing conditions and community rating in serious danger of being thrown out as well to strengthen the legal case for the mandate.

Apparently not only has Obama’s position on the mandate shifted radically, but he has managed to shift the bulk of his base’s opinion of the mandate with it. Obama’s shift and the partisan nature of this fight has caused base Democrats to develop a frankly bizarre attachment to the individual mandate. This is a reminder of the true power of the bully pulpit. A President’s position can’t sway the whole country, but it can have a huge power to sway the President’s base. We saw similar dynamics with support among Obama’s base for the Libya war and same-sex marriage going up significantly after he spoke out in favor of them. A president can easily get his own base to become invested in a particular position, even if just a few years ago the same president’s campaign was spending millions running ads saying it was a bad idea.

http://www.alternet.org/newsandviews/article/983743/national_campaign_to_tax_wall_st._kicks_off_in_15_cities_tomorrow_--_join_in!/#paragraph2



Americans will rally in 15 cities across the country at noon toDAY to kickoff a national campaign to establish a Wall Street tax that would generate billions for the public good. This Financial Transaction Tax, called the "Robin Hood Tax," is a levy of less than half of a percent on trades in derivatives, stocks, bonds and foreign currencies. According to the campaign, economists estimate that $350 billion could be raised each year for health care, jobs, education, infrastructure and various other needs, which may help rejuvenate the economy. The campaign states that it is pushing for “a tax for the people.”

These Robin Hood Tax events will take place in front of JPMorgan Chase branches because of its recent $2 billion loss from a risky hedge investment. According to the campaign, it is “the latest bank to have the spotlight shone on their reckless behavior that has hurt millions.” A Robin Hood Tax event will also take place in Rio de Janeiro tomorrow at the Rio +20 international conference on climate change.

Though within the last few months the campaign started reaching the United States, it has been pushed in more than 40 countries over the last two years. Several countries, including the UK, China, Brazil and India have already implemented this tax, while France and Germany have aimed to implement it by 2013.

The Robin Hood Tax idea has drawn a lot of support. Businesspeople like Bill Gates, George Soros and Warren Buffet support the tax along with economists Joseph Stilglitz and Paul Krugman. Political leaders such as Al Gore and President Regan's Budget Director David Stockman also endorsed it. It also has the support of the Vatican, Ban Ki-Moon, and a variety of other groups such as unions, nurses, AIDS activists and environmentalists.

You can go here to find a rally near you: http://robinhoodtax.org/latest/19th-june-robin-hood-tax-campaign-launch

AND FOR MOST OF US HERE ON THIS THREAD, IT DOES....

http://mathbabe.org/2012/06/16/on-being-an-alpha-female/

About 8 months ago I found out I’m an alpha female. What happened was, one day at work my boss mentioned that he and everyone else is afraid of me. I looked around and realized he was pretty much right (there are exceptions). I went home to my husband and mentioned how weird it was that people at work are afraid of me, and he said, “No, it’s not weird at all. Don’t you realize that you’re constantly giving people the impression that you’re about to take away their toy and break it??”. No, I hadn’t realized that – and that sounds pretty awful! Am I really that mean? Then he told me I was an alpha male living in a woman’s body....If you google “alpha male in a woman’s body,” (without the quotes) which I did, you come upon the phrase “alpha female” pretty quickly.

It came as a surprise to me – I’d always thought I am nice. But it wasn’t a surprise to anyone else; in fact when I mentioned my realization to my close friends, each and every one of them laughed out loud that I hadn’t known this about myself. One of my friends told me it was less that I was about breaking toys and more about how I call out people’s bullshit, which is something I have to admit I relish doing. Upon further reflection I had to admit to myself that I am nice, but only to people who I think are nice themselves. So I guess that means I’m not just simply nice. And if I enjoy calling people on their bullshit, that’s not exactly nice either...


.....................................................................



Why am I mentioning all of this? Because I think it might help people, especially women in math or in tech, to learn to think a bit more like an alpha female, and I want to give some tips on how to do it. It’s like injecting a shot of testosterone at the right time. These tips can be used in specific situations like an interview or a talk or at a work meeting. Feel free to ignore these tips if you hate everything about the idea, which I would totally understand too. In fact when I first learned about it myself, I was offended by it on a matter of principle, but I’ve come to think of it more like a mysterious part of the human experience, on the same page as pheromones and how women have the same menstrual cycle when they live together.

Tips on how to think and act like an alpha female:

• When you’re asked to describe your accomplishments, talk about yourself the way your best friend would describe you. So in other words with pride and enthusiasm for your accomplishments, without being embarrassed. Don’t lie or exaggerate, but don’t underplay anything.
  
