Weekend Economists On the Dark Side October 28-30, 2011

Well, we approach the Dark Half of the year, as the Celts would put it, which begins with the month Samonios (the October/November lunation, which was last night, as best as I can tell), and ends with the 'light' half, beginning with the month Giamonios (the April/May lunation, which may never come anyway, so why look that far ahead?).



Celts would cleanse their livestock (and probably themselves) by running them through smoky fires, no doubt in an attempt to rid them of any skin parasites before they were confined for the winter in barns...

The Samhain celebrations have survived in several guises as a festival dedicated to the harvest and the dead. In Ireland and Scotland, the Féile na Marbh "festival of the dead" is the name of All Souls', a church festival introduced on the eve of All Saints in the 11th century.

The night of Samhain, in Irish, Oíche Samhna and Scots Gaelic, Oidhche Samhna, is one of the principal festivals of the Celtic calendar, and falls on the October 31. It represents the final harvest. In modern Ireland and Scotland, the name by which Halloween is known in the Gaelic language is still Oíche/Oidhche Samhna. It is still the custom in some areas to set a place for the dead at the Samhain feast, and to tell tales of the ancestors on that night.

Traditionally, Samhain was time to take stock of the herds and grain supplies, and decide which animals would need to be slaughtered in order for the people and livestock to survive the winter. This custom is still observed by many who farm and raise livestock because it is when meat will keep since the freeze has come and also since summer grass is gone and free foraging is no longer possible. I THINK WE ARE SEEING THIS PROCESS IN THE WORLD MARKETS THIS WEEK, AS THE BANKSTERS DECIDE WHICH NATIONS TO SLAUGHTER AGAINST WINTER FAMINE...

Bonfires played a large part in the festivities celebrated down through the last several centuries, and up through the present day in some rural areas of the Celtic nations and the diaspora. Villagers were said to have cast the bones of the slaughtered cattle upon the flames. In the pre-Christian Gaelic world, cattle were the primary unit of currency and the center of agricultural and pastoral life. Samhain was the traditional time for slaughter, for preparing stores of meat and grain to last through the coming winter.

With the bonfire ablaze, the villagers extinguished all other fires. Each family then solemnly lit its hearth from the common flame, thus bonding the families of the village together. Often two bonfires would be built side by side, and the people would walk between the fires as a ritual of purification. Sometimes the cattle and other livestock would be driven between the fires, as well.

Gaelic custom of wearing costumes and masks, was an attempt to copy the evil spirits or ward off them. In Scotland the dead were impersonated by young men with masked, veiled or blackened faces, dressed in white. Candle lanterns (Gaelic: samhnag), carved from turnips were part of the traditional festival. Large turnips were hollowed out, carved with faces, placed in windows to ward off evil spirits.

Guisers — men in disguise, were prevalent in 16th century in the Scottish countryside. Children going door to door "guising" (or "Galoshin" on the south bank of the lower Clyde) in costumes and masks carrying turnip lanterns, offering entertainment of various sorts in return for food or coins, was traditional in 19th century, and continued well into 20th century. At the time of mass transatlantic Irish and Scottish immigration that popularized Halloween in North America, Halloween in Ireland and Scotland had a strong tradition of guising and pranks.

Divination is a common folkloric practice that has also survived in rural areas. The most common uses were to determine the identity of one's future spouse, the location of one's future home, and how many children a person might have. Seasonal foods such as apples and nuts were often employed in these rituals. Apples were peeled, the peel tossed over the shoulder, and its shape examined to see if it formed the first letter of the future spouse's name. Nuts were roasted on the hearth and their movements interpreted - if the nuts stayed together, so would the couple. Egg whites were dropped in a glass of water, and the shapes foretold the number of future children. Children would also chase crows and divine some of these things from how many birds appeared or the direction the birds flew. --http://en.wikipedia.org/wiki/Samhain

WELL, THE PORTENTS FOR THE COMING YEAR COULDN'T BE GRIMMER, WITH ANGELA MERKEL RAISING THE SPECTER OF WAR, OF ALL THINGS, TO GET PEOPLE TO SIGN ON TO HER LATEST FANTASTICAL, PREPOSTEROUS DEAL.

Thanks, Demeter! :toast:

(honestly, I'm just making this up as I go along...no plans, no targets, no inspirations, seat-of-the-pants)

:)

Keep up the great work!

Due to incipient Alzheimers (or stupidity) I neglected to list bank failures these past two weekends. I herewith repost my make-up report from Weds? whenever the light dawned on Marblehead....



Piedmont Community Bank, Gray, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank and Trust Company, Macon, Georgia, to assume all of the deposits of Piedmont Community Bank.

The two branches of Piedmont Community Bank will reopen on Saturday as branches of State Bank and Trust Company...As of June 30, 2011, Piedmont Community Bank had approximately $201.7 million in total assets and $181.4 million in total deposits. In addition to assuming all of the deposits of the failed bank, State Bank and Trust Company agreed to purchase essentially all of the assets...The FDIC and State Bank and Trust Company entered into a loss-share transaction on $163.2 million of Piedmont Community Bank's assets. State Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $71.6 million. Compared to other alternatives, State Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Piedmont Community Bank is the 77th FDIC-insured institution to fail in the nation this year, and the twentieth in Georgia. The last FDIC-insured institution closed in the state was CreekSide Bank, Woodstock, on September 2, 2011.


Blue Ridge Savings Bank, Inc., Asheville, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of North Carolina, Thomasville, North Carolina, to assume all of the deposits of Blue Ridge Savings Bank, Inc.

The ten branches of Blue Ridge Savings Bank, Inc. will reopen on Monday as branches of Bank of North Carolina...As of June 30, 2011, Blue Ridge Savings Bank, Inc. had approximately $161.0 million in total assets and $158.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, Bank of North Carolina agreed to purchase essentially all of the assets...The FDIC and Bank of North Carolina entered into a loss-share transaction on $143.2 million of Blue Ridge Savings Bank, Inc.'s assets. The Bank of North Carolina will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.0 million. Compared to other alternatives, Bank of North Carolina's acquisition was the least costly resolution for the FDIC's DIF. Blue Ridge Savings Bank, Inc. is the 78th FDIC-insured institution to fail in the nation this year, and the second in North Carolina. The last FDIC-insured institution closed in the state was The Bank of Asheville, Asheville, on January 21, 2011.


First State Bank, Cranford, New Jersey, was closed today by the New Jersey Department of Banking and Insurance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Northfield Bank, Staten Island, New York, to assume all of the deposits of First State Bank.

The two branches of First State Bank will reopen on Saturday as branches of Northfield Bank...As of June 30, 2011, First State Bank had approximately $204.4 million in total assets and $201.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Northfield Bank agreed to purchase essentially all of the assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $45.8 million. Compared to other alternatives, Northfield Bank's acquisition was the least costly resolution for the FDIC's DIF. First State Bank is the 79th FDIC-insured institution to fail in the nation this year, and the first in New Jersey. The last FDIC-insured institution closed in the state was ISN Bank, Cherry Hill, on September 17, 2010.


Country Bank, Aledo, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Blackhawk Bank & Trust, Milan, Illinois, to assume all of the deposits of Country Bank.

The two branches of Country Bank will reopen on Saturday as branches of Blackhawk Bank & Trust...As of June 30, 2011, Country Bank had approximately $190.6 million in total assets and $167.5 million in total deposits. In addition to assuming all of the deposits, Blackhawk Bank & Trust agreed to purchase approximately $113.3 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $66.3 million. Compared to other alternatives, Blackhawk Bank & Trust's acquisition was the least costly resolution for the FDIC's DIF. Country Bank is the 80th FDIC-insured institution to fail in the nation this year, and the eighth in Illinois. The last FDIC-insured institution closed in the state was First Choice Bank, Geneva, on August 19, 2011.


Old Harbor Bank, Clearwater, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with 1st United Bank, Boca Raton, Florida, to assume all of the deposits of Old Harbor Bank.

The seven branches of Old Harbor Bank will reopen during their normal business hours beginning Saturday as branches of 1st United Bank...As of June 30, 2011, Old Harbor Bank had approximately $215.9 million in total assets and $217.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, 1st United Bank agreed to purchase essentially all of the assets.

The FDIC and 1st United Bank entered into a loss-share transaction on $155.6 million of Old Harbor Bank's assets. 1st United Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.3 million. Compared to other alternatives, 1st United Bank's acquisition was the least costly resolution for the FDIC's DIF. Old Harbor Bank is the 81st FDIC-insured institution to fail in the nation this year, and the twelfth in Florida. The last FDIC-insured institution closed in the state was The First National Bank of Florida, Milton, on September 9, 2011.


Decatur First Bank, Decatur, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Fidelity Bank, Atlanta, Georgia, to assume all of the deposits of Decatur First Bank.

The five branches of Decatur First Bank will reopen during their normal business hours beginning Saturday as branches of Fidelity Bank...As of June 30, 2011, Decatur First Bank had approximately $191.5 million in total assets and $179.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Fidelity Bank agreed to purchase essentially all of the assets.

The FDIC and Fidelity Bank entered into a loss-share transaction on $111.5 million of Decatur First Bank's assets. Fidelity Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $32.6 million. Compared to other alternatives, Fidelity Bank's acquisition was the least costly resolution for the FDIC's DIF. Decatur First Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the twenty-first in Georgia. The last FDIC-insured institution closed in the state was Piedmont Community Bank, Gray, on October 14, 2011.


Community Capital Bank, Jonesboro, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank and Trust Company, Macon, Georgia, to assume all of the deposits of Community Capital Bank.

The two branches of Community Capital Bank will reopen during their normal business hours beginning Saturday as branches of State Bank and Trust Company...As of June 30, 2011, Community Capital Bank had approximately $181.2 million in total assets and $166.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, State Bank and Trust Company agreed to purchase essentially all of the assets.

The FDIC and State Bank and Trust Company entered into a loss-share transaction on $141.3 million of Community Capital Bank's assets. State Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $62.0 million. Compared to other alternatives, State Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Community Capital Bank is the 83rd FDIC-insured institution to fail in the nation this year, and the twenty-second in Georgia. The last FDIC-insured institution closed in the state was Decatur First Bank, Decatur, earlier today.

GET A LOAD OF THIS ONE!

The Federal Deposit Insurance Corporation (FDIC) today was appointed receiver for Community Banks of Colorado, Greenwood, Colorado, by the Board of Governors of the Federal Reserve System. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank Midwest, National Association, Kansas City, Missouri, to assume all of the deposits of Community Banks of Colorado.

The 40 branches of Community Banks of Colorado will reopen during their normal business hours beginning Saturday as branches of Bank Midwest, National Association. Depositors of Community Banks of Colorado will automatically become depositors of Bank Midwest, National Association...As of June 30, 2011, Community Banks of Colorado had approximately $1.38 billion in total assets and $1.33 billion in total deposits. In addition to assuming all of the deposits of the failed bank, Bank Midwest, National Association agreed to purchase essentially all of the assets.

The FDIC and Bank Midwest, National Association entered into a loss-share transaction on $714.2 million of Community Banks of Colorado's assets. Bank Midwest, National Association will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $224.9 million. Compared to other alternatives, Bank Midwest, National Association's acquisition was the least costly resolution for the FDIC's DIF. Community Banks of Colorado is the 84th FDIC-insured institution to fail in the nation this year, and the sixth in Colorado. The last FDIC-insured institution in the state for which the FDIC was named receiver was Bank of Choice, Greeley, on July 22, 2011.

Information for All American Bank, Des Plaines, IL

On Friday, October 28, 2011, the Illinois Department of Financial and Professional Regulation – Division of Banking closed All American Bank, Des Plaines, Illinois. The Federal Deposit Insurance Corporation (FDIC) was then named the Receiver. No advance notice is given to the public when a financial institution is closed.

more
http://www.fdic.gov/bank/individual/failed/allamerican.html

All American Bank, Des Plaines, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with International Bank of Chicago, Chicago, Illinois, to assume all of the deposits of All American Bank.

The sole branch of All American Bank will reopen during normal business hours as a branch of International Bank of Chicago...As of June 30, 2011, All American Bank had approximately $37.8 million in total assets and $33.4 million in total deposits. In addition to assuming all of the deposits, International Bank of Chicago agreed to purchase essentially all of the failed bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6.5 million. Compared to other alternatives, International Bank of Chicago's acquisition was the least costly resolution for the FDIC's DIF. All American Bank is the 85th FDIC-insured institution to fail in the nation this year, and the ninth in Illinois. The last FDIC-insured institution closed in the state was Country Bank, Aledo, on October 14, 2011.

