and too true to be funny.

At 500, Machiavelli's 'Prince' Still Inspires Love And Fear

http://www.npr.org/blogs/parallels/2013/05/27/185746692/may-2013-machiavelli-s-the-prince-500th-anniversary?ft=1&f=1001

So get ready for a Machiavellian Event! sharpen your rapier wit and deepen your boundless cynicism. And when in doubt, grovel!

The mid-year market correction of 2013 is quite different to the previous three mid-year market corrections. It’s caused by economic strength and stability, rather than the opposite. In each of 2010, 2011 and 2012 global equities fell in the second quarter because of either growth slowdowns in the US, eurozone crisis flare-ups, growth scares in China and, in 2011, rising oil prices caused by the Arab Spring. In May 2013, the big US economic releases such as non-farm payrolls, manufacturing surveys, retail sales and small business confidence have all been better than expected, Japan’s economy rebounded in the second quarter and with the Nikkei up 70 per cent Japan looks to have turned the corner, eurozone bond yields are still declining as the risks of a euro break-up recede, and fears of Chinese hard landing are also receding.

This year’s market correction, starting later than usual, was sparked purely by speculation about the end of QE3 – the Federal Reserve’s third, ongoing, round of quantitative easing. After Fed chairman Ben Bernanke’s testimony to Congress last week markets now believe that will happen around the end of this year or early next year, although they had already been coming to that conclusion. Markets have become addicted to liquidity instead of reality; it could be a painful, volatile, withdrawal, but worth it in the end. As the second of the 12 steps of Alcoholics Anonymous says: “Came to believe that a power greater than ourselves could restore us to sanity” (the “power” being economic growth, not the booze of liquidity).

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

The other thing to emerge this past week is that the “winner” of the currency wars will be the United States. It’s a weird war, though. The winner will be the first to surrender, because low interest rates and money printing worked and produced a sustainable economic recovery, so the currency could be allowed to rise once more. The market now believes the US is closest to that surrender. Thanks to stronger economic data the US dollar index has rallied sharply in May after going sideways for two months, and has now appreciated 6.5 per cent since early February. So the countries that are trying to get their currencies down through domestic monetary easing – Japan, Europe, Australia, UK, Canada – are getting help from the rising US dollar, as markets anticipate the end of QE.

Read more: http://www.businessspectator.com.au/article/2013/5/27/markets/my-name-mr-market-and-im-qe-aholic#ixzz2UXWpXCj8

I wouldn't count them out until they are both stone cold dead, and their heirs have squandered the legacy.

The Kochs no doubt fancy themselves as pillars of the community.

A TRULY SCARY INTERACTIVE GRAPH FROM WSJ

http://graphics.wsj.com/national-debts/#i[]=999

THIS IS THAT DRY AND NUTTY BRITISH HUMOR, RIGHT?

http://www.bbc.co.uk/news/world-europe-22624104

Germany is the most positively viewed nation in the world in this year's annual Country Ratings Poll for the BBC World Service. More than 26,000 people were surveyed internationally for the poll. They were asked to rate 16 countries and the European Union on whether their influence in the world was "mainly positive" or "mainly negative". Germany came out top, with 59% rating it positively. Iran was once again the most negatively viewed. Global views of Europe's biggest country have improved significantly in 2013, according to the poll.

It was conducted for the BBC by GlobeScan and PIPA, who conducted face-to-face and telephone interviews with randomly selected people in 25 countries. Of those countries, 22 have been surveyed two years in a row, so become the tracking countries on which the average ratings are based. These averages exclude the target country's rating of itself. So for example, the opinions of Germans on Germany are excluded, meaning the country's average rating is based on 21 tracking countries. A three-point increase in Germany's average rating returned it to the top of the BBC list, displacing Japan, which saw its positive ratings drop from 58% to 51%, and fell from first to fourth place overall.

The BBC's Stephen Evans in Berlin says the poll results may be a reward for diligent German diplomacy. Government ministers frequently tour countries with markets for German goods, or countries like Mongolia with raw materials for German products, he says. There were high positive ratings for Germany in recession-hit Spain and France - though not in Greece - despite the well-publicised placards depicting Chancellor Angela Merkel as a Nazi, paraded during anti-austerity protests in Europe.

MORE TEA LEAF READING AT LINK

THEY ARE ON TO HIM!

http://www.guardian.co.uk/commentisfree/2013/may/27/obama-war-on-terror-speech

The hallmark of a skilled politician is the ability to speak to a group of people holding widely disparate views, and have all of them walk away believing they heard what they wanted to hear. Other than Bill Clinton, I've personally never seen a politician even in the same league as Barack Obama when it comes to that ability. His most consequential speeches are shaped by their simultaneous affirmation of conflicting values and even antithetical beliefs, allowing listeners with irreconcilable positions to conclude that Obama agrees with them.

The highly touted speech Obama delivered last week on US terrorism policy was a master class in that technique. If one longed to hear that the end of the "war on terror" is imminent, there are several good passages that will be quite satisfactory. If one wanted to hear that the war will continue indefinitely, perhaps even in expanded form, one could easily have found that. And if one wanted to know that the president who has spent almost five years killing people in multiple countries around the world feels personal "anguish" and moral conflict as he does it, because these issues are so very complicated, this speech will be like a gourmet meal.

