http://mathbabe.org/2014/10/24/the-class-warfare-of-halloween/

...For me it’s always been about the way social rules get thrown out the window and there’s a celebration of generosity and neighborliness. Costumes are the excuse to tell each other how amazing they look, and candy is the excuse to symbolically exchange a token of friendship....At least that was my naive opinion until a friend of mine (subject line “this question made me want to nuke connecticut from orbit”) forwarded me this recent Slate.com’s Dear Prudence advice column entitled Kids from poorer neighborhoods keep coming to trick-or-treat in mine. Do I have to give them candy?

Read the column, unless you think you might barf. It’s exactly as bad as you think it is. The good news is that Prudence’s answer is spot on and includes the phrase:



To tell you the truth, I’d never seen a whiff of class warfare in Halloween until this ridiculous question. But now, having thought about what Halloween represents, as an alternative – if very brief – economic system in which we all actually share (versus the so-called “sharing economy”), I can understand why someone who intensely examines and frets about their place in the hierarchy might find some way to distort it.

Instead of reveling in the inherent rule-breaking nature of Halloween, in other words, this person is threatened by it and wants to control it and make it conform to the class-based system they are familiar with. At least that’s my interpretation, because obviously it’s not really about how much Halloween candy costs.

Or maybe that person is just a witch (or a warlock).

TAKE THAT BACK, MATHBABE, OR YOU'LL HAVE ROWLING ON YOUR CASE!

http://www.addictinginfo.org/2014/10/24/another-150000-detroit-residents-are-about-to-become-homeless/

As the looting of Detroit continues, another 1/5 of the city’s residents are slated to become homeless, under right wing governor Rick Snyder’s Emergency Manager. On October 8th, Detroit’s appointed Emergency Manager, Kevin Orr, along with the city’s conspicuous mayor, Mike Duggan (read how Duggan was *elected here) and Wayne County Treasurer, Raymond Wohtowicz, announced another mass sell off of Detroit property, via public auction. One lucky, undisclosed bidder, will soon become of the owner of more than 6,300 properties, at least 1,000 of which are considered valuable, in what is being promoted as a ‘blight bundle.’

To understand exactly how much of Detroit is being sold to the highest bidder, look at the map below. Light blue shading indicates properties that have already been sold, while dark blue dots indicate properties that are being sold now. The red dots you see are all properties that are included in single bid, huge ‘blight bundle’ that includes more than 6,300 properties.



It’s hard to imagine that after seeing the map above, anyone is still confused about the purpose of Rick Snyder’s emergency manager law. Apparently the Governor’s hand picked emergency manager believes the best way to deal with ‘blight’ is to put an additional 150,000 Detroit citizens out, forcing them onto the city’s streets.

The Bush era housing crisis may have impacted the city of Detroit more than any other city in the nation. After years of right wing policies that paved the way for the outsourcing of American jobs, union busting and attacks on middle class wages, the last vestiges of the city’s middle class neighborhoods were finally swept away in the criminal mortgage fraud scheme, that took its toll on the entire country, but maybe nowhere else quite like here. While the criminal bankers received little more than a slap on the wrist, the people who were harmed by that criminal activity continue to experience the devastating consequences of mortgage fraud, rate rigging and corporate looting.

Who is buying up Detroit? According to the Wall Street Journal, there has been a ‘billionaire’s buying spree‘, as the rich swoop in like the vultures they are, to buy up the property of the very people they made poor, through their own criminal activity. If getting their hands on something that belongs to someone else results in another 1/5 of the city’s residents having no roof over their heads, even as we move into the next Michigan winter, so be it. Why should they care about that? Whoever has the most stuff wins. Human lives and human suffering be damned.

Michigan governor Rick Snyder has done his best to propagandize the need to appoint an ‘emergency manager’ to handle Detroit’s financial crisis. He’s tried to sell his decision to force the city into bankruptcy as ‘what was best’ for the city. Now that those decisions have been forced upon Michigan residents (Michigan voters rejected Snyder’s emergency manager law in November of 2012) we see the devastating effects of allowing those who put money over human beings to gain control over the state. More than 50 percent of Michigan’s minority citizens now live in areas run by Snyder appointed emergency managers, instead of duly elected representatives. Those citizens no longer have a say in who represents them, and it shows in the way EM controlled areas are being governed.

Detroit’s manufactured water crisis is just another part of the same scenario. The water crisis currently effecting Detroit residents is not the result of people failing to pay their bills, as most media outlets have falsely reported. The water crisis was created by fraud on the part of the Detroit Water and Sewage Company. DWSD claims they billed people in error for six years, then suddenly, before the crisis occurred, sent out bills to residents which totaled $116 million dollars. DWSD claims they didn’t bill Detroit residents properly for six years because ‘oops, sorry’ there was a ‘systems change.’