THINK WE'LL HIT 100 THIS YEAR?

http://www.nytimes.com/imagepages/2011/10/22/opinion/20111023_DATAPOINTS.html?ref=sunday-review

To See It All: http://www.chartporn.org

That includes U.S., Japan, Britain, France, Germany, China, as well as the PIIGS or some call them the GIIPS
http://www.nytimes.com/imagepages/2011/10/22/opinion/20111023_DATAPOINTS.html?ref=sunday-review

http://www.marketwatch.com/Story/story/print?guid=A3598D6A-EDEF-11E0-9CD6-002128040CF6

Memo to the Super Rich, your high-paid lobbyists and your no-compromise political puppets whose sole mission is destroying the presidency: Yes, you are succeeding. You’re also killing the economy. Thanks to your self-destructive ideology, America is now in the second of back-to-back Lost Decades. A new one on the heels of the 2000-2010 Lost Decade where Wall Street lost more than 20% inflation-adjusted. Get it? You guys launched America’s second Lost Decade of 21st century. Yes, two consecutive job-killing Lost Decades. The first created by Wall Street’s obsessive greed. The new one triggered by the widening wealth gap that’s feeding endless partisan political wars powered by Super Rich conservatives hell-bent on re-establishing the same free-market, trickle-down Reaganomics policies that have been sabotaging America for the last generation.

Unfortunately, the new one gets worse: Why? The coming Lost Decade is a backdrop for a wave of class warfare destined to trigger a historic revolution in American politics, bigger than the ‘29 Crash and Great Depression...Initially inspired by the Arab Spring, Occupy Wall Street is a virus spreading rapidly as Occupy Everything, a reform movement that will overshadow the GOP/Tea Party as the voice of the people, leading to an Occupy America.

Investors, listen closely: First, we’ll summarize five major signs of America’s new Lost Decade 2011-2021. Then, we summarize seven diverse examples of rebellions across the world adding fuel to America’s accelerating Occupy Wall Street revolution. Why is this crucial for investors? Because these class wars are guaranteed to deepen America’s market and economic problems during the coming Lost Decade. So listen closely investors:

1. Decade of debt stagnation till 2021

2. Investors lose faith, bailing out

3. Fed surrenders, cannot fix economy

4. Wall Street still doesn’t get it

5. Yes, America’s second Lost Decade just began

SO MUCH MORE...SEE LINK http://www.informationclearinghouse.info/article29297.htm

http://www.informationclearinghouse.info/article29292.htm

Is history getting too close for comfort for the fragile little American heart and mind? Their schools and their favorite media have done an excellent job of keeping them ignorant of what their favorite country has done to the rest of the world, but lately some discomforting points of view have managed to find their way into this well-defended American consciousness.

First, Congressman Ron Paul during a presidential debate last month expressed the belief that those who carried out the September 11 attack were retaliating for the many abuses perpetrated against Arab countries by the United States over the years. The audience booed him, loudly.

Then, popular-song icon Tony Bennett, in a radio interview, said the United States caused the 9/11 attacks because of its actions in the Persian Gulf, adding that President George W. Bush had told him in 2005 that the Iraq war was a mistake. Bennett of course came under some nasty fire. FOX News (September 24), carefully choosing its comments charmingly as usual, used words like "insane", "twisted mind", and "absurdities". Bennett felt obliged to post a statement on Facebook saying that his experience in World War II had taught him that "war is the lowest form of human behavior." He said there's no excuse for terrorism, and he added, "I'm sorry if my statements suggested anything other than an expression of love for my country." (NBC September 21)

Then came the Islamic cleric, Anwar al-Awlaki, an American citizen, who for some time had been blaming US foreign policy in the Middle East as the cause of anti-American hatred and terrorist acts. So we killed him. Ron Paul and Tony Bennett can count themselves lucky.

What, then, is the basis of all this? What has the United States actually been doing in the Middle East in the recent past?

• the shooting down of two Libyan planes in 1981
  
• the bombing of Lebanon in 1983 and 1984
  
• the bombing of Libya in 1986
  
• the bombing and sinking of an Iranian ship in 1987
  
• the shooting down of an Iranian passenger plane in 1988
  
• the shooting down of two more Libyan planes in 1989
  
• the massive bombing of the Iraqi people in 1991
  
• the continuing bombings and draconian sanctions against Iraq for the next 12 years
  
• the bombing of Afghanistan and Sudan in 1998
  
• the habitual support of Israel despite the routine devastation and torture it inflicts upon the Palestinian people
  
• the habitual condemnation of Palestinian resistance to this
  
• the abduction of "suspected terrorists" from Muslim countries, such as Malaysia, Pakistan, Lebanon and Albania, who were then taken to places like Egypt and Saudi Arabia, where they were tortured
  
• the large military and hi-tech presence in Islam's holiest land, Saudi Arabia, and elsewhere in the Persian Gulf region
  
• the support of numerous undemocratic, authoritarian Middle East governments from the Shah of Iran to Mubarak of Egypt to the Saudi royal family
  
• the invasion, bombing and occupation of Afghanistan, 2001 to the present, and Iraq, 2003 to the present
  
• the bombings and continuous firing of missiles to assassinate individuals in Somalia, Yemen, Pakistan, and Libya during the period of 2006-2011
  
  A LAST, DARK HARVEST INDEED...MORE AT LINK
  

Allow me to post a bit of an essay here, defending my chosen field of study.

The BF and I often get into dinner conversations over questions -- almost always his -- that begin with "Why do you think it is that. . . .?" Subjects include why are Americans so much more "religious" (specifically christian Americans) than the western European nations from which their ancestors emigrated? Why do so many of the 99%ers defend the 1%ers? If there's a work ethic, why do so many of us play the lottery or gamble in hopes of winning big? If there's a national mythology of the rugged individualist and the self-made man, why does the right wing demand tax-free inheritances?

Logic alone won't answer those questions, because human beings are frequently not logical. But they are always human. (Maybe not humane, but human nonetheless.)

The BF is a bit of a technology geek and a rabid sports enthusiast, so he knows his math and he knows all the Super Bowl champions (and tee scores, blah blah blah) and the World Series winners (and losers) ad nauseam, but statistics don't give him answers. Well, I tell him, read some history. Read some social history, not just dates and kings and presidents and generals. Read some sociology and some anthropology and some mythology.

Sometimes he actually listens to me.

But to keep one step ahead of him, I read, too. Not as much as I'd like to or should, but a bit here and there so he doesn't think I'm slacking off. A few weeks ago I happened to pick up two books. One is Unscientific America: How Scientific Illiteracy Threatens Our Future by (journalist) Chris Mooney and (scientist) Sheril Kirshenbaum. The other is The Grand Design by Stephen Hawking and Leonard Mlodinow. Something in Stephen Hawking's book grabbed my attention, but not for the reason you might think. Allow me to quote the relevant passage from pages 22-24:



In other words, the philosopher Aristotle preferred to think about science and come up with ideas that made sense to him, that felt comfortable within his existing worldview, rather than actually seek the truth through observation and experimentation. As we all know, it was the search for the truth and the discovery that it made a lot of powerful people uncomfortable that got Galileo in trouble.

But what caught my attention was that Aristotle, instead of being the paragon of logic was really a slave to his emotions. And while we can excuse him a little bit on the basis of his lack of adequate math skills and scientific technology, how do we reconcile that with the almost idolatrous veneration paid to him by none other than Ayn Rand?

Now, it is of course easy to excuse her, as well, by saying that she was no Stephen Hawking. I mean, that's pretty obvious. And while it's not likely that our understanding of what Aristotle was and how flawed his philosophy might have been will allow us to change the way her philosophical descendants see the world, I think we can better understand them and counter their arguments when directed toward the unconvinced.

That kind of synthetical analysis is only possible, I believe, when one is familiar with the soft, inexact, human-based social sciences. When history is reduced to nothing more than dates and events, it becomes just data, not real information. It has no relevance. It's only when history is combined with all the other elements of the social sciences that the full picture emerges.

But hey, what do I know?



Tansy Gold

http://www.nationofchange.org/what-s-happened-big-players-financial-crisis-1319725765

Widespread demonstrations in support of Occupy Wall Street have put the financial crisis back into the national spotlight lately, so here’s a quick refresher on what’s happened to some of the main players, whose behavior, whether merely reckless or downright deliberate, helped cause or worsen the meltdown. This list isn’t exhaustive -- feel welcome to add to it.

Mortgage originators

Mortgage lenders contributed to the financial crisis by issuing or underwriting loans to people who would have a difficult time paying them back, inflating a housing bubble that was bound to pop. Lax regulation allowed banks to stretch their mortgage lending standards and use aggressive tactics to rope borrowers into complex mortgages that were more expensive than they first appeared. Evidence has also surfaced that lenders were filing fraudulent documents to push some of these mortgages through, and, in some cases, had been doing so as early as the 1990s. A 2005 Los Angeles Times investigation ofAmeriquest – then the nation’s largest subprime lender – found that “they forged documents, hyped customers' creditworthiness and ‘juiced’ mortgages with hidden rates and fees.” This behavior was reportedly typical for the subprime mortgage industry. A similar culture existed at Washington Mutual, which went under in 2008 in thebiggest bank collapse in U.S. history...Countrywide, once the nation’s largest mortgage lender, also pushed customers to sign on for complex and costly mortgages that boosted the company’s profits. Countrywide CEO Angelo Mozilo was accused of misleading investors about the company’s mortgage lending practices, a charge he denies. Merrill Lynch and Deutsche Bank bothpurchased subprime mortgage lending outfits in 2006 to get in on the lucrative business. Deutsche Bank has also been accused of failing to adequately check on borrowers’ financial status before issuing loans backed by government insurance. A lawsuit filed by U.S. Attorney Preet Bharara claimed that, when employees at Deutsche Bank’s mortgage received audits on the quality of their mortgages from an outside firm, they stuffed them in a closet without reading them. A Deutsche Bank spokeswoman said the claims being made against the company are “unreasonable and unfair,” and that most of the problems occurred before the mortgage unit was bought by Deutsche Bank.

Where they are now: Few prosecutions have been brought against subprime mortgage lenders. Ameriquest went out of business in 2007, and Citigroup bought its mortgage lending unit. Washington Mutual was bought by JP Morgan in 2008. A Department of Justice investigation into alleged fraud at WaMu closed with no charges this summer. WaMu also recently settled a class action lawsuit brought by shareholders for $208.5 million. In an ongoing lawsuit, the FDIC is accusing former Washington Mutual executives Kerry Killinger, Stephen Rotella and David Schneider of going on a "lending spree, knowing that the real-estate market was in a 'bubble.'" They deny the allegations...Bank of America purchased Countrywide in January of 2008, as delinquencies on the company’s mortgages soared and investors began pulling out. Mozilo left the company after the sale. Mozilo settled an SEC lawsuit for $67.5 million with no admission of wrongdoing, though he is now banned from serving as a top executive at a public company. A criminal investigation into his activities fizzled out earlier this year. Bank of America invited several senior Countrywide executives to stay on and run its mortgage unit. Bank of America Home Loans does not make subprime mortgage loans. Deutsche Bank is still under investigation by the Justice Department.

SEE LINK FOR DETAILS ON THE FOLLOWING OTHER PLAYERS:

Mortgage securitizers

The people who created and dealt CDOs

The ratings agencies

The regulators

The politicians

Executives of big investment banks

Fannie Mae and Freddie Mac

http://www.nationofchange.org/wall-street-still-out-control-and-why-obama-should-call-glass-steagall-and-breakup-big-banks-1319713

BY Robert Reich

Next week President Obama travels to Wall Street where he’ll demand – in light of the Street’s continuing antics since the bailout, as well as its role in watering-down the Volcker rule – that the Glass-Steagall Act be resurrected and big banks be broken up.

I’m kidding. But it would be a smart move — politically and economically.

Politically smart because Mitt Romney is almost sure to be the Republican nominee, and Romney is the poster child for the pump-and-dump mentality that’s infected the financial industry and continues to jeopardize the American economy...Romney was CEO of Bain & Company – a private-equity fund that bought up companies, fired employees to save money and boost performance, and then resold the firms at a nice markups...Romney also epitomizes the pump-and-dump culture of America’s super rich. To take one example, he recently purchased a $3 million mansion in La Jolla, California (in addition to his other homes) that he’s razing in order build a brand new one.

What better way for Obama to distinguish himself from Romney than to condemn Wall Street’s antics since the bailout, and call for real reform? Economically it would be smart for Obama to go after the Street right now because the Street’s lobbying muscle has reduced the Dodd-Frank financial reform law to a pale reflection of its former self. Dodd-Frank is rife with so many loopholes and exemptions that the largest Wall Street banks – larger by far than they were before the bailout – are back to many of their old tricks. It’s impossible to know, for example, the exposure of the Street to European banks in danger of going under. To stay afloat, Europe’s banks will be forced to sell mountains of assets – among them, derivatives originating on the Street – and may have to reneg on or delay some repayments on loans from Wall Street banks. The Street says it’s not worried because these assets are insured. But remember AIG? The fact Morgan Stanley and other big U.S. banks are taking a beating in the market suggests investors don’t believe the Street. This itself proves financial reform hasn’t gone far enough.

If you want more evidence, consider the fancy footwork by Bank of America in recent days. Hit by a credit downgrade last month, BofA just moved its riskiest derivatives from its Merrill Lynch unit to a retail subsidiary flush with insured deposits. That unit has a higher credit rating because the Federal Deposit Insurance Corporation (that is, you and me and other taxpayers) are backing the deposits. Result: BofA improves its bottom line at the expense of American taxpayers...Wasn’t this supposed to be illegal? Keeping risky assets away from insured deposits had been a key principle of U.S. regulation for decades before the repeal of Glass-Steagall. The so-called “Volcker rule” was supposed to remedy that. But under pressure of Wall Street’s lobbyists, the rule – as officially proposed last week – has morphed into almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.

