Weekend Economists View the Trojan Horse June 15-17, 2012

[Demeter]

SOURCE FOR FRACTAL FLAG: http://shortgreenpigg.deviantart.com/art/US-Flag-86794316


Yep, it's Friday, the start of a momentous weekend. This weekend we have Flag Day (Thursday), Father's Day (Sunday) and the long-awaited, much dreaded Election in Greece, in which the fate of the euro, the eurozone, globalism, and the whole world will be determined.

Or not.

But probably, yes. Things have come to such a tangle that any further scheming is bound to start unravelling the Gordian Knot.

The Gordian Knot is a legend of Phrygian Gordium associated with Alexander the Great. It is often used as a metaphor for an intractable problem solved easily by cheating or "thinking outside the box". ("cutting the Gordian knot&quot :

"Turn him to any cause of policy,
The Gordian Knot of it he will unloose,
Familiar as his garter" (Shakespeare, Henry V, Act 1 Scene 1. 45–47)

Alexander cuts the Gordian Knot, by Jean-Simon Berthélemy (1743–1811)

Legend

At one time the Phrygians were without a king. An oracle at Telmissus (the ancient capital of Phrygia) decreed that the next man to enter the city driving an ox-cart should become their king. A peasant farmer named Gordias drove into town on an ox-cart. His position had also been predicted earlier by an eagle landing on his cart, a sign to him from the gods, and on entering the city Gordias was declared king by the priests. Out of gratitude, his son Midas dedicated the ox-cart to the Phrygian god Sabazios (whom the Greeks identified with Zeus) and either tied it to a post or tied its shaft with an intricate knot of cornel (Cornus mas) bark. The ox-cart still stood in the palace of the former kings of Phrygia at Gordium in the fourth century BC when Alexander arrived, at which point Phrygia had been reduced to a satrapy, or province, of the Persian Empire.

Several themes of myth converged on the chariot, as Robin Lane Fox remarks: Midas was connected in legend with Alexander's native Macedonia, where the lowland "Gardens of Midas" still bore his name, and the Phrygian tribes were rightly remembered as having once dwelt in Macedonia. So, in 333 BC, while wintering at Gordium, Alexander the Great attempted to untie the knot. When he could not find the end to the knot to unbind it, he sliced it in half with a stroke of his sword, producing the required ends (the so-called "Alexandrian solution&quot . That night there was a violent thunderstorm. Alexander's prophet Aristander took this as a sign that Zeus was pleased and would grant Alexander many victories. Once Alexander had sliced the knot with a sword-stroke, his biographers claimed in retrospect that an oracle further prophesied that the one to untie the knot would become the king of Asia.

Status of the legend

Alexander is a figure of outstanding celebrity and the dramatic episode with the Gordian Knot remains widely known. Literary sources are Alexander's propagandist Arrian (Anabasis Alexandri 2.3) Quintus Curtius (3.1.14), Justin's epitome of Pompeius Trogus (11.7.3), and Aelian's De Natura Animalium 13.1

While sources from antiquity agree that Alexander was confronted with the challenge of the knot, the means by which he solved the problem are disputed. Both Plutarch and Arrian relate that according to Aristobulus, Alexander pulled the knot out of its pole pin, exposing the two ends of the cord and allowing him to untie the knot without having to cut through it. Some classical scholars regard this as more plausible than the popular account.

Alexander later went on to conquer Asia as far as the Indus and the Oxus thus, for Callisthenes, fulfilling the prophecy. http://en.wikipedia.org/wiki/Gordian_Knot

Well, in Greece this Sunday, a young man with the memorable name of Alexis Tsipras seeks to do Alexander the Great one better.



Isn't it interesting that I could not find an image of Alexis with a Greek flag? How on earth do they manage to get elected in Greece without demonstrable flag-worshipping? But I digress...

Tsipras (I wonder if it's pronounced Cyprus?) is going to try to disentangle Greece from the Euro-noose while keeping the Euro-knot intact, a feat worthy of a political Houdini. But Greeks are creative and resourceful people, capable of enduring great trials and prevailing. Consider that the Trojan Horse was a Greek trick that led to the fall of Troy....

We'll line up the news on this and other items of quasi-economic impact.

And to all the fathers out there...

[Demeter]

1. Things Must Be Serious--3 Failed Banks at 7 PM

No Father's day Weekend for the FDIC. They probably have enslaved women only working this weekend...


Putnam State Bank, Palatka, 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 Harbor Community Bank, Indiantown, Florida, to assume all of the deposits of Putnam State Bank.

The three branches of Putnam State Bank will reopen during their normal business hours beginning Saturday as branches of Harbor Community Bank...As of March 31, 2012, Putnam State Bank had approximately $169.5 million in total assets and $160.0 million in total deposits. In addition to assuming all of the deposits of the failed bank, Harbor Community Bank agreed to purchase essentially all of the assets.

The FDIC and Harbor Community Bank entered into a loss-share transaction on $112.3 million of Putnam State Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $37.4 million. Compared to other alternatives, Harbor Community Bank's acquisition was the least costly resolution for the FDIC's DIF. Putnam State Bank is the 29th FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution closed in the state was Security Bank, National Association, North Lauderdale, on May 4, 2012.

Security Exchange Bank, Marietta, 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 Security Exchange Bank.

The two branches of Security Exchange Bank will reopen on Monday as branches of Fidelity Bank...As of March 31, 2012, Security Exchange Bank had approximately $151.0 million in total assets and $147.9 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 $102.8 million of Security Exchange Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $34.3 million. Compared to other alternatives, Fidelity Bank's acquisition was the least costly resolution for the FDIC's DIF. Security Exchange Bank is the 30th FDIC-insured institution to fail in the nation this year, and the fifth in Georgia. The last FDIC-insured institution closed in the state was Covenant Bank & Trust, Rock Spring, on March 23, 2012.


The Farmers Bank of Lynchburg, Lynchburg, Tennessee, was closed today by the Tennessee Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Clayton Bank and Trust, Knoxville, Tennessee, to assume all of the deposits of The Farmers Bank of Lynchburg.

The four branches of The Farmers Bank of Lynchburg will reopen during their normal business hours beginning Saturday as branches of Clayton Bank and Trust, including the one branch that operates as First State Bank, Chapel Hill, Tennessee, and the two branches that operate as Oakland Deposit Bank, Oakland, Tennessee...As of March 31, 2012, The Farmers Bank of Lynchburg had approximately $163.9 million in total assets and $156.4 million in total deposits. Clayton Bank and Trust will pay the FDIC a premium of 0.10 percent to assume all of the deposits of The Farmers Bank of Lynchburg. In addition to assuming all of the deposits of the failed bank, Clayton Bank and Trust agreed to purchase essentially all of the assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $28.3 million. Compared to other alternatives, Clayton Bank and Trust's acquisition was the least costly resolution for the FDIC's DIF. The Farmers Bank of Lynchburg is the 31st FDIC-insured institution to fail in the nation this year, and the third in Tennessee. The last FDIC-insured institution closed in the state was Tennessee Commerce Bank, Franklin, on January 27, 2012.

CHECK BACK LATER FOR UPDATES IF ANY

[Demeter]

17. Statisticians: Don't Rob A Bank; It's Not Worth It

http://www.npr.org/blogs/thetwo-way/2012/06/14/155041709/statisticians-dont-rob-a-bank-its-not-worth-it?ft=1&f=1001

It was a scenario many have imagined: Retiring to a lonely beach in Mexico after a few minutes of a heart-pounding crime — like Bonnie and Clyde riding into the sunset with a good stash of money attained through a handful of bank heists. A group of scientists armed with a "normally confidential data set" decided to test the financial realities of robbing banks (pdf) and they found that it simply doesn't pay. Well, that's speaking figuratively. In reality, the statisticians report it does pay — just "not very much."

Here is their conclusion:

"The return on an average bank robbery is, frankly, rubbish. It is not unimaginable wealth. It is a very modest £12 706.60 {$19,734} per person per raid. Indeed, it is so low that it is not worth the banks' while to spend as little as £4500 {$6,989} per cashier position at every branch on rising screens to deter them. A single bank raid, even a successful one, is not going to keep our would-be robber in a life of luxury.

"It is not going to keep him long in a life of any kind. Given that the average UK wage for those in full-time employment is around £26 000, it will give him a modest lifestyle for no more than 6 months. If he decides to make a career of it, and robs two banks a year to make a sub-average income, his chances of eventually getting caught will increase: at 0.8 probability per raid, after three raids or a year and a half his odds of remaining at large are 0.8×0.8×0.8=0.512; after four raids he is more likely than not to be inside. As a profitable occupation, bank robbery leaves a lot to be desired."

The Wall Street Journal reports the same is true in the United States, where 1,081 robberies occurred. The average "loot" in the U.S., according to the FBI? $5,531.

The authors of the study note that bank robbers already got the hint.

"Bank robberies and attempted bank robberies have been decreasing, in both the USA and the UK; in the UK, robberies from security vans are on the increase. Security vans offer more attractive pickings," the authors report.

[Po_d Mainiac]

19. Bill Black wrote a bit on the subject

The book is titled:
The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry, 2005

Unlike the looting taking place today, a decade ago the crime didn't always pay.

[Demeter]

2. THE 411 ON ALEXIS TSIPRAS

Alexis Tsipras (Greek: ??έ??? ??ί????, pronounced [aˈleksis ˈtsipras]) (born 28 July 1974) is a Greek left-wing politician, member of the Hellenic Parliament, president of the Synaspismós political party and head of the Coalition of the Radical Left (SYRIZA) parliamentary group.

On 8 May 2012, Karolos Papoulias, the President of Greece, mandated him to form a coalition government. One day before, Antonis Samaras (ND) had given up his attempt to form a coalition. Each politician mandated in this way in Greece are allowed 72 hours for such an attempt. In the evening of 9 May 2012, Tsipras announced he had failed to form a coalition government.

HENCE THIS SUNDAY'S RUNOFF ELECTION

Early life and career

Tsipras was born on 28 July 1974, in Athens. He studied civil engineering at the National Technical University of Athens (NTUA). After graduating in 2000, he pursued graduate training in land surveying and planning at an inter-departmental programme of NTUA, and he worked as a civil engineer in the construction industry. He undertook several projects and wrote several studies related to the city of Athens.
Political activity

Tsipras joined the Communist Youth of Greece in the late 1980s. In the early 1990s, as a student of Ampelokipoi Branch High School, he was active in the student uprising against the controversial law of then minister Vasilis Kontogiannopoulos. Tsipras rose to prominence as a representative of the student movement when he was featured as a guest at a show hosted by journalist Anna Panagiotarea. During an interview, the journalist implied that Tsipras was being disingenuous in defending middle and high school students' right to absenteeism without parental notification.

As a university student he joined the ranks of the renovative left student movement and was member of the executive board of the Students' union of the Civil Engineering School of NTUA and also served as student representative at the University Senate. From 1995 to 1997, he served as an elected representative on the Central Council of the National Students Union of Greece (EFEE).

Political career

After the departure of the Communist Party of Greece from Synaspismós coalition of radical parties, Tsipras left the party to remain in the coalition. He was the first person ever to hold the leading position (political secretary) of the youth wing of Synaspismós Neolaia Syn, from May 1999 to November 2003, and was succeeded by Tasos Koronakis. He managed quite efficiently to maintain a strong adherence to the policy of the party, effectively outvoicing political rivals to the left and the right. As secretary of the Synaspismós Youth he took active part in the process of creating the Greek Social Forum and attended all the international protests and marches against neoliberal globalization. In December 2004, at the fourth Congress of Synaspismós, he was elected a member of the party's Central Political Committee and consequently to the Political Secretariat, where he was responsible for educational and youth issues.

Tsipras first entered the limelight of the Greek political system during the 2006 local elections when he ran for the municipality of Athens on the "Anoihti Poli" (Greek: ??????ή ?ό??, "Open Town&quot Coalition of the Radical Left (SYRIZA) ticket that gained 11% of the Athenian vote. He did not run for membership of the Hellenic Parliament (Vouli) in the 2007 legislative election, choosing instead to continue to serve his term as a member of the municipal council of Athens.

On 10 February 2008, Tsipras was elected chairman of Synaspismós during the fifth party congress after the previous chairman, Alekos Alavanos, decided not to apply for a renewal of his chairmanship citing personal reasons. Tsipras was 33 when he was elected president of Synaspismós, thus becoming the youngest ever head of a Greek parliamentary political party.

In the 2009 Greek legislative election, he was elected a member of the Hellenic Parliament for the Athens A' constituency. He was elected unanimously by the secretariat of the SYRIZA as the head of its parliamentary group.

In the May 2012 Greek legislative election, SYRIZA came second and Tsipras was elected a member of the Hellenic Parliament for the Athens A' constituency being the head of the coalition. As a result, on 8 May 2012, Karolos Papoulias, the President of Greece, mandated him to form a coalition government. One day before, Antonis Samaras (ND) had given up his attempt to form a coalition government.

Personal life

His partner is Peristera Baziana, an electrical and computer engineer. They met in 1987 as schoolmates at the Ampelokipoi Branch High School and both became members of the Communist Youth of Greece. Today, they live together and have one son.

[Demeter]

3. Greek Election Pledges by Syriza Leader Alexis Tsipras By Eleni Chrepa

http://www.bloomberg.com/news/2012-06-15/greek-election-pledges-by-syriza-leader-alexis-tsipras.html

The following are the main pledges and economic policy of Syriza leader Alexis Tsipras for the Greek national election on June 17.

-- Cancel Greece’s bailout and implementation laws and replace them with a national recovery plan

-- Reduce the number of ministers and government advisers

-- Renegotiate the country’s loan agreement and seek a European solution to the Greek debt crisis

-- Restore Feb. 28 wage reductions, special bonus cuts and labor collective agreements; minimum wage of 751 euros

-- Restore unemployment benefit of 461.5 euros and extend payment to two years from one

-- No special taxes for the unemployed, people on low incomes and pensioners

-- Set a primary spending plan of as much as 43 percent of Greek GDP instead of 36 percent

-- Increase the country’s revenue by taxing higher incomes to reach a European level of 4 percent of GDP

-- Halt implementation of cuts in wages, social spending and pensions

-- Implement and extend public spending control using technology

-- Implement a Greek citizens’ property registration system

-- Gradually reduce sales taxes, minimize them for basic food products

-- Modernize and staff tax offices, enhance information technology

-- Sign a special national agreement with shipowners, cancel 58 tax reductions

-- Help return bank deposits to Greece, stabilize the Greek banking system

-- Nationalize, socialize banks

-- Redesign management of European funds

-- Write down loans for heavily indebted businesses and households

-- Freeze program of privatizing state-run companies and gradually bring strategically significant companies back to state control (OTE, PPC, Hellenic Postbank, Athens Water)

-- Restructure the public sector and administration

-- Amend constitutional law on ministers’ responsibilies

-- Declare a Greek exclusive economic zone

-- Find a mutually acceptable solution of the dispute over the name “Macedonia” in the United Nations. Greece, the northern third of which consists of the region of Macedonia, objects to use of the name by the former Yugoslav Republic of Macedonia.

[Demeter]

4. Greek leftist Alexis Tsipras is 'enfant terrible' of euro crisis

http://economictimes.indiatimes.com/news/international-business/greek-leftist-alexis-tsipras-is-enfant-terrible-of-euro-crisis/articleshow/14159537.cms

ATHENS: Greek leftist Alexis Tsipras, "enfant terrible" of Europe's debt crisis, cut his political teeth as a student protest leader in the 1990s and is now championing a rebellion that could end up sinking the single currency. His vow to tear up the terms of an international bailout deal keeping debt-ridden Greece afloat has put him and his SYRIZA party within a few votes of government in a knife-edge election on Sunday in which the stakes could not be higher. The strategy amounts to a game of chicken. Tsipras says Europe's lenders will not pull the plug on Greece for fear of the ripple effect of a Greek exit from the euro, so they will be forced to scrap the bitterly unpopular austerity measures demanded of Athens and which have driven the country into a spiral of recession.