But whatever else is true, what should be beyond dispute at this point is that Obama's speeches have very little to do with Obama's actions, except to the extent that they often signal what he intends not to do. How many times does Obama have to deliver a speech embracing a set of values and polices, only to watch as he then proceeds to do the opposite, before one ceases to view his public proclamations as predictive of his future choices? Speeches, especially presidential ones, can be significant unto themselves in shaping public perceptions and setting the terms of the debate, so Obama's explicit discussion of the "ultimate" ending of the war on terror can be reasonably viewed as positive.

But it signals nothing about what he actually will do. I'm genuinely amazed that there are still smart people who treat these speeches as though they do. As Esquire's Tom Junod put it after the speech: "if the Lethal Presidency reminds us of anything, it's that we should be a long way from judging this president on his rhetoric or his portrayal of himself as a moral actor." The Atlantic's Conor Friedersdorf added that Obama "has a long record of broken promises and misleading rhetoric on civil liberties, and it would be naive to assume that he'll follow through on everything he said on Thursday."

MORE KNIFING AT LINK--WELL WORTH THE READ!

Don't pay attention to what he says, pay attention to what he does.

and OUCH! Oh, goddess, I DO HOPE that President Mellifluous is reading this. Particularly this:

NO MORE THAN THE POTUS DOES, CERTAINLY! IT'S NOT A 1% CHARACTERISTIC.

http://www.salon.com/2013/05/26/george_packer_dont_ceos_have_any_shame/

What happened to the idea that it's wrong to fire 20 percent of your staff and give yourself a raise?

Of all the compliments I’m inclined to pay to George Packer’s new book, “The Unwinding: An Inner History of the New America,” the one worth paying first is that it’s a pleasure to read, though not in the way I anticipated.

Packer is intelligent, explicitly analytical and happy to give himself plenty of word count to interrogate his subject from every angle. It’s a style he brings to his reporting in the New Yorker and to books like “The Assassin’s Gate: America in Iraq.”

“The Unwinding” is complex and intelligent, but these qualities are coalescent rather than explicit. And the narrative space of the book is highly pressurized. The chapters are short. The sentences shoot forward. The descriptors come quick and sharp and loaded for bear. The perspective jumps from one protagonist to the next rapidly, with nothing connecting the many characters — knowns like Newt Gingrich, unknowns like struggling biofuels entrepreneur Dean Price — except for Packer’s masterful location of them within the larger drama of the “unwinding.”

MORE

http://www.dailykos.com/story/2013/05/22/1211018/-Internal-Wall-Street-pitchbook-shows-that-you-the-clients-are-suckers

Do you despise Wall Street sufficiently yet? How about now?



Sexism ain't the half of it. It's basically a manual on how to sell stocks modeled on how the biggest bastards of the used car industry might sell used cars, and is a fine demonstration of how similar the two worlds are. A part of the pitch book known colloquially at the firm as "Don't Pitch the Bitch" demonstrates how to push a client to hurry up and buy some stock without getting his wife involved:


Alternatively, maybe you tease the client by … oh, hell, I don't even know what this is:


There's also tips on how to bully clients into buying a stock by claiming that time is running out on this hot deal, or by implying that the client is just a small fish and you're practically doing them a favor by letting them buy from you at all, what with all the bajillionaires you usually work with. Nearly all of it, in fact, it based on bullying the client. Here's the internal pitchbook for a high-profile Wall Street firm, and it reads like a how-to manual for telemarketing scams. Not that that there's much difference there.

Nothing about Wall Street exists to help the little guy. Nothing. It's all just a mechanism for extracting money from the less wealthy, from cities and states, and from entire industries to put into the hands of the very rich.

I had an agent with Merrill Lynch who tried to use tricks like this, really opened my eyes. This is why brokers like Scott Trade and T.D. Ameritrade are doing so well.

But my sister, retired from a big Boston bank, refuses to see otherwise. Those mutual funds she has, spread the risk among lots of stocks such that when one stock is a loser, the rest of the fund pulls in the gains from the remaining stocks. In theory, that is true.

But in PonziWorld, those mutual funds are extracting her so-called wealth to the benefit of the super-rich. When the markets crash again, insiders will have already gotten out their gains. But sister tells me that she would never get out because over the long term, her funds will recover.


Again, in theory, that is true. However, we are living in PonziWorld, where the wealth will be extracted again for the super-rich.

http://www.businessinsider.com/americas-top-colleges-have-a-rich-kid-problem-2013-5

In case you ever wondered just how much wealthy students dominate America's top colleges, here's a nice illustration from a new report by the Century Foundation.

At the most selective schools in the country,* 70 percent of students come from the wealthiest quarter of U.S. families.

Just 14 percent come from the poorest half.

And while these statistics date back to 2006, I think it's safe to say they haven't changed greatly in the last few years.

SOUNDS LIKE THE 70'S TO ME.