It would have been far simpler simply to ban proprietary trading from the jump. Why should banks ever be permitted to use peoples’ bank deposits – insured by the federal government – to place risky bets on the banks’ own behalf? Bring back Glass-Steagall! True, Glass-Steagall wouldn’t have prevented the fall of Lehman Brothers or the squeeze on other investment banks in 2007 and 2008. That’s why it’s also necessary to break up the big banks....MORE

http://www.scientificamerican.com/article.cfm?id=finance-why-economic-models-are-always-wrong

When it comes to assigning blame for the current economic doldrums, the quants who build the complicated mathematic financial risk models, and the traders who rely on them, deserve their share of the blame. . But what if there were a way to come up with simpler models that perfectly reflected reality? And what if we had perfect financial data to plug into them?

Incredibly, even under those utterly unrealizable conditions, we'd still get bad predictions from models.

The reason is that current methods used to “calibrate” models often render them inaccurate....Calibrating a complex model for which parameters can't be directly measured usually involves taking historical data, and, enlisting various computational techniques, adjusting the parameters so that the model would have "predicted" that historical data. At that point the model is considered calibrated, and should predict in theory what will happen going forward....It turned out that there were many different sets of parameters that seemed to fit the historical data. And that made sense, he realized--given a mathematical expression with many terms and parameters in it, and thus many different ways to add up to the same single result, you'd expect there to be different ways to tweak the parameters so that they can produce similar sets of data over some limited time period.

The problem, of course, is that while these different versions of the model might all match the historical data, they would in general generate different predictions going forward--and sure enough, his calibrated model produced terrible predictions compared to the "reality" originally generated by the perfect model. Calibration--a standard procedure used by all modelers in all fields, including finance--had rendered a perfect model seriously flawed. MORE

http://www.nytimes.com/2011/10/26/opinion/its-consumer-spending-stupid.html

AS an economic historian who has been studying American capitalism for 35 years, I’m going to let you in on the best-kept secret of the last century: private investment — that is, using business profits to increase productivity and output — doesn’t actually drive economic growth. Consumer debt and government spending do. Private investment isn’t even necessary to promote growth...Economists will tell you that private business investment causes growth because it pays for the new plant or equipment that creates jobs, improves labor productivity and increases workers’ incomes. As a result, you’ll hear politicians insisting that more incentives for private investors — lower taxes on corporate profits — will lead to faster and better-balanced growth. The general public seems to agree. According to a New York Times/CBS News poll in May, a majority of Americans believe that increased corporate taxes “would discourage American companies from creating jobs.”

But history shows that this is wrong.

Between 1900 and 2000, real gross domestic product per capita (the output of goods and services per person) grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of G.D.P. What’s more, in 1900 almost all investment came from the private sector — from companies, not from government — whereas in 2000, most investment was either from government spending (out of tax revenues) or “residential investment,” which means consumer spending on housing, rather than business expenditure on plants, equipment and labor. In other words, over the course of the last century, net business investment atrophied while G.D.P. per capita increased spectacularly. And the source of that growth? Increased consumer spending, coupled with and amplified by government outlays.

The architects of the Reagan revolution tried to reverse these trends as a cure for the stagflation of the 1970s, but couldn’t. In fact, private or business investment kept declining in the ’80s and after. Peter G. Peterson, a former commerce secretary, complained that real growth after 1982 — after President Ronald Reagan cut corporate tax rates — coincided with “by far the weakest net investment effort in our postwar history.”...President George W. Bush’s tax cuts had similar effects between 2001 and 2007: real growth in the absence of new investment. According to the Organization for Economic Cooperation and Development, retained corporate earnings that remain uninvested are now close to 8 percent of G.D.P., a staggering sum in view of the unemployment crisis we face.

So corporate profits do not drive economic growth — they’re just restless sums of surplus capital, ready to flood speculative markets at home and abroad. In the 1920s, they inflated the stock market bubble, and then caused the Great Crash. Since the Reagan revolution, these superfluous profits have fed corporate mergers and takeovers, driven the dot-com craze, financed the “shadow banking” system of hedge funds and securitized investment vehicles, fueled monetary meltdowns in every hemisphere and inflated the housing bubble....MORE

sage, sweet grass, spruce and smudge the house and property to chase away the bad ju-ju. Peace to all this weekend. Thank you Demeter.

I lean more to burning bags of dog poop on the front porches of the people who are currently ticking me off....

She called the cops. It made the paper reported as cult activity in Englewood. I did not get caught. :evilgrin:

:evilgrin:

http://news.yahoo.com/obamas-student-loan-debt-relief-plan-too-good-234242818.html

President Obama on Wednesday is launching a new plan to lower the cost of paying back student loans for millions of borrowers – the latest installment in his bid to move a jobs agenda that bypasses a gridlocked Congress.

At nearly $1 trillion, federal and private student loans now exceed US credit-card debt, posing a formidable repayment burden for many borrowers at a time of near-double digit unemployment.

The plan, to be implemented by executive authority alone, allows some 1.6 million students to cap their loan payments at 10 percent of their discretionary income starting in 2012. It also forgives the balance of student loans after 20 years of payments. Current law allows students to limit loan payments to 15 percent of income, forgiving debt after 25 years of payments, though few students are aware of this option...

I WOULDN'T BET ANY MONEY ON THIS MYSELF...

How do they calculate "discretionary" income?

I WISH THEM LUCK, BUT DON'T HOLD OUT ANY HOPE

http://www.latimes.com/news/la-kadafi-nato-m,0,2579791.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews+%28L.A.+Times+-+Top+News%29&utm_content=My+Yahoo

The family of deceased Libyan dictator Moammar Kadafi reportedly plans to file a war-crimes complaint against NATO for the role they believe the international military alliance played in the former leader's death, a lawyer for the family told Agence France-Presse news service.

Marcel Ceccaldi, a French lawyer who previously worked for Kadafi's regime and now represents his family, told AFP on Wednesday that the complaint would be filed with the International Criminal Court in the Hague because the family believes a NATO strike on Kadafi's convoy led directly to his death...

http://www.nytimes.com/2011/10/29/world/africa/criminal-court-qaddafi-son.html

The chief prosecutor of the International Criminal Court at The Hague said on Friday that he had been in indirect contact with Seif al-Islam el-Qaddafi, the fugitive son of Col. Muammar el-Qaddafi and his one-time heir apparent, about turning himself in to face trial before the court.

The prosecutor, Luis Moreno-Ocampo, said in a statement that he did not know the whereabouts of Mr. Qaddafi, and he did not identify the parties who were conveying messages for him.

Mr. Moreno-Ocampo also did not make clear whether the informal contacts had been initiated by Mr. Qaddafi, who has previously ridiculed the court as a tool of foreign powers hostile to the Qaddafi government. The court issued arrest warrants four months ago, at Mr. Moreno-Ocampo’s request, for Colonel Qaddafi, Seif al-Islam el-Qaddafi and Abdullah al-Sanousi, Colonel Qaddafi’s intelligence minister and brother-in-law, on charges of systematically killing civilians during the early days of the Libyan uprising.

There has been speculation that Mr. Qaddafi, who has eluded capture by the rebels who overthrew Colonel Qaddafi in late August, may have undergone a change of heart about turning himself over to court custody after his father was seized by rebel fighters, brutalized and killed on Oct. 20 in his hometown of Surt, an event captured on cellphone videos and widely circulated on the Internet....

http://www.npr.org/2011/10/26/141736982/freddie-mac-ceo-3-chairmen-to-step-down?ft=1&f=1001

Freddie Mac CEO Charles E. "Ed" Haldeman Jr. will resign within the next year, according to the government regulator that oversees the mortgage giant. The Federal Housing Finance Agency also said Wednesday that Freddie Mac will lose its chairman of its governing board and two other board members in the coming months. The departures amount to the biggest leadership shake-up for the agency since it was taken over by the government in 2008.

Haldeman, 62, has served as CEO since August 2009. He guided Freddie as it struggled under the weight of mounting loan defaults and uncertainty about its very existence in the mortgage industry. He also brought stability to the mortgage giant after his predecessor, David Moffett, resigned in frustration over strict oversight in 2009, and the firm's CFO committed suicide.

Two board members John Koskinen, who serves as chairman, and Robert Glauber will step down in February after hitting the mandatory retirement age of 72. A third board member Laurence E. Hirsch told company officials earlier this month he would not seek re-election after his term ends. Hirsch, chairman of Eagle Materials Inc., a private equity firm, cited "personal and professional commitments" in explaining his departure....

http://www.nytimes.com/2011/10/28/opinion/krugman-the-path-not-taken.html

Financial markets are cheering the deal that emerged from Brussels early Thursday morning. Indeed, relative to what could have happened — an acrimonious failure to agree on anything — the fact that European leaders agreed on something, however vague the details and however inadequate it may prove, is a positive development.

But it’s worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine — a doctrine that has inflicted huge damage both in Europe and in the United States...The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed...This doctrine was sold both with claims that there was no alternative — that both bailouts and spending cuts were necessary to satisfy financial markets — and with claims that fiscal austerity would actually create jobs. The idea was that spending cuts would make consumers and businesses more confident. And this confidence would supposedly stimulate private spending, more than offsetting the depressing effects of government cutbacks.

Some economists weren’t convinced. One caustic critic referred to claims about the expansionary effects of austerity as amounting to belief in the “confidence fairy.” O.K., that was me. But the doctrine has, nonetheless, been extremely influential. Expansionary austerity, in particular, has been championed both by Republicans in Congress and by the European Central Bank, which last year urged all European governments — not just those in fiscal distress — to engage in “fiscal consolidation.” And when David Cameron became Britain’s prime minster last year, he immediately embarked on a program of spending cuts in the belief that this would actually boost the economy — a decision that was greeted with fawning praise by many American pundits.

Now, however, the results are in, and the picture isn’t pretty. Greece has been pushed by its austerity measures into an ever-deepening slump — and that slump, not lack of effort on the part of the Greek government, was the reason a classified report to European leaders concluded last week that the existing program there was unworkable. Britain’s economy has stalled under the impact of austerity, and confidence from both businesses and consumers has slumped, not soared. Maybe the most telling thing is what now passes for a success story. A few months ago various pundits began hailing the achievements of Latvia, which in the aftermath of a terrible recession, nonetheless, managed to reduce its budget deficit and convince markets that it was fiscally sound. That was, indeed, impressive, but it came at the cost of 16 percent unemployment and an economy that, while finally growing, is still 18 percent smaller than it was before the crisis. So bailing out the banks while punishing workers is not, in fact, a recipe for prosperity. But was there any alternative? Well, that’s why I’m in Iceland, attending a conference about the country that did something different. SUMMARY OF ICELAND'S PATH...And there’s a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn’t and doesn’t have to be this way.

http://www.marketwatch.com/story/debit-card-fees-maybe-not-banks-say-2011-10-28?siteid=YAHOOB

...There was of course a big outcry when Bank of America Corp. BAC -0.14% announced it would charge a $5 monthly fee for debit-card use. But today, a news report by Reuters suggests the bank is planning to scale back that plan.

Maybe B. of A. is taking a cue from J.P. Morgan Chase & Co., which said it would not proceed with its proposal to levy similar fees, after testing the idea for months. Read commentary on how Bank of America leads, but no one follows...http://www.marketwatch.com/story/bank-of-america-leads-but-no-one-follows-2011-10-28

Meanwhile, my bank — Wells Fargo & Co. — didn’t exactly levy a new fee on my checking account, but it did recently tell customers that it was removing one means of waiving the monthly fee. Before, automatically transferring money from checking to savings worked to waive the monthly checking-account fee, but the bank decided to end that practice. (I won’t owe a monthly fee because I have a number of other accounts linked to mine, but presumably a fair number of people now are facing a $15 monthly hit.)

It’s a good reminder to check up on your bank costs. Certainly, all the fee news has prompted plenty of consumers to switch banks. Maybe it’s time for you to assess whether you should do the same...

DON'T FORGET MOVE YOUR MONEY--NOVEMBER 5TH!

http://www.youtube.com/watch?v=2JlxbKtBkGM&feature=player_embedded

I got a bunch of hornbeam slats..really dense wood, and weighty. :bounce:

Good way to recycle, too. Most such companies have formal recycling programs to handle the extra paper. Not sure about the shingles, though.

US economic growth accelerated to 2.5 per cent in the third quarter as consumers, businesses and the federal government boosted their spending.

The annualised increase in gross domestic product confirmed expectations that the economy had improved from the 1.3 per cent growth rate posted in the second quarter. Economists polled by Bloomberg had forecast the growth rate to come in at 2.5 per cent.

Read more >>
http://link.ft.com/r/8P1R88/GDJ2BM/XBAN6/YBG2ZU/307L0R/36/t?a1=2011&a2=10&a3=27

PROVING THAT SOONER OR LATER, ONE HAS TO BUY SOME THINGS. THERE ARE FEW PEOPLE READY AND ABLE TO PRODUCE FOR THEMSELVES, AND EVEN THEY NEED TO GET RAW MATERIALS.