MORE DISASTER CAPITALISM AT LINK

http://www.detroitnews.com/story/news/politics/elections/2014/10/23/obama-detroit-visit-november/17774183/

President Barack Obama is scheduled to rally Michigan Democrats on Nov. 1 in Metro Detroit, the Michigan Democratic Party said Thursday.

The president’s visit on the Saturday before the Nov. 4 general election remains tenuous because of the ongoing health crisis surrounding the Ebola virus, which has caused the White House to keep Obama’s schedule nimble. But the White House plans to tout the candidacies of Mark Schauer for governor and U.S. Rep. Gary Peters for U.S. Senate.

“We are honored to have President Obama come to Michigan and highlight just how much is at stake this November,” Michigan Democratic Party Chairman Lon Johnson said in a statement.

The White House confirmed last week that the president would swing through the Detroit area during the last week of the campaign as part of an effort to help Democratic candidates in four states. Sites for a rally in Detroit are still being scouted, one source said...

PERSONALLY, I WOULDN'T BE SURPRISED IF THIS VISIT BY SUCH AN UNPOPULAR PRESIDENT WAS DESIGNED TO ENSURE THAT THE GOP SNAKE SNYDER IS RE-ELECTED GOVERNOR.

http://www.nytimes.com/2014/10/26/us/law-lets-irs-seize-accounts-on-suspicion-no-crime-required.html?_r=0

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up...

SHOCKING? YES. UNEXPECTED? NO.

MORE LIKE THE END OF UNCLE SAM'S QE4EVER, PUMPING UP EVERYONE ALL OVER THE GLOBE...

http://globaleconomicanalysis.blogspot.com/2014/10/home-prices-drop-in-69-of-70-chinese.html

...All it took for china to reverse course was a .8% year-over-year decline.

Home sales are down 11% this year, but that may not last long if September is any indication. Then again, the easing of restrictions may have suckered in the last remaining greater fools.

Either way, I laugh at the assessment analyst Yang Kan who says "developers will keep prices attractive as they open more projects toward the end of the year to meet sales targets".

The only thing that will make prices attractive is a 50% decline in price. That's how big China's property bubble is.

Even in China the pool of greater fools will eventually run out. Perhaps it already has.

MORE DETAIL AT LINK

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/25/why-europe-is-doomed-in-3-paragraphs/

This, from Reuters, tells you everything you need to know about Europe's continued descent into depression:



Here's the background. Euro-zone inflation has fallen to just 0.3 percent, more than low enough to hurt their not-really-recovering economy. That's because lower than expected inflation makes debt burdens higher than expected, so borrowers have to cut back—usually more than lenders increase their own spending. Not only that, but "lowflation" makes it harder for Europe's crisis countries to regain competitiveness, because it forces them to actively cut wages—which increases unemployment—to do so. In short, Europe needs more inflation, and it needs more inflation now. But instead of doing anything about it, the ECB has just told people to pay no attention to the disinflation behind the curtain. It was all, they said, due to one-off factors that would reverse themselves. So no need to worry about a Japanese-style lost decade with low growth and low, or even negative, inflation feeding off each other in a cycle of quiet doom.

This façade lasted until August. That's when ECB chief Mario Draghi finally admitted, in some off-script remarks, that inflation had fallen too low, and Europe's governments had to help out by doing less austerity. Cue the German freakout.

Now here's what you need to remember about the ECB. It hasn't been willing to do anything without the German government's buy-in. (The German central bank is a lost cause that's compared Draghi to the devil—yes, really—for being open to printing money). Of course, this isn't how central banks are supposed to work—they're supposed to be independent—but it's how Europe works. Or doesn't. Once you understand that, you understand why Europe has floundered from one existential crisis to the next. There will be a problem, the ECB will dawdle, then it will try to persuade Angela Merkel to get on board, they'll debate whether it should do too little too late or too late too little, and then, finally, the ECB will do just enough to keep the euro zone from falling apart.

But now even the bare minimum is too much for Merkel. That's because, now that interest rates are zero and the ECB is buying private sector bonds, that bare minimum has turned into the one thing Germany won't agree to: buying government debt, aka quantitative easing. The German public (falsely) believes this would amount to little more than another bailout for southern Europe—especially now that their new anti-euro party is egging them on. That leaves a few possibilities....