?w=300&h=225

(ILLUSTRATION FROM America’s Love Affair with All Things Zombie
http://barbaralsorensen.wordpress.com/2011/08/27/americas-love-affair-with-all-things-zombie/

)

BUT ON WITH THE STATED TOPIC:

http://www.counterpunch.org/2013/05/24/the-resurrection-of-ben-bernanke/

An effort is underway by establishment economists to legitimate the Bush and Obama administrations’ bank bailouts and the Federal Reserve’s subsequent efforts to boost financial asset prices as necessary actions that saved the economies of the capitalist West. Liberal luminaries such as Princeton University’s Paul Krugman and MIT’s Robert Solow have come to the defense of Fed Chair Ben Bernanke in particular, and Treasury Secretaries Henry Paulson and Timothy Geithner by inference, to assert what could have been a catastrophe reminiscent of the Great Depression was averted through well-conceived public policies and that Mr. Bernanke’s economic prescriptions have added to ‘our’ understanding of how to manage financial crises.

This is not to suggest enthusiastic criticism of government and Fed actions, or rather inactions, have not been forthcoming. Mr. Krugman in particular has argued that far greater efforts to revive the still moribund economy are needed including fiscal stimulus and more aggressive monetary policies from the Fed. But the general sense conveyed is the government and Fed actions taken were legitimate and beneficial to ‘the economy.’ In this formulation it is the ill fortune of those who haven’t benefited that relegates them to the ether of ‘the economy’ as defined by mainstream economists and official statistics. Given the terms of this ‘discussion,’ a new Great Depression and relative prosperity can coexist for a time without contradicting establishment economist’s claims of (limited) economic revival.

The language of fortune and misfortune suggest nature’s caprice, the luck of the draw, the unpredictable outcomes of random events. However, ‘market’ economics requires a benevolent and prescient nature—one that links ‘natural’ endowments—intelligence, imagination, ambition and talent, to ‘nature’s’ rewards. It may be ‘unfortunate’ that bankers, corporate executives and inheritance rentiers have been the only beneficiaries of government and Fed policies to date, but only to the extent everyone isn’t a banker, corporate executive or trust-fund baby. The great economic tragedy in this theory is policy ‘mistakes’ caused temporary periods where the benevolence of markets was overwhelmed by accidents of history—random events with improbable links to human actions, institutions and historical relations.

Evidence of class struggle is empty conspiracy at the conferences and forums where educated (mostly) men in suits get to know each other’s ‘human’ side. The apolitical careerists of Washington and New York, Chicago and Des Moines, long ago concluded ‘its just business,’ the intersection of economic and political power an artifact of their natural distribution. For those too dull to intuit the facts of nature economists have mathematical models, and for the truly dull Powerpoint presentations, that explain it all. Sure, the Federal Reserve created three trillion dollars and used it to buy financial assets from connected insiders at above market prices, but how did they get to be connected insiders in the first place? And yes, the bank bailouts were odious, but imagine the consequences if J.P. Morgan’s Payday Lending subsidiaries could no longer supply banking services to ‘under-banked’ communities?

HOW, INDEED? READ ON AT LINK

http://www.reuters.com/article/2013/05/27/us-economy-global-idUSBRE94P0D820130527


...Global stocks stumbled last Thursday in one of the few times the grey economic reality cut through this year's reverie in financial markets. And that could mark the start of a trend, after Federal Reserve Chairman Ben Bernanke last week hinted the U.S. central bank could soon scale back its monthly bond purchases that have flooded stock markets with new cash.

Some poor business surveys from China have also had an impact, suggesting the world's No.2 economy is struggling for momentum.

While there is little in the way of major economic data this week that will send chills through stock markets as happened on Thursday, there is a renewed sense of caution in the market.

"The underlying momentum in the global economy is weaker than it should be at this point of the economic cycle, five years after the global crisis," said Lena Komileva, director of G+ Economics consultancy in London.

"We have yet to see evidence of a convincing, self-sustained positive feedback loop between real growth and market value inflation."

Hope that market confidence would filter through to the real economy was memorably described as "positive contagion" by European Central Bank President Mario Draghi in January - in hindsight perhaps more in hope than expectation. Growth is still proving to be elusive for the euro zone economy, largely thanks to the extent of the budget austerity taking place across the continent. On Wednesday, the European Commission will release its review of its countries' debt-cutting policies, which will confirm that the likes of France, Spain and Slovenia are to be given more time to trim their budget deficits to target. The Organisation for Economic Co-operation and Development's semi-annual review of the world's major economies will come out on the same day, having identified global economic activity "picking up" in its interim assessment in March....

ALL THAT'S NEEDED IS A BLACK-SWAN EVENT, AND WE HIT THE TIPPING POINT....

http://www.nationofchange.org/washington-s-literal-sinkhole-and-our-idiotic-fixation-deficits-1369663205

On Tuesday, a “sinkhole” suddenly sank in Washington D.C. three blocks from the White House. Not a metaphor, but a massive hole in the road as “long as a Ford Explorer,” double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897. The sinkhole will take at least five days to “repair.”