European leaders reached a deal with Greek debtholders on Thursday morning that would see private investors take a 50 per cent cut in the face value of their bonds, a deep haircut that officials believe will reduce Greek debt levels to 120 per cent of gross domestic product by the end of the decade.

The agreement, made just before 4am after nearly 11 hours of talks at a summit of eurozone leaders, includes a new €130bn bail-out of Greece by the European Union and the International Monetary Fund.

Read more >>
http://link.ft.com/r/H60H77/WT09LM/T10SH/EXKQVF/C4IOAN/LE/t?a1=2011&a2=10&a3=27

SO, A PLAN THAT'S SUPPOSED TO BE IN EFFECT FOR 9 YEARS...WITHOUT FIXING ANYTHING. AND THE IMF IS INVOLVED, TOO.

WHEN DOES THIS DEAL FALL APART? PLACE YOUR GUESS IN THE POOL.

Spain’s Santander, the biggest bank in the eurozone by market capitalisation, is quietly trying to sell a €3bn ($4.1bn) package of thousands of repossessed homes and plots of land to foreign investors to clean up its balance sheet, according to people familiar with the talks

Read more >>
http://link.ft.com/r/DHGUVV/4C5PL2/LSLXF/62ACCW/C4IOO4/MQ/t?a1=2011&a2=10&a3=26

Britain is set to be represented in the European parliament by an expert on the paranormal, who ran a course at an unaccredited West Virginia university about ghosts, apparitions, poltergeists, UFOs, aliens, sasquatches and the Loch Ness monster

Read more >>
http://link.ft.com/r/73UJGG/JEN5D9/T10SH/MSJTFR/5V5BFF/1G/t?a1=2011&a2=10&a3=28

I AM NOT MAKING THIS UP, AS DAVE BARRY ALWAYS PROTESTS...

----------

The financial markets have enthusiastically welcomed the agreements reached in Brussels on Thursday, and understandably so – not only for their immediate content but also for what they signal about how far European leaders are willing to go to finally catch up with the realities of the region’s crisis.

Read more >>
http://link.ft.com/r/LVA6WW/97D8OV/4VXHZ/FKDFYM/KQN4KG/D5/t?a1=2011&a2=10&a3=28

YEAH, SURE, RIGHT

The single most effective thing we can do to get the global economy growing faster is to get the American economy growing faster. And given the scope of the challenge and the threat to the global economy, it is important for all of us that Europe's strategy be implemented successfully – including building a credible firewall that prevents the crisis from spreading, strengthening European banks, charting a sustainable path for Greece and tackling the structural issues at the heart of the current crisis

Read more >>
http://link.ft.com/r/EB8122/4C5LO2/7ZY85/IIE3C9/SPBQOP/XL/t?a1=2011&a2=10&a3=27

The day may yet come when the eurozone finally agrees a comprehensive package to end the crisis, but this was not the day. What policymakers agreed at 4am Brussels time on Thursday came close to what they set out to do. They secured a “voluntary” deal with the banks, and they agreed the outer perimeters of a system to leverage the European financial stability facility. But none of this is going to end the crisis.

The deal with the Institute of International Finance is for a “voluntary” 50 per cent haircut on Greek debt on behalf of their member banks. This would amount to €100bn, and would be supplemented by a contribution from eurozone governments to the tune of €30bn. The goal is to achieve a ratio of Greek sovereign debt to gross domestic product of 120 per cent by 2020.

Read more >>
http://link.ft.com/r/CTBPCC/U16QGR/SUO9T/YBGTTD/FK92BI/QR/t?a1=2011&a2=10&a3=27

In typical European fashion, a summit deal which seemed out of reach at midnight last night was triumphantly unveiled at 4am. The deal does not, and was not intended to, have any effect on the core problems facing the eurozone. There is still an urgent need to restore growth to economies which are hamstrung by uncompetitive business sectors, and continuous fiscal tightening. Recession still looms, especially in the southern economies.

What the deal is intended to provide is adequate medium term financing for sovereigns and banks which have been facing urgent liquidity problems. On that, it is notable that the summit has not really raised any new money, apart from an increase in the private sector’s write-down of Greek debt by some €80bn.

Read more >>
http://link.ft.com/r/KC2844/R3BYNB/9MEOW/KQ9N58/QNTYVD/ID/t?a1=2011&a2=10&a3=27

...The euro, like the Titanic, is a marvel. It is an impressive expression of human engineering and achievement. But currencies, no matter how marvelously engineered they may be, are not designed to collide with massive outcroppings of sovereign debt...

ERIC FRY, THE DAILY RECKONING. COM

A SUMMARY OF VIEWS ACROSS THE GLOBE

http://www.creditwritedowns.com/2011/10/roger-bootle-on-the-european-crisis-deal.html#.TqoXKniaf5c.gmail

Sweet dreams, all. Dream of 2025, when all this stress will have ended, one way or another....

http://telshemesh.org/tishrei/autumn_equinox_ritual_at_camp_isabella_freedman.html

One of the highlights of the wonderful Rosh haShanah retreat at Camp Isabella Freedman this year (Oct. 22-24, www.isabellafreedman.org) was that more than twenty people came for the midnight autumn equinox ritual in the woods. It was such an amazing ritual that I want to share it with others.

When I realized that the moment of the autumn equinox would fall around midnight on the first night of Rosh haShanah, I knew I had to plan something to mark this event. So, I invited the other retreatants to join me for a Jewish ritual welcoming the autumn, and asked Tel Shemesh drummer Shoshana Jedwab to bring her drums. Mati, a camp resident, agreed to be our guide into the woods at night. When Rosh haShanah services and dinner were over, late at night, we began to gather to prepare oursleves for our walk into nature to honor the shifting seasons.

We met at the gazebo near the center of camp, sang Shabbat tunes, and learned Jewish traditions of the equinox, including the story that Abraham first encountered the Divine on a Rosh haShanah that was also an autumn equinox, while looking at the stars. I spoke about the balance of dark hours and light hours that occurs on the equinox, and talked about what it meant to be entering the dark half of the year, the half of the year that inspires dreams and visions. We learned the blessing over the equinox, related in the Talmud: Baruch ata adonai, eloheinu melech ha’olam, oseh vereishit (Blessed are You, Divine Guide of the World, who makes creation). Finally, we sang together an equinox song adapted from a song by Holly Taya Shere:

holy is the darkness
and holy is the light
holy is each one of us
and holy is the night




*** i was looking around for Dark Half & ran across this wonderful event -- maybe these are auspicious times.

http://www.economist.com/blogs/dailychart/2011/10/currency-wars

As countries battle with austerity, they would like to see their currencies decline in order to boost exports. But for each move up something must go down. Click on the chart below for an animated explanation of how this game of Old Maid is played with hundreds of billions of dollars.

http://www.dailymail.co.uk/news/article-2054406/Furious-Greeks-lampoon-German-overlords-Nazis-picture-Merkel-dressed-SS-guard.html

Greeks angry at the fate of the euro are comparing the German government with the Nazis who occupied the country in the Second World War.

Newspaper cartoons have presented modern-day German officials dressed in Nazi uniform, and a street poster depicts Chancellor Angela Merkel dressed as an officer in Hitler’s regime accompanied with the words: ‘Public nuisance.’

She wears a swastika armband bearing the EU stars logo on the outside.

http://www.kentwillard.com/5-ducats/2011/10/euro-bailout-failure.html

Have so many ever been so enthusiastic over a plan to beg, borrow, and steal $1.5 trillion?

• Beg - Weaker European banks will have to raise over $100 billion in capital.
  
• Borrow - Eurozone will borrow $1.4 trillion to bailout future sovereign and bank defaults.
  
• Steal - Private investors lose 50% of their Greek bonds' face value (ok, "steal" is a bit strong).

Begging, borrowing, and stealing doesn't usually instill confidence. And it shouldn't. Piece by piece, here's why...

Greek bond 50% haircut:

1. Greek bonds held by the ECB and IMF don't get a haircut, so the Greek gov't didn't get half of all of their debt cut - only part of it. They still owe much more than 50%.
   
   
2. Greece's economy is still shrinking and it still runs a trade deficit, so they will continue to run a gov't budget deficit. They are going to default again.
   
   
3. The bank trade group agreed to the 50% cut as voluntary so that it wouldn't trigger a CDS default, but their decision doesn't bind the actual bond investors, and some probably won't volunteer.
   
   
4. The best reason to volunteer now is so that you haven't shot your wad early, before Greece defaults again, when you might get a bigger payout.
   
   
5. Nobody knows what the interest rate and term of the restructured bonds will be. Assume it will be very low and very long, so that the present value of the bonds will be much less than 50%. Looking for volunteers? (in truth there isn't that much Greek CDS out there).

Banks Raise Capital:

1. The rule was created so that it scarcely touches German and French banks, funny how that works since they negotiated the deal.
   
   
2. Italian banks have to raise a lot of capital, but do private investors want to put money in banks in a stagnant economy, with a government that probably can't bail them out?
   
   
3. The goal is to hit a target capital as a percentage of assets. Instead of raising capital, they could sell assets - particularly the good ones that will sell for a high price, which leaves them with the crummy assets and makes the bank weaker in the long run.
   
   
4. A scarcity of bank capital will cause banks to lend less and lend more conservatively, which will contrain economic growth and ultimately make it harder for banks and governments to pay back their debt.
   
   
5. If banks sell many of their assets, and lend less, then that will generally lower the price of European assets and further undermine bank solvency.
   
   
6. If the value of sovereign bonds is used to determine bank capital adequacy, why would a bank now buy Italian and Spanish bonds that have a greater risk of falling in value? Sovereign bonds are now risky to banks even if they don't default.

Borrow €1.0 trillion ($1.4 trillion):

1. €1 trillion equals 45% of China's foreign reserves, but China's reserves aren't in Euro cash, but mostly in US Treasury and Agency debt. And although these are very liquid assets, you can't sell $1.4 trillion of anything without driving down your price a lot (unless the Fed wants to buy it).
   
   
2. No nation will guarantee the €1 trillion debt, Germany explicitly will not.
   
   
3. Germany demanded that the ECB would not guarantee the debt either.
   
   
4. The Euro Emergency Stability Fund will take the first loss before any of the €1.0 in debt defaults, but the EFSF is backed by credit risks such as Italy and Spain, who are more likely to default than lend in an emergency.
   
   
5. Borrowing €1.0 trillion from China will increase demand for the Euro, causing it to rally and make the Eurozone trade deficit worse.
   
   
6. If the money is lent from within the Eurozone, then you are removing money that would otherwise be lent to someone else, which may constrain economic growth.
   
   
7. If the €1.0 debt is perceived as safer than some individual Eurozone members, then individual Eurozone members may not be able to sell their own bonds to refinance their debt - which means that they would be forced to tap the leveraged emergency fund.

If I'm China, here's what I think:

1. If this loan is so important, why won't the borrowing nations' guarantee it?
   
2. If this loan is so important, why won't they let their own bank guarantee it?
   
3. If this loan is so important, why did they send the French guy rather than the German?
   
4. Why should I risk the value of my US investment portfolio?

Then I offer the Frenchman some sage words, some spare change, and a pat on the head. Give them maybe one year's worth of their Eurozone trade surplus - about €140 billion, since it is natural to recycle trade supluses back into the importer's debt.

STOP BORROWING.

Period. End of discussion. STOP BORROWING.

Figure out how to pay off the debts you already owe, but don't for fuck's sake go deeper into debt.



Understand who you're borrowing from and why, and understand that this is NOT A GOOD IDEA. The people who are benefiting from the borrowing are not the ones who are going to have to pay it back, so they should not be borrowing.

Go to the ones who already have the "money" -- your locl bazillionaires -- and tell them they've got enough and they ain't gettin' any more. If BAC and JPM and all the rest can pay obscenely ginormous bonuses, then they don't need another sou.

Fuck 'em, fuck 'em all. Sideways. With a hornbeam slat or an ocotillo branch, I don't care.




Tansy Gold, who needs to go cut some rocks

http://finance.yahoo.com/news/Goldman-sued-for-107-billion-rb-1419026634.html%3b_ylt%3dAqL_EEwLOd3P3iOtgO4XLcm7YWsA%3b_ylu%3dX3oDMTE1NTVnZm5kBHBvcwM5BHNlYwN0b3BTdG9yaWVzBHNsawNnb2xkbWFuc3VlZGY-?x=0&sec=topStories&pos=6&asset=&ccode=

Goldman Sachs Group Inc (NYSE:GS - News) has been hit with a new $1.07 billion lawsuit for having allegedly sold risky debt that it expected would tumble in value to an Australian hedge fund, causing that fund to become insolvent. The lawsuit by the Basis Yield Alpha Fund alleges fraud, breach of contract and negligence, and seeks to recoup $67 million of losses plus $1 billion of punitive damages. It was filed on Thursday with a New York state court in Manhattan. Basis Yield was managed by Sydney-based Basis Capital Funds Management Ltd.

Basis Yield sued three months after a U.S. judge dismissed a similar case, saying the fund could not sue in federal court under U.S. securities laws because its investment in the Timberwolf 2007-1 collateralized debt obligation did not qualify as a "domestic" transaction.