"The memorandum of bankruptcy will belong to the past on Monday," Tsipras told thousands of flag-waving supporters on Thursday in the capital's Omonoia square, once one of the ornaments of central Athens but now grimy and scarred by crime and poverty.

"Today you made Omonoia the most beautiful square in Athens and you sent a message of victory inside and outside the country: Brussels expect us, we are coming on Monday to negotiate over people's rights, to cancel the bailout," he said. It is a high-risk strategy that detractors say smacks of political inexperience and a short, comfortable life spent mainly on Greece's anti-establishment fringe.

Born into a middle-class family with a small building business, Tsipras has a post-graduate degree in engineering but worked only briefly in construction before turning to full-time politics. He dabbled while at university as a member of the Communist party's youth wing and as a student protest leader in the 1990s, before joining the SYRIZA coalition of 12 radical leftist groups, including environmentalists and human rights activists.

REFRESHING CHANGE OR UNTESTED IDEOLOGUE?

Tsipras lost an election for mayor of Athens in 2006, but the race lifted him into the party's top ranks and in 2008, his mentor and then SYRIZA leader Alekos Alavanos virtually handed him the leadership at the age of 33. Now 37, spurning suit ties and stuffy formality, Tsipras represents a refreshing change for many Greeks fed up with a close-knit political establishment that has run the country into the ground...To Greece's euro zone partners, he is an untested ideologue who lacks the acumen to run a country, let alone steer it through a crisis that threatens financial calamity. "So what if he doesn't have the experience?" said SYRIZA deputy Panagiotis Kouroublis. "If he can run a party, he can run a country. Greece has suffered from people who promised one thing and did another."

Tsipras has promised to nationalise banks, stop privatisations and freeze the austerity measures that his establishment rivals - the conservative New Democracy and socialist PASOK - agreed to in February as the price of a 130 billion euro EU/IMF bailout package. Greeks rebelled in the streets the night the measures were adopted, burning banks and shops. Then the country held an election on May 6, and New Democracy and PASOK were roundly punished. SYRIZA polled 16.8 percent in a highly fragmented field, putting it second. Opinion polls suggest it is neck-and-neck with New Democracy ahead of Sunday's repeat vote, forced after bitterly divided political factions failed to form a government.

Tsipras is a father of one child and is expecting another with his partner Betty after the election. In trademark defiance of traditional Greek society, the two have not married.

[Warpy]

72. If he is elected and allowed to turn the country left

instead of being assassinated before he does much at all, then Greece has a chance of coming out of this thing well. All he has to do is look to Iceland for the road map: nationalize the banks, jail the fraudsters, tax the wealthy, and keep the social safety net intact. People on the bottom will slowly spend their way out of trouble and the rich will start to pay down all the debt their greed caused. Banks can go back to the private sector once they've learned their lessons, changed the corrupt culture, and have enough safeguards written into law to prevent thieves from setting up shop again for a very long time.

It doesn't have to be a communist coup to work, although those have been able to get rid of entrenched moneyed aristocracy and allow the country to move toward a reasonably equitable and profitable mixed system.

Then again, they might vote for the right wing guy and more of them will be giving up their children to the state because they can no longer feed them.

[Demeter]

5. Greek election: Candidate Alexis Tsipris hopes an earthquake will shake the euro zone Sunday

http://www.washingtonpost.com/business/economy/greek-election-candidate-alexis-tsipris-hopes-an-earthquake-will-shake-the-euro-zone-sunday/2012/06/15/gJQARoCMfV_story.html

For the past eight years, Greece’s leaders have had impressive degrees from top world universities, Amherst, Harvard and the London School of Economics among them. They have left the country in quite a pickle, and the question now is whether a 37-year-old, Greek-educated civil engineer can do any better...Alexis Tsipras comes from a grand tradition in Greece’s boisterous democracy, a strident left-winger who cut his teeth in student politics and, like his predecessors in the 1970s who helped overthrow a military junta, is rattling the establishment. His student movement was called “The Earthquake,” and that’s what many worry will be felt if he becomes prime minister in a Sunday election that could determine whether Greece remains in the euro zone – or one of Europe’s central projects begins to unravel.... He insists that the leverage is on Greece’s side — that in the end the likes of German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde will cave and give the recession-plagued country more time and more money rather than risk a euro exit.

If there’s any doubt about the stakes, the world’s central banks are girding for the worst.

“On Sunday, the old world will die,” Tsipras said at an Athens rally Thursday, his brow knitted and sweaty on a sultry Greek night. Invoking what has become Greece’s modern version of a mythic beast — the “memorandum” that lays out the strict conditions for the country’s bailout loans — he made clear what will happen if Syriza wins enough parliamentary seats to form a government.

“This will be a historic change for Greece and Europe. .?.?. The memorandum is coming to an end.”

That sort of epochal language is driving Syriza’s popularity in a country weary of a five-year recession that only seems to deepen, and of a pile of debt that has grown larger in the hands of bailout lenders such as the IMF, the European Central Bank and other European nations. Right now Greece is obliged to pay about $15 billion a year in interest alone, money those institutions sequester from each chunk of Greece’s emergency loans — kind of like a credit-card company adding monthly payments to the balance of a bill. Tsipras has captured a sense of indignity over the situation and reflected it in a youthful package. Square-shouldered while standing on a stage at Athens’ Omonoia Square in a white shirt with sleeves rolled up, tie discarded and collar unbuttoned, he called out by name the politicians he hopes the country will reject — all of them a generation older, professorial in demeanor, sometimes more comfortable speaking in English than Greek...At the National Technical University of Athens, where Tsipras studied how to build roads and fire up a crowd, former teachers remember a strong-willed student. The campus outside the city center is speckled with revolutionary graffiti, while student opinion covers the spectrum from hard-left anti-capitalist to hard-right anti-immigrant. “He has been in protests and occupations since he was a teenager,” said Konstantinos Moutzouris, chairman of the civil engineering department when Tsipras was a student and now a conservative candidate for parliament on the Greek island of Lesbos.

“He is soft-spoken, but if you dig inside him, he is iron. You don’t change his position,” Moutzouris said.

Personal Post

The perception that Tsipras will prove too strident for the intricacies of an international financial negotiation is one reason the election is an apparent dead heat between Syriza and the center-right New Democracy party led by Antonis Samaras. Samaras, a Harvard MBA, was as a key opposition figure under earlier governments and signed letters agreeing to the terms of the international bailout. In New Democracy circles, there is talk that a Tsipras victory would prompt Merkel and others to make an example of Greece and push it from the euro to prove the region will enforce its budget and economic standards — courting short-run calamity in return for longer-term confidence. Tsipras’s rise “is a mistake that’s about to become a tragedy,” said Chrisanthos Lazaridis, a New Democracy candidate. New Democracy television ads set that tone, with disappointed school children wondering why they don’t get to use the euro like other kids around Europe — even in Cyprus! — and a Greek flag sadly descending from among the others in the European Union...Syriza’s ads note how Samaras is suddenly ready to demand easier terms for the deal he endorsed just a few weeks ago, when Greece signed a second bailout package that was already a renegotiation from its original 2010 rescue.

Assuming a government emerges from Sunday’s voting — an election last month left New Democracy in the lead and Syriza second, but neither able to form a coalition with Greece’s myriad other parties — the real battle will be joined. Whoever takes power will have to open immediate talks with the IMF, the ECB and the European Commission over an urgently needed tranche of bailout money — negotiations that will set the fate of the bailout program and perhaps the euro itself....IMF and European officials have left room for modest amendments to the program. But the sort of changes envisioned by Tsipras — such as repealing a cut in the minimum wage that IMF economists say is important to encourage hiring — may go too far. Syriza’s plan for state control of the banks, meanwhile, would likely endanger some $38 billion set aside by Europe and the IMF to restart Greece’s banking system. The constraints, in other words, are real and binding: Greece’s government does not collect enough money month to month to pay its bills, and the economy as a whole needs hard currency from outside to import oil and other necessities. If the cash squeeze leaves Greece unable to pay bondholders, this default could trigger Greece’s exit from the euro, either by its own choice or at the insistence of other euro-zone members.

With Tsipras, the essential puzzle is whether to fully trust a man whose gravity-defying platform would have Greece tear up the IMF’s advice, put government officials in charge of bank lending, quickly collect the taxes no one else has been able to collect and all the while remain within the euro and restore the faith of global investors.

MORE

[girl gone mad]

29. I am holding my breath.

[Demeter]

6. Alexis Tsipras: Angela Merkel’s Europe ‘belongs to the past’ By Alex Spillius in Athens

http://www.telegraph.co.uk/news/worldnews/europe/greece/9333002/Alexis-Tsipras-Angela-Merkels-Europe-belongs-to-the-past.html

Greece’s radical leftist leader Alexis Tsipras told a final campaign rally on Thursday night that his party represented the new Europe and German Chancellor Angela Merkel the old...

He said his main rival, New Democracy leader Antonis Samaras, "has guaranteed Merkel's Europe of the past”.

“We guarantee the Europe of the future," he told about 8,000 supporters in central Athens.

"On Monday we will form a government for all Greeks... with Europe and the euro," said the 37 year-old.

MORE

[Demeter]

7. NIALL FERGUSON: 'If There's Going To Be A Lehman Moment In The Crisis, It's Going To Be Next Week'

http://www.businessinsider.com/the-financial-equivalent-of-the-cuban-missile-crisis-2012-6

Harvard professor Niall Ferguson told Bloomberg TV this morning that a Lehman moment could be nearing for the euro crisis as elections in Greece threaten to undermine European stability.

"If there's going to be a Lehman moment in the crisis it's going to be next week," he explained, saying that the back-and-forth between Athens and Berlin is "a game of chicken" that will not be resolved until the power structure in Greece has been decided.

He explained what will happen with another frightening analogy:

"It's not clear who's going to blink at this point. My guess is that, in the end, there will be a bit of blinking on both sides. This is the financial equivalent of the Cuban Missile Crisis. And the missile is really a bank run, which ultimately even the Germans can't be completely immune to. Not that there will ever be a run on German banks, but the effects of a bank run right across Southern Europe are going to be felt by the economy. German policymakers know that; they're just having to say one thing to their own voters and another thing privately to other European leaders."

While Ferguson waxed optimistic about the likelihood that Greece will stay in the euro and that EU leaders will find common ground after the Greek elections, he warned against putting too much faith in central banks.

Referring to the huge rally yesterday following rumors of coordinated central bank action, he said:

"In the end, the central banks can't do this on their own. And I think for the markets to assume that this can be fixed by yet another round of quantitative easing or whatever you want to call it—LTRO—I think that's not realistic, because this is no longer just about liquidity. It's about the solvency of governments, the solvency of banks."

[Demeter]

22. Central Bank Chief Says He’s Set to Step In After Greek Vote

http://www.nytimes.com/2012/06/16/business/global/daily-euro-zone-watch.html

...The head of the European Central Bank, Mario Draghi, hinted that he would be ready to pump cash into banks there to head off turmoil. His counterpart in Tokyo, Masaaki Shirakawa, promised that the Bank of Japan was ready to “to take all possible measures to ensure the financial system does not come under threat.”

The statements underscored just how anxious policy makers are ahead of the vote, which they fear could result in a victory by left-wing parties that oppose the deep austerity Greece agreed to in exchange for financial help. If the anti-austerity Syriza party wins, it could eventually force an exit by Greece from the euro zone and feed fears of a broader financial crisis.

Authorities hope that a large infusion of cash into the financial system, if needed next week, could act as a financial firewall to help protect shakier banks in Southern Europe. Depositors have been fleeing not only Greek banks, but Spanish banks as well, raising concerns that these institutions could run short of the funds necessary to conduct normal business. As worries have spread, banks on the Continent have sharply curtailed short-term loans to each other out of concern that they may not be repaid if things start spinning out of control. That fear has further dried up the flow of money in many European economies.

It is unclear whether authorities can pump enough money into the system to stave off troubles if the Greek election results scare investors. But investors welcomed Mr. Draghi’s pledge as a sign that after years of half-steps that repeatedly failed to halt the momentum of the crisis in Europe, leaders were finally facing up to the severity of Europe’s distress and acting before investors forced their hand...


LIKE TRAINING A DOG, ISN'T IT?

[Demeter]

23. In Euro Crisis, Obama Looks to Merkel

http://www.nytimes.com/2012/06/16/world/europe/in-euro-crisis-obama-tries-to-sway-merkel.html

At the end of a summit meeting at Camp David last month, as the other world leaders were heading for their helicopters, President Obama did what has become a habit during his years in the White House: he made time for an informal but deadly serious talk with Chancellor Angela Merkel of Germany...

...A collapse of the euro could derail America’s fragile recovery and doom Mr. Obama’s re-election hopes. So the president finds himself in the strange position of having forged a relationship with Ms. Merkel that is perhaps the best he has with any foreign leader, but that has not yet resulted in the chancellor’s agreeing to what Mr. Obama thinks must be done in Europe: an American-style bailout and fiscal stimulus.

Mr. Obama and Ms. Merkel will meet again Monday at a Group of 20 summit meeting in Mexico, with the stakes for Europe even higher than they were last month. With Greece holding elections on Sunday that could precipitate its exit from the European currency union — the nightmare feared by the financial markets — Mr. Obama may be running out of time to make his case.

And there is no indication Ms. Merkel is any more inclined to heed his advice. In a speech to the German Parliament on Thursday, she said the world should not expect Berlin to be Europe’s savior, rejecting calls to create euro bonds to share the debt burden of the Mediterranean countries...

MUCH MORE, MOST OF IT FLUFF

[Demeter]

8. BofA: Here's What The Markets Will Look Like After Sunday's Greek Elections

http://www.businessinsider.com/bofa-stocks-bonds-euro-gold-rates-greek-elections-2012-6?op=1

Bank of America's top strategists and economists put together forecasts on the prices for stocks, bonds, commodities, and currencies depending on how the Greek elections shape up on Sunday night.

The three scenarios they examine for each asset class include:

1. A base case (the highest probability scenario) in which Greek voters elect parties that can form a "pro-EU" government and there are no surprise policy responses from the European Union or the European Central Bank.
   
   
2. A bull case (the lowest probability scenario) in which a "pro-EU" government is not forthcoming and, as a result, the EU and ECB are forced to step in with bold policies that trigger a risk rally.
   
   
3. A bear case (which BofA assigns a "low to medium probability&quot in which a "pro-EU" government is not formed and the ECB and EU don't step in to limit the fallout.

BofA breaks down what each asset class will look like in each of these three scenarios...

10-yr US Treasury Yield

Base Case: 1.75 percent

Bull Case: 2.10 percent

Bear Case: 1.3 percent

Commentary: BofA notes that in the base and bull cases, we still have the fiscal cliff to deal with in the United States, which will be an important factor for Treasury yields. However, the bear case assumes the safe haven flows we've grown accustomed to lately and more QE from the Fed, which will floor rates.


Source: Bank of America Merrill Lynch

Read more: http://www.businessinsider.com/bofa-stocks-bonds-euro-gold-rates-greek-elections-2012-6?op=1#ixzz1xuRw8yIU

[Demeter]

9. Your Complete Guide To This Sunday's Greek Elections Simone Foxman

http://www.businessinsider.com/guide-greek-elections-this-sunday-2012-6

Investors are anxiously waiting this weekend's parliamentary elections in Greece, a repeat of elections on May 6 that failed to produce a government.

As the leading opposition party repudiates the terms of the aid package Greece has received from the European Union and the IMF, European leaders led by Germany insist that this vote is a referendum on Greece's euro membership, and that there will be no wiggle room to negotiate the bailout deal.

Brinksmanship at its best.