There is an idiocy about our current national politics that is simply stupefying. We are sitting idly, watching, and suffering, as our nation disintegrates into a run-down backwater. Our airports are a global disgrace. Our railroads, broadband, energy grid are all outmoded by international standards. A bridge falls every other day. Our sewage systems are overwhelmed by normal use, and collapse in the extreme weather that has become the national norm. Sinkholes now are becoming a life-threatening peril.

At the same time, over 20 million people are in need of full-time work. The construction industry has still not recovered from the housing collapse. The federal government can borrow money at interest rates near zero. Yet instead of grabbing this opportunity to rebuild the country, Washington is focused on cutting budgets, an austerity that clearly costs jobs and impedes the recovery.

Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future. That’s why the head of the Business Roundtable, former Republican governor John Engler, says it. At the top of his wish list for the economy is borrowing money to invest in roads and infrastructure. The resulting growth will more than repay the virtually free money. We’ll end up with a more competitive economy, a healthier and modern infrastructure that will make lives easier and safer, more jobs, more income, more taxes and less debt.

This is literally a no-brainer. Yet when president proposes even a modest infrastructure bill, the Republican Congress rules it dead on arrival...

MORE MOANING AND GROANING AT LINK

http://www.bloomberg.com/news/2013-05-27/europe-s-banks-turn-to-u-s-subprime-for-salvation.html

The U.S. mortgage bonds that were exported around the globe and triggered the worst financial crisis since the Great Depression are now helping Europe’s banks and governments repair balance sheets after jumping in value.

Lloyds Banking Group Plc (LLOY), Britain’s biggest mortgage lender, is auctioning $8.7 billion of mortgage debt to plug a capital shortfall, a month after Lone Star Funds and Credit Suisse Group AG paid 6.7 billion euros ($8.7 billion) for assets taken over from the failed Belgian bank Fortis. The Netherlands can sell debt from the bailout of ING Groep NV (INGA) at a “decent profit,” Chief Executive Officer Jan Hommen said this month.

While European banks and governments need to sell assets to raise capital or repay taxpayer-funded rescues, investors are seeking riskier, potentially higher-paying securities as central banks globally push down yields on safer debt. With U.S. home prices rising at the fastest pace in seven years, that has turbocharged demand for non-agency bonds, with subprime-backed debt returning 12.7 percent this year after rallying more than 41 percent in 2012, according to Barclays Plc data.

“Fundamentals of housing continue to improve, and the asset class itself continues to shrink in size as borrowers repay debt or default,” said Harrison Choi, a bond manager for TCW Group Inc., which oversees about $131 billion in assets.

http://www.bloomberg.com/news/2013-05-28/worse-than-cyprus-debt-load-means-caribbean-defaults-to-moody-s.html

Three bond restructurings totaling about $9.7 billion in the Caribbean this year are failing to ignite economic growth and may not help the region avoid more defaults, according to Moody’s Investors Service.

The bond swaps this year didn’t go far enough to fixing the Caribbean’s “unsustainable” mix of debt and deficits, Warren Smith, the president of the Caribbean Development Bank, said May 22. Jamaica and Belize, which restructured about $9.5 billion in local and global bonds this year for the second time since 2006, face a “high probability” that they will default again, Moody’s said in a May 20 report.

Among Caribbean island economies, only the Bahamas is expected to grow more than 1.5 percent this year compared with 4 percent for Latin America, Moody’s said in an earlier report. Without faster growth, repeat defaults may become common as Caribbean governments find it easier to cut bond payments than spending, said Arturo Porzecanski, a professor of international finance at American University in Washington.

“These countries are exhibiting an increased unwillingness to pay,” Porzecanski said. “We may be seeing the birth of a region of serial defaulters.”

http://www.bloomberg.com/news/2013-05-27/franco-german-youth-jobs-push-seeks-to-damp-national-differences.html

Germany and France said companies in struggling euro-area countries need cheaper credit to create jobs and ease youth unemployment, as Europe’s two biggest economies seek a joint response to the debt crisis.

German Finance Minister Wolfgang Schaeuble, his French counterpart, Pierre Moscovici, and Werner Hoyer, who heads the Luxembourg-based European Investment Bank, all singled out higher company financing costs in southern Europe as an obstacle to economic recovery at a meeting in Paris today.

“An Italian or Spanish small or medium-size enterprise doesn’t fund its investments at the same rate as a German company,” Moscovici said. “The channels of financing aren’t working.” Schaeuble said soaring youth unemployment in the region undermines European unification.

French President Francois Hollande and German Chancellor Angela Merkel have pushed competing views on how to kick-start growth throughout the 17-nation euro bloc, with the French leader urging less austerity and Merkel calling for a reduction of debt and deficits with labor-market overhauls to fuel hiring.

http://www.bloomberg.com/news/2013-05-27/rajoy-awaits-reprieve-as-spanish-recession-evidence-mounts.html

Spain will probably secure two more years to tame the largest budget deficit in the European Union (EUBDEURO) as first-quarter data show the effects of the toughest austerity measures in its democratic history.