Timberwolf was cited in a scathing U.S. Senate panel report in April that faulted Goldman, Deutsche Bank AG (XETRA:DBKGN.DE - News) and others for hawking debt they expected to perform poorly. That report said Goldman kept marketing Timberwolf even after Thomas Montag, an executive who is now Bank of America Corp's (NYSE:BAC - News) co-chief operating officer, in an email to a colleague called Timberwolf "one shitty deal."

In the new complaint, the Basis Yield fund said it entered $80.8 million of credit default swaps related to "triple-A" and "double-A" rated Timberwolf debt. It said it also bought $12.3 million of "triple-B" rated debt tied to subprime residential mortgages and issued by another CDO, Point Pleasant 2007-1. These transactions, the fund said, "provided a vehicle for Goldman to unload its toxic inventory and to profit from the decline in value of the very securities it was recommending that its clients purchase." Goldman, it added, even offered sales staff "ginormous" credits to shed the securities. Within weeks, the transactions began to tumble in value, and Basis Yield began to liquidate within two months. It said it lost $56.3 million on Timberwolf in less than six weeks, and $10.8 million on Point Pleasant in less than three months...

:eyes:

http://www.nytimes.com/2011/10/29/business/americans-savings-rate-drops-again-puzzling-experts.html?_r=1&ref=business

When the recession began, Americans began to save more of their money, prompting predictions that their financial habits might be changing permanently. But the surge has not been sustained. In September, the nation’s savings rate dropped for the third consecutive month, the Commerce Department said Friday. It is now at 3.6 percent of personal disposable income, its lowest level since the month the recession began. The latest decline raises the question of whether consumers are returning to their old spendthrift habits or were temporarily relaxing budget restrictions to make long-awaited purchases.

Real personal after-tax income declined in September, just as it did in July and August. Even so, consumers spent more, for an increase of 0.6 percent in September...

Some of the spending increase was to cover necessities like medical bills and gasoline. Consumers also spent more on furniture and goods like televisions Scott Hoyt, an economist at Moody’s Analytics who specializes in consumer spending, said there were two competing hypotheses as to why the savings rate had dropped. “One is that consumers have just decided that they need to spend — they need to replace the car, the appliance, they want a new wardrobe.” The other, he said, is that the data, which is often revised months down the road, is simply incorrect. “There have been several times where we spent a year or more talking about a negative savings rate” — meaning consumers spent more than they took in — “only to get benchmark revisions to the data,” Mr. Hoyt said. “The savings rate’s never been negative.” Mr. Hoyt said he leaned toward the second explanation, in part because more spending was less likely with credit tight and consumer confidence at recession-level lows. But, with appliances and cars aging, there is pent-up demand for replacements.

In the decade leading up to the recession, Americans socked away an average of only 3.1 percent of their income, a much lower rate than in Europe, China, India and Japan. After the crisis began, Americans raised their savings rate to above 5 percent. It slipped briefly below 4 percent in mid-2009 before climbing again. Paul Ashworth, chief United States economist at Capital Economics, offered a partial explanation for the latest change. With interest rates so low, people who have money are earning lower returns, while people who owe money can service their debts for less. In effect, this has resulted in a transfer of wealth from people who are more likely to save — say, someone nearing retirement age — to someone more likely to spend — say, a young couple with a mortgage and a car loan. But that would not account for the whole shift from saving to spending, he said. “Maybe households were desperate and didn’t know what else to do,” he said. “You can put off some discretionary spending, but there is a level of spending that you have to follow through on.”

http://www.nakedcapitalism.com/2011/10/occupywallstreet-alternative-banking-working-group-meeting-in-nyc-sunday-3-pm.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The New York City General Assembly website has a section for a recently-formed Alternative Banking group, which has started meeting on Sundays from 3:00 to 5:00 PM. You can read the notes from last week’s session here: http://www.nycga.net/groups/alternative-banking/docs/ows-alt-banking-meeting-minutes-23-october-2011

Despite the title, this is NOT about moving your money. An alternative economics committee had already started on that effort and the alternative banking committee agreed to let them run with that ball. Although this group is still in the process of deciding what it is about, it appears to be moving towards making fundamental, wide-ranging critiques and proposals.

Anyone is welcome, and the group would particularly benefit from the input of people with capital markets, regulatory, and wholesale banking expertise. The group already has some members with relevant experience (SEC, major hedge fund, investment banking) but more depth would be of great benefit.

Please sign up at the NYCAG webpage to find the meeting location.
http://www.nycga.net/groups/alternative-banking/home/
There is also a dial in number if you are not in NYC and would still like to take part.

http://www.nakedcapitalism.com/2011/10/the-natural-chaos-of-markets.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Having just watched the second episode of All Watched Over By Machines of Loving Grace by my favourite documentary maker Adam Curtis, in which he tells the “story of how our modern scientific idea of nature, as a self-regulating ecosystem, is actually a machine fantasy”, I am once again struck by what an absurd body of ideas, or more accurately, self delusions, much of modern economic prejudice-masquerading-as-theory is.

Curtis, in this episode, shows that the idea that there was a balance of nature was always flimsy, never supported by the empirical evidence, and based on extreme, self proving over simplifications. Ecological thought is about on the same level as economic thought, it seems. Nature is not in balance at all. Consequently all those ideas about self correcting systems — you know, Adam Smith’s so called invisible hand — also turn out to be a fantasy. The neo-liberal assumption that markets are like an ecology, a natural system that will self correct provided it is left alone, is also looking rocky. If, indeed, markets are natural systems — and they are not, they are created systems — then they will not self correct. The vegetative metaphor is extremely unpersuasive.

Curtis does not explore the implications for economics, his interest lies more in how we have given up the power to act because we have allowed machine driven systems to take us over. But what he traces is extremely damaging for General Equilibrium theory, a central plank of much economic “theory” and the basis of micro-economics. General Equilibrium theory basically borrows the vegetative metaphor, that there is a “balance of nature” and applies it to markets. This was always a nonsense move, because markets are not natural, they are artificial. As Curtis shows, it is double nonsense, because even if the metaphor holds, it leads to the opposite conclusion. That markets will probably not incline towards equilibrium at all. Quelle surprise.

In one sense, the assumption that there will eventually move towards equilibrium is typical of the kind of circular arguments of which economists are so fond. Balance is implied in the transactional structures. Balance sheets have to, well, balance; assets must match liabilities. Prices must reflect some sort of balance between supply and demand. That is what a price is. Debts must be repaid from income. And so on. In the artificial rules of finance, equilibrium is implicit...

http://ataxingmatter.blogs.com/tax/2011/10/perrys-flat-tax-proposal.html

The Atlantic has a good summary article contrasting Perry's Flat Tax proposal (an alternative choice to the income tax, that is modeled after Steve Forbe's flat tax, which will result in much lower taxes for the wealthy because of the deductions it retains along with the zero taxation of capital income) and Cain's 9-9-9 intermediary proposal as well as Cain's ultimate goal of the so-called "FAIR tax" --a national sales tax at a tax-inclusive rate of 23%--both of which will result in much lower taes for the wealthy because of zero taxation of capital income. Of course, along the way to his purported "FairTax", Cain will put us through his wacky 9-9-9 plan that includes a VAT (but one that has solely a wage base), an individual Flat Tax (but one whose provisions to benefit the poor are uncertain--some kind of poverty exemption and impoverished district exemption, without much information about how it works or how much it helps), and a FairTax (without any relief from the lumpiness of the tax that causes it to be particularly unfair to the poorest of the poor). See Derek Thompson, Perry Tax, Flat Tax, Fair Tax, VAT (Tax): What's the Difference?, The Atlantic (Oct. 25, 2011).

None of these proposals are revenue neutral (they will raise less revenues than raised under the current tax system). Either the rates would have to be increased or the government would be forced to operate in deficits (as it was pushed into doing with the Bush tax cuts where the $1.2 trillion cost over ten years of the 2001 bill moved the nation from surplus to deficit in one fell swoop).

None of them are distributionally fair--they shift the tax burden (to whatever extent the federal government is allowed to exist) down to the middle class and maybe the poor, while giving the rich extraordinary tax reductions through complete exemption of their main type of income.

None of these proposals are "simple" in any meaningful way. They all require similar tax administrative apparatus to the current system (or, in Perry's case, duplicative administration to take care of the choice of Flat or Income tax), involve the same calculations about timing, amount and character of income necessary under the income tax (but now fraught with more potential for abuse through mischaracterization, since one type is entirely tax free), and require the same procedural due process and penalty mechanisms, as well as forms, instructions, guidance and audits that are required under teh current system. The only sense in which the Flat or FAir tax or VAT is simpler is when you mean by simpler that the wealthy pay less in taxes.

So if we are to judge the proposals by their results, it would seem that these two right-wing contenders for the GOP presidential nod think that two things are immensely important:

1) reducing taxes on the uberrich, and

2) reducing revenues available to the government to fund important programs.

MORE

http://www.businessspectator.com.au/bs.nsf/Article/CDOs-on-the-brink-of-collapse-report-pd20111024-MXPXK?opendocument&src=rss

A move by the United States government to seize the main subsidiary of American mortgage insurer PMI Group, along with the broader struggles in the US housing market, have put hundreds of millions worth of collateralised debt obligations (CDOs), distributed exclusively in Australia, on the brink of collapse, according to a report by the Australian Financial Review.

The issue came to a peak yesterday when it became increasingly likely that three CDOs in particular-- Torquay, Scarborough and a portion of the Parkes CDO, would collapse, an event that would cost Australian investors up to $250 million. Councils, charities, churches and wealthy individuals are particularly exposed to CDOs, with the City of Melville, in Perth, among the most exposed, with nearly $5 million invested.

US mortgage insurer PMI was a popular company among CDO creators, ensuring that the company's seizure by the US government, and a subsequent credit event, would have a significant impact on a wide array of CDOs. If PMI defaults, Scarborough would collapse, while Torquay and a portion of the Parkes CDO would lose some 98 per cent of their capital, according to the AFR.

CAN'T MAKE AN OMELET WITHOUT BREAKING A FEW NEST EGGS...I HATE THIS COUNTRY'S ABUSE OF ALL PEOPLES AND ALL NATIONS.

Those fuckers on Wall St. sold their turds all over the world. I would find it hard to believe that some of the investors, institutions, and such that bought that crap does not have some connections to organized crime or the underworld. It may not be long before some of them start sending their goons over here to have a little talk with the likes of Blankfein, Mack, Dimon, Thain, et al in a dark parking garage. I have no doubt that these fuckers are getting some nasty phone calls from their rich peers. How long before someone is found slumped over in their Mercedes with a bullet wound in the head. We my not need Eric Holder and his department to take care of this mess. I am just saying it my not be long before these fuckers start feeding on each other.

2008 scared them. Not enough so they would stop screwing us, just enough so they would stop screwing each other.

Look at them letting Maddoff walk off with $84M. That's unconscionable.

What you said makes sense, but wouldn't the Maddoff's be small potatoes to the crime bosses? Bernie is in prison and is protected sort of. It was a couple of years before Jeffrey Dahmer wound up dead in the shower. (Dahmer might not be a very good example.) Sometimes the goon squad allows their victims to relax and let their guard down before they get whacked or forced to bite the curb. I have chores to do. I'll be back later to finish up with this morbid train of thought.

I think you may have something. I frequently hear Max Kieser talking about drug money being laundered through the TBTF banks. I am sure money went to WS too.

If there is one thought that helps me sleep at night, it is the thought Blankfein, Dimon, Thain, Mozella, et al getting whacked or sleeping with the fishes. Maybe a surgical amputation of a body part sans anesthesia before they met their fate (that must be the Indian in me-sorry).

And the sad part is that these banksters have weakened the government so much, that they will have no protection against this. Ironic nes pas.

I am think about Marlon Brando in the movie "The Freshman". He was on the phone to his broker. "What do you mean I lost money. I don't like to lose money.

Love this weekend's theme! K & R!

There is a series of "young adult" books by Susan Cooper, one of which is titled "The Dark is Rising." http://en.wikipedia.org/wiki/The_Dark_Is_Rising

The second book in the series - also titled "The Dark is Rising" was the first one I read - and until reading this wiki, I didn't even remember - if I ever knew - that it was actually the second book.

I believe I read #s 2 ("Rising")-3-4 - it was a good while ago - and my memory is that after "Rising" I thought the others were interesting and "good," but did not meet the standard set by the 2nd, which I consider one of those gems one comes across, a near perfect reading experience.

Although targeted at older children/young adults, the writing is so good, the images so potent, that I would think anyone of any age would be captivated as I was. Using the ancient Celtic mythic landscape, she manages to create an atmosphere in which the most ordinary of interactions somehow carry a sense of foreboding and danger - a mysterious but somehow primal threat. The absence of modern technology to the story, the use of natural and universal human ritual objects and acts (wood, music) create a world both beautiful and terrifying.



And serendipitously, our own xchrom posted an interesting bit elsewhere on the site: http://www.bbc.co.uk/news/uk-wales-south-west-wales-15493977



edit for spelling

I think I have "The Dark is Rising" around here somewhere, or maybe another book in the series, maybe "The Grey King"?? I'll have to look. I don't have the whole series, but it might be worth locating the rest and curling up on a chilly evening with them.