Here's a look at the Greek players:

Antonis Samaras and New Democracy: Samaras and New Democracy once frightened European leaders when they took a tougher stance against austerity, but remarkably their party has come full circle to represent the pro-bailout incumbency. While Samaras has now called for some changes to the terms of the deal which would ease downward pressure on the Greek economy, ND's commitment to the bailout and euro membership dictate its policies. New Democracy won 18.9 percent of the vote on May 6.

Alexis Tsipras and SYRIZA: Tsipras and his party argue that Greek's bailout agreement is untenable because harsh austerity policies have forced the country into a Great Depression from which recovery in the medium-term is unlikely. They argue that Europe has much to lose from a Greek exit, and therefore EU leaders are bluffing when they frame the elections as a referendum on the euro and refuse to consider any amendments to Greece's bailout agreement. SYRIZA won 16.8 percent of the vote on May 6, and appeared to win support directly after those elections.

Evangelos Venizelos and PASOK: PASOK led the Greek government from June 2009-November 2011, and support for the party declined dramatically as the crisis worsened. Analysts expect little dissension between PASOK and New Democracy on the bailout. PASOK won 13.2 percent of the vote on May 6.

While four other parties also won seats in the May election, analysts are focusing on the success of these three parties primarily because both SYRIZA and ND-PASOK governments will face difficulty winning support from other parties.

Read more: http://www.businessinsider.com/guide-greek-elections-this-sunday-2012-6#ixzz1xuSvsyFZ

[Demeter]

10. ON THE GROUND IN GREECE: Long-term jobless figure hits 600,000 By Christina Kopsini

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_14/06/2012_447123

Unemployment rose to 22.6 percent in the first quarter of the year, according to data released on Thursday by the Hellenic Statistical Authority (ELSTAT), but even more worrying is the soaring number of long-term jobless.

ELSTAT’s survey showed that in the first three months of 2012 the total number of unemployed people climbed to 1,120,097, with 56.5 percent of these seeking work for over a year.

Among young people aged up to 24 the jobless rate stood at 52.7 percent, while for women in that age group the rate came to a staggering 60.4 percent.

The biggest drop in employment was in the manufacturing sector, where it fell 15.1 percent compared to the first quarter of 2011. In the primary sector it contracted by 5.8 percent while in the service sector employment shrank by 7.2 percent. Foreigners had a jobless rate of 30.5 percent, far above that of Greeks (21.8 percent).

[Demeter]

24. How Greece Killed Its Own Banks!

http://boombustblog.com/reggie-in-the-news/item/1470

Yes, you read that correctly! Greece killed its own banks. You see, many knew as far back as January (if not last year) that Greece would have a singificant problem floating its debt. As a safeguard, they had their banks purchase a large amount of their debt offerings which gave the perception of much stronger demand than what I believe was actually in the market. So, what happens when these relatively small banks gobble up all of this debt that is summarily downgraded 15 ways from Idaho.

Reference (Bloomberg) Stocks Plunge as Dollar, Treasuries Gain After Greece, Portugal Rate Cuts and (the Wall Street Journal) S&P Downgrades Greece to Junk Status:

“S&P cut Greece's ratings to junk status, saying the country's policy options are narrowing as it tries to cut its large budget deficit. The news, combined with an S&P downgrade of Portugal, pushed down the euro to $1.3269, hit U.S. stocks and sent Treasury prices higher”.

•Stocks Plunge, Asia Bond Risk Climbs on Greece, Portugal Default Concerns
•Greece's Junk Contagion Pressures EU to Broaden Bailout After Market Rout
•Trichet Travels to Berlin on Diplomatic Mission as Merkel Nears Greek Vote
•Greece Bondholders May Lose $265 Billion in Default as S&P Sees 70% Loss

April 28 (Bloomberg) -- Holders of Greek bonds may lose as much as 200 billion euros ($265 billion) should the government default, according to Standard & Poor’s.

The ratings firm cut Greece three steps yesterday to BB+, or below investment grade, and said bondholders may recover only 30 percent and 50 percent for their investments if the nation fails to make debt payments. Europe’s most-indebted country relative to the size of its economy has about 296 billion euros of bonds outstanding, data compiled by Bloomberg show.

The downgrade to junk status led investors to dump Greece’s bonds, driving yields on two-year notes to as high as 19 percent from 4.6 percent a month ago as concern deepened the nation may delay or reduce debt payments. Prime Minister George Papandreou is grappling with a budget deficit of almost 14 percent of gross domestic product.

“It’s now not just market sentiment, but a top rating agency sees Greek paper as junk,” said Padhraic Garvey, head of investment-grade strategy at ING Groep NV in Amsterdam.

Before yesterday, Greece’s bonds had lost about 17 percent this year, according to Bloomberg/EFFAS indexes. The 4.3 percent security due March 2012 fell 6.54, or 65.4 euros per 1,000-euro face amount, to 78.32.

...

S&P indicated the cuts, which may force investors who are prevented from owning anything but investment-grade rated bonds to sell, may not be over, assigning Greece a “negative” outlook.

“The downgrade results from our updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory,” S&P credit analyst Marko Mrsnik said in a statement.

Credit-Default Swaps

Traders of derivatives are betting on a greater chance that Greece fails to meet its debt payments.

Credit-default swaps on Greek government bonds climbed 111 basis points to 821 basis points yesterday, according to CMA DataVision. Only contracts tied to Venezuela and Argentina debt trade at higher levels, according to Bloomberg data. Venezuela is at about 846 basis points and Argentina is at about 844, Bloomberg data show.

Just minutes before lowering Greece’s ratings, S&P cut Portugal to A- from A+. Yields on Portugal’s two-year note yields jumped 112 basis points to 5.31 percent, while credit- default swaps on the nation’s debt rose 54 basis points to 365. The downgrades may force banks to boost the amount of capital they are required to hold against bets on sovereign debt, said Brian Yelvington, head of fixed-income strategy at broker-dealer Knight Libertas LLC in Greenwich, Connecticut.

While bank capital rules give a risk weighting of zero percent for government debt rated AA- or higher, it jumps to 50 percent for debt graded BBB+ to BBB- on the S&P scale and 100 percent for BB+ to B-.

“These downgrades are going to cause people to increase their risk weightings,” Yelvington said.

Well, the answer is.... Insolvency! The gorging on quickly to be devalued debt was the absolutely last thing the Greek banks needed as they were suffering from a classic run on the bank due to deposits being pulled out at a record pace. So assuming the aforementioned drain on liquidity from a bank run (mitigated in part or in full by support from the ECB), imagine what happens when a very significant portion of your bond portfolio performs as follows (please note that these numbers were drawn before the bond market rout of the 27th)...



The same hypothetical leveraged positions expressed as a percentage gain or loss...




SEE ALSO: http://boombustblog.com/blog/item/6089-dead-bank-deja-vu?-how-the-sovereigns-killed-their-banks-why-nobody-realizes-theyre-dead

[Demeter]

11. SYRIZA Economic Programme COMPLETE AND TRANSLATED

http://www.scribd.com/doc/97135969/SYRIZA-Economic-Programme

[Demeter]

12. Debt crisis: ECB last hope as dam breaks in Spain By Ambrose Evans-Pritchard

http://www.telegraph.co.uk/finance/financialcrisis/9332663/Debt-crisis-ECB-last-hope-as-dam-breaks-in-Spain.html

Spain's borrowing costs have surged to record highs and are perilously close to the point of no return, threatening a full-blown sovereign crisis unless the European Central Bank comes to the rescue..."We're facing maximum tension. The situation is unsustainable over time," said the country's finance minister Luis de Guindos. Yields on 10-year Spanish bonds yields punched to almost 7pc, above levels that triggered ECB intervention to back stop Spain last November.

"The ECB needs to intervene very quickly or it is game over," said Nicholas Spiro from Spiro Sovereign Strategy. "There is a whiff of capitulation in the air."

The dramatic escalation comes just days after the eurozone agreed a €100bn rescue package for the Spanish state to recapitalise its crippled banks. "It is very worrying. Markets are behaving as if the eurozone is heading for break-up," said Jens Sondergaard from the Japanese bank Nomura.

France's industry minister Arnaud Montebourg said the markets were flying out of control because the ECB was failing to take charge. "We need an ECB that does its job," he said.

In an astonishing outburst for a French minister, he lashed out at German Chancellor Angela Merkel and the "German right" for driving much of Europe into slump. "Certain European leaders, led by Mrs Merkel, are fixated by blind ideology."

[Demeter]

13. The Crisis Shifts to Italy

http://www.nakedcapitalism.com/2012/06/the-crisis-shifts-to-italy.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

As we head towards Greece’s weekend election, rumoured to be celebrated by the locals by moving ever larger sums of money elsewhere, the Eurozone appears to be seriously straining under the constant pressure of its ongoing crisis. I have long felt that Italy would be the limit for the monetary union, most notable for its sheer size, and due to this I expected much more decisive action, one way or the other, once the crisis returned to Italian shores.

Last week I noted a warning from the head of the IMF suggesting Europe only has a short period of time left and did wonder whether it was triggered by growing concerns that Italy was next after Spain:

As the clock ticks down to Greece’s crunch election on June 17, which is being seen as a referendum on the country’s membership of the euro zone, the warnings that European leaders need to act to prevent a collapse of the currency union are getting stronger by the day.

Now, Christine Lagarde, head of the International Monetary Fund (IMF), has warned that the euro zone has less than three months to get its act together. In an interview broadcast on Monday evening, Lagarde told the television station CNN that action to save the euro is needed in “more shortly (sic) than three months.” She was referring to a recent prediction by billionaire investor George Soros that Europe has three months to save the euro.

Not to be outdone, the UK finance minster has also suggested that it could be time to let Greece go in order to shift Germany into action:

Europe may need to sacrifice Greece’s membership of its single currency bloc in order to convince Germany to put in more money to save the euro, Britain’s finance minister George Osborne suggested in remarks certain to enrage euro zone leaders.

…

“I ultimately don’t know whether Greece needs to leave the euro in order for the euro zone to do the things necessary to make their currency survive,” Osborne said in remarks published on Wednesday in The Times newspaper.

“I just don’t know whether the German government requires a Greek exit to explain to their public why they need to do certain things like a banking union, euro bonds and things in common with that.

Such stability.



As you can also see from the chart, GDP growth is now negative with the 2012 Q1 figure coming in at -0.8% taking Italy deeper into recession. The Bank of Italy suggested the yearly figure will come in around -1.5% but with a solid trend in place that figure could now be optimistic. Unemployment has also increased by 2% this year to stand at Eurozone record high of 9.8% with youth unemployment hovering in the mid 30s. To add to the woe, business confidence is the lowest it has been since the GFC and consumer confidence is now at record lows:



MORE

[Demeter]

14. Wolf Richter: Manna for Bankrupt Cyprus

http://www.nakedcapitalism.com/2012/06/wolf-richter-manna-for-bankrupt-cyprus.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. And on July 1, in the ironic European manner, the tiny country on a Mediterranean island that is geographically closer to Turkey, Syria, and Israel than any European country, will automatically rotate into the Presidency of the Council of the European Union for a six-month term—mechanized democracy at the EU level.

Only last year’s €2.5 billion loan from Russia has kept it afloat. Its economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and after an even more phenomenal nationwide title-deed scandal that bankers, lawyers, and developers were colluding in to their immense benefit. And it has taken down the banks. [For more on that fiasco, read my post from last October.... Another Eurozone Country Bites the Dust].

So the banks need to be “recapitalized.” As is the case in Eurozone bailouts, the losses will be socialized to taxpayers in distant countries. €1.8 billion, or 10% of GDP, is needed just to recapitalize its second-largest bank, Cyprus Popular Bank. Many more billions will be needed for the other banks. And as the first bailout is never enough, more money will be needed for the second wave. The government itself needs to be bailed out too; it has been cut off from the markets and can’t get its deficits under control—amazing how a country with 803,000 people can concoct problems of such magnitude.

“The issue is urgent,” said Finance Minister Vassos Shiarly on Monday because “recapitalization of the banks must be completed by June 30.” And on Tuesday, a government spokesman confirmed that a bailout would be “one of the options.” It would be large—”a comprehensive request covering not only present circumstances and the recapitalization of the banks but also future needs,” Shiarly said. But there is one thing Cyprus has that the other four bailed-out debt sinners don’t have...Vast deposits of natural gas. Noble Drilling announced the discovery last December. Based on its Cyprus A-1 well, it estimated that the field off the southern coast held up to 8 trillion cubic feet of gas. There is a good probability of other gas fields around Cyprus. And a mad scramble has ensued. 15 major oil and gas companies and consortiums, among them Russia’s Novatec, Italy’s ENI, France’s Total, and Malaysia’s Petronas, are bidding to start exploratory drilling activities. Novatek may also invest in transport, processing, and liquefaction facilities (to produce LNG for export). Chinese firms have submitted proposals. Israel is working with Cyprus on a “unitization agreement” for reserves that overlap the border between their “exclusive economic zones.” And they’re bent over plans for a pipeline between their gas fields...MORE

[Demeter]

15. 2.5 MINUTE SUMMARY OF THE EUROCRISIS / THE EUROCRISIS SONG

<iframe width="560" height="315" src="

" frameborder="0" allowfullscreen></iframe>

[Demeter]

16. Satyajit Das: The Euro-Zone Debt Crisis – It’s Now ABOUT Germany NOT UP TO Germany!

http://www.nakedcapitalism.com/2012/06/satyajit-das-the-euro-zone-debt-crisis-its-now-about-germany-not-up-to-germany.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. Das’ post has a lot of useful information, but like a lot of finance people, he is hostage to a conventional markets-driven reading of the issues. Governments are not households or businesses. When the private sector delevers, unless a country is running a big surplus (as Germany is) you can’t have government delever at the same time. So Germany’s notion of virtue (that governments and private citizens should wear an austerity hair shirt) works only for Germany.

There are also ways to prevent an Euro train wreck that don’t involve using German’s balance sheet, such as having the ECB issue bonds, or do revenue sharing (say on a per capita basis, as Marshall Auerback suggested in a NC post). Or the ESM could be given a banking licence via the ECB so that it has the ability to deploy unlimited capital to sort out the solvency issue (as France has suggested). Yanis Varoufakis’ “Modest Proposal” is another approach. But if Germany continues to oppose having the ECB take a much more aggressive stance, Das’ concerns are germane...

MULTIPLE LINKS TO REFERENCED ARTICLES / SATAYAJIT STARTS BELOW:

...Germany is financially vulnerable. Irrespective of the course of events, it faces crippling costs...Germany may be in great danger, having left it to late to excise the gangrenous body parts of the Euro-Zone...To date, Germany has had a very good European debt crisis. The German economy is one of the few economies to have grown since 2008. Unemployment is low and workers have received pay rises. Interest rates on its government bonds, Bunds, are at a record low. On 23 May 2012, the two year note was issued with a zero coupon and gave investors a return of 0.07% per annum, prompting the Financial Times to post the headline: Oh Schatz: No Coupon (the German two year bond is known as the Schatz). A few days later the bonds were yielding zero percent. Shortly thereafter, the yield on the 2-year bonds was negative. The low rates reflect safe haven buying as investors flee other European markets.

Politically, Germany’s importance has never been greater. Chancellor Angela Merkel bestrides Europe as a female Bismarck (the German view) or a Gorgon (the Greek view).

...Germany’s success is based on an economy heavily rooted in manufacturing. It is also the result of Chancellor Gerhard Schröder’s structural reforms, especially of the labour market. The recent 4.3% pay increase won by the influential IG Metal union is the largest since 1992. Interestingly, the union made little headway in the recent negotiations on the area of greater controls on contract labour, which companies use for flexibility and managing costs.

But a significant part of Germany’s growth has been driven by the Euro-Zone...German exporters were major beneficiaries of this growth. German banks and financial institutions helped finance the growth. It was the European version of Chimerica, where China financed American buyers of its products by lending back its trade surpluses. German exporters also benefitted from a cheap Euro, receiving a significant subsidy because of the inclusion of weaker economies such Italy, Spain, Portugal and Greece in the common currency. This cost advantage assisted German export performance, especially in emerging markets in Eastern Europe and Asia.