The European Commission will decide tomorrow whether to grant Spain until 2016 to bring its deficit back within the EU limit of 3 percent of gross domestic product. Its verdict is due as a series of releases this week including mortgage lending, gross domestic product and inflation may underline that the construction slump that triggered the nation’s economic crisis in 2008 is far from over.

Prime Minister Mariano Rajoy is struggling to reorder public finances and haul the fourth-largest economy in the euro region out of recession as EU leaders back off austerity-first policies without embracing funded stimulus. Rajoy himself has ruled out lowering taxes.

“It’s not enough just to ease back on austerity,” Jonathan Loynes, chief European economist at Capital Economics Ltd. in London, said in a telephone interview. “There needs to be more stimulus, part of which can be done on a national level through structural reforms and some of which has to be done at the euro-zone level in terms of monetary policy.”

http://uk.reuters.com/article/2013/05/28/uk-greece-polls-idUKBRE94R08A20130528

(Reuters) - Greece's ruling conservatives have widened their lead over anti-austerity opponents, three polls showed, in a sign that improving business sentiment has bolstered support for the crisis-ridden country's government.

A survey by GPO pollsters for Mega TV released on Tuesday put support for the New Democracy party at 21.3 percent, 1.8 percent ahead of the leftist Syriza party, which opposes Greece's international bailout.

Two polls published on Sunday by agencies RASS and ALCO showed Prime Minister Antonis Samaras' conservatives leading by as much as 2.8 points, up from about 1 point last month.

This is New Democracy's widest poll lead since an election victory last year that made it the backbone of a three-party coalition dedicated to renewing Greece's EU/IMF bailout and saving it from bankruptcy and a chaotic exit from the euro zone.

http://uk.reuters.com/article/2013/05/28/uk-colombia-moneylaundering-idUKBRE94R04220130528

(Reuters) - Rotting wooden planks heave as dozens of barefoot Wayuu Indians carry washing machines, fans and stereos on their backs from the hull of a cargo ship docked on the tip of northern Colombia.

Throughout the night, they unload thousands of boxes piled 30 feet (10 meters) high and haul them down the battered ramp to waiting trucks.

By torchlight, customs director Claudia Gaviria rips open a box at the makeshift wharf at Puerto Nuevo on the La Guajira peninsula. She counts the number of fans against documents supplied by the ship.

"If there's more than the paperwork says, we will seize the merchandise and investigate because it could be contraband or even money laundering," said Gaviria, taping the box up and reaching for another. "We found some doctored papers on this ship."

http://uk.reuters.com/article/2013/05/28/uk-volkswagen-wages-idUKBRE94R04W20130528

(Reuters) - Volkswagen granted its German factory workers an inflation-busting pay rise on Tuesday, the latest hefty wage hike in Germany as union demands meet support from politicians seeking both to woo local voters and underpin the wider EU.

Germany faces federal elections in September which have emboldened unions to press for salary increases popular with the public. But Berlin is also hoping the round of salary increases can encourage Germans to spend more on goods and services from weaker euro zone economies, evening out imbalances and boosting the bloc as a whole, after the International Monetary Fund pressed the German government to act.

VW's pay deal - which lifts wages 3.4 percent from September, then by another 2.2 percent from July 2014 - matches an agreement negotiated earlier this month by the IG Metall union for Germany's 3.7 million engineering and metal workers. Inflation is currently running at just 1.2 percent.

"This and other similar wage deals will encourage Germans to spend more, supporting German economic growth but also helping euro zone rebalancing," said Christian Schulz, an economist at Berenberg Bank.

http://uk.reuters.com/article/2013/05/28/uk-ecb-nowotny-idUKBRE94R0DQ20130528


(Reuters) - The European Central Bank is looking at ways to boost banks' liquidity rather than cutting interest rates, ECB policymaker Ewald Nowotny said in an interview with Reuters.

Sitting in his wood-panelled office at the Austrian central bank in Vienna, the ECB Governing Council member said he expected the economy to brighten eventually.

"Concerning the economy in Europe, I think it ... will improve in the second half of this year," Nowotny said.

With rates already "very low" the focus, he said, should be on giving banks easier access to liquidity, for example by reviving the asset-backed securities (ABS) market in Europe and by lowering the mark down on such assets when used as collateral at the ECB.

S&P 500 +0.7%
DOW +0.7%
NASDAQ +0.9%

http://www.nationofchange.org/washington-s-literal-sinkhole-and-our-idiotic-fixation-deficits-1369663205

On Tuesday, a “sinkhole” suddenly sank in Washington D.C. three blocks from the White House. Not a metaphor, but a massive hole in the road as “long as a Ford Explorer,” double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897. The sinkhole will take at least five days to “repair.”

There is an idiocy about our current national politics that is simply stupefying. We are sitting idly, watching, and suffering, as our nation disintegrates into a run-down backwater. Our airports are a global disgrace. Our railroads, broadband, energy grid are all outmoded by international standards. A bridge falls every other day. Our sewage systems are overwhelmed by normal use, and collapse in the extreme weather that has become the national norm. Sinkholes now are becoming a life-threatening peril.