  
• Let there be silence. If you’ve finished what you’re saying and you’re done, wait for someone else to say something.
  
  
• If you want credit, give credit first. Generosity is, in my experience, contagious. So if you want to get credit for contributing something to a project, start out by talking about how awesome your collaborators have been on the project. This gets people thinking about credit in a generous way, and it also gives you authority for bestowing it as the first person who brought it up. Note this is different from what I see lots of people do, namely not mentioning credit themselves and waiting passively for someone else to raise it (and to share it).
  
  
• Ignore titles and hierarchy. Those things are silly. You can talk to anyone at any time if you have a good idea.
  
  
• If you want feedback, give feedback. This includes to your boss (see previous tip). If you want to find out how you stand with someone, the best thing to do is to tell someone else how they stand with you. People love hearing about themselves. This works best when you can say something nice, but it also works when it’s a difficult conversation.
  
  
• Define your narrative. When your standing is in question, put out your version of the story first, for a couple of reasons – one is that you define the scope of the question, and the other is that your narrative is now the standard, and any one refuting it has to refute it.
  
  
• When you’re in a meeting and want to bring your point across in a room full of alpha males, think about defending or arguing for an idea, rather than for yourself. It helps with gaining confidence in your argument.
  
  
• Of course it also helps if your argument is water-tight, so practice making your points in your mind, and write them down beforehand if that helps.
  
  
• Develop a thick skin. When you say what you think first, there are plenty of people who might take offense and jump on you and be vicious. Sometimes it’s just a show of power. Keep an observer’s eye on that kind of reaction, and don’t take it personally, because it’s almost never about you really, it’s maybe about their relationship with their mom or something.
  
  
• At the same time, what’s cool about putting yourself out there is that people react and often point out how your thinking is flawed or lazy and you get to learn really, really quickly. Learning is the best part!
  
  
  

or 92F with a heat index of 98F, depending on the source. In any event, too hot.

Only 100 right now, but the humidity is only 5%, so it feels like a mere 94.

Excessive heat warnings for Wednesday and Thursday, with temps 110-115. No, I'm not kidding.

it's 87 in Ohio

http://deadlyclear.wordpress.com/2012/06/15/does-the-judge-in-your-foreclosure-case-own-stock-in-the-bank-foreclosing-on-you/

What would you do if you found out that the judge presiding over your foreclosure owned stock in the bank foreclosing on you?

Michael J. Fuchs has been living through a Hawaii court process that turned into a reality show nightmare. The Judge in his case owns a lot of stock in the foreclosing bank! And that’s not all…HBO‘s former CEO and Chairman of the Board, Michael J. Fuchs, invested over $100 million (dollars) in a Big Island Hawaii development that sank like the Titanic with the economy in 2007. The Hawaii scales of justice have not been tipped in Mr. Fuchs’ favor – apparently they haven’t even been balanced.

Hawaii attorney Gary Dubin, discovered a seriously conflicted situation with more than an appearance of impropriety and asked that the Judge, Honorable Bert I. Ayabe, recuse himself from the case because of…stock investments in Bank of Hawaii, campaign donations to a U.S. senatorial candidate… a law firm first representing Fuchs and then representing the opposing parties… whose lead attorneys were law school chums of the judge, the judge’s wife may have performed legal work for the developer… and the list goes on.

The saga reads like a HBO movie and “it pains me,” said Mr. Dubin, “because we’ve been before this Court many times and this judge is fair, but this time there is certainly an appearance of impropriety and my role and my duty is to protect my client.”

When it was initially discovered that Judge Bert I. Ayabe claimed on his April 25, 2011 Supreme Court of Hawaii Certified Financial Disclosure Statement that he “owned between $25,000 and $50,000 worth of stock in the Bank of Hawaii,” which has not only been a principal party to the actions, but its officers were material witnesses to this day in both cases – Dubin wrote a letter to the judge...

By Matt Stoller

http://www.nakedcapitalism.com/2012/06/did-the-federal-reserve-survey-on-wealth-exclude-the-top-400-wealthiest-people-in-america.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The recent Federal Reserve analysis of the effects of the Great Recession on household wealth and income was a doozy, showing that median income dropped 7.7% and median net worth fell by 38.8% from 2007-2010. But that may not be the whole truth – the Fed might actually be leaving a very significant group of people out of the sample – the top 400 wealthiest people, or the 0.0000035%.

Someone brought this part of the the Fed study to my attention (note to self, always read the section on methodology).