SPECULATION AT LINK

http://www.spiegel.de/international/business/capitalism-in-crisis-amid-slow-growth-and-growing-inequality-a-998598.html

Six years after the Lehman disaster, the industrialized world is suffering from Japan Syndrome. Growth is minimal, another crash may be brewing and the gulf between rich and poor continues to widen. Can the global economy reinvent itself? (WITHOUT A WORLD WAR, IF YOU PLEASE...) A new buzzword is circulating in the world's convention centers and auditoriums. It can be heard at the World Economic Forum in Davos, Switzerland, and at the annual meeting of the International Monetary Fund. Bankers sprinkle it into the presentations; politicians use it leave an impression on discussion panels. The buzzword is "inclusion" and it refers to a trait that Western industrialized nations seem to be on the verge of losing: the ability to allow as many layers of society as possible to benefit from economic advancement and participate in political life. The term is now even being used at meetings of a more exclusive character, as was the case in London in May. Some 250 wealthy and extremely wealthy individuals, from Google Chairman Eric Schmidt to Unilever CEO Paul Polman, gathered in a venerable castle on the Thames River to lament the fact that in today's capitalism, there is too little left over for the lower income classes. Former US President Bill Clinton found fault with the "uneven distribution of opportunity," while IMF Managing Director Christine Lagarde was critical of the numerous financial scandals. The hostess of the meeting, investor and bank heir Lynn Forester de Rothschild, said she was concerned about social cohesion, noting that citizens had "lost confidence in their governments."

It isn't necessary, of course, to attend the London conference on "inclusive capitalism" to realize that industrialized countries have a problem. When the Berlin Wall came down 25 years ago, the West's liberal economic and social order seemed on the verge of an unstoppable march of triumph. Communism had failed, politicians worldwide were singing the praises of deregulated markets and US political scientist Francis Fukuyama was invoking the "end of history."

Today, no one talks anymore about the beneficial effects of unimpeded capital movement. Today's issue is "secular stagnation," as former US Treasury Secretary Larry Summers puts it. The American economy isn't growing even half as quickly as did in the 1990s. Japan has become the sick man of Asia. And Europe is sinking into a recession that has begun to slow down the German export machine and threaten prosperity...

GAG ME WITH A GOLD-PLATED, SILVER SPOON!

THEY RESURRECT THAT OLD TRICKLE-DOWN REAGANITE VAMPIRE, DAVID STOCKMAN EVEN, JUST IN TIME FOR HALLOWEEN!

By Greg Hunter’s USAWatchdog.com

Michael Snyder is a self-proclaimed “truth-seeker” and financial writer who says there is no recovery on Main Street, and we are not going to get one—ever. Snyder contends, “We’ve had permanent damage to the U.S. economy. It’s kind of like going to the beach, and you build a sandcastle. The waves start coming in, and the sandcastle is not going to be destroyed by the first wave. Then, more waves will come in, and eventually the whole sandcastle will be wiped out. That’s kind of what’s happening to the U.S. economy. We’ve had waves of economic problems, and we have had permanent damage as a result. Our economy is not totally destroyed yet, but we have permanent damage. Now, new waves are on the way, which will cause more damage because of the long term trends.” Snyder goes on to explain, “None of the long term problems that have been plaguing our economy have been fixed. Instead, the Fed printed a bunch of money and pumped up the stock market. It made people feel good, but the underlying fundamentals are not getting any better.”

http://usawatchdog.com/permanent-damage-to-us-economy-michael-snyder/

I've had another night of contemplation on Sustainable Technology....

IF two basic issues with electricity were solved (by investment, basically) we could switch to an all-electric, all renewable economy practically overnight, and not lose any of our hard-earned technological knowledge in the transition.

Those two issues are STORAGE and TRANSMISSION.

Storage is for times of low-generation of renewable electricity due to lack of sun, or water, or the winds being too slow or too fast for the turbines, or breakdown of the generation plant or the grid.

Currently our battery technology sucks: the batteries are too heavy, store too little electricity per pound (kg) compared to gasoline or other liquid fuels, and usually involve large quantities of toxic compounds: lead, mercury, acids, etc. There's been lots of research underway on battery technology for the past 50 years. Alternatives to battery storage include:

• distributed generation, so that one doesn't have to lug around large batteries, but can tap into local sources just as we fill up at gas stations today. Faster recharging schemes would have to be developed...
  
  
• storage as a fluid fuel (a gas or liquid form) that is recyclable...in form of rechargable (non-polluting) storage: fuel cells that produce water as the waste product are the most developed version, but still going nowhere after 50 years at GE (of course).
  