But the good times are ending. The question is whether the Wirtschaftswunder (post-second world war economic miracle) ends in Götterdämmerung (the twilight of the Gods) or Weltuntergang (the end of the world). MUCH MORE AT LINK

[Demeter]

18. SOMETHING COMPLETELY DIFFERENT: Tonight, Wallenda Will Attempt High-Wire Walk Over Niagara Falls

http://www.npr.org/blogs/thetwo-way/2012/06/15/155146582/tonight-wallenda-will-attempt-high-wire-walk-over-niagara-falls?ft=1&f=1001

...Wallenda is trying to become the first person to walk across Niagra Falls on a tightrope. Here's ABC with a the details:

"Others have crossed the Niagara River itself, but never over the falls. Wallenda said that tonight's feat will be the fulfillment of a lifelong dream as well as a chance to honor his great-grandfather, legendary funambilist Karl Wallenda, who died after falling from a tightrope in Puerto Rico in 1978.

"Wallenda, 33, has called his great-grandfather his "biggest inspiration" and said he will be thinking of him during the stunt. The 1,500-foot walk between Goat Island in the U.S. side to Table Rock in Canada will be fraught with unforgiving natural conditions: blinding mist and drafts created by the force of the waterfalls crashing down on the Niagara River.

"Those obstacles notwithstanding, Wallenda told reporters Thursday that he hopes the walk will be "peaceful and relaxing."

Wallenda is scheduled to begin his walk at 10:15 p.m. ET. ABC is airing it live and it will stream beginning at 8 p.m. here: http://www.where.ca/nik-wallenda-tightrope-walk-live/

[Demeter]

20. Hope lifts Wall Street before Greek election

http://news.yahoo.com/stock-index-futures-flag-higher-wall-street-open-091445413--finance.html

Stocks rallied on Friday to close a second straight week of gains on hopes of collective action from global central banks if Sunday's election in Greece triggers market turmoil.

The news helped offset the latest round of weak U.S. economic data, which pointed to sluggish domestic growth. But traders were cautious and safe-haven U.S. bond prices also rose on Friday...

...Officials of the Group of 20 leading nations told Reuters on Thursday that central banks of major economies would take steps to stabilize markets and prevent a credit squeeze, if necessary. The news spurred sharp gains late in Thursday's session. Later reports of the European Central Bank hinting at an interest-rate cut and Britain's pledge to flood banks with cash sparked further bullishness.

"It pokes a hole in the balloon of bad news after more bad news," said Richard Sichel, chief investment officer of Philadelphia Trust Co.

"None of the (U.S.) economic data we saw today were impressive. The gains seem to be based more on hope and less on the economic reports."

HOPIUM...CAN'T KEEP A BAD MARKET DOWN!

[Demeter]

21. Relying on Fake German Strength Wolf Richter

http://www.zerohedge.com/contributed/2012-06-15/relying-fake-german-strength

While we’re sitting on the edge of our chairs, waiting breathlessly for the Greek election, or for Fate to swallow Greece and send financial Armageddon over the Eurozone, stock markets rallied. Not because of a sudden plethora of good economic news, but in anticipation of how central banks might react to the Greek vote—that’s how far this farce has come! As if sheer artificial liquidity could wash away the putrid odor of decomposing debt.

They lined up on Friday to give their spiel. ECB President Mario Draghi would “continue to supply liquidity to solvent banks where needed.” Bank of Japan governor Masaaki Shirakawa was “prepared to take all possible measures” but denied rumors that central banks around the globe would take coordinated action. The Bank of England spoke up. The Swiss National Bank confirmed its iron determination to keep the flood of euros at bay, with capital controls, if it had to; its currency peg would hold, come hell or high water.

To calm the credit markets, it was leaked earlier that Draghi, European Council President Herman van Rompuy, European Commission President José Manuel Barroso, and Euro Group President Jean-Claude Juncker were feverishly bent over a grand plan to convert the beleaguered monetary union into some sort of federal state governed by unelected EU bureaucrats....So, while waiting for the vision to appear, I skyped with a friend in Germany who owns two restaurants. They’re doing well, he said. 2011 was a record year, and this year looks good too. He’d redecorated, his new menu was a hit, and he was excited, though it was a day-to-day struggle, in a jungle of regulations, with taxes out the wazoo. And what about the debt crisis? He didn’t pay much attention to it, he said.

Indeed. The debt crisis has been good to Germany, formerly the “sick man of Europe.” After Reunification, Germany was marked by high unemployment, stagnation, and lacking innovation. The dotcom euphoria bypassed it. Inflation surged and real wages declined. Industry restructured, ditched unprofitable operations, axed workers. But countries around it boomed. Spain and Greece were riding high. The Celtic Tiger was cleaning everyone’s clock. And Germans became morose. Eventually, the internal devaluation, insidious as it was on the middle class, paid off for industry. Exports took off, and Germany was showing signs of growth. Then the financial crisis hit. Export orders fell off a cliff, causing GDP to plunge 2.1% in the fourth quarter of 2008 and a horrid 3.8% in the first quarter of 2009. Annualized, those two quarters printed a double-digit decline in GDP. The worst two quarters in the history of the Federal Republic. The German economy lives and dies by its exports.But... as the financial crisis morphed into the Eurozone debt crisis and began infecting the periphery, Germany recovered. Exports to Asia skyrocketed, exports to European countries did well, and a good part of the US stimulus money made its way to German enterprises, such as Siemens and its suppliers. They produced and hired. Exports last year exceeded €1 trillion for the first time ever. Unemployment dropped to a two-decade low. Its budget is nearly balanced, and yields on its debt probed zero. Euphoria set in. Short lived, it seems. According to a slew of recent data, Germany is backsliding. Its banks are highly leveraged and packed with who knows what kinds of decomposing assets. Its debt, at 81% of GDP, is high for a country that can’t print its own money, and is higher than that of Spain. If China implodes and the US enters a recession, while the Eurozone continues to teeter, German exports will once again collapse. The savior of Europe will find itself in a deep recession, with large deficits, rising unemployment, spiking yields....


“If Greece doesn’t get its next loan installment, the Eurozone will collapse the following day,” scowled Alexis Tsipras, leader of the left-wing SYRIZA. By threatening the entire Eurozone with its demise, if he won the election, he ratcheted up the bailout extortion racket a few more notches. The run on Greek banks turned into panic. Eurozone heads of state, already on edge, threatened Greece in return. Everything is coming to a head. Read.... Greece in Panic ... um, Wait!

[mbperrin]

65. Funny how these "free-market" bankers are absolutely counting on governments

to solve their problems.

Yet, their huge bonuses and salaries are "required" to hold onto their "talent."

I taught sophomores in high school for years, and they had better excuse-making skills than these dumbasses.

[Po_d Mainiac]

25. Stewart, the Senate & the morgue

http://www.huffingtonpost.com/2012/06/15/jon-stewart-senate-jamie-dimon-video_n_1599689.html

[Demeter]

26. I'm calling it a night, folks. Tomorrow All the News that ISN'T Greek or Euro!

Gotta go soak my sore little fingers... But please, post anything you found exceptionally egregious or funny or whatever...

And put some music or something in for variety:

&feature=related

[Po_d Mainiac]

27. And the moral of the Trojan Horse?

From Wiki;
The most detailed and most familiar version is in Virgil's Aeneid, Book II [1] (trans. A. S. Kline).

After many years have slipped by, the leaders of the Greeks,
opposed by the Fates, and damaged by the war,
build a horse of mountainous size, through Pallas’s divine art,
and weave planks of fir over its ribs:
they pretend it’s a votive offering: this rumour spreads.
They secretly hide a picked body of men, chosen by lot,
there, in the dark body, filling the belly and the huge
cavernous insides with armed warriors.
[...]
Then Laocoön rushes down eagerly from the heights
of the citadel, to confront them all, a large crowd with him,
and shouts from far off: ‘O unhappy citizens, what madness?
Do you think the enemy’s sailed away? Or do you think
any Greek gift’s free of treachery? Is that Ulysses’s reputation?
Either there are Greeks in hiding, concealed by the wood,
or it’s been built as a machine to use against our walls,
or spy on our homes, or fall on the city from above,
or it hides some other trick: Trojans, don’t trust this horse.
Whatever it is, I’m afraid of Greeks even those bearing gifts.’

[Tansy_Gold]

28. "Never On Sunday"

[Demeter]

30. Now THAT'S Funny

After this crisis is over, I can see the Greek Dictator proclaiming elections are not going to be held, because they are on Sundays...

[DemReadingDU]

44. When there were records, and portable record players

Does anyone remember dancing around by oneself to the music?
I don't recall that I did, I mostly had my face in a book or taking pictures.

Which is another funny story...
The 10 year old grandkid was at a garage sale near his house, and bought a 35mm camera. So we went to the drugstore and bought some film and a new battery and he took a few pictures that the 4 & 5 year old grandkids immediately wanted to see in the review mode. Except there isn't any review on a 35mm camera!

So I had to explain we needed to take all 24 pictures on the roll, and not to open the camera until we finished all the pictures because light would get in and ruin the pictures. After all the 24 pictures are taken, then we take the film back to the drugstore where the pictures are made. Then we pick up the pictures and then get to look at them. The 10 year old explains this is the antique way of taking pictures.

Then I thought I would mention that people at the drugstore would see the film and pictures being made so to be careful what we take pictures of. Five year old tells the 10 year old not to take any pictures of his butt! So we all had a laugh that butt pictures are not really cool.

[Tansy_Gold]

47. Does anyone remember dancing around by oneself to the music?

Oh, honey, I still do!

And I may even have my old vinyl 45 of Don Costa's 1960 instrumental version of "Never On Sunday."

[Demeter]

31. WALLY DEFINES GLOBALISM FOR US

[Demeter]

32. MEANWHILE, BACK IN THE USA...

It had to come, you know. We can't spend the entire weekend dreaming of Greek heroes reincarnated...

[Demeter]

33. Another Schneiderman Con: Proposes Likely-to-go-Nowhere Foreclosure Fraud Legislation

http://www.nakedcapitalism.com/2012/06/another-schneiderman-con-proposes-likely-to-go-nowhere-foreclosure-fraud-legislation.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Having sold out the possibility of getting a decent settlement for homeowners for a seat in Michelle Obama’s box at the State of the Union address and a star turn on a Potemkin mortgage fraud task force, Schneiderman appears to be an adept student of the Obama strategy of preferring empty gestures to substance, since they generate good PR and take a lot less effort.

The latest headfake is that Schneiderman has presented a bill to the New York State legislate opposing foreclosure fraud. What’s not to like? Well, for a former state Senator who got some heavily contested legislation through, Schneiderman appears not to even be doing the basics. From the Politics on the Hudson blog:

Schneiderman said the bill has an Assembly sponsor in Assemblywoman Helene Weinstein D-Brooklyn, but he didn’t mention a sponsor in the Senate—where Schneiderman was a member.

No Senate sponsor for a late-in-session bill? And it’s even later than that. Nevada’s attorney general, Catherine Cortez Masto pushed for legislation to criminalize foreclosure abuses and it became law last October. Schneiderman and Masto were almost certainly communicating last year; he was probably aware of the legislation before it was passed. Why did he take so long to launch (feebly) a similar measure here?

By contrast, the New York courts were swift to act when the robosigning scandal broke. A mere month later, it imposed a certification requirement which had the effect of lowering the bar for sanctioning attorneys for failing to take “reasonable” steps to verify the accuracy of documents submitted to the court. This has a chilling effect. Foreclosure filings plummeted. This was a de facto admission that the banks were not able, by legal means, to establish in court that they had the right to foreclose.

Now one might argue that this bill (were it ever to pass) still has merit because it, like the Nevada bill, criminalizes foreclosure abuses and preparing other types of false mortgage documents (like HUD or FHA documentation), and not just for attorneys, but for other document preparers and their managers. Even so, Schneiderman’s bill is less bloody minded than Masto’s. Hers had up to 10 years in prison and a $10,000 fine per violation. By contrast, it takes five or more incidents of bad conduct in one year to get a class E felony conviction, which would lead to up to four years in prison...

MORE

[Demeter]

34. To Save Money-Market Mutual Funds, Scrap Them

http://www.bloomberg.com/news/2012-06-13/to-save-money-market-mutual-funds-scrap-them.html

Long-overdue rules to prevent a repeat of the 2008 run on money-market mutual funds may not be passed this year, thanks to a provision just inserted in a funding bill before Congress by Representative Jo Ann Emerson, Republican of Missouri. This is unfortunate but unsurprising. Because real reforms jeopardize the very existence of money-market funds, opposition from the industry has been fierce. There is a way out, however: Pairing such reforms with a creative alternative to the current model could make the demise of money funds palatable even to their sponsors.

We propose extending a government program called TreasuryDirect, which allows investors to buy Treasury securities directly from the government in accounts held with the Treasury Department. Banks and brokerages should embed a more user-friendly version of TreasuryDirect in their accounts - - call it a (new) U.S. Money Fund.

To appreciate the merits of this alternative, it’s useful to review some history.

Checkered Past

Money-market funds were created in the early 1970s when inflation soared but banks weren’t allowed to pay interest on checking accounts. Initially, money-market funds bought only Treasury bills. Later, as funds competed for customers by promising higher yields, they loaded up on riskier commercial paper, the unsecured short-term securities that businesses often issue to meet day-to-day needs. Money funds had the same look and feel as traditional checking accounts -- customers could write checks against their balances -- but offered higher yields because they enjoyed several cost advantages. They didn’t have to pay for deposit insurance or hold capital in reserve, they weren’t subject to regular examination by multiple regulators, and they didn’t have to comply with most consumer-protection rules or demonstrate their contribution to the local community. Relying on ratings companies to identify investment-grade assets eliminated the costs of loan officers and credit committees.

True, the accounts weren’t insured. But they did carry the regulatory imprimatur of the Securities and Exchange Commission. As more and more people moved into money markets, banks lobbied for and eventually secured the right to offer their own funds. By 1985, balances in money-market funds dwarfed those in traditional bank accounts. Money-market funds were thought to be “unrunnable,” because all withdrawals could be met by selling the assets of the fund. That illusion was shattered in September 2008. The pioneering Reserve Fund had large holdings of commercial paper issued by Lehman Brothers Holdings Inc. The failure of Lehman triggered redemption requests for more than $20 billion, but less than half that amount could be honored by selling assets since the markets were frozen. Redemption requests then surged at all money-market funds, but they could only sell their safest and shortest-term securities. The commercial-paper market froze. Fears of an economic collapse prompted the government to guarantee the previously uninsured funds.

Today, risky investments by money-market funds remain a public menace. The Federal Reserve’s policy of maintaining short-term interest rates of almost zero has impelled a desperate search for yield. Until quite recently, dodgy European bank paper constituted about 45 percent of the assets of the large money-market funds in the U.S. Although most funds have since reduced this exposure, the experience of 2008 demonstrates that they won’t always have such clear warnings or the time to divest in the future...

LENGTHY, BUT EDUCATIONAL. WORTH THE READING

[westerebus]

52. Leave them alone.

How else are we going to know when the run on the banks are in full swing?

If the shares were not priced at a dollar per, the FED would have let it go in 2008, once it broke the buck, the FED had no choice.

"the regulatory imprimatur of the SEC". Now that's funny.

[Demeter]

36. Plenty to Hide By Jay Stanley

http://www.aclu.org/blog/technology-and-liberty-national-security/plenty-hide

A commentator on my recent post about the DEA installing license plate scanners on the nation’s interstate highways asks, “If you aren't doing anything illegal why would you care if someone captures your license plate number?” Another commentator countered: “If I'm not doing anything illegal, why do the police need to record my license plate number?” It’s a great response. In essence, it points to our civilization’s core principle that the government is not supposed to look over our shoulder unless it has particularized suspicion that we are involved in wrongdoing. But the original poster’s point is a frequent refrain: “Why should I care about surveillance if I have nothing to hide?” As a privacy advocate I have heard this question for many years, and over time developed my own list of answers, aided by the sharp thinking of others who have grappled with this question, such as Dan Solove and Bruce Schneier.