Second, a supplemental sample is selected to disproportionately include wealthy families, which hold a relatively large share of such thinly held assets as noncorporate businesses and tax-exempt bonds. Called the “list sample,” this group is drawn from a list of statistical records derived from tax returns. These records are used under strict rules governing confidentiality, the rights of potential respondents to refuse participation in the survey, and the types of information that can be made available. Persons listed by Forbes magazine as being among the wealthiest 400 people in the United States are excluded from sampling.

This passage describes how the Fed got the information on wealth and income., and I’ve bolded the relevant sentence. The Fed can easily get data on the non-wealthy, because the non-wealthy don’t have very much. Most people, to the extent they own anything, have some home equity, a bank account and perhaps a few mutual funds, with most wealth concentrated in housing. So the Fed researchers can essentially look at homeownership rates and figure out how much the non-wealthy people own, and how much they’ve lost or gained. But the wealthy are different, and here’s where it gets tricky. The wealthy own lots of illiquid assets, everything from priceless paintings to private multi-billion dollar companies. So the Fed does a separate survey just on the wealthy. Only, as the researchers say, “analysis of the data confirms that the tendency to refuse participation is highly correlated with net worth.” The rich aren’t just rich, they are secretive. And apparently the super-rich are super-secretive. And for some reason, these researchers just didn’t include the Forbes 400, the very richest of the rich.

You might say that the exclusion of 400 people isn’t significant; after all, it’s just 400 people. How big a difference could that really make? Well, it turns out, as of 2011, that the top 400 people in America own more than the entire bottom 60% of Americans. So this is not a trivial exclusion. The Fed claims in the report that it has a method for adjusting for rich people who don’t respond to their survey. Why the Fed has just not included the Forbes 400 is not clear, and I’m curious how they adjust for leaving out Mr. Gates and Mr. Buffett and company. I’ll send an email to the Fed to find out.

http://neweconomicperspectives.org/2012/06/mmp-blog-51-the-efficiency-fairy-and-inflation-goblins.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+neweconomicperspectives/yMfv+%28New+Economic+Perspectives%29

The main objection to MMT is the belief that adoption of a fiat money necessarily leads to high inflation if not to hyperinflation. Those who adopt this critique usually see MMT as a proposal, although some (like Paul Samuelson) recognize that MMT actually describes the system we already have. The latter group fears that if we tell the truth about the existing monetary system, then elected officials will “run the printing presses” to create high inflation. Hence, best to adopt what Samuelson described as the “old time religion” of lies about the fiscal options open to sovereign government to keep the inflation goblins at bay.

Aside from the fear of inflation, the second biggest bogeyman is efficiency—that is to say, lack thereof. This is mostly applied to MMT’s promotion of the job guarantee, but it also applies more generally to the MMT belief that government has a positive role to play in the economy. Government is said to be inherently inefficient, and particularly so when it comes to employing labor. Only the “free” market is capable of using “scarce” resources in the most efficient manner. Anything government does is bound to be less efficient, so the first preference is always to rely on the efficiency fairies of free enterprise. Adopting the JG gives us the worst of both worlds: higher inflation plus lower efficiency. It is better to leave people unemployed where they can help to fight inflation and inefficiency in a reserve army of the unemployed. The best use of the unemployed is to keep them unemployed.

For the few bleeding heart liberals in this camp, the suffering of the unemployed can be relieved in the most efficient manner by simply providing welfare (perhaps in the form of a BIG—basic income guarantee). Their higher income is then spent in the “free” market which more efficiently uses labor to efficiently produce the consumption goods our unemployed want. Besides, it is claimed, many (most?) people really don’t want to work, so the BIG incomes allow people to choose to do what they prefer, while the efficiency fairies ensure we’ve got all the goodies people want to consume. Through BIG, we get to keep low inflation plus high efficiency with the added benefit of a life of leisure for anyone who wants it. Now, of course, the MMT+JG response to this has been that unemployment, itself, is a massive waste of our most valuable resource, labor. Unemployment destroys lives, families, and communities. It is bad for physical and mental health. It promotes crime, ethnic division, and even terrorism. It is hard to conceive of a JG program so badly designed that it does not reduce waste. Further, the JG by design helps to stabilize prices, by providing a wage anchor. The employed bufferstock is much better than the reserve army of the unemployed. And our view is that most people want to be productive members of society—and like it or not, ours is a capitalist society in which there is a strong ethical imperative to “earn” one’s keep. But our critics are not swayed.

Before digging deeply into the topic of efficiency, let’s look at a couple of examples...