  
• storage in potential energy form: water pumped uphill or dammed for hydro generation, heat storage in phase-changing materials, flywheels for rotational mechanical energy, etc. Much of this is the sexy part of energy research, therefore, the most impractical at the moment.
  
  
• efficiency. Efficiency is the most neglected part of our energy economy. This involves not only using as little power as possible, but also making sure that the end result is worth the energy investment. Jimmy Carter was right.

Real efficiency would mean that purely wasteful activities (most types of marketing, my pet peeve, comes to mind; warfare, which is another pet peeve; most construction of office buildings as well as most houses and buildings that leak heat like sieves and don't use natural sublight, a third pet peeve...) would have to be eliminated by becoming economically untenable or more efficient (exception being warfare...nobody wasn't that to become more efficient. We are already far too good and practiced at destruction and death).

We've already had a revolution in lighting efficiency--that was the low-hanging fruit. We just need to keep the economic pressure on, to get results in housing/building, manufacturing, and transportation.



DISTRIBUTION/TRANSMISSION

The first way to fix this problem is to eliminate it by distributed generation...the solar in your backyard option.

The second would be to truly fix the grid--take it out of private hands and recognize it as a common good and public utility: fix, repair, redesign (infrastructure, my friends!) and generate efficiencies there. Transmission losses are horrible today, and grow worse for each mile of transmission.

The ultimate design would incorporate BOTH Transmission AND Storage in way stations located ever so many miles apart...the entire purpose of these stations would be to ensure a basic available level of electrical current at each user's command.

IF WE COULD PURGE THE GOVERNMENT OF THE PNAC CONSPIRACY AND THE CORPORATE CORRUPTION, WE COULD HAVE AN ALL-ELECTRIC ECONOMY TODAY.

it's cheaper for heat in winter

and natural gas (methane) is also a source of greenhouse gasses if it leaks during extraction or transmission or combustion...not to mention the generation of another greenhouse gas, deadly carbon monoxide (CO), if your furnace malfunctions or cracks...

Fact is, with adequate (super) insulation, you could heat most every structure in the US cheaply by the lighting and cooking, laundry and body heat of the occupants (mostly), and with heat exchangers, you can ensure clean fresh air cycling through the structure on a regular, healthy basis.

Converting old structures to super-insulation is a job, but worth it, IMO.

http://m.france24.com/en/20141026-off-grid-german-village-banks-wind-sun-pig-manure/



If Germany has taken a pioneering though risky role in shifting to renewable energy, then the tiny village of Feldheim -- population 150 -- is at its vanguard. The hamlet near Berlin is Germany's first to have left the national grid and switched to 100 percent local, alternative energy, swearing off fossil fuels and nuclear power decades before the rest of the country plans to near the same goal.

Electricity now comes from a wind park towering over its gently rolling fields and reaches homes through Feldheim's own mini smart grid. More than 99 percent of the wind power is sold into the national system, along with electricity from a solar park on a former Soviet military base.

As winter nears, people here will heat their homes from a biogas plant powered by local pig and cattle manure and shredded corn, while on the coldest days a woodchip plant will also burn forestry waste.

The villagers took bank loans and state subsidies to build the system, in partnership with green power company Energiequelle, but say it is paying off as electricity and heating bills have been slashed. Feldheim no longer pays for 160,000 litres (40,000 gallons) of heating oil a year, said Werner Frohwitter of the local energy cooperative.

"This money is no longer going to Arab sheiks or (Russian President) Vladimir Putin," he said at the village 80 kilometres (50 miles) southwest of Berlin. "This money is now staying right here."

"Former Reagan chief of staff Donald T. Regan said an astrologer had set the time for summit meetings, presidential debates, Reagan's 1985 cancer surgery, State of the Union addresses and much more. Without an O.K. from the astrologer, he said, Air Force One did not take off."


Joan Quigley, Astrologer to a First Lady, Is Dead at 87

"Further, Mrs. Reagan paid the astrologer a retainer of $3,000 a month, wrote Mr. Regan, who had also been a Treasury secretary under Reagan and the chief executive of Merrill Lynch."

"The resulting brouhaha over the revelations prompted a comedian to wonder if there would be a “Secretary of Health, Education and Voodoo.” Religious leaders condemned astrology as a “devil’s tool.” Democratic politicians said they were glad to hear that Reagan, a Republican, had listened to anybody."

Ain't THAT the truth! Eat your heart out, Dave Barry!

http://www.bloomberg.com/news/2014-10-24/regulators-ramp-up-bond-fund-reviews-due-to-volatility.html

Surging market volatility is making regulators increasingly concerned that bond funds have loaded up on hard-to-sell assets.