Here are the answers to this question that I have settled upon over time:

1. Some people do have something to hide, but not something that the government ought to gain the power to reveal. People hide many things from even their closest friends and family: the fact that they are gay, the fact that they are sick, the fact that they are pregnant, the fact that they are in love with someone else. Though your private life may be especially straightforward, that should not lead you to support policies that would intrude on the more complicated lives of others. There’s a reason we call it private life.
   
   
2. You may not have anything to hide, but the government may think you do. One word: errors. If we allow the government to start looking over our shoulders just in case we might be involved in wrongdoing—mistakes will be made. You may not think you have anything to hide, but still might end up in the crosshairs of a government investigation, or entered into some government database, or worse. The experience with terrorist watch lists over the past 10 years has shown that the government is highly prone to errors, and tends to be sloppily overinclusive in those it decides to flag as possibly dangerous.
   
   
3. Are you sure you have nothing to hide? As I said in this 2006 piece, there are a lot of laws on the books—a lot of very complicated laws on the books—and prosecutors and the police have a lot of discretion to interpret those laws. And if they decide to declare you public enemy #1, and they have the ability to go through your life with a fine-tooth comb because your privacy has been destroyed, they will find something you’ll wish you could hide. Why might the government go after you? The answers can involve muddy combinations of things such as abuse of power, mindless bureaucratic prosecutorial careerism, and political retaliation. On this point a quotation attributed to Cardinal Richelieu is often invoked: “Give me six lines written by the hand of the most honest man, and I’ll find something in them to hang him by.”
   
   
4. Everybody hides many things even though they’re not wrong. The ultimate example is the fact that most people don’t want to be seen naked in public. Nudity also makes a good metaphor for a whole category of privacy concerns: just because we want to keep things private doesn’t mean we’ve done anything wrong. And, it can be hard to give rational reasons why we feel that way—even those of us who feel most comfortable with our bodies. True, some people may be perfectly happy posting nude pictures of themselves online, but other people do not like to show even a bare ankle—and they should have that right. In the same way, there may not be anything particularly embarrassing about other details of our lives—but they are our details. The list of all the groceries you have purchased in the past year may contain nothing damaging, but you might not want a stranger looking over that either, because of that same difficult-to-articulate feeling that it would just be, somehow, invasive, and none of their damned business. As Bruce Schneier aptly sums it up, “we do nothing wrong when we sing in the shower.”
   
   
5. You may not care about hiding it, but you may still be discriminated against because of it. As I discussed recently in this post about data mining, people are often denied benefits or given worse deals because some company decides that some behavior—entirely innocent and legal—might suggest you are a poor risk. For example, credit card companies sometimes lower a customer’s credit limit based on the repayment history of the other customers of stores where a person shops.

Privacy is about much broader values than just “hiding things.” Although many people will want more specific answers to the question such as the above, ultimately the fullest retort to the “nothing to hide” impulse is a richer philosophical defense of privacy that articulates its importance to human life—the human need for a refuge from the eye of the community, and from the self-monitoring that living with others entails; the need for space in which to play and to try out new ideas, identities, and behaviors, without lasting consequences; and the importance of maintaining the balance of power between individuals and the state.

[snot]

76. Thank you!

One of my favorite stories re- this issue is that the US government blackmailed Lennon into abandoning his anti-war activities by threatening him with deportation based on his past marijuana use.

As Daniel Ellsberg has pointed out, they can even use your hopes and dreams against you.

[Demeter]

38. SCOTUS Kills Habeas Corpus

http://www.emptywheel.net/2012/06/11/scotus-kills-habeas-corpus/

SCOTUS has just declined to take all seven of the pending Gitmo habeas corpus petitions, including Latif and Uthman.

This effectively kills habeas corpus.

Consider what SCOTUS just blessed:

Holding a person indefinitely for being in the wrong place at the wrong time–including a school, a road, and a guest house–where suspect people are.

Holding a person indefinitely based on an admittedly error-ridden report the government wrote up itself.

Holding a person indefinitely based on pattern analysis.

Completely upending the role of District Court judges in the fact-finding process.

[Demeter]

39. Court's Refusal to Hear Habeas Cases Invalidates Landmark 2008 Ruling

http://truth-out.org/news/item/9736-guantanamo-attorney-landmark-supreme-court-habeas-ruling-now-no-more-effective-than-a-law-review-article

Now what?

That's the question attorneys who represent Guantanamo detainees are asking after the Supreme Court on Monday refused to consider the appeals of seven prisoners, who petitioned the justices to review decisions in their habeas cases made by a conservative appeals court. The decision flies in the face of the court's 2008 landmark ruling in Boumediene v. Bush, which granted detainees a "meaningful opportunity" to challenge their detentions.

SCOTUSblog reported that the "practical effect" of the Supreme Court's decision, "is that the D.C. Circuit Court now functions as the court of last resort for the 169 foreign nationals remaining at the U.S.-run military prison in Cuba, and that court has a well-established practice of overturning or delaying any release order issued by a federal judge, when the government objects."

None of the justices dissented and the Supreme Court did not issue a statement explaining its decision.

Brent Mickum, an attorney who has spent nearly a decade working on the habeas cases of several Guantanamo detainees and currently represents the high-value prisoner, Abu Zubaydah, said, "For those of us who have been working in the trenches for years and years this is a really sad and disappointing day."

"All of our work has essentially been for naught," Mickum said. "This leaves open a glaring question, what is the next step? All of the habeas attorneys will be getting together for a major meeting to discuss that."

MORE. READ IT AND WEEP

[Demeter]

40. We Don’t Need No Education By PAUL KRUGMAN

http://www.nytimes.com/2012/06/15/opinion/krugman-we-dont-need-no-education.html

Hope springs eternal. For a few hours I was ready to applaud Mitt Romney for speaking honestly about what his calls for smaller government actually mean. Never mind. Soon the candidate was being his normal self, denying having said what he said and serving up a bunch of self-contradictory excuses. But let’s talk about his accidental truth-telling, and what it reveals...In the remarks Mr. Romney later tried to deny, he derided President Obama: “He says we need more firemen, more policemen, more teachers.” Then he declared, “It’s time for us to cut back on government and help the American people.” You can see why I was ready to give points for honesty. For once, he actually admitted what he and his allies mean when they talk about shrinking government. Conservatives love to pretend that there are vast armies of government bureaucrats doing who knows what; in reality, a majority of government workers are employed providing either education (teachers) or public protection (police officers and firefighters). So would getting rid of teachers, police officers, and firefighters help the American people? Well, some Republicans would prefer to see Americans get less education; remember Rick Santorum’s description of colleges as “indoctrination mills”? Still, neither less education nor worse protection are issues the G.O.P. wants to run on.

But the more relevant question for the moment is whether the public job cuts Mr. Romney applauds are good or bad for the economy. And we now have a lot of evidence bearing on that question.

First of all, there’s our own experience. Conservatives would have you believe that our disappointing economic performance has somehow been caused by excessive government spending, which crowds out private job creation. But the reality is that private-sector job growth has more or less matched the recoveries from the last two recessions; the big difference this time is an unprecedented fall in public employment, which is now about 1.4 million jobs less than it would be if it had grown as fast as it did under President George W. Bush. And, if we had those extra jobs, the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.

The really decisive evidence on government cuts, however, comes from Europe. Consider the case of Ireland, which has reduced public employment by 28,000 since 2008 — the equivalent, as a share of population, of laying off 1.9 million workers here. These cuts were hailed by conservatives, who predicted great results. “The Irish economy is showing encouraging signs of recovery,” declared Alan Reynolds of the Cato Institute in June 2010. But recovery never came; Irish unemployment is currently more than 14 percent. Ireland’s experience shows that austerity in the face of a depressed economy is a terrible mistake to be avoided if possible. And the point is that in America it is possible. You can argue that countries like Ireland had and have very limited policy choices. But America — which unlike Europe has a federal government — has an easy way to reverse the job cuts that are killing the recovery: have the feds, who can borrow at historically low rates, provide aid that helps state and local governments weather the hard times. That, in essence, is what the president was proposing and Mr. Romney was deriding.

So the former governor of Massachusetts was telling the truth the first time: by opposing aid to beleaguered state and local governments, he is, in effect, calling for more layoffs of teachers, policemen and firemen. Actually, it’s kind of ironic. While Republicans love to engage in Europe-bashing, they’re actually the ones who want us to emulate European-style austerity and experience a European-style depression. And that’s not just an inference. Last week R. Glenn Hubbard of Columbia University, a top Romney adviser, published an article in a German newspaper urging the Germans to ignore advice from Mr. Obama and continue pushing their hard-line policies. In so doing, Mr. Hubbard was deliberately undercutting a sitting president’s foreign policy. More important, however, he was throwing his support behind a policy that is collapsing as you read this. In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.

[Demeter]

41. What Republicans Think By DAVID BROOKS

http://www.nytimes.com/2012/06/15/opinion/brooks-what-republicans-think.html

Democrats frequently ask me why the Republicans have become so extreme. As they describe the situation, they usually fall back on some sort of illness metaphor. Republicans have a mania. President Obama has said that Republicans have a “fever” that he hopes will break if he is re-elected. I guess I’d say Republicans don’t have an illness; they have a viewpoint. Let me describe it this way: In the 1950s, Dwight Eisenhower reconciled Republicans to the 20th-century welfare state. Between Ike and George W. Bush, Republican leaders basically accepted that model. Sure, they wanted to cut taxes and devolve power, but, in practice, they sustained the system, often funding it more lavishly than the Democrats. But many Republicans have now come to the conclusion that the welfare-state model is in its death throes. Yuval Levin expressed the sentiment perfectly in a definitive essay for The Weekly Standard called “Our Age of Anxiety”:

“We have a sense that the economic order we knew in the second half of the 20th century may not be coming back at all — that we have entered a new era for which we have not been well prepared. ... We are, rather, on the cusp of the fiscal and institutional collapse of our welfare state, which threatens not only the future of government finances but also the future of American capitalism.”

To Republican eyes, the first phase of that collapse is playing out right now in Greece, Spain and Italy — cosseted economies, unmanageable debt, rising unemployment, falling living standards.

America’s economic stagnation is just more gradual. In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The average growth was a paltry 1.7 percent annually between 2000 and 2009. It averaged 0.6 percent growth between 2009 and 2011. Wages have failed to keep up with productivity. Family net worth is back at the same level it was at 20 years ago. In America as in Europe, Republicans argue, the welfare state is failing to provide either security or dynamism. The safety net is so expensive it won’t be there for future generations. Meanwhile, the current model shifts resources away from the innovative sectors of the economy and into the bloated state-supported ones, like health care and education. Successive presidents have layered on regulations and loopholes, creating a form of state capitalism in which big businesses thrive because they have political connections and small businesses struggle. The welfare model favors security over risk, comfort over effort, stability over innovation. Money that could go to schools and innovation must now go to pensions and health care. This model, which once offered insurance from the disasters inherent in capitalism, has now become a giant machine for redistributing money from the future to the elderly.

This is the source of Republican extremism: the conviction that the governing model is obsolete. It needs replacing.

Mitt Romney hasn’t put it this way. He wants to keep the focus on President Obama. But this worldview is implied in his (extremely vague) proposals. He would structurally reform the health care system, moving toward a more market-based system. He would simplify the tax code. He would reverse 30 years of education policy, decentralizing power and increasing parental choice. The intention is the same, to create a model that will spark an efficiency explosion, laying the groundwork for an economic revival.

Democrats have had trouble grasping the Republican diagnosis because they don’t have the same sense that the current model is collapsing around them. In his speech in Cleveland on Thursday, President Obama offered an entirely different account of where we are. In the Obama version, the welfare-state model was serving America well until it was distorted a decade ago by a Republican Party intent on serving the rich and shortchanging the middle class. In his speech, Obama didn’t vow to reform the current governing model but to rebalance it. The rich would pay a little more and everyone else would get a little more. He’d “double down” on clean energy, revive the Grand Bargain from last summer’s budget talks, invest in infrastructure, job training and basic research. Obama championed targeted subsidies and tax credits. Republicans, meanwhile, envision comprehensive systemic change. The G.O.P. vision is of an entirely different magnitude: replace the tax code, replace the health care system and transform entitlements.

This is what this election is about: Is the 20th-century model obsolete, or does it just need rebalancing? Is Obama oblivious to this historical moment or are Republicans overly radical, risky and impractical?

WELL, IF ONE OVERLOOKS ALL THE DATA AND IGNORES ALL THE DESTRUCTION OF LIVES, PROPERTY AND FUTURES, ONE COULD HOLD THAT POINT OF VIEW, I SUPPOSE....

Republicans and Democrats have different perceptions about how much change is needed. I suspect the likely collapse of the European project will profoundly influence which perception the country buys this November.

[Fuddnik]

56. Other than George Will, is there a bigger asshole than David Brooks.

Well, I guess a few, like Grover Norquist.

I'll agree with him on one thing. Our governing model is obsolete. Our economic model too.

But I've got a completely different idea in mind on how to fix it.

[xchrom]

35. kalimera!

[Fuddnik]

49. I don't know what that is,

But I'll take some!

[westerebus]

55. Find the local Greek Church.

The Yah-yah's (grandmother's) bake every few weeks for some saint day or other.

Anything filled with almond paste or covered with honey is finger food, beverage is optional, anything covered with powdered sugar is meant to be enjoyed with hot tea or coffee, dry is not optional.

[Fuddnik]

57. We've got nothing but Greeks in Tarpon Springs.

And a boatload of Greek restaurants and bakeries on the sponge docks.

Maybe I'll go out for a snack later.

[Demeter]

58. Tarpon Springs...one of the few spots in Florida that I really like

who knows if I'll ever get that far again?

[Fuddnik]

64. Within walking distance of my house.

Ya got a place to stay, if you need a sanity break.

[westerebus]

60. Then I must have a cousin out there some where.

My sister married in.

Living near Richmond Va. is hopeless when it comes to decent food with a couple of exceptions.

I grew up in Jersey. You can't beat a Jersey dinner and the City was 25 minutes by train door to door.

DC is the closest place and unless I'm staying in town, the trip isn't worth the nascar race on 95 which stops at Quantico for an hour and resumes with trooper's blue light specials between dump trucks up to the 495 mixer.

You're one lucky man.

[xchrom]

37. DAVID ROSENBERG: 51 Signs The Economy Is A Total Disaster

http://www.businessinsider.com/david-rosenberg-charts-2012-6

The U.S. economic recovery has been weak and the looming fiscal cliff threatens to act as a further drag on the economy. Europe is imploding with the chances of a 'Grexit' increasing, and Spain's economy deteriorating and risking contagion.
In his latest report "Charts With Dave", bearish Gluskin Sheff economist David Rosenberg looks at the state of the U.S. and global economy and writes that the recovery isn't where it should be.
"Three years into the aftermath of the worst recession since the 1930s, the global economy still cannot manage to expand organically — that is, without the need for ongoing life support from central banks and governments," writes Rosenberg.









***more at link

[xchrom]

42. Desperate Greeks Withdraw Money from Accounts

http://www.spiegel.de/international/europe/greeks-emptying-bank-accounts-a-839160.html

Joanna Stavropoulos is not proud of what she has done. "I had a guilty conscience when I withdrew my money from Greece," says the 43-year-old. Of course she knew what would happen if everybody does the same: Greece's banks would be threatened with collapse. But she says she had to think of her two-month-old daughter, Josephina, who is currently asleep on Joanna's shoulder.