At the same time, over 20 million people are in need of full-time work. The construction industry has still not recovered from the housing collapse. The federal government can borrow money at interest rates near zero. Yet instead of grabbing this opportunity to rebuild the country, Washington is focused on cutting budgets, an austerity that clearly costs jobs and impedes the recovery.

Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future. That’s why the head of the Business Roundtable, former Republican governor John Engler, says it. At the top of his wish list for the economy is borrowing money to invest in roads and infrastructure. The resulting growth will more than repay the virtually free money. We’ll end up with a more competitive economy, a healthier and modern infrastructure that will make lives easier and safer, more jobs, more income, more taxes and less debt.

http://www.washingtonpost.com/business/economy/united-states-lags-europe-on-paid-vacation-time/2013/05/27/5cc98964-c4b1-11e2-914f-a7aba60512a7_story.html

Oh, to be Austrian.

On a weekend when thoughts officially turn to summer, fruity cocktails and ways to skip work, it is an apt time to remember: Not everyone is able to laze around on Memorial Day.

Or looking forward to a vacation at all.

Or getting paid for whatever time off they do receive.

In its latest update on vacation and holiday rules among developed countries, the Center for Economic Policy and Research notes that the United States remains alone as the only rich nation without legally mandated vacations for employees, and with no requirement that official holidays come with extra pay and a compensating day off.

http://www.washingtonpost.com/business/economy/gasoline-prices-spike-in-midwest/2013/05/27/b6b0fda6-c4b9-11e2-8c3b-0b5e9247e8ca_story.html

Gasoline prices have smashed records in much of the upper Midwest as refinery outages, low inventories and continuing high crude oil prices have combined to inflict pain at fuel pumps on the eve of the summer driving season.

Prices hit a record $4.27 a gallon in Minnesota on May 20, up 80 cents in less than a month, according to AAA’s Daily Fuel Gauge Report. In North Dakota, where the production of crude oil has been booming, gasoline prices set a record of $4.24 on Wednesday, up 64 cents in less than a month.

The Union of Concerned Scientists estimated that Americans would spend $1.4 billion on gasoline over the Memorial Day weekend, the traditional start of the heavy driving season. The group, which supports greater fuel efficiency, said new automobile standards could save motorists $619 million by 2025. That would be enough to buy 300 million ice cream cones, 10.5 million amusement park tickets or 77 million bottles of sunscreen, the group estimated.

The federal Energy Information Administration’s weekly petroleum report blamed the sharp price increases in the Midwest on “both planned and unplanned refinery maintenance.” It said that as a result of limited gasoline production, “inventories, which were robust going into turnaround season, have been significantly depleted.” The agency said getting extra supplies from the Gulf of Mexico coast by pipeline could take as long as three weeks.

http://www.washingtonpost.com/politics/political-intelligence-firms-set-up-investor-meetings-at-white-house/2013/05/26/73b06528-bccb-11e2-9b09-1638acc3942e_story.html

Wall Street investors hungry for advance information on upcoming federal health-care decisions repeatedly held private discussions with Obama administration officials, including a top White House adviser helping to implement the Affordable Care Act.

The private conversations show that the increasingly urgent race to acquire“political intelligence” goes beyond the communications with congressional staffers that have become the focus of heightened scrutiny in recent weeks.

White House records show that Elizabeth Fowler, then a top ­health-policy adviser to President Obama, met with executives from half a dozen investment firms in 2011 and 2012. Among them was Kris Jenner, a stock picker with T. Rowe Price Investment Services who managed its $6 billion Health Sciences Fund.

Separately, an officialin the agency that oversees Medicare and Medicaid spoke in December with managers of hedge funds, pension plans and mutual funds in a conference call. The official, Andrew Shin, was pressed during the 50-minute call for information about upcoming Medicare decisions but declined to discuss matters still under agency review, according to people familiar with the call.

http://www.guardian.co.uk/commentisfree/2013/may/28/student-debt-lasts-lifetime

Amy Diede homeschools her two children – Caleb, 9, and Ashley, 8 – and is married to a devoted husband and father, Christian. Even though Amy has a master's in psychology, and until recently was a professional herself, Christian is now the breadwinner for the family, working as a cardiovascular nurse on short-term contracts across the country.

At the moment, the Diede family lives in California. Christian wants to own a home again, but for now they are a roaming family whose home is a 400-square-foot RV. A big part of the problem is Amy's student loan debt. It does not merely affect their bank statement, it has found its way into their daily thoughts and life. Together, Amy and Christian owe over $82,000 in student loans.

"It's like carrying a big backpack filled with bricks all over the place, and I can't ever let it go. It's always there. I may get rid of a few bricks, but there's always going to be more. I don't see the student loans going away."

Amy signed up for the Income Based Repayment Program (IBR) in the summer of 2012, which means after she pays a modest amount every month for the next 20 years on her federal student loans, her debt will be forgiven. Yet in Amy's mind, it will never go away.

http://www.voxeu.org/article/banking-crisis-giant-carry-trade-gone-wrong

A pernicious aspect of the Eurozone crisis is the ‘doom loop’ linking European banks and governments. This column argues that poor European policy choices in the wake of the 2008 Global Crisis worsened the problem. Rather than being forcefully recapitalised as in the US and UK, many Eurozone banks were left undercapitalised and free to gamble for redemption. In what may be the greatest carry trade ever, they borrowed cheap, first in short-term debt markets and then from the ECB, to invest in high-yield but risky sovereign debt. Substantial bank recapitalisations against sovereign-bond losses is the way forward.