The U.S. Securities and Exchange Commission has stepped up exams of money managers, while pushing mutual funds to test whether they could satisfy customer redemptions during periods of financial stress, said people with knowledge of the plans. Federal Reserve officials have reached out to the biggest investment firms to quiz them on markets after price swings for stocks, currencies and commodities hit a 13-month high last week, said a person briefed on the discussions.

“I certainly received a lot of calls from many regulators worldwide over the last few weeks asking me what’s going on,” BlackRock Inc. (BLK) Chief Executive Officer Laurence D. Fink said in an Oct. 21 Bloomberg Television interview. The New York-based firm is the world’s biggest money manager with $4.5 trillion of assets.

A focus for regulators is ensuring that investors know the dangers of putting their cash in funds that trade daily yet invest in less-liquid assets such as loans and junk bonds. Last year, customers plowed a record $62.9 billion into leveraged-loan mutual funds, bringing their share of non-bank institutional lending to more than 30 percent from less than 20 percent in 2012, according to Lipper and Loan Syndications and Trade Association data...

TPP-toeing through the tulips...


http://uk.reuters.com/article/2014/10/27/trade-tpp-idUKL4N0SM0VG20141027

Negotiations for an ambitious trade pact among Pacific countries made significant progress over the weekend but there is still a gap between Japan and the United States over market access and other hurdles, trade representatives said on Monday.

The 12-nation Trans-Pacific Partnership (TPP) is central to President Barack Obama's policy of expanding the U.S. presence in Asia and the president has expressed hopes of concluding a deal by the end of the year. But while all sides hailed the progress made during the latest round of talks, no breakthrough was forthcoming on the thorniest questions. "There is no prospect for an agreement on market access (between Japan and the United States) at the moment," Japanese Economics Minister Akira Amari told a news conference in Sydney. "I expect we will reach results that satisfy both (countries)," he said, adding they would hold further talks.

An agreement between Tokyo and Washington is crucial to securing the broader pact as other partners are reluctant to commit until they see how those two resolve their differences, particularly over access to each other's markets in sectors such as agriculture and automobiles. Australian Trade Minister Andrew Robb, who hosted the meeting, said the shape of an "ambitious, comprehensive, high-standard and balanced deal" was forming.

"There is a real sense that we are within reach of the finish line and the prize does look very attractive," Robb said, describing the negotiations as at the "compromise stage".

"We are seeing a preparedness to make some of the difficult decisions. This includes some of the key issues that we've been circling for a long time in the whole IP (intellectual property) area and market access and state-owned enterprises and other areas."

The United States insists that Japan should lower barriers to agricultural imports, but Japan wants to protect sensitive products, including pork, beef, dairy and sugar....Other major outstanding issues include intellectual property rights, particularly on products such as pharmaceuticals, environmental protection and country-specific issues around state-owned enterprises. Opposition over those issues was visible in Australia, with anti-TPP protesters gathering on Saturday outside the hotel in Sydney where the negotiations were taking place. Concerns that the agreement would help to drive up pharmaceutical prices must be taken as seriously as any potential trade benefits, Australian Medical Association President Brian Owler said on Sunday.

"I think it's very important that the interests of the Australian government but also of patients and individual consumers in Australia are protected through trade agreements," he told the Australian Broadcasting Corporation.

I HOPE THE JAPANESE DO A PEARL HARBOR ON THIS ABOMINATION...

Will US Browbeating of Japan Revive the Zombified TransPacific Partnership?


As readers may recall, we declared the toxic, national-sovereignty-gutting, misnamed “trade” deal called the TransPacific Partnership to be dead based on America’s colossal mishandling of Japan (not that it has handled the other prospective signatories any better, mind you). The pact was designed to be an “everybody but China” grouping, a centerpiece of Obama’s pivot to Asia. Japan’s participation is essential to meeting that objective, as well as to another critical objective: that of getting major nations to sign up to agreements that subordinated national regulations to the profit-making rights of foreign investors, who could sue governments over any incursions in secretive, conflicted arbitration panels.