Increasing numbers of Greeks are following Joanna Stavropoulos' example and emptying their accounts. They are afraid that Greece may leave the euro zone and return to the drachma.
Stavropoulos is one of the few people who know very well what this scenario would look like in concrete terms. As a journalist and NGO worker, she has traveled all over the world, most recently in Haiti and Iraq. "I have been to countries where banks closed," she says. She was in Argentina, for example, when the government declared a national default. She has also lived in Zimbabwe, where three-digit inflation destroyed the currency. Joanna is sure that Greece could face the same thing if it returns to the drachma. "My country is going downhill," she says.

There is still little sign of panic in Greece, and there has not been a stampede to the banks. Nevertheless, people are withdrawing hundreds of millions of euros from the banks every day. In May alone, outflows totaled €5 billion. According to official figures, €80 billion has been withdrawn since the start of the crisis.

[xchrom]

43. Greek, Spanish savings flee eurozone crisis

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_MONEY_FLIGHT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-16-07-31-12

ATHENS, Greece (AP) -- Savers across Europe are fleeing the continent's debt crisis. In Europe's most economically stricken countries, people are taking their money out of their banks as a way to protect their savings from the continent's growing financial storm. Worried that their savings could be devalued, or that banks are on the verge of collapse and that governments cannot make good on deposit insurance, people in Greece, Spain and beyond are withdrawing euros by the billions - behavior that is magnifying their countries' financial stresses. The money is being hoarded at home or deposited in banks in more stable economies.

In Greece and Spain, two of the hardest-hit by the debt crisis in the 17 countries that use the euro, savers and businesses are already pulling money out of banks. They are either worried that their money could be converted into a new currency at a much lower value or because their bank might be on the verge of collapse.

It's a steady bank "jog" at the moment than a full-bore run. But it threatens to undermine the finances of those countries' already-stressed lenders. And if it does turn into a full bank run after Greece's crucial election on Sunday, it could hasten financial disaster in Europe and help spread turmoil around the world.

Since the Greek debt crisis broke in late 2009, deposits have fallen by 30 percent cent, as savers have slowly pulled some (EURO)72 billion ($90.24 billion) from local lenders, with total household and corporate deposits standing at (EURO)165.9 billion ($207.94 billion) in April, according to the latest data from the Bank of Greece.

[xchrom]

45. Hi, Robot: A New Fund Doubles Down on Our Automated Future

http://www.theatlantic.com/technology/archive/2012/06/hi-robot-a-new-fund-doubles-down-on-our-automated-future/258563/



Dmitry Grishin -- one of "Russia's Mark Zuckerbergs" -- made his fortune as the CEO of the Internet communications platform Mail.ru. The service is one of the most popular websites in Russia, a communications portal that might resemble AOL, had AOL also invented Facebook. His leadership of Mail.ru has made Grishin, at 33, one of Russia's most successful -- and richest -- social web entrepreneurs.

Now, though, Grishin is betting on a different kind of future, based on a network not of people, but of ... anti-people.

Grishin thinks the future belongs to robotics. And he's backing up that belief with a hefty chunk of his own considerable fortune. Grishin just announced the launch of Grishin Robotics, which will be the first global investment company focused exclusively on funding personal robotics. Grishin is investing $25 million in the company, which will be based in New York City. It will be a venture fund, essentially, focused on robot innovation -- with an overall mission of promoting the work of companies and inventors who are helping to build us a cyborgian future.

Robotics is, at this point, pretty much the opposite of a new frontier in technology: We've been awaiting a robot-driven future for approximately a century now. But Grishin sees particular potential in the field of personal robots, he told me, for the automation of everyday necessities like home maintenance, education, healthcare, entertainment, and transportation. (Think automated medical procedures, self-driving cars, interactive refrigerators, Roombas, and -- fingers crossed! -- DJ Roombas.) While Grishin acknowledges military and industrial robotics as essential and inevitable components of automation's progress, he is especially excited about the mass-market possibilities of our self-starting friends. Grishin envisions a world overlaid with assistance from automated creatures -- a kind of robo-augmented reality.

[bread_and_roses]

46. "Oh, for ice floes to put them on" - Spanish austerity

http://www.commondreams.org/view/2012/06/16

Published on Saturday, June 16, 2012 by Foreign Policy in Focus / Focal Points blog
Spanish Austerity Savage to the Point of Sadism
by Conn Hallinan

... whether something “works” or not depends on what you do for a living.

If you work at a regular job, you are in deep trouble. Spanish unemployment is at 25 percent—much higher in the country’s southern regions—and 50 percent among young people. In one way or other, those figures—albeit not quite as high—are replicated across the Euro Zone, particularly in those countries that have sipped from Circe’s bailout cup: Ireland, Portugal, and Greece.

... the “sado-monetarism” strategy is about more than just bailing out the banks at the expense of the vast majority of European taxpayers. It cloaks its long-term designs in coded language: “rigid labor market,” “internal devaluation,” “pension reform,” “common budgetary process,” “political union.”

A quick translation.

“Rigid labor market” means getting rid of contracts that guarantee decent wages, working conditions and benefits, all won through a long process of negotiations and industrial action. As the New York Times put it, the current rightwing Spanish government is attempting to “loosen collective bargaining agreements.”

The drive to scrap union contracts is coupled with “internal devaluation,” which, as Krugman points out, “basically means cutting wages.” If the working class can be forced to accept lower wages and slimmer benefits—and there is no better disciplinarian in these regards than a high unemployment rate—profits will go up. Sure, the vast majority will be poorer, but not the people who run Deutsche Bank.

“Pension reform” simply means impoverishing old people, who had nothing to do with the real estate bubbles that brought down Ireland and Spain. But again, someone has to sacrifice, and old people don’t have all that much time left anyhow.

Oh, for ice floes to put them on.

... Weakening unions is central to this, as is privatizing everything capital can get its hands on, and the economic crisis is the perfect cover to try an accomplish this. For a fascinating analogy, pick up Indian journalist P. Sainath’s brilliant “Everyone Loves A Good Drought” that exposed how wealthy landlords in India manipulated a natural crisis to increase their grip over agriculture.

... So, the answer to Krugman’s question, “why are they repeating ancient mistakes?”

Because they are making out like bandits.

[Tansy_Gold]

48. That quote is why I get so furious with Krugman

Quoting from the above:

. . . So, the answer to Krugman’s question, “why are they repeating ancient mistakes?”

Because they are making out like bandits.


They aren't repeating "mistakes" at all. And that's what Krugman either doesn't get or just doesn't say. "They" know what they're doing and are quite happy putting on a false face of astonishment.

If and when someone with Krugman's visibility comes out and declares the emperor really stark ass naked, we may be getting somewhere. Until then, no.

[Demeter]

50. They are "Making out like bandits" Because....

They ARE bandits.

And until we have a politician honest enough to call a spade a spade, we have no hope, and no change.

If the shoe fits, Predatordroneboy, suck on it.

[Fuddnik]

51. You get it.

Ain't no mistake at all. Somebody is planning on making a killing off these "mistakes".

AIG didn't make a mistake taking on all those CDS. They had no intention of paying them anyway. They took their pay and bonuses and rode off happily into the sunset. The same with Countrywide, BoA, Wells, Chase, et al. They all made their money up front, then shifted all the well-planned ruination to every other sucker they could find. Not really suckers, but people who trusted the corrupt ratings agencies.

Nothing about this was an accident or mistake.

[DemReadingDU]

53. +++

[bread_and_roses]

81. You are spot on - he has to hide the truth from himself

Krugman strikes me as a prime example of Chris Hedges' "Liberals" -

http://www.truthdig.com/report/item/the_world_liberal_opportunists_made_20101025/

... The liberal class, which once made piecemeal and incremental reform possible, functioned traditionally as a safety valve. During the Great Depression, with the collapse of capitalism, it made possible the New Deal. During the turmoil of the 1960s, it provided legitimate channels within the system to express the discontent of African-Americans and the anti-war movement. But the liberal class, in our age of neo-feudalism, is now powerless. It offers nothing but empty rhetoric. It refuses to concede that power has been wrested so efficiently from the hands of citizens by corporations that the Constitution and its guarantees of personal liberty are irrelevant. It does not act to mitigate the suffering of tens of millions of Americans who now make up a growing and desperate permanent underclass. And the disparity between the rhetoric of liberal values and the rapacious system of inverted totalitarianism the liberal class serves makes liberal elites, including Barack Obama, a legitimate source of public ridicule. The liberal class, whether in universities, the press or the Democratic Party, insists on clinging to its privileges and comforts even if this forces it to serve as an apologist for the expanding cruelty and exploitation carried out by the corporate state.

... The death of the liberal class, however, is catastrophic for our democracy. It means there is no longer any check to a corporate apparatus designed to further enrich the power elite. It means we cannot halt the plundering of the nation by Wall Street speculators and corporations. An ineffectual liberal class, in short, means there is no hope, however remote, of a correction or a reversal through the political system and electoral politics. The liberals’ disintegration ensures that the frustration and anger among the working and the middle class will find expression in a rejection of traditional liberal institutions and the civilities of a liberal democracy. The very forces that co-opted the liberal class and are responsible for the impoverishment of the state will, ironically, reap benefits from the collapse. These corporate manipulators are busy channeling rage away from the corporate and military forces hollowing out the nation from the inside and are turning that anger toward the weak remnants of liberalism. It does not help our cause that liberals indeed turned their backs on the working and middle class.

I know I've quoted this article ad nauseum but I can't stop myself from doing it again - it becomes more relevant by the day. And Krugman is a particularly good example of it - because he more than most others these days is actually LESS "sold out" to our Corporate Masters - he actually dares to talk about reining them in. But since he can't face the truth of what they are and much less the truth of what the system is - as you so rightly point out - he is not only ineffectual but near ridiculous, as in "mistakes."

[bread_and_roses]

87. this all reminded me of an economist I heard on "Capitol Pressroom"

Which is a radio show here in NY focused on what's going on in the Legislature. This segment was on raising the minimum wage, and among the perspectives featured was this wonk, "Dr. Len Burman, Daniel Patrick Moynihan Professor of Public Affairs, Maxwell School of Syracuse University."

I was irate enough to look him up and find an article he recently had published with the same arguments he droned on about on the radio (the only consolation on his radio spot was that he was so droning, so boring, so tediously and incomprehensibly wonky referring to studies and theories no one knew or understood anything about that I doubt anyone remembered a word he said).

http://www.forbes.com/sites/leonardburman/2012/03/14/raising-the-minimum-wage-in-new-york-would-be-risky/

... As an economist, my instinctive reaction is that raising the minimum wage while the economy is still weak could actually hurt some of its intended beneficiaries by raising unemployment, but the evidence is ambiguous.

The simple economic model starts from the premise that, in competitive markets, compensation matches what people produce. If a worker adds $20 of value, they will get paid about that much. (If not, they’ll go work for someone else.) If the worker add $7.25 to the bottom line, they’ll earn the minimum wage of $7.25. If they produce less than that amount, they will be unemployed.

HEY MR ECONOMIST - YOU AIN'T NOTICED THE WORLD HASN'T WORKED THAT WAY FOR QUITE A WHILE - IF EVER? YOU DIDN'T READ ABOUT THE GAP BETWEEN PRODUCTIVITY AND WAGES?

In his article, he meticulously refers us to numerous other studies, so in order to fully understand what he's talking about one would have to read all of them too. Here's a sample:

Some empirical evidence seems consistent with this “efficiency wage” hypothesis. Nancy Folbre had a nice discussion of this literature on the New York Times Economix blog back in 2o10. (Folbre focuses on this article by economists Arindrajit Dube, T. William Lester, and Michael Reich.) Critics counter that, while the minimum wage might not have large effects on overall employment, it can be especially damaging to teenagers’ chances of finding employment. Teen unemployment was 24.4 percent last year (24.8 percent in New York), so this is worrisome. Sylvia Allegretto, Dube, and Reich, however, published a recent study that concluded that the apparent effects on teen employment were due to methodological flaws in previous studies. When those statistical issues are addressed, the teen employment effect is negligible.

I guess he was too busy reading articles to look around and notice that MINIMUM WAGE WORKERS IN NY CAN'T EAT AND PAY THE RENT/UTILITIES IN THE SAME MONTH?????????????????????? DOES HE THINK HIS FUCKING STUDIES MAKE ANY DIFFERENCE TO THEM???????????????????????????

(sorry, folks, it's a miracle I didn't wreck the car when he was on the radio and reading him has me in the same state.)

Now, the thing is, I would not call this guy a "conservative." Why? Because at the end of the article he states his support for raising and indexing the minimum wage at the Federal Level!

I guess he never noticed that the same tired arguments are decked up and tricked out every time the idea is floated at the Federal Level too - AND I guess he never noticed that neither at the individual State nor at the Federal Level does the world ever come to an end when the rate is raised, despite the screams of our bloated Corporatists that the death knell will sound.

Quisling Liberals.

edit to remove "useless" from last - obviously, these "Liberals" are VERY useful to our Overlords.

[Tansy_Gold]

54. Let's see: summer, Father's Day, Trojan horses. . . . . . . .

(The Excedrin Extra Strength and Eveready batteries are bonus chuckles.)

HAVE A GREAT WEEK-END, ALL!

[Demeter]

59. How dare you pun all over my thread!

That was simply awful.

but inevitable, I suppose.

I'm trying to imagine the consternation if Tsipras is installed, with his "partner" and 1.5 children and no marriage certificate....

[Tansy_Gold]

61. A friend sent me a bunch of funny pix just the other day

This was one of them. It was so perfect for the thread.

I couldn't resist.

[westerebus]

62. I'm surprised it got this far.

[Po_d Mainiac]

73. ayuh

[Tansy_Gold]

63. Mondragón

http://www.democraticunderground.com/1002816231

Like, if they had been paying ATTENTION, this wouldn't be such a big wow.

[Demeter]

66. Japan’s Prime Minister Orders Restart of Two Nuclear Reactors

http://www.nytimes.com/2012/06/17/world/asia/japans-prime-minister-orders-restart-of-2-nuclear-reactors.html

Brushing aside widespread public opposition to avoid feared electric power shortages, Prime Minister Yoshihiko Noda ordered the reactivation of two nuclear reactors at a plant in western Japan on Saturday, making it the nation’s first plant to go back online since the crisis last year in Fukushima.

The decision to restart the Ohi nuclear plant ends the temporary freeze of Japan’s nuclear power industry, when all 50 of the country’s functional reactors were idled after the triple meltdown at the Fukushima Daiichi plant. Despite the prime minister’s vows to strengthen the Ohi plant against the same sort of huge earthquake and tsunami that knocked out the Fukushima plant in March 2011, the Japanese people have remained deeply divided on the safety of nuclear power...

MY DAY IS COMPLETE

[Demeter]

67. Troubled Greek Economy Is Being Left to Fend for Itself

AND WE ALL KNOW HOW THAT FEELS...IN AMERICA, IN EUROPE, IN JAPAN...


http://www.nytimes.com/2012/06/16/business/global/greek-economy-is-being-left-to-fend-for-itself.html

No matter what happens in this weekend’s elections, Greece is rapidly becoming an isolated economy. Carrefour, the giant French supermarket and retail group, said on Friday that it was selling its entire stake in Greece at a loss to its local franchise partner, so it could concentrate “on markets where it sees growth,” a spokesman said. Coca-Cola’s operations in Greece were also downgraded by Moody’s Investors Service, which cited the increased likelihood that Greece could exit the euro zone. A day earlier, the French bank Crédit Agricole said it was ring-fencing its Greek operations to protect itself should that happen. Two of the world’s largest import-export insurers, Euler Hermes and Coface, have recently refused to cover transactions involving companies in Greece, imperiling the import of basic goods.

Global businesses and investors are retreating both because of the uncertainty on whether they might be paid someday in a devalued currency, and because domestic consumption has plunged after three years of painful austerity. Nearly a quarter of the people are out of work. Buying power has shriveled. Sales of clothing and pharmaceuticals have slumped, and even gas purchases are down as people drive less to save money. Companies short on cash have stopped paying one another. Companies short on cash have stopped paying one another.