I'm reminded, too, of an old "cartoon" published annually by the Chicago Tribune, titled "Injun Summer" by John T. McCutcheon. While it may be a bit un-PC, I think it illustrates how easily the human mind tricks itself when even the slightest element of fear is invoked. The right has long employed fear to control the people -- who doesn't fear being "left behind"??? -- and we need to understand how they do it and how to undo it.

http://dealbook.nytimes.com/2011/10/28/mf-global-securities-prices-plummet-as-firm-races-toward-a-sale/

MF Global is racing to sell itself before the markets reopen on Monday, with its stock and bond prices nearly in a free fall.

The pressures on MF Global, a commodities and derivatives brokerage firm, and its chief executive, Jon S. Corzine — once the chief of Goldman Sachs and a former New Jersey governor — are enormous. With two major credit ratings agencies having cut their ratings on the firm to junk status, a sale of some kind appears to be MF Global’s only hope for survival.

In the space of only a week, MF Global has shed two-thirds of its market value. Its shares plunged 16 percent on Friday to $1.20, after having briefly dipped below $1 earlier in the day. And its five-year bonds tumbled to 49 cents, according to data from Trace research service.

By Friday afternoon, MF Global executives had become focused on selling the entire firm by Sunday evening, according to a person briefed on the matter who spoke on the condition of anonymity because the discussions were private. Other possibilities, including a sale of just its futures brokerage arm, remained on the table but were becoming less likely.

when I watched "Too Big to Fail" I loved the behind the scenes look at those fuckers sweating and pissing themselves trying to make deals to stop the crash they caused. One of the best scenes was when Paulson got down on his knees and begged Nancy to push the bailout through. Squirm you fuckers. To be a fly on the wall listening to Corzine make phones calls would be priceless. This comment at the end of the article is a hoot
"It appears Corzine ran this like he did New Jersey. What next? Perhaps a cabinet position in the Obama administration."

Someone has to be the first domino that falls and sets all the others into an unstoppable cascade. Lehman should have done it. Merrill Lynch should have done it. I'm not sure if MF Global will do it or not, but I hope so.

As I wrote above in another post, the borrowing has to stop. Eventually, even China's well will run dry, and the siphoning of the wealth has accelerated to the point that the global crash may very well be a whole lot closer than we think.

Jon Corzine screwed over New Jersey and handed it on a silver platter to Chris Christie and the pukes. Put him to work at the KFC in Cape May.

Had to shower for half an hour just to get the deep fat fry stink off of him after work.

http://timesofindia.indiatimes.com/world/china/Indian-firms-jolted-by-Chinas-social-security-plan/articleshow/10520579.cms

BEIJING: Indian businesses operating in China are shaken by China's decision to impose social security obligations for foreign employees, which will push up the wage bill by over 40 per cent. It has put expansion plans of some companies in a quandary while new investors may have to reconsider their plans.

"It will upset our cost calculations and affect business prospects. This will be on top of our existing expense on medical insurance," MVRabade, chief executive officer of Adani Power China, told TNN.

China has extended the social security system to cover foreign companies and their employees. Under the law, employers are expected to contribute 37% of salary and employees 11% into the social security pool. The maximum amount to be paid per month varies between 9,000 yuan and 11,600 yuan ($1,415 to $1,837) in various cities.

The plan has several components with employers and employees expected to contribute towards pension and insurance for medical, unemployment, maternity and work related injury.

About time this basic economic fact was imprinted on some western behinds.

http://economictimes.indiatimes.com/news/international-business/germany-finds-eur-55-bn-after-accountancy-error/articleshow/10533086.cms

BERLIN: Germany is 55.5 billion euros ($78.7 billion) richer than it thought due to an accountancy error at the bad bank of nationalised mortgage lender Hypo Real Estate (HRE), the finance ministry said.

Europe's largest economy now expects its ratio of debt to gross domestic product to be 81.1 per cent for 2011, 2.6 per centage points less than previously forecast, it said.

The HRE-linked bad bank FMS Wertmanagement was set up after HRE was nationalised in 2009, so that HRE could transfer the worst non-performing assets to an off-balance sheet bank guaranteed by the German state.

"Apparently it was due to sums incorrectly entered twice," said a ministry spokesman on Friday, adding the reason for the error still needed to be clarified.

http://news.firedoglake.com/2011/10/27/house-passes-the-even-obama-supported-non-jobs-jobs-act/

The House bill eliminating the 3% withholding rule, making it easier for government contractors to cheat on their taxes, a small part of the American Jobs Act and supported by the President, passed today, on a near-unanimous vote of 405-16. The bill was paid for through a separate measure, which changes the calculation of modified adjusted gross income by including Social Security benefits in the calculation, for the purposes of determining eligibility for programs like Medicaid and SCHIP. This fix of a “glitch” that would allow some middle-income early retirees to get nearly free Medicaid coverage (we can’t have that!), passed by a smaller amount, on a vote of 262 to 157. 27 Democrats joined 235 Republicans in supporting the bill.



How facilitating tax cheating counts as a jobs measure is beyond me, but whatever the case, the bill and its offset go to the Senate. A 3% withholding bill got 57 votes in the Senate last week, with a different offset that just reduces expenditures across the board. That was before the Administration came out in favor of the bills, however. So surely, something incorporating 3% withholding is likely to pass Congress.

The CBO estimates that federal revenues would be reduced $11 billion over 10 years by this measure. That’s a little more than 2% of the cost of the American Jobs Act. And it has almost nothing to do with jobs. But it’s destined to become law.

http://blogs.reuters.com/great-debate/2011/10/27/everyones-housing-market-profits-were-fictitious/

Also read part one of this series, How Ed DeMarco finally cried fraud:

http://blogs.reuters.com/great-debate/2011/10/25/how-ed-demarco-finally-cried-fraud/

A big clue something had become dysfunctional at Fannie Mae and Freddie Mac came in the first week of 2011, when the government mortgage market makers announced the terms of a settlement agreement they’d reached with Bank of America, and were immediately pilloried for extending the bank another “backdoor bailout” by the likes of Maxine Waters and the American Enterprise Institute.

By the end of January an internal investigation had convened, all other settlement negotiations had been suspended, and Edward J. DeMarco, the acting Fannie/Freddie overseer pending the confirmation of his replacement, found himself suddenly faced with the challenge of replacing himself as congressional Republicans vowed to stonewall Obama’s pick. Part one of this series traced DeMarco’s unlikely conversion in 2011 from coddler of banks to unyielding litigator of bank fraud. It’s a rare shift in Washington, where “corruption” is a process that’s practically synonymous with “aging.” What’s often forgotten when bureaucrats fail as spectacularly as they have at Fannie and Freddie is the critical roles played by cluelessness, incuriosity, faulty reasoning and fraudulent economic logic as well.

Consider what the inspector general learned about the corporate procedures for pursuing “putback” claims in place at Freddie Mac. While purchase contracts entitle the GSEs to force banks to buy back any delinquent loan in which it finds evidence of fraud, Freddie restricted examiners to screening only mortgages which had defaulted within two years of origination, a tiny sliver of total foreclosures comprising less than one-tenth of defaults from the years 2004 to 2007—the vintage of the Countrywide loans. When one of DeMarco’s deputies noticed this apparent oversight and began warning executives that “Freddie could passively be absorbing billions of dollars of losses” merely by refusing to glance at 90% of their files, the enterprise … chose to absorb the losses, repeatedly resorting to a boilerplate argument justifying the two-year policy holding that: "loans that had demonstrated a consistent payment history over the first two years following origination and then defaulted in later years…likely did so for a reason such as loss of employment, which is unrelated to fraud."

Oh really.

The deputy spent six or so months attempting to politely introduce his colleagues to the concept of the “teaser rate.” Perhaps, he writes in one email, Freddie was failing to take into account that “from 2005 through 2007 there was a substantial increase in non-traditional mortgage products which frequently featured ‘teaser’ rates initially resulting in low payments” which would “increase dramatically two, three, or five years after origination” when “rates reset and/or the repayment of principal began”—thus rendering virtually any deliberate fraud essentially “invisible” for the first few years of the life of the loan. The examiner, though, was either himself mistaken, or trying to be polite, because those dates are off by a few important years. As he might have gleaned from the company’s annual survey of adjustable rate mortgage trends, a 28-year-old Freddie Mac tradition available online, the “substantial increase in non-traditional mortgage products” began well before 2005; what changed in 2005 is that housing prices in the hottest markets finally, slowly began to edge down a bit, meaning that each passing month was rendering increasing numbers of borrowers “underwater” on their loans. But when Freddie executives attempted to get themselves off the hook by blaming plummeting housing values for the uptick in foreclosures, the inspector general shoots them down in a fascinating footnote (emphasis mine):



Causation is irrelevant to the issue in controversy? Pretty bold statement for a professional investigator! MUCH MORE AT LINK

http://www.housingwire.com/2011/10/27/senators-press-obama-for-swifter-reo-strategy

CAN YOU JUST SEE THEM, WRIGGLING IMPATIENTLY FOR PAYOFFS AND PROFITEERING?


A group of 33 senators sent President Obama a letter Thursday asking his administration and the Federal Housing Finance Agency to expedite pending plans for selling and renting previously foreclosed homes held by the government. Sens. Jack Reed (D-R.I.), Bob Menendez (D-N.J.) and banking committee chair Tim Johnson (D-S.D.) led the letter.

"We urge you to analyze, quickly and diligently, the input you have received so that all REO properties under your control may be best managed to produce the most value for Fannie Mae, Freddie Mac, and FHA," the senators wrote. "As part of this analysis, we ask that you also keep in mind the importance of looking for the most effective ways to stabilize neighborhoods and housing values."

In August, the White House sent a request for information from the housing industry, looking for new strategies to help these agencies better manage the supply of more than 90,000 REO homes currently on the market. Along with the plan to boost refinancing for underwater borrowers, the Obama administration is looking for local ways to alleviate this influx of inventory.

The size of the Fannie Mae foreclosure inventory alone grew to 162,489 in 2010 from 25,125 three years earlier. Even more troubling are the 10.4 million mortgages set to default, according Amherst Securities analyst Laurie Goodman....MORE

http://www.macrobusiness.com.au/2011/10/occupying-struggle-street/?utm_source=Media+List&utm_campaign=71fcfc1a2d-RSS_DAILY_MAILCHIMP_CAMPAIGN&utm_medium=email

...Inequality in a dynamic capitalist economy is to be expected. If equality arises as a result of variation in work effort and entrepreneurial endeavour, then its impact on social cohesion is limited, as opportunities are available for lower income individuals and families to climb the ladder of success with a good dose of hard work, entrepreneurship, and luck.

However two specific trends have arisen in the past three decades that are undermining this idealist notion of inequality under dynamic capitalism.

Inequality has increased beyond what appears reasonable from individual effort alone, and more importantly,
upward mobility, or the chances that a descendent generation will improve their position on the income distribution, has declined. Poor people in 2011 are more likely to stay poor, while the rich are likely to stay rich, and indeed, get richer...

All packed and ready to go in the morning.

I need it bad.

I'm sort of doing the same thing -- took a week off the day job. No pay, of course, because as an "independent contractor" I have no benefits like vacation, but I just need the time for myself.

May you have fair winds and sunshine.


TG

I put in a full day of work and a full morning here, and that leaves not much.
So let's meet up tomorrow, and see if they slipped anything over the weekend.

This article is so good in many parts that I don't know where to cherry pick a quote

http://www.commondreams.org/view/2011/10/29-7


I'm not conversant enough with various philosophical systems to quite understand a few of his references, but the overall analysis is quite clear and in plain, everyday language.

It struck me that "pregnant vacuum, an opening for the truly new" resonates for me with the time of year we are entering - a seemingly "dead" time, but the necessary precursor to new life, new births. But still fraught with peril for all that - the time of cold, and long dark, when all weakness is exposed and magnified, when there is no margin, the fear of famine and disease haunts our ancestral memories, and the night terrors that stalk us, the worms in our brains, are not held at bay by light and warmth.

In the Words of the Starks: "Winter is coming" (reference from "A Song of Ice and Fire."

* how perfectly "Clintonesque"
:eyes:

it's just that, a vacuum. And I think now -- Saturday night -- we're seeing that it's not the new ideas that are rushing to full that vacuum but more of the worst of the same. Namely, the police and violence.

I'd really like OWS and its offspring to prove me wrong, but as I've said to others publicly and privately, OWS was never big enough to survive, let alone effect any kind of substantive change. A few hundred in a park in NYC, a few thousand at the most? That's nothing. That's less than nothing. That's a showing of how weak the "movement" really is. The 99% aren't hungry enough, aren't desperate enough, aren't willing to risk what they have because the truth is, they still have it. The U.S. is not Egypt or Libya, it's not even Greece or Spain. Unless and until millions flood into Central Park, the movement is too vulnerable.

Was the movement's goal just to get people into the parks, onto the streets? So what? And now that they've accomplished just about nothing, are the rest of us better or worse off? Has the other side consolidated its power, gained confidence that it can do whatever the fuck it wants? Have the banks and hedge funds suffered any losses at all because of OWS? Has a single politician changed his or her stance on the issues?