Nevertheless, meetings on the TransPacific Partnership continue, with the latest round in Sydney last week. The US press is depicting the Japanese as bad guys who can be browbeaten into giving up protecting their beef and rice farmers, among others. From a Wall Street Journal article titled Japan Market Access Still Hurdle at Trans-Pacific Partnership Talks:



Yves here. This reads as if it comes from a parallel universe. “Full benefits of the pact that will flow to the 12 nation participants”? No, the benefits are intended for effectively stateless multinationals that are smart enough to be big US campaign donors, such as the financial services industry, Big Pharma, and tech companies. And as for the “great deal of momentum,” if anything, it has all been in reverse. But we thought it was possible that we might be missing something, so we checked in with Naked Capitalism’s de facto Japan stringer, commentariat member Clive. His report:



An article in the Nikkei Asian Review, on Obama’s lame duck status and how Republican hopefuls jockeying for position makes the prospects for seeing any legislation get done in the next two years even worse, discusses the TransPacific Partnership in passing. It points out another obstacle we’ve cited: Obama’s decision to be extremely secretive about the TransPacific Partnership text (literally only Congresscritters on the right committees can go and read the text; they can’t take copies and have their staffers study them) has produced a revolt over his abuse of the already-way-too-generous fast track authorization, which limits Congress to a yes or no vote on an entire deal once it has been cooked up by the Administration. Democrats are most upset about it, but they have a fair bit of Republican company. But as the article points out, even if the Republicans gain ground in November, it is unlikely to help any of the stalled trade deals:



In other words, the Administration effort to pretend that the TransPacific Partnership is moving forward is fooling no one that counts. And the US negotiators have waited way too long to have made the sort of concession that might have enabled it to go forward. While miracles are in theory possible, that’s about what it would take at this stage to bring this deal back from the dead.

VIDEO AT LINK

http://www.bloomberg.com/news/2014-10-27/ecb-list-of-failing-banks-shrinks-if-you-read-small-print.html

Most of the lenders that failed the European Central Bank’s balance-sheet test have been let off for good behavior.

Only eight banks haven’t already plugged capital gaps or satisfied the ECB with plans to shrink, out of 25 found with a shortfall. That means just 6.35 billion euros ($8 billion) remains from a 25 billion-euro hole, and half of that is in Italy. The ECB, releasing results of its year-long bank audit yesterday, said investors should focus on the insight they’ve gained into lenders’ books instead.

Just over a week before the central bank becomes the financial supervisor of the euro area, officials are attempting to end half a decade of financial turmoil with full disclosure on any bad loans and mispriced assets. The ECB is staking its reputation on this exercise convincing investors that lenders are clean and can again play a role in reviving a stalling economy.

“Some people may wish to conclude that because there is no ‘blood on the street,’ the exercise is not credible,” said Eli Haroush, a fund manager at APG Asset Management in Amsterdam, which oversees 390 billion euros. “I think it is credible. It was a very serious effort and a significant amount of capital has been raised during 2014.”

WELL, WE WILL JUST HAVE TO WAIT AND SEE....

http://www.nakedcapitalism.com/2014/10/ilargi-europe-redefines-stress-bank-boosterist-stress-tests.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. As we’ve repeatedly pointed out, bank “stress tests” are officially-orchestrated bank PR. And the reason they worked so well the first time was that exercise was accompanied by all sorts of Administration “we’re fully behind the banks” messaging, including a commitment that any banks that fell short would get a heapin’ helping of new capital. But the effort to talk bank stock prices up worked so well that many, even the weaker ones, were able to float new shares. The Europeans have tried emulating the Americans, but with more emphasis on the optics and less on prodding the banks to take meaningful steps to shore up their capital bases. Ilargi describes how even this exercise in porcine maquillage is failing to cover up the unhealthy state of many banks.

By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth


The EU and ECB claim they conduct their stress tests and Asset Quality Reviews to restore confidence in the banking sector. That is easier said than done. The problem with the confidence boosting game is that if the tests are perceived as not strong enough, nobody knows which banks to trust anymore. And, on the other hand, if the tests are sufficiently stringent, there’s a genuine risk not many banks are found healthy. There’s the additional issue of quite a large group of banks having been declared ‘systemic’ by their mother nations, which is of course equal to Too Big To Fail, and, in layman’s terms, ‘untouchable’...All in all, after the results were announced today, it’s hard not to have the feeling that Europe aims at restoring that confidence by not telling us the whole story. There are a lot of numbers, but there are even more questions. Which may well be because those answers the leaders of the political and the financial world would want to see are simply not available, other than by making the tests even less credible....Letting the numbers sink in, would the markets really feel more confident about European banks, or would they simply continue to have faith in the ECB’s bail-out desire for as long as that lasts? When I read that the ‘Comprehensive Assessment’ issued today states that the stock of bad loans in Europe is estimated, after the tests, at €879 billion, but banks’ capital shortfall only at €25 billion, I wonder where the confidence should come from.

The data. Starting with a Bloomberg piece from last Wednesday.