Amid rows of unsold screws, drills and power tools at his hardware store here, Deodoris Diamadis is one of many Greeks awaiting elections that he hopes could bring much desired economic improvement.

“Commerce in Greece is down to almost nothing because of all the economic and political uncertainty,” Mr. Diamadis said grimly on a recent weekday as he watched the occasional customer flit in and out without buying anything. “We’re hoping that a new government will resolve this crisis.”

Those hopes are likely to be dashed, given the bleak outlook. Even the strongest parts of the economy are suffering badly. Tourism, which accounts for nearly 20 percent of all jobs in Greece, is expected to plunge by about 15 percent this year as dire headlines leave visitors uneasy about planning vacations. The shipping business here has been losing steam to China, and its profitability fading, especially in the last year....Alexis Tsipras, the left-wing leader who is emerging as a front-runner in Sunday’s elections on promises of repudiating Greece’s loan agreement, said in an interview Thursday that growth would mainly be restored by reversing the harsh austerity measures required by the international community for Greece’s bailout. He promised initiatives to stimulate the economy, without specifying what those initiatives would be or where the money would come from — aside from taxing wealthy businesses and individuals more, collections that have failed repeatedly in this tax-evasive culture. Greece needs to get its finances in order, he added, “but if we annihilate growth while doing it, what’s the point?" Global companies have been wary about the country for a while, but their concerns shot to new heights last month after Greeks voted in large numbers for Mr. Tsipras’s left-wing party, stoking fears that his willingness to tear up the country’s 130 billion euro bailout agreement could lead Greece to exit the monetary union...The economy is suspended by a long chain of arrears.

[Demeter]

68. The Safest Bank By JOE NOCERA

http://www.nytimes.com/2012/06/16/opinion/nocera-the-safest-bank.html

This is not another column about the chief executive of JPMorgan Chase, the one and only Jamie Dimon. I mean, what’s left to say after his appearance this week before the Senate Banking Committee? With the senators unwilling to ask even mildly probing questions about the trades that cost the bank billions — hoping, no doubt, to be rewarded with JPMorgan campaign contributions — you could practically see Dimon regaining his old swagger with every passing minute.

Instead, let’s focus on a bank chief executive devoid of swagger. An executive who doesn’t denigrate the importance of regulation. Who has actually come out in favor of the Consumer Financial Protection Bureau. And who doesn’t view banks as institutions that should be taking supercharged risks hoping to make supercharged returns for shareholders. I’m talking about Vikram Pandit of Citigroup. The Times’s Ben Protess once labeled him the anti-Dimon. Bingo. Citigroup is 200 years old on Saturday, and when you think about its history, you can’t help but focus on the larger-than-life men who have run it. From the late-1960s to the mid-1980s, Citigroup was led by Walter Wriston, one of the great bankers of the modern age. He was followed by John Reed, who as Wriston’s protégé practically invented the modern credit card and gave us the A.T.M. As C.E.O., he turned Citigroup into the most powerful consumer bank in the world.

In 1998, Reed agreed to merge Citi with Travelers Group, which was led by Sandy Weill. An insatiable empire-builder, Weill soon pushed Reed aside and presided over the ultimate financial supermarket, a firm that offered insurance, investment banking, stock brokerage, proprietary trading, you name it — and, yes, some banking, too. (Dimon was Weill’s protégé.) Under Chuck Prince, Weill’s short-lived successor, Citigroup dove headfirst into subprime mortgages and played all kinds of games with its balance sheet. The only thing Prince will ever be remembered for is his pathetic utterance in defense of his bank’s insane risk-taking: “As long as the music is playing, you’ve got to get up and dance.”

By the time Pandit was put in charge in 2007, Citigroup was a sprawling, unmanageable mess. And that was before the financial crisis. One reason Citigroup acts differently than other too-big-to-fail banks is that no bank was so deeply humbled during the dark days of 2008. It didn’t need just one round of bailout loans from the Treasury Department; it needed two. No bank had more “toxic assets” than Citigroup. Indeed, in the aftermath of the crisis, it wasn’t answering to shareholders. It was answering to the federal government, which worried about whether it would survive. Inside the Obama White House, a number of the president’s economic advisers advocated for winding it down. Although it took him awhile to chart a course, Pandit eventually segmented the bad assets and has slowly been shedding them. He took much of the serious risk out of the bank’s balance sheet. He put aside enormous amounts of money to write off bad loans. And he gradually built up the bank’s capital — so that it could survive the next big shock, should it come to that. “Dimon talks about a fortress balance sheet,” says Daniel Alpert of Westwood Capital. “But it’s really Citi that has the fortress balance sheet.” The kind of risky “portfolio hedging” that caused JPMorgan all that trouble? Citigroup isn’t involved. It mostly invests its excess deposits in safe government securities. After Dodd-Frank was passed, it eliminated proprietary trading, not even waiting for the Volcker Rule (which has yet to be instituted). Mainly, Pandit is trying to bring Citi back to its roots as a commercial bank that makes its money the old-fashioned way: by making sound loans, to both consumers and companies.

There are plenty of Wall Street analysts who hate Pandit’s approach — after all, Citigroup’s stock remains a laggard...

[Demeter]

69. Running on Empty By GAIL COLLINS

http://www.nytimes.com/2012/06/16/opinion/collins-running-on-empty.html

Our biggest political division is the war between the empty places and the crowded places.

It’s natural. People who live in crowded places tend to appreciate government. It’s the thing that sets boundaries on public behavior, protects them from burglars and cleans the streets. If anything, they’d like it to do more. (That pothole’s been there for a year!) The people who live in empty places don’t see the point. If a burglar decides to break in, that’s what they’ve got guns for. Other folks don’t get in their way because their way is really, really remote. Who needs government? It just makes trouble and costs money.

The Tea Party is so Empty Places. Do you remember that Tea Party rally in Washington last year over the budget crisis? (That would be the spring budget crisis as opposed to the many other seasonal versions.) “Nobody wants the government to shut down,” began Representative Mike Pence of Indiana, diplomatically. “Yes we do!” cried voices from the crowd. The Empty Theory made a lot of sense when the country was full of isolated farms, but it lost its mojo when the farmland filled up with suburbs and we elected a long series of presidents who were, to one degree or another, Modified Crowded. But now Empty is making a comeback, less an expression of physical reality than a state of mind. People living on Social Security and Medicare in a 400-unit condo development built with federal subsidies can march to their congressman’s town-hall meeting and demand that he get government out of their hair.

Lately, I’ve been fascinated with Texas, the perfect exemplar of the New Empty. The population of Texas is approaching 26 million, mostly urban-suburbanites. But many of them believe they’re on the lone prairie. “Ask my students,” a professor at Texas A&M University told me. “They all associate themselves with the country. They’re living a myth. They think of Texas as open wide, but 80 percent of the people in Texas live in one of the major metropolitan areas.”

Texas is so Tea Party. Democrats haven’t won a statewide race there since 1994. Dick Armey, the former House majority leader, was one of the Tea Party’s organizational founders. Ron Paul was a kind of intellectual godfather. Rick Perry hails from an area in West Texas nicknamed “The Big Empty.” So, on the one hand, it seemed appropriate that Mitt Romney nailed down the presidential nomination there. On the other hand, the support seemed a little less than full-throated. Perry, who maintained his perfect record of election victories by making his name miraculously disappear from the ballot, told The Texas Tribune that he was super-enthusiastic about his party’s nominee. Then he noted that “we really don’t have an option here.”

MORE

[Demeter]

70. Watergate at 40: So many 'what ifs'

http://news.yahoo.com/watergate-40-many-ifs-070822305.html

THE FINAL DECISIONS OF HISTORY ARE SOMETIMES DETERMINED BY THE LAST MAN LIVING...THE LAST UNINDICTED CONSPIRATOR, THE LAST COMPROMISED WITNESS...THE LAST LIAR...

[rusty fender]

71. Excellent post--A+ for the Gordian Knot analogy

[Demeter]

75. Thank you, and Welcome to WEE!

Hope to see you around Stock Market Watch, daily in this forum, as well!

[rusty fender]

115. I've been checking it everyday, lately,

although I am not able to read every post each time, I appreciate the knowledge and facts you all bring to the economic picture.

[Po_d Mainiac]

74. Who gets to keep the yacht

Greece and Germany appear set to make some headway in solving a long-running dispute over the delivery of four submarines, but the fate of a shipyard west of Athens remains in doubt following a high-level meeting last week.

Defense Minister Evangelos Venizelos held talks with ThyssenKrupp Marine Systems CEO Hans Christoph Atzpodien in a bid to resolve the issue of the outstanding submarine order, which has weighed heavily on Greek-German relations in recent years.


http://www.americanhellenic.org/news/2010-07-10.php

[Demeter]

77. Why Does Mitt Romney Like Firing People? Because He Made $20,000 On Every Laid-Off Worker

http://www.nationalmemo.com/why-does-mitt-romney-like-firing-people-because-he-made-20000-on-every-laid-off-worker/

Mitt Romney would prefer for you to recall just one number regarding his record at Bain Capital. That would be 100,000 — the number of jobs that the Republican candidate claims he created during 15 years at the private equity firm.

But now there is a more interesting, plausible and relevant number: $20,000. That’s how much money Romney is estimated to have made from each worker laid off during Bain’s many corporate takeovers.

In fairness, Romney’s goal at Bain was never to create jobs but to reap the biggest returns for their valued investors. Judging by that metric, he did exceedingly well, as even Bill Clinton accidentally admitted when discussing Romney’s “sterling” business career. And of course, Romney’s fortune, estimated somewhere between $190 million and 250 million, attests to that assessment.

But over the course of the Romney’s years at Bain Capital, at least five of the companies he took over eventually went bankrupt, while still rewarding Bain investors handsomely: SEE LINK...While it is true that some of those companies went under after Romney had left Bain, the job growth for which he now seeks credit also occurred after his departure in 1999. But the bankruptcies — and the bust-out scenario that helped Bain to profit anyway — are not news. What AOL’s Daily Finance has contributed to the Bain debate is a simple calculation: Bain Capital booked $1.995 billion in profits from the layoffs of 11,030 workers at various firms. And by that scoring, Romney earned roughly $20,000 himself for each of those fired employees. Nice work if you can get it (or take it away from someone else).

[Demeter]

78. Why the world may change on Sunday (and how it could affect the 2012 election) by Georgia Logothetis

http://www.dailykos.com/story/2012/06/15/1100432/-Why-the-world-may-change-on-Sunday-and-how-it-could-affect-the-2012-election



...Greece is suffering through an economic crisis the likes of which a modern developed country has never seen. As much as certain Greek political parties dispute the characterization, the world has framed Sunday's election as a referendum on Greece's continued participation in the eurozone. If any analyst claims to definitively know what the outcome of the election will be or what impact any election outcome will have, they're lying. Uncertainty is the new Zeus, holding dominion over the entire landscape.

Why hasn’t the Greek bailout worked?

Despite implementing draconian austerity measures, Greece is still neck-deep in a years-long recession. But the bailout did, from one perspective, work. Yes, unemployment among youth is over 50 percent, nearly 1 in 3 Greeks are living in poverty or damn near close to it, and 1 in 5 young Greeks plan to flee the barren wasteland that is the current Greek employment landscape. Yes, families are expected to live on just hundreds of euros a month. And yes, standards of living have plummeted while the cost of living skyrockets. The rate of suicides is alarming, homeless shelters are overcrowded, the Greek government is in tatters, tourism is down and extremism is rising. Greece has been beaten down into a bloody heap of a broken society crumbled at the bottom of what Germany has affectionately labeled a "bottomless pit," but saving Greece wasn’t the goal of "aiding Greece." Containing her was, and the news over the last few weeks demonstrates that in that respect—when the austerity-only bailout program is viewed not as a lifesaver but as a European tourniquet to isolate a wounded sovereign appendage—the bailout program was a wild success.

AND THEN, THERE'S THE BANKS

Floyd Norris earlier this year stated it point blank: "Europe is prepared to pay what it needs to pay to save its banks. But not to rescue Greece." Bloomberg crunched the numbers and found that "Europe’s taxpayers have provided as much financial support to Germany as they have to Greece," primarily because "Germany’s banks were Greece’s enablers," and thus stand to benefit the most from an almost exclusive focus on debt service. You may hear from some circles that more than enough money has been thrown at Greece, with 115 Marshall Plans, claims one analyst. However, when you realize that almost none of that financial assistance has gone to stimulating Greece's economy and when you acknowledge the fact that the massive transfusion of cash was used primarily for debt service, you can understand why Greeks are so incredibly frustrated and why they demand a true pro-growth program.

How is all this going to affect the United States?

Imagine the relationship between the United States and Europe as a twisted game of cat's cradle where fates are intertwined. Europe is one of the largest buyers of American services and exports, devouring more than 20 percent of what we export. Our financial system and Europe's, both dominated by international banking behemoths, share lifeblood in the form of loans, investments, and bond exposure. Our stock market sighs or smiles on issues like the probability of a Greek exit. Last month's election resulted in a slight dip and rebound the day after the Greek election after it became clear the conservative and pro-bailout, pro-austerity New Democracy took the lead. How markets will react to a possible win by the anti-austerity and anti-bailout Syriza party is unknown.

Niall Ferguson, TIME:

“The possibility is now very real that a double-dip recession in Europe could kill off hopes of a sustained recover in the United States...Slower growth and higher employment can only hurt his chances in an already very tight race with Mitt Romney.

”

Ezra Klein, Washington Post:

"Scariest sentence I've read today? Oh, that's easy: "Because there has been time to prepare, some economists say, Greece’s departure from the euro will not be as much of a shock as the collapse of Lehman Brothers in 2008, which provoked a global financial crisis."

That's from Jack Ewing and Paul Geitner in the New York Times, and it's enough to ruin your Friday morning: "Some economists say" a Greek departure wouldn't be as bad "as the collapse of Lehman Brothers in 2008, which provoked a global financial crisis"? Yeesh. That's like some bomb units say they can get the vest off of you without it going "BOOM."

David Horsey, Los Angeles Times:

As is the case in every election, the sitting president will get credit or blame for what happens on his watch. If the economic numbers are being dragged down by events in Europe and the resentful rebellion of the Greeks, voters will punish the man in the White House.

Eduardo Porter, New York Times:

While nobody has a clear idea of how a breakup of the euro would affect the American economy, it would hurt. Citizens of vulnerable European countries would rush to withdraw their euro deposits ahead of the breakup, to avoid having their savings converted into pesetas or drachmas. Banks would fail, and financial markets would plummet as investors took their money out of risky assets and put them into the comparative safety of German bunds and American Treasury bonds.

This would very likely cripple some big American banks. And a stock market crash would wipe out the savings of many ordinary citizens. Exports to Europe would slow sharply as European economies contracted — depriving the United States of one of its few engines of growth.

Look at it this way: When Lehman Brothers went bankrupt in 2008, sending the global financial system into a tailspin, its debts amounted to about $600 billion. Government debt alone in Greece, Spain, Portugal and Ireland — the most vulnerable European countries — adds up to about $1.9 trillion. And the economies and government finances of most developed countries are in worse shape than they were four years ago.

In short, the Greek crisis is a European crisis and a European is a world crisis. If there was any political and economic situation where the butterfly effect metaphor was appropriate, this would be it. A Greek citizen in a voting booth in Greece on Sunday can check a box and possibly impact markets a continent away.

[snot]

109. Hasn't Greece been Germans' favorite vacay spot for decades?

Maybe now they can buy it.

[Demeter]

79. How Not to Be a Union

http://truth-out.org/news/item/9825-how-not-to-be-a-union

Unions were originally built on the principle of solidarity. Workers soon realized that as individuals they were powerless when trying to defend their interests in relation to their profit-maximizing employers. But when they were organized and stood together, their combination gave them the upper hand. Under the banner of "an injury to one is an injury to all," workers went on to make historic gains in their standard of living by acting collectively – gains that we still enjoy today, although they are under attack.