What has OWS -- rather like Obama -- accomplished? What was it supposed to do? How was it supposed to help people, make things better, change things?

Don't feed me bullshit about pregnant vacuums. Pregnant vacuums don't write legislation or file class action lawsuits or force investment banks into bankruptcy. We had a 2008 campaign of lofty rhetoric about change and hope and all that crap; what we need now is action. Specific action designed to produce specific results. None of the leaderless leadership crap.

NOTHING HAS CHANGED, at least not for the better.

What needs to be done now, is for all these people that feel something needs to be done, is to take the OWS movement and Occupy Congress. Fill up the political buildings in Washington DC with the OWS people. People need to remain occupying the House and Senate until the politicians and the banksters are prosecuted for abusing their power and steathly stealing our money for bailouts, and to get the money out of the political system.

Remember last winter when people occupied the Wisconsin capitol building to support unions and collective bargaining? Something similar needs to be done in Washington DC with millions of people.


edit to add link for the 2011 Wisconsin protests
http://en.wikipedia.org/wiki/2011_Wisconsin_protests


edit to add more from Ilargi at The Automatic Earth

10/6/11
Bankers, and financial institutions in general, can only go as far as a political system lets them. I’ve noted many times before that we don't have a financial crisis, we have a political crisis. The reason why is so obvious it's hard to see: if you allow money into your political system, it will buy that system, and end up controlling it entirely (or close, allowing for the odd 1 in 1000 honest politician).
A democratic political system needs to be independent of money, or it will not remain democratic. Allow the first bits of money in and at some point it will turn into Mussolini's corporatism, aka fascism. It's like when you can a jar of jelly, and you don't shut it properly, if even for a second. After a certain period of time the entire jar will be filled with something other than jelly. We're well on our way there, very well.
But getting money out of politics is a long-term goal, one that is too far-reaching and too complex to solve in street protests. Still, it’s more realistic than protesting bankers' greed. You might as well protest the fact that the sun goes down. Or that bankers wear suits. Bankers would still be greedy if they all were forced to wear polka-dot dresses. Many people are greedy. They just don't always get the means to satisfy their greed. And perhaps bankers don't even need to be all that greedy and still make obscene amounts of money.
The Occupy movement needs more attainable goals if it is to succeed and survive. The anger is there, as is the energy, but the focus does not seem to be.
http://theautomaticearth.blogspot.com/2011/10/october-6-2011-occupy-this-mark-banks.html

10/9/11
Protesting bankers' greed is useless; bankers can only do what the political systems lets them, and as long as the system allows them to feed their greed, they will. So what protests should be targeted at is to change the political side of the equation.
http://theautomaticearth.blogspot.com/2011/10/october-9-2011-occupy-debit-card-fees.html

Right now, imho, OWS is just a disorganized assembly. That's not enough. As cool as anarchy may seem, it's not an effective way to deal with well organized, well armed Authority. The various police forces, the mayors and sheriffs, the governors and attorneys general, etc., are all very well organized. OWS needs to be organized, too.

This is especially important because OWS is grossly outnumbered. If OWS had 25,000 camped in Zucotti Park, they might be able to accomplish. . . .. something. But they don't. And they don't have millions occupying Central Park and more millions in Chicago and LA and SF and Dallas and Atlanta and Denver and Seattle and St. Louis and Omaha and Boston and Miami and Rochester and Phoenix and Little Rock and Raleigh and Detroit and Columbus and Des Moines and Des Plaines and Modesto and Memphis.

Who's in charge of OWS's money? Who determines where it's spent? What it's spent on?

Who speaks for OWS? What does OWS plan to do, other than just sit there in the mud and snow and ice, freezing their asses off and making a mess of things?

I'm not asking what they WANT, because I know what they WANT. I want to know how they plan to go about getting it.

Are they just going to DEMAND it? And what will they do if whoever it is they're demanding it of doesn't give it? What's their "Or else. . . . ."?


Imho, what OWS wants is a revolution. Not a bloody confrontation, mind you, but a complete alteration of the economy and the government and the media and the whole American psyche. That's a huge order, and an enormous undertaking. That kind of "change" doesn't happen overnight and it doesn't happen without plans, contingency plans, planning, organization, strategy and tactics and communication. Oh yes, and money. Money that's accounted for and used effectively.

If I were in charge, which I'm not, I'd be, among other things. . . .

1. Organizing volunteers in locations with inclement weather to provide cars/vans for giving campers respite from the cold as well as cell phone/laptop charging.
2. Organizing volunteers to handle laundry and garbage situations.
3. Organizing a system for mail and package delivery of supplies, everything from mittens and blankets to flashlights and batteries and pizzas.
4. Organizing information distribution to the media, designating spokespersons.
5. Organizing specific targets with specific desired results.

Anyone who thought this was going to be easy and that all that was needed was for a few thousand people to show up with tents and the whole world would change doesn't have their head on straight. TPTB are entrenched, they have wealth and resources -- police, rubber bullets and tear gas, the courts, and the media -- on their side. David isn't going to defeat this Goliath just by showing up; he's going to need a deadly weapon, a means to discharge it, and damn good aim. At the present time, the OWS David is just standing there getting cold and wet, and Goliath is laughing at him before he sweeps the little fucker aside.

As for getting millions of people out, that's not going to happen any time soon.

The fact is, there aren't millions of people who have both the means and the desperation to do so. Yes, we have a middle/working class that's under attack, but we still have a significant portion of the population that's gainfully employed. The government figures of 10% unemployment and another 10% underemployed are probably not accurate and both figures are probably higher. (I'm sure someone will post the proper percentages.) We have a huge proportion of our population classified as below the poverty line in income. We have a shamefully high percentage of our families on food stamps. We have far more "food insecurity" than is acceptable in a nation of such bounty. BUT, we also have those fragile safety nets of food stamps and TANF and social security and social security disability and local food banks and churches and family members who are still employed, etc., etc., etc. We have the legacy of the 50s and 60s and even 70s prosperity that hasn't been wiped out yet.

As long as people have assets that they think will see them through until things turn around, they will not risk what they've got left. Oh, some will. There will be the wealthy to get out there and hold up their signs. There will be the celebrities who spend a few nights in the encampments. But these people have sufficient assets that they can risk a few. People who are caught in the middle -- not yet desperately poor but far from wealthy, and that's most of us -- just can't risk it. Some of us have jobs that we still have to go to in order to keep a roof over our heads and food on the table. Are all of us willing to give that up, run the risk that when OWS is over we will have lost everything, with no protection? I'm not doing it, and I don't see millions of other people putting everything they've got on the line.

The people who have nothing left -- or who are young and have a half century ahead of them to recoup -- will be there. The good news is, we don't have enough desperate people with nothing left to lose. Unfortunately, for OWS that's also the bad news.

The reality is that the Wisconsin protests didn't accomplish much. Eventually a couple of state senators were recalled, but the state government remained in GOP hands. The corrupt clerk in Waukesha managed to control the election to keep the pukes in power, and nothing has been done. The status quo was maintained. Some of the more onerous portions of the anti-union bill may have been modified, but the reality is NOTHING MUCH HAPPENED.

The millions who took to the streets in 2003 didn't stop the invasion of Iraq; they marched and then went home. Compare that to Greenham Common. http://en.wikipedia.org/wiki/Greenham_Common_Women's_Peace_Camp

Frankly, I don't see OWS being successful on any points. It's much too small, too disorganized, too scattershot to be effective at anything other than making a mess and getting a lot of bad publicity for the causes it espouses.


Sorry.



Tansy Gold, a member of the reality-based community.

The OWS movement is disorganized. I say take all your ideas, and concentrate in DC. Start at the top with Congress as the main focal point. As time goes on, there will be more and more desperate people, and they should all show up in DC. There will be more power with more people. This is not going to be quick resolution, it will take months if not years. And the main goal should be to get the money out of the political system. Get back government of the people, by the people, for the people.

Actually, two:

http://www.npr.org/2011/10/29/141816778/why-the-haves-have-so-much
Why The Haves Have So Much
by Scott Horsley

It's as namby-pamby as everything else on NPR these days, and not worth quoting - (and incredibly, on the front page http://www.npr.org/ summary of the story it says



(See! No class warfare here! It's no-one's fault - it's just "the economy!" Un-fucking-believable. Goddess, I detest NPR)

and: http://www.npr.org/2011/10/29/141828916/the-week-in-news-the-rich-got-richer



Of course, they don't actually "discuss" the story - they summarize the CBO study and move on - nothing to see here!

... and these were on only three days after another story:

http://www.npr.org/blogs/money/2011/10/26/141716961/why-has-income-gone-up-so-much-for-top-earners?ps=rs
Why Has Income Gone Up So Much For The Top 1 Percent?

(and this one, while lacking the "and some R troglodyte said" pro forma "balance" NPR is so married to, being a fairly straightforward look at CBO report, looks only at income and not wealth.

Now, not a single one of these has anything that everyone here doesn't know, nor are they even (to my mind) in any way adequately explored for even their paltry content, but when have we seen three stories on income inequality on NPR in three days?

OWS has changed the conversation. For how long, who knows? That depends on what happens from here, I agree.

I understand your frustration, Tansy, but I honestly think it is misdirected. The real fault belongs with all of us who've settled for the incremental tinkering our "Liberal" organizations and coalitions have timidly put forward all these years. The real fault belongs especially to Labor, which has so badly failed both our own members and our responsibility to the working class in general. You write, "Pregnant vacuums don't write legislation or file class action lawsuits or force investment banks into bankruptcy. We had a 2008 campaign of lofty rhetoric about change and hope and all that crap; what we need now is action. Specific action designed to produce specific results. None of the leaderless leadership crap."

But we have done all that. I am part of I-don't-know-how-many coalitions that have offered our so-called representatives the legislative remedies we need (or that at least would ameliorate some of the worst excesses and oppressions) - and we've backed them up with millions of phone calls, signed petitions, hundreds and thousands of visits to Congressional offices, rallies, photo-ops, OP-EDS, in other words, everything one can do. Nothing changes. Not to mention, as you yourself do, that we elected a President and Congress who were supposed to - at least - start that process - just what else are we supposed to do?

The answers - or at least those answers that safely stay within the paradigm of a regulated capitalist economy - are out there. We've written them. We've done all the things one does - and with, literally, millions and millions of voices behind us, despite the MSM's appearance to the contrary. And nothing changes.

That's when all you can do is put your body in the way of the machine - which OWS has done, with incredible bravery and tenacity so far.

I too, hold my breath, and feel frustration. The logical outcome of OWS is a General Strike - and I don't think it's going to happen - yet. Mostly because Labor is not brave enough yet. But OWS - even if (well, not if, when, I sadly suppose) it fades away, is quite likely a necessary precursor to such an action.

The only thing that will work - maybe - is a General Strike. At this point, I'm not even sure who's job it is to call for it (Oakland OWS did, but Labor promptly bailed). Logically, it would be the job of the Labor movement - to take this groundswell of awareness and energy, turn it into a demand, and go for it with everything we've got, bringing our friends with us. But I doubt we have the necessary weight of authenticity to do it. Is it the job of OWS to do it? I don't know - but they've opened the space where such a thing comes into the realm of possibility, if not yet reality. That's the "pregnant vacuum" they've created - something none of us, with all our coalitions and campaigns, managed to do.

edit for a html muddle

bread_and_roses wrote : . . . but they've opened the space where such a thing comes into the realm of possibility, if not yet reality. That's the "pregnant vacuum" they've created - something none of us, with all our coalitions and campaigns, managed to do.

I don't think they created any such thing. That possibility has always been there, and it always will be there. It's a space always waiting to be filled, and sometimes it is filled, for a moment or two, by an idea or a leader that marshals the latent forces. Whether it's a Martin Luther King or a Cesar Chavez, a "No More War!" or "Hope & Change" or "Drill Baby Drill" or whatever -- that space is always available. What's happened is the OWS hasn't filled the space.

We can all wage our own general strike any time we want to. As soon as we leave the corporate rat race behind, stop being mindless consumers of cheap crap, start respecting people and nature and life and truth -- that's the real general strike TPTB are afraid of. They don't care if the airplanes don't fly for a day. They don't care if the garbage piles up for a week. (Anyone else remember NYC in January 1968?) As long as everyone has a good time on their strike for a day or two and then goes back to business as usual, it's all good.

But if you stop buying the shit, stop piling up the debt, that's the sabot in the machinery. That's why they don't want to renegotiate the mortgages -- they want us in debt to them. They want to control us.

Go back to what "the hippies" of the late 60s and the counter-culture of the 70s were really about. Look at the lingering vestiges and embrace them. Do more with less. Cut the chemical crap out of your life. Reduce, reuse, recycle. Change your own lifestyle, and you change the world.

And I'm not talking about you, individual, bread_and_roses, but all of us collectively. (ooh, bad word! bad word!) Take our money out of the big banks and put it into the credit unions. Drive less and use less oil. Find a solar alternative, if you can, to the power company.

I work, as an "independent contractor," for a small company. I could work more and make more money, but no matter how much or how hard I work for them, they will always make more money from my labor than I will. I know this for a fact. So I have chosen to make less money from them, and use my labor for myself. I am essentially on half-strike all the time. It's not always easy, and I'm never going to be wealthy, but I have a special peace of mind knowing that I'm contributing as little as I can to the global monster.