Those €203 billion the banks managed to acquire can be interpreted as positive, since they managed to do it, but it can also be seen as negative, because they needed it in the first place. It also raises the question whether another €203 billion would be just as easy. Not very likely, the low hanging fruit always goes first. Question then is, could they perhaps need another €200 billion? Brussels clearly says not, but Brussels is a figment of the imagination of politicians. Then, the New York Times today:



That’s €184 billion in troubled loans and overvaluations. That leaves €19 billion of the €203 billion banks bolstered their balance sheets with, for all other shortcomings. Doesn’t sound like a lot. On to today’s Bloomberg summary:



Striking to note that the ECB doesn’t rule out having to save more banks. Discomforting too. For taxpayers. But the main question mark remains the simulated recession: what were the assumptions under which is was conducted? Make them too rosy and you might as well not test or simulate anything. Unless of course window dressing is the only goal.

Bloomberg’s Mark Whitehouse writes about quite a different stress test, which quite different outcomes. Makes you think.



The ECB’s Comprehensive Assessment says $203 billion was raised since 2013, leaving ‘only’ €25 billion yet to be gathered. The Swiss report says €487 billion is needed just for 37 of the 130 banks the ECB stress-tested. Of the banks the Swiss identify as having the greatest capital shortfalls, most passed the EU tests. Judging from the graph, the 7 banks in need of most capital have an aggregate shortfall of some €300 billion alone...Among them the 3 main, and TBTF, French banks, who all passed with flying colors and got complimented for it by French central bank governor Christian Noyer today, but according to the Center for Risk Management are about €200 billion short between them. Which means France as a nation has a stressed capital shortfall of over 10% of its GDP, more than twice as much as the next patient.

Wouldn’t it better to let an independent bureau do these tests, instead of the ECB which obviously has huge political skin in the game? Or are we all too afraid of what might come out?

Will the markets actually feel more confident, or are they going to fake that too? Was this really a yearlong audit, or did it only take that long because the spin doctors needed to make sure the lipstick was applied correctly on the pig?

We all deserve better than a yearlong exercise in futile tepid air. But Europe’s taxpayers deserve it most of all.

Another Unbelievable Stress-Free Test; Whitewash Math and Deferred Tax Assets

that usually means snow...but the temperatures are still above freezing, so there's still time for Autumn pleasures. 36F at 7:40 (dawn), supposed to reach 70F. Weird.

Not delivering the Sunday paper felt so good, I'm going to have to do it again!

http://www.businessinsider.com/fleeing-investors-are-decimating-brazilian-equities-after-the-election-2014-10

Global investors are selling off Brazilian equities Monday morning, after Dilma Rousseff was narrowly re-elected as the country's president Sunday.

Hoping for a win from pro-business candidate Aecio Neves, markets are expressing their disappointment.

In Frankfurt, the part-nationalized Brazilian energy giant Petroleo Brasileiro was down 10.78%.

And in Paris, the Lyxor ETF Brazil, an exchange traded fund that tracks the country’s Ibovespa index of equities, was down 9.42%.

It's the same story across the world. The main ETF tracking Brazil in Japan opened down more than 7%.



Read more: http://www.businessinsider.com/fleeing-investors-are-decimating-brazilian-equities-after-the-election-2014-10#ixzz3HLXNJIkE

PAYBACK TIME!

http://www.bloomberg.com/news/2014-10-27/rousseff-re-elected-on-call-to-save-brazil-s-social-gains.html

Brazil’s re-elected President Dilma Rousseff promised “great changes” in her second term, starting with a plebiscite on political reform and open dialog with her critics, after winning the country’s top job by the tightest margin since at least 1945.

“Sometimes in history, narrow results produce much stronger and faster changes than very wide victories,” Rousseff said yesterday in her victory speech. “I will and I want to be a much better president than I have been up to now.”

Rousseff, who has maintained record-low unemployment even as the economy posted the slowest growth under any Brazilian president in more than two decades, won 52 percent of the vote, while Senator Aecio Neves earned 48 percent.

Brazil’s first female president faces the challenge of pulling the economy out of recession, slowing above-target inflation and narrowing a budget deficit that threatens the country’s investment grade status. She also needs to calm markets: preferred shares of state-run oil company Petroleo Brasileiro SA tumbled 7 percent in Germany today after her victory. Leme Investimentos said stocks may fall as much as 10 percent today...Rousseff said her “first and most important” task is an overhaul of the political system that will help reduce corruption.