DETAILS AT LINK

http://firedoglake.com/2013/05/26/reasoning-by-metaphor/

We don’t make policy in this country based on our knowledge of the likely outcomes; instead we limit our actions to those possible in an age dominated by gut feelings and the irrational demands of the rich, driven by faulty reasoning. This week we see several examples of disrespect for knowledge and reasoning. On the more or less left, we have the spectacle of Michael Kinsley, currently an editor at large at The New Republic, exploring the Puritan within himself:



I think that last sentence means that it is a least possible that the people who caused the Great Crash might suffer now or in the future, Kinsley’s nod at the unfairness of his solution. Kinsley drew sharp rebuttals from people who notice that his solution is miserable for millions. Somewhere John Maynard Keynes wrote that he was deeply moved by the sight of unemployed people, and saw no reason for it. This insight played a major role in the development of the ideas in The General Theory. It runs directly counter to Kinsley’s gut feelings. Keynes explains how we get out of the disaster. Kinsley and the austerians have no clue about how their ideas lead us out, except along the Via Dolorosa, all of it borne by the people who didn’t cause the problem.

In Rolling Stone, Matt Taibbi turns his explanatory powers to the Republican intransigence on the debt ceiling:


Taibbi points out that our national debate is all about how government is just like a household that has run up too much debt, a stupid metaphor. It completely ignores all the ways that governments and households are radically different, not least of which is that governments don’t die. People use that metaphor to frame their thinking about how to cope with continuing federal deficits, and come up with answers that lead to austerity and the Republican refusal to raise the debt ceiling...The error in both cases comes from reasoning with a metaphor. Kinsley talks about a “we” who did bad things with money and the economy. By we, he means society. Then he uses individuals as a metaphor for society. If you commit a sin, you should be punished. If society commits a sin, it should be punished. This reasoning is identical to the reasoning from the household metaphor. Reasoning with a metaphor is a common mistake in any kind of serious thinking, and one that is very hard to dislodge, as shown in a paper by two Stanford professors, Paul Thibodeau and Lera Boroditsky. When a metaphor is used to describe a problem, there is a bias towards using it to work towards solutions. The authors ask people for solutions to the crime problem in a fictional city. They use two metaphors, crime is a beast and crime is a virus, with two groups of subjects. The answers given by the groups follows the metaphor: beast people want strict law enforcement and longer sentences, while virus people want to know what causes the crime and how to remedy those causes. These metaphors don’t just show up in a society; people seeking a specific outcome deliberately inject them into public discourse. Kinsley complains about this: “People who favor austerity are “austerians,” a clever Krugman coinage that makes adherents sound like aliens from another planet.” Well, Kinsley ignores his coinage of choice: we are sinners who should be punished.

If we lived in a society that valued knowledge in decisions about public policy, this would not be a problem. Take the words of the paper. You would simply ask how is crime like a beast? Or, how is crime like a virus? Asking the question forces actual thought. That’s what lawyers do. They ask the judge to decide whether or not the facts of a previous legal case are like or different from their case. The judge is supposed to be neutral, and questioning the metaphors helps the judge make good decisions. In Kinsley’s case, people are asking these questions. But as Taibbi shows, even knowledgeable people use the stupid household metaphor, and Republicans are addicted to it. Democracy only works when people have actual knowledge about the likely consequences of policy decisions. Unfortunately, knowledge isn’t the decisive factor in policy decisions, and it’s as true of the left as it is of the right. Just look at the sorry example of the courtier Larry Summers. Or at Taibbi’s statement that the Fed is just ignoring stupid public debate.

How can we have a democracy when we surrender control of the discourse to specialists in the coinage of fraudulent metaphors?

FIRST, WE SHOOT ALL THE PR PEOPLE...

All the more likely to close down 500....WTF is wrong with people?

I'm going back through the Looking Glass, by means of a glass or two...as soon as I have the time and opportunity to drink myself into a stupor. Maybe next week, or next month...or next year, if we are still around then.

There's probably (likely) an algorithm out there that predicts just how many suckers they can con by raising prices on select stocks with high frequency trading. These suckers jump in right before the ole dump cycle of the pump 'n dump.

And look at the article in LBN about home prices running up faster than before the crash. Some people never learn.

They never learn

It's cold (55F), thundering and rainy, the Kid is sick and I'm sneezing.

Also it's the first Board meeting after the annual meeting and election the result of which is merely to leave us one member short, so stalemates of ties are possible...no new blood, either.

http://ataxingmatter.blogs.com/tax/2013/05/does-apples-cook-cook-the-tax-books.html

Apple's CEO was apparently all smiling and charming in his testimony on Apple's international tax gimmicks. Not surprisingly, he claimed that Apple pays tax on all its US profits and doesn't shift US profits offshore. See, e.g., Michael Shear, Torches and Pitchforks for IRS but Cheers for Apple, New York Times (May 22, 2013); Schwartz & Chen, In disarming testimony, Apple chief eases tax tensions, New York Times (May 21, 2013) (noting that Apple effectively claims a rate of about 30% but that is misleading).