If OWS advocated that, it might have a chance.


TG

I don't believe we can succeed on a call for what most see as a terrible deprivation. We simply can't counter the entire culture that way.

"I am essentially on half-strike all the time. It's not always easy, and I'm never going to be wealthy, but I have a special peace of mind knowing that I'm contributing as little as I can to the global monster."

I do too, Tansy. My own "half-strike" has always been to work in pretty low-paid jobs that - I thought (in most cases, wasn't actually so - more bandaids on mortal wounds)- did some good in the world. I have NEVER embraced consumerism - I never forgot that "recycle" was not a substitute for "reduce and reuse" and buy nearly everything used, avoid plastic and other artificials, never use chemical poisons for gardens and pest control, and of course do recycle.

And what good does it do? I am one person, you are one person. Our efforts are meaningless except - and it's no small except - in our adherence to a personal ethic.

It's not catching on.

We will have to agree to disagree - though in the end, regarding OWS, in a way I think we're both right. We are surely on the same side.

I'm re-reading Todd Gitlin's "The Sixties," more for its social history of the 50s than anything else. And I'm once again struck by the power of popular culture.

That's where the real vacuum is. The left/liberal/progressive activist side that we're all on has failed to create a "culture" that could be adapted to and adopted by the public in general, so it would in fact "catch on," as you say.

Because popular culture is a mighty powerful thing. If OWS could fill THAT vacuum, they might be unstoppable.


I'm gonna go recycle some porcupine quills right now. Pictures later.



TG

What we do as individuals may not seem like much, bread_and_roses, but it matters. Remember the starfish on the beach and the star thrower.

As for those porcupine quills

that ought to sell well!

Just got back from the Halloween Party. I started making lasagna at 1PM, the kids showed up at 3:30, we cleaned up at 6:30. They were scraping the sides of the lasagna pan. We had such cute kids and creative costumes, all designed for the 29F weather we are having....we did crafts, we ate (and ate) and talked, and it was highly successful.

Thank goddess it's only once a year.

http://en.wikipedia.org/wiki/Bank_War

The Bank War is the name given to the controversy over the Second Bank of the United States and the attempts to destroy it by President Andrew Jackson. At that time, it was the only nationwide bank and, along with its president Nicholas Biddle, exerted tremendous influence over the nation's financial system. Jackson viewed the Second Bank of the United States as a monopoly since it was a private institution managed by a board of directors, and in 1832 he vetoed the renewal of its charter.

History of the Banks of the United States
Main article: History of central banking in the United States

The First Bank of the United States was founded in 1791 with the support of Alexander Hamilton over the objections of Thomas Jefferson. The First Bank's charter expired in 1811 under President James Madison. The bank was revived in 1816 as the Second Bank of the United States, and Nicholas Biddle was appointed to be its president. Madison and Congress agreed on the bank as a means to control inflation after the government found itself with a formidable debt as a result of the War of 1812. (I HAVE READ THAT THE WAR OF 1812 WAS STARTED FOR JUST THIS PURPOSE, TO FORCE THE US INTO DEBT AND INFLATION AND A NATIONAL BANKING CARTEL--DEMETER).

The War, Election, and Jackson's Veto and removal of funds

The Bank War started in 1829, when Andrew Jackson made his antagonism toward the Second Bank of the United States clear. In response, Nicholas Biddle and Henry Clay applied to renew the bank's charter four years earlier than necessary in order to make it an election issue. But when Jackson easily won in the election of 1832, he interpreted this victory as a mandate to terminate the bank entirely.

Andrew Jackson’s background contributed to his veto of the bank's charter. Jackson had owed debts to banks during his earlier years, and had experienced the plight of the indebted, who would often have their property and anything of value repossessed by banks, over what were often termed unfair agreements. He was a strong advocate for hard currency. His negative personal experiences contributed to his hostility towards banks and the use of fiat money. Jackson explained his decision in his veto message to Congress, declaring that "some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution" and referring to the bank's sole control on the country's currency as a monopoly.

His stance against the bank brought him a great deal of resistance and criticism from powerful quarters, and at one point stood to be impeached by its supporters - such was the influence of the central bank and its vast wealth. He was viewed by Daniel Webster to be a monarchical president because he used his presidential power to veto against the bank liberally. Henry Clay, who owned a number of banks and was an avid supporter of the central bank, moved to get Jackson impeached, on the notion that "Jackson claimed powers greater than European kings." The Senate approved the motion to censure Jackson in 1834. However in response, Andrew Jackson wrote to the Senate stating that Maine, New Jersey, and Ohio were in support of his vetoes. These states' legislatures considered Jackson’s anti-bank vetoes to be wise and constitutional. The censure text was expunged in 1837 when the Senate Democrats resumed a majority.

In 1833, Jackson moved to finish off the bank. Jackson ordered all federal deposits in the bank withdrawn. To do this, Jackson was forced to remove two secretaries of the treasury who refused to carry out Jackson's orders, eventually replacing Louis McLane and William J. Duane with the more agreeable Roger B. Taney. Despite the Senate's refusal to confirm Taney's appointment, during his nine months as acting Secretary, he carried out Jackson's orders. Jackson announced that effective October 1, 1833, federal funds would no longer be deposited in the bank. In retaliation, Nicholas Biddle began calling in loans from across the country, engineering a financial crisis. Biddle believed that this would highlight the need for a central bank. However, the move backfired, when angry businessmen and farmers started blaming the bank. The bank lost its charter in 1836, and went out of business in 1841. The third central bank, called the Federal Reserve Bank was not chartered until 1913, during the presidency of Woodrow Wilson, citing the Economic Crisis of 1907 as justification.

http://avalon.law.yale.edu/19th_century/ajveto01.asp

...A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.

The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders.

An apology may be found for the failure to guard against this result in the consideration that the effect of the original act of incorporation could not be certainly foreseen at the time of its passage. The act before me proposes another gratuity to the holders of the same stock, and in many cases to the same men, of at least seven millions more. This donation finds no apology in any uncertainty as to the effect of the act. On all hands it is conceded that its passage will increase at least so or 30 per cent more the market price of the stock, subject to the payment of the annuity of $200,000 per year secured by the act, thus adding in a moment one-fourth to its par value. It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners. By this act the American Republic proposes virtually to make them a present of some millions of dollars. For these gratuities to foreigners and to some of our own opulent citizens the act secures no equivalent whatever. They are the certain gains of the present stockholders under the operation of this act, after making full allowance for the payment of the bonus.

MORE

Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their Government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market. The value of the monopoly in this case may be correctly ascertained. The twenty-eight millions of stock would probably be at an advance of 50 per cent, and command in market at least $42,000,000, subject to the payment of the present bonus. The present value of the monopoly, therefore, is $17,000,000, and this the act proposes to sell for three millions, payable in fifteen annual installments of $200,000 each.

It is not conceivable how the present stockholders can have any claim to the special favor of the Government. The present corporation has enjoyed its monopoly during the period stipulated in the original contract. If we must have such a corporation, why should not the Government sell out the whole stock and thus secure to the people the full market value of the privileges granted? Why should not Congress create and sell twenty-eight millions of stock, incorporating the purchasers with all the powers and privileges secured in this act and putting the premium upon the sales into the Treasury?

http://www.daytondailynews.com/business/victims-of-mcsi-criticize-sentence-given-to-ex-chief-executive-1276837.html

DAYTON — Former employees and shareholders of MCSi Inc. say they have lost faith in the court system after ex-chief executive Michael E. Peppel received a seven-day prison sentence for the elaborate fraud he committed.

Peppel’s crimes led to MCSi’s 2003 collapse, which wiped out the jobs or investments of hundreds of victims.

“I think it sends a terrible message. I think it shows that money and power can influence a case,” said Mary Schwarz of Kettering, whose late husband, Albert, served as president and chief executive officer of MCSi prior to Peppel. “He pled guilty to being a crook, and he gets seven days?”

The FBI, Internal Revenue Service, Securities and Exchange Commission and Postal Inspection Service worked together for years to unravel the MCSi financial reporting fraud, prosecutors said....

---------------------------------------

Dark side indeed, 7 days, after ruining peoples lives.

http://www.newstalkradiowhio.com/news/news/local/ohio-mock-zombie-outbreak/nFP3F/?cxtype=feedbot


COLUMBUS — A central Ohio county is using a zombie outbreak on Halloween to prepare for more likely disasters.

"People got zombie fever here in Delaware," said Jesse Carter, a spokesman for the local health district.

More than 200 volunteers in Delaware County north of Columbus will dress as zombies on Monday to help train officials who would deal with real-life situations involving hazardous materials and disaster response.

Centers for Disease Control and Prevention have warned people to be prepared for a "zombie apocalypse."


=================================================================

Dark Side Fun?

http://www.youtube.com/watch?v=R1v0uFms68U

http://www.economist.com/node/21534753

ERIC WONG, who helps run his Hong Kong family’s money through an investment office, TCG Capital, looks like a hedge-fund manager’s dream. He’s rich, young and, having been to university there, comfortable with American ways—just the type of investor that Western hedge funds looking for Asian expansion have set their sights on. He is not, however, very interested. Real estate is the “best pension plan my family ever had,” he says. Why change?

Where they are not greeted with apathy, Asia-minded hedge funds often face antipathy. Since the financial crisis of the late 1990s “fund” has been a four-letter word throughout Asia. George Soros, a famous hedge-fund investor, is still reviled for aggravating and profiting from the crisis. When the Chinese refer to hedge funds as ju e, or “big crocodiles”, it is not by way of a compliment on their killer instincts.

Despite muted interest and outright scorn, though, more and more hedge-fund managers are determined to make their mark on Asia. They see a lot of money to be made, a lack of entrenched competition and a vast number of potential clients.

Ravenous growth and maturing equity and credit markets should mean Asia offers a lot of opportunities. “Our investable universe has doubled in the last five years,” says one happy executive at a fund that recently launched in Hong Kong. At the same time there is little by way of an asset-management industry in much of Asia. Investors’ portfolios mostly consist of just property and stocks, which leaves lots of room for hedge funds’ offerings. And there are vast numbers of millionaires to whom such offers can be made.

The Kid is a great fan of Harrison Ford. She comes by it honestly, from her mother. So in her weekend retrospective, she just screened "Air Force One".

In Air Force One, the President and his family are hijacked and held hostage. Harrison Ford picks off the attackers, one by one, and sees the American who betrayed him revealed at the last second, and sent crashing to his death.

Now, I'm a reasonable voter. I don't ask the President to go up against Chechen terrorists, mano a mano. I don't even ask him to go up against the banksters, mano a mano. But I do expect certain results:

1. Return of the Rule of Law, Habeas Corpus, Constitution and the Bill of Rights for ALL citizens, even Muslims located abroad for whatever reason. Dismantlement and redirection of the TSA to dealing with real terrorists, not any and everyone.
   
   
2. The immediate dismissal of Geithner and Holder, and a demand for Bernanke's resignation. Or they could be brought up on charges; your choice, Mr. President.
   
   
3. An immediate ban on all drones for any reason as a weapon of war crime caliber, and complete withdrawal from Iraq, Afghanistan, Libya, Syria, and anywhere else, of troops, mercenaries, contractors, CIA, FBI, and all agents of aggression.
   
   
4. And if that's not possible, an immediate resignation. Again, your choice, Mr. President.

That's not too much to ask. Not if you want to be re-elected.

I'm feeling as disgusted as Keith Olberman. I hope he understands if I borrow his tag line:

Goodnight, and good luck.

Send it bank to them!

10/27/11 Keep Wall Street Occupied
http://www.youtube.com/watch?v=2JlxbKtBkGM&feature=player_embedded appx 5 minutes


I just re-stuffed 4 envelopes for Chase bank, with heavier than usual promotional materials. Great idea!

http://uk.reuters.com/article/2011/10/30/uk-germany-commodities-idUKTRE79T1MB20111030

(Reuters) - The German government and about 10 companies based in Europe's biggest economy are planning to found a company before the end of the year to buy key raw material needed by the industrial sector, German magazine Der Spiegel reported.

Without citing sources, it said that the companies, which include BASF (BASFn.DE), Daimler (DAIGn.DE), Evonik EVON.UL and ThyssenKrupp (TKAG.DE), will each invest a six-digit figure in the project.

ThyssenKrupp, Germany's biggest steelmaker, said a year ago that the government and German companies should band together to buy raw materials. Germany depends on raw materials from abroad to power its export-driven economy.

German Economy Minister Rainer Bruederle at the time also urged industrial firms to set up a "Deutsche Rohstoff AG," or a German raw materials company, to find and secure rare earths, which are used to manufacture a range of high tech products.

I know this doesn't truly belong here - but it is just too wonderful, I have to share. Stolen shamelessly from a post by "DeSwiss" in this thread http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x629823 (the video is pretty good too - KO at his finest), I am simply astounded that I've never read it before. No wonder Mary Wollstonecraft loved him!

http://www.artofeurope.com/shelley/she5.htm (I have quoted only the last part but the whole thing is worth reading)

http://www.artofeurope.com/shelley/she5.htm