MORE, PLUS VIDEO AT LINK

http://www.businessinsider.com/hussman-the-stock-market-is-crashing-2014-10



Fund manager John Hussman of the Hussman Funds has been one of the most vocal bears on Wall Street for the past few years.

The market has continued to rise strongly in the face of these warnings, which has clobbered Hussman's reputation and performance. But those who are loud and early/wrong on Wall Street are always ridiculed...unless/until the trend changes. At that point, they become one of the heralded few who were "right."

For the last 6 months or so, Hussman has been increasing the volume of his warnings about a potential market crash.

In this week's note, Hussman shares his view that the market's sharp rally over the past 7 trading days is not likely the resumption of a rocketship bull market that began in 2009, but a standard bear-market rally.

Specifically, Hussman believes that the market rolled over a month ago and is now in the process of crashing.



Read more: http://www.businessinsider.com/hussman-the-stock-market-is-crashing-2014-10#ixzz3HLY2T2RJ

How Serious is NY Fed Dudley’s Tough Talk About Fixing Banking Culture?



Last week, New York Fed President William Dudley gave a speech on remedying cultural problems in financial services firms, meaning the tendency of employees to loot them and leave the mess in taxpayers’ laps. It caught pretty much everyone by surprise because it contained two sensible and effective reform ideas, namely, that of putting compensation measures in place that would have the effect of rolling them a long way back towards the partnership model, as well as making it harder for bad apples to find happy homes in other firms...My sources are of the view that Dudley was browbeaten into taking a tougher line by the Federal Reserve Board of Governors, specifically Danny Tarullo, rather than being keen to be more aggressive himself. It was blindingly obvious that the banks had a culture problem in 2009 and 2010, when industry incumbents paid themselves record bonuses rather than at least feigning gratitude and building up their capital bases. We described in July how the Fed was having tea and cookies conversations about banks shaping up their cultures, which looked to be a pathetic exercise in public relations for the rubes.

Nevertheless, the fact that Dudley is pushing some tough ideas is an important shift, even if the New York Fed president was under pressure to look serious. One notable contrast between the US and the UK has been the willingness of the central bank to criticize the conduct of its major charges. The Bank of England, at least under Mervyn King, engaged in regular, pointed criticisms, and fought fiercely for a version of Glass Steagall to be implemented. It only partially won that fight due to bitter opposition from Treasury; the compromise of ring-fencing retail operations is still a meaningful improvement over status quo ante. By contrast, the (US?--DEMETER) authorities have been loath to say anything negative, as in reality-based, about the major banks, lest they upset the confidence fairy.

The novel idea in the Dudley speech is to defer a big chunk of bonuses of big producers, particularly traders and senior executives, for a sufficiently long period that any reversals, such as trades that produced book profits in one period turning a cropper later on, or lawsuits and fines, would have surfaced. Those bonuses are paid only after these charges are deducted. Dudley calls this a performance bond; you can also think of it as the most junior equity, sitting underneath common equity.

This is Dudley’s pitch for this arrangement:



The five-year deferral component resembles the arrangement that Berkshire Hathaway has in its reinsurance business, where bonuses that total 15% of unit profits are paid out five years after the business is booked. That’s a long enough period to determine whether the deal has worked out or not. The performance bond element is clearly better than THE popular but failed idea of having bankers get restricted stock. Both Bear Stearns and Lehman had very significant stock ownership by employees...The second element of Dudley’s idea is to create an industry database similar to one used for retail brokers, to track the hiring and firing of professionals. This isn’t a bad idea, but it would tend to catch only employees who engaged in flagrantly bad conduct. It’s not obvious that those who engaged in “didn’t pass the smell test” behavior would get any demerits. But this is still an idea that can’t hurt and has the potential to do some good at the margin. But how serious is this? The New York Fed does not have the power to implement the rule, so the industry knows that even if Dudley had his heart behind these proposals, this is more bark than bite. But the flip side is that industry leaders ought to recognize this as a long-overdue shot over their bows. And the fact that Dudley has endorsed this notion means it’s fair game for legislation. In other words, even though financiers are too deeply invested in their own sense of entitlement to get Dudley’s message, he’s telling them that if they don’t clean up their acts, something they don’t like really could be imposed on them. I’d love to be proven wrong, but I wouldn’t place a large wager than anyone will take the hint.

http://www.msn.com/en-us/news/politics/the-bushes-led-by-w-rally-to-make-jeb-%e2%80%9845%e2%80%99/ar-BBbowhD?ocid=iehp

My God have mercy on our soils.

I didn't realize that there was some controversy behind this quote until looking up references...evidently it was said to Peter, as well as the devil...whew!

got to open the windows and let the brimstone out!