While nobody at the hearing questioned the figure, it provides a distorted picture of Apple’s total tax burden. Based on its public filings, the company pays just under 14 percent of its income in taxes worldwide, according to Scott D. Dyreng, an assistant professor of accounting at Duke University’s business school whose research specializes in the actual tax rates of large U.S. companies...Cook’s statistical spin goes to the heart of the debate over corporate tax avoidance. By shifting income from countries where they operate to offshore tax havens, multinational companies such as Apple, maker of the iPhone and iPad, can manipulate their tax rates and boost their profit. Apple’s calculation “ignores the issue of profit shifting, which is the central controversy that was the subject of the hearing,” said Martin Sullivan, a former U.S. Treasury Department economist and chief economist at Tax Analysts, a nonprofit organization. “Apple has shifted enormous amounts of profits from the United States to an untaxed entity overseas.

Our ability to handle offshoring of assets hasn't advanced enough to take into account the ready globalization of intangible assets in any way that makes sense, and our tax administrators (bludgeoned by the heavily financed corporate lobbyists and their Congressional enablers, constantly underfunded and understaffed and therefore outmanned, constantly attacked by the right, as in the craziness currently underway against the division that attempts to appropriately categorize tax exempt applicants to avoid subsidizing their political activity without at least demanding disclosure of donors) and our courts (with too many ideologically driven right-wing activist judges that favor Big Business interests, appointed mostly by GOP presidents but even some by DEM presidents) don't usually have the desire or the guts to take on the use of offshore corporate shells under well-established statutory and judicial anti-abuse doctrines.

Those existing federal tax common law doctrines would permit courts (and therefore administrators) to disregard circular flows of cash, non- economic reality based on tax-avoidance dreams, and use of corporate shells with no or few employees and no or few actual commodities and management from a distant headquarters as conduits. But the companies have gotten away with it for so long, and have so effectively lobbied tax administrators who have too cozy a relationship with the tax bar and legislators who have a much cozier relationship with Big Business principals, that almost everybody now talks of use of seemingly endless chains of empty shell corporations or corporations tweaked with "just enough" superficial semblance of an actual business function to avoid US taxes as "common practices" that "everybody" considers legal under the "letter of the law." This is hyper-textualism that condones doing anything you think you can get away with so long as it isn't clearly prohibited by a specific provision. Of course, the creation of specific provisions to counter discovered abuses requires considerable effort to get through a Big-Business friendly Congress. Those that do make it through increase the complexity of the Code. And then the lobbyists who lose on one-in-a-hundred of these innovative interpretations of what's allowable just go to work on tax administration to get a more friendly interpretation, and then go to work on Congress to "simplify" the Code and "cut rates" so they can be "competitive." It is a vicious cycle that is driving corporate taxes to zero, while most of the wealthy elite who own the corporate stock and business debt and business partnership interests are also driving their own rates down, as the myth of "job creation" by owners of capital who "deserve" lower capital gains rates is pushed by the same funding sources through well-funded so-called 'think tanks' and hired academic guns.

The Senators gave him more blowjobs than he could have bought at the Moonlight Bunny Ranch.

Corporate tools at their finest.

http://www.marketwatch.com/story/us-home-price-growth-fastest-in-nearly-7-years-2013-05-28



Prices here are certainly doing well. (Newer) existing homes are going to contract in a few weeks, sometimes days. Just not a lot of inventory for one but that's changing. There are now about 6-8 new developments within a half-mile to a mile from where I live. Supposed to be close to 2,000 - 2,200 new homes total when all is said and done w/those developments.

And we can't get a new high school built because of NIMBY howlers.

restricting the supplies, it's not surprising. People got to live somewhere.

5/28/13 Keeping The 'Recovery' Dream Alive; 3 Big Banks Halt Foreclosures In May

What is the only thing better than Foreclosure Stuffing to provide an artificial supply-side subsidy to the housing market? How about completely clogging the foreclosure pipeline, by halting all foreclosure sales, which is just what the three TBTF megabanks: Wells Fargo, JPMorgan and Citi have done in recent weeks. Under the guise of 'ensuring late-stage foreclosure procedures were in accordance with guidelines', the LA Times reports that these three banks paused sales on May 6th and all but halted foreclosures. Perfectly organic housing recovery - as we noted earlier... and guess what states the greatest number of 'halts' are in from these banks - California, Nevada, Arizona - exactly where the surges in price have occurred.

more...
http://www.zerohedge.com/news/2013-05-28/keeping-recovery-dream-alive-3-big-banks-halt-foreclosures-may

Granted, it's very anecdotal but out of about 170 homes, we had 4 abandoned homes. Now there's only 1. 3 of them finally sold all within a couple of weeks of each other. Weird...they sat empty since we moved in nearly 3 years ago and all of a sudden 75% of them sell?