However, in the current period, electoral politics has come to replace the principle of solidarity. Rather than mobilize their members to stand together on picket lines, union leaders typically devote their energies to electing Democrats to office. This means that most union members remain at home, uninvolved and disengaged. At most, some of them agree to go to some union hall to do "phone banking" in order to "get out the vote." But there is little interaction among those who participate since they are absorbed with making one call after another, reading a text that has been written out for them and trying not to sound robotic.

On rare occasions when unions do call a strike, other unions usually remain uninvolved. At worst, they will cross the picket lines.

But now we find out that this absence of solidarity has been taken to a new high in New York. According to The New York Times ("Donations Show a Rift Among Unions," June 8, 2012), several of the building trades unions have joined the Committee to Save New York, which is funded primarily by business interests, particularly real estate interests, and is dedicated to reducing the salary and benefits of public workers. These building trades unions have contributed $500,000 to the committee to help launch the attack on their "brothers and sisters" in the public unions.

The logic of the building trade unions is simple: the less the state of New York pays its public employees, the more money is available for infrastructure and publicly financed building projects which provide their members with employment. And it is not surprising that they would turn in this direction. Surrounded by the culture of capitalism where self-interest and competition prevail, these unions are implementing the logic of their surrounding culture. Unfortunately, while this narrow self-interested logic works fine for the capitalists, since they cannot survive unless they compete effectively, it proves disastrous for working people in general and unions in particular...the unions stand at a crossroads. They can accept the growing inequalities in wealth as a fact of nature beyond human control and compete with one another for the crumbs. Or they can mobilize their ranks, bring public and private sector workers together, and mount a massive campaign, demanding that the government raise taxes on the rich to such a high degree that there would be plenty of money to fund our schools, restore social services, and establish a federal jobs program that would put everyone to work. Options like these have given rise to the cliché, "If we do not hang together, we will hang separately." In the absence of such a concerted campaign, there should be little surprise that the building trades unions in New York chose to think only of themselves. But it is not too late for organized labor to execute a turn away from electing Democrats and reaffirm its roots with massive demonstrations in the streets.

[Demeter]

83. Post-New Deal America Needs Unions

http://prospect.org/article/post-new-deal-america-needs-unions

Those who think workers only needed to organize in the bad old days need to face the hard truth: We're living in them...One of the most common arguments against unions is that they were necessary in the bad old days, when sweatshops abounded, wages were low, and the wage-and-hour legislation of the New Deal was yet to be enacted. They were needed in the pre-New Deal economy, but have been superfluous since. What the argument misses is that we’re now deep into a post-New Deal economy, and the low-wage work, wage theft, unpaid overtime and job insecurity—in the technical parlance of economists, the shit jobs—that abounded before the New Deal have returned in full force.

...According to a paper from the National Employment Law Project [April 2012 Issue Brief, “Slower Real Growth, Declining Real Wages Undermine Recovery], 30 percent of this decade’s job openings will have a median wage around $20,000. According to a report issued earlier this month by the Food Chain Workers Alliance, a survey of food workers—from farm workers to processing workers to kitchen workers to servers—found that just 13.5 percent made a wage that was at least 150 percent of the regional poverty threshold. And need I point out that the nation’s largest private-sector employer, with more than 1.4 million workers (excuse me, associates) based in the United States, is WalMart? And that many thousands more work in Wal-Mart’s low-wage supply chain, among them port truckers who struggle to break even and warehouse workers who make just over the minimum wage?

In short, shit jobs abound. The shit jobs that are often the only jobs that workers who’ve lost decent-paying jobs as American manufacturing can find. And for all we hear about American wages having to come down as a result of globalization and low-wage foreign competition, none of the jobs I’ve mentioned are subject to foreign competition. Alan Blinder, the Princeton economist who was deputy Chairman of the Federal Reserve during Bill Clinton’s presidency, has set the number of American jobs that can be offshored at a little over 40 million – meaning, roughly twice that number of jobs cannot. That’s one thing that happens when you shift from a manufacturing-dominated economy to a service-dominated one.

Have there been efforts to unionize these jobs? Many—and yet the vast majority have failed due to the dysfunctionality of the laws that nominally protect workers’ right to organize. Port truckers, for instance, lost their employee status and were rendered “independent contractors” by the deregulation of the trucking industry. Absent an employer of record, they barely get by. Wal-Mart has many thousands of warehouse workers who take the products off those trucks, sort and stack them on pallets bound for WalMarts all over the nation, but WalMart has arranged a system by which those workers are employed by a bewildering array of temporary employment agencies. Unions have been trying to organize the port truckers and the warehouse workers for years – in the case of the truckers, for decades – but the byzantine employment arrangements have proved too steep a climb.

MORE

[Demeter]

94. State Of The Unions: Labor And The Middle Class

http://www.npr.org/2012/06/16/155186594/state-of-the-unions-labor-and-the-middle-class?ft=1&f=1001

For many full-time employees in the United States, the five-day work week, paid overtime and holidays are expected benefits. This wasn't always so, and many workers' benefits today are the achievements of labor unions. Just five decades ago, unions were on the frontline of the fight for the rights and wages of the middle class. But today, unions are on the decline.

After World War II, organized labor represented a third of America's workforce. Today, only 12 percent of the overall workforce belongs to labor unions both public and private. About 37 percent of the public sector workforce belong to unions as opposed to only 7 percent in the private sector, but they're now in the cross hairs of cash-strapped states and cities. This month, Wisconsin Gov. Scott Walker celebrated after winning a recall election that was triggered when he curtailed public union collective bargaining. Similar anti-union efforts took place in Indiana and Ohio. Voters in Ohio later repealed a law that would limit collective bargaining for some public-sector unions, but unions in many states are still at odds with government. So if unions decline, where does that leave the middle class?

The Power Of Unions

Marcus Oladell, a 62-year-old from East Hartford, Conn., has been a bus driver in the area for about 15 years. Just 12 years ago, he helped form a union of school bus drivers with the Teamsters. Since unionizing, he tells weekends on All Things Considered guest host Jacki Lyden, starting wages for drivers have doubled to $16 an hour. Before unionizing, senior drivers were given raises of a just a nickel an hour.

"If they ever tried to give us a nickel raise now, we'd be walking," Oladell says. "So we had no holidays, now we're up to eight a year. In our last contract, which we never had before, there was a longevity bonus given to members there for 10, 15 and 20 years."

While the workers are not getting rich, Oladell says, no one could argue the unions have raised the standards compared to what they had just 12 years ago. Oladell became shop steward of his local for the Teamsters. He now travels across the country helping organize bus yards like his.

"The generation behind us has to get an understanding of how powerful a union can be," he says. "If that middle class is going to be strong, it has to be represented by unions.

Unions And The Middle Class

Middle class wages, at least for the majority of people, are the invention of American unions, says Harold Meyerson, a political columnist for The Washington Post and an editor-at-large at The American Prospect. He says if big labor dies, then America's middle class dies with it....

MORE

[bread_and_roses]

123. That is all too true - we are helping to cut our own throats

This tale is well known in NY - the shortsightedness of it is so appalling - it is too dispiriting even to talk about.

[Demeter]

80. SEC Taps Wall Street Veteran to Oversee Rating Agencies

http://truth-out.org/news/item/9823-sec-taps-wall-street-veteran-to-oversee-rating-agencies

...The Securities and Exchange Commission announced that Thomas J. Butler has been appointed the new head of the Office of Credit Ratings. He starts Monday and will supervise a staff of about 25 lawyers, accountants and examiners who will monitor firms such as Moody's Investors Service and Standard & Poor's.

Butler has no regulatory background, nor has he worked for a ratings agency. The SEC said Butler has spent the past 14 years at Wall Street firms – mostly in wealth management positions – including Morgan Stanley Smith Barney, the U.S. division of Swiss global giant UBS Securities, Citi Global Wealth Management and the now-defunct Australian financial firm Babcock & Brown, which helped pioneer the lucrative business of pooling loans into complex bonds...

...Consumer advocates ... see someone who might be too close to the ratings agencies, which were instrumental in Wall Street's creation of complex financial instruments that received AAA ratings that made them appear to investors as the safest of financial bets.

"The ideal candidate from our point of view for this job would have been someone who knows the credit-rating agencies inside and out, and is aware of their weaknesses, intimately knowledgeable about where they've gone wrong in the past," said Barbara Roper, director of investor protection for the Consumer Federation of America..."If you really want to send the message that you are determined to fix that set of problems, that would be in my view the kind of individual you are looking for," said Roper. "I am not saying anything specifically about this individual – he may be highly competent – but on the surface he does not appear to be the type of candidate we envisioned filling this job."

...The SEC did not make Butler available for comment.

[Demeter]

82. Rhode Island Passes "Homeless Bill of Rights"

http://www.huffingtonpost.com/2012/06/15/rhode-island-homeless-bill-of-rights_n_1595063.html

Rhode Island's governor is expected to sign into law the first "Homeless Bill of Rights" in the United States as early as next week, formally banning discrimination against homeless people and affirming their equal access to jobs, housing and services.

The legislation, which won final approval by the state Senate on Wednesday, bucks a national trend among municipalities toward outlawing behaviors associated with homelessness such as eating, sleeping and panhandling in public spaces.

Among other steps, the Rhode Island law would guarantee homeless people the right to use public sidewalks, parks and transportation as well as public buildings, like anyone else "without discrimination on the basis of his or her housing status."

It guarantees a "reasonable expectation of privacy" with respect to personal belongings similar to that of people who have homes.

While other laws already guarantee many of the rights specified in this legislation, supporters say it was necessary due to widespread discrimination...

IF IT DOESN'T GUARANTEE A HOME TO THE HOMELESS, THEN WHAT GOOD IS IT?

[Demeter]

84. Why Cutting the Individual Mandate Will Not be Doomsday for Obamacare By Robert B. Reich

Most high-court observers think it will strike down the individual mandate in the Act that requires almost everyone to buy health insurance, as violating the Commerce Clause of the Constitution -- but will leave the rest of the new health care law intact.

But the individual mandate is so essential to spreading the risk and cost of health care over the whole population, including younger and healthier people, that some analysts believe a Court decision that nixes the mandate will effectively spell the end of the Act anyway.

Yet it could have exactly the opposite effect. If the Court strikes down the individual mandate, health insurance company lobbyists and executives will swarm Capitol Hill seeking to have the Act amended to remove the requirement that they insure people with preexisting medical conditions. They'll argue that without the mandate they can't afford to cover preexisting conditions.

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

This opens the way to a political bargain. Insurers might be let off the hook, for example, only if they support allowing every American, including those with preexisting conditions, to choose Medicare, or something very much like Medicare. In effect, what was known during the debate over the bill as the "public option."

AND IF PIG HAD WINGS, THEY'D BE PIGEONS...THE AUTHOR IS ARGUING LOGIC, WHEN THE TOPIC IS OBSCENE PROFITEERING

[Demeter]

85. Inflation likely to continue to fall (AND I HAVE A NICE BRIDGE FOR SALE--HISTORICAL PROPERTY!)

http://finance.fortune.cnn.com/2012/06/15/inflation-to-fall/?iid=HP_LN

New study suggests that stocks do a better job of predicting inflation than gold, real estate or anything else. - Federal Reserve chairman Ben Bernanke often gets criticized for overreacting to the stock market. But maybe that's exactly what he should be doing. QE2 and Operation Twist were announced after market drops. And the recent swoon in the Dow, despite rebounding yesterday, along with some rather weak economic data, have reignited new speculation that Bernanke & Co. might finally announce a new stimulus program. That's led some critics to contend that Bernanke cares more about the direction of stocks than the general economy. Others, who predict the Fed's moves will spark massive inflation, say Bernanke is choosing investors over consumers.

But a new study suggests that keeping an eye on the market is exactly what Bernanke should be doing. Inflation Tracking Portfolios, which was released as a working paper by the NBER this week, looked at the movement in consumer prices and a number of various investments from the beginning of 1985 through the end of last year. The study's authors, which included UCLA economics professor Francis A. Longstaff and two employees from investment firm Blackrock, found that most things that we generally tend to think of as inflation hedges, such as gold and real estate, tend to overstate the actual moves in prices. Even Inflation-Protected Treasury bonds, nicknamed TIPs, came out as a pretty poor predictor of future inflation. Prices of TIPs tended to jump around much more than overall prices did. The best inflation oracle: the market. In general, the authors found that future inflation tends to track stocks better than anything else they looked at. So if the market dropped over the course of a month, it tends to indicate that inflation will be lower a month from now. A jump in stocks, tends to mean consumer prices will rise as well.

What's more, the authors found some industries are more correlated to inflation than others. Oil stocks tend to move in the same direction as inflation; retail stocks, not as much. So if you really want to track inflation, you need to build a portfolio that long the sectors that are correlated with inflation and short the sectors that are not, which is what the authors of the study did. What is the inflation portfolio predicting now? Generally, that inflation, which dropped 0.3% in May, will continue to fall. The authors stopped constructing their portfolio at the end of 2011. But oil stocks are down 14% in the past month. A number of retailing stocks, on the other handing including Wal-Mart (WMT) and Target (TGT) are up. Sears (SHLD) is down.

Longstaff says he wasn't looking to make any statement about monetary policy. But if stocks are really the best indicator of future inflation, then it seems to make sense that Bernanke would jump to action, as he has, when stocks have dropped. And given how bad May was, another QE or some other round of Fed stimulus is probably on its way, or at least it should be.


AND THAT'S WHY A "QUART" OF MAYONNAISE NOW ONLY HOLDS 30 OUNCES, NOT 32? AND COSTS 3 TIMES WHAT IT COST IN 1980?

STOCKS ARE TOTALLY DIVORCED FROM REALITY THESE DAYS, AN INDICATOR OF HOW MUCH FRAUD, BASELESS HOPE AND SPECULATION DOMINATE THE GLOBAL ECONOMY.

[Demeter]

86. The Acropolis Is INCREDIBLE Joe Weisenthal

SEE LINK FOR SLIDE SHOW

http://www.businessinsider.com/the-acropolis-2012-6

[DemReadingDU]

88. Warren E. Pollock interviews John J. Xenakis

6/12/12
Back to pragmatic analysis, John Xenakis and I compare and contrast conclusions based on Generational Theory against my findings using my methodology of trajectories. We talk about the generational aspects around the globe including the United States, Western Europe, Russia, Georgia, Turkey, Syria, Israel, and China. Major flash-points and trends are identified.

Generational Dynamics is very important at this time in America's history because we've entered a new "crisis period." Ten years ago, all the nation's senior government, business and educational leaders and managers were from the generation that grew up during World War II, and experienced the trauma of seeing homelessness, starvation and death all around them, while they lived in fear of German and Japanese bombers. That risk-aversive generation dealt with problems using compromise and containment.

Today, those risk-aversive leaders are gone, retired or dead. Today's leaders are from the "Baby Boomer generation," born after World War II with no personal memory of that war. The people in this generation are not risk-aversive. The people in this generation are more likely to be risk-seeking, arrogant, hubristic, narcissistic, and self-assured. That's why America's attitudes have changed so much in the last ten years.

Once you understand Generational Dynamics, then you'll understand a very great deal about how the world works, and about America's future for the next thirty years.


About the Site
http://www.generationaldynamics.com/cgi-bin/D.PL?s=InRzoK&d=ww2010.weblog

Since 2002, we've been using Generational Analysis to make specific, hard predictions about worldwide events, politics, culture, technology, economics and international finance, and with much better accuracy than private analyst firms.

About John J. Xenakis

John J. Xenakis is an MIT grad, a journalist, writer, technologist, researcher and analyst who became interested in study and analysis of world history and how generational changes over the centuries have led nations into everything from humiliation to greatness. The result is Generational Dynamics, a technique for analyzing history and for understanding how nations change their beliefs and attitudes as generations change.


For lots more info, read John Xenakis's Basics of Generational Dynamics
http://www.generationaldynamics.com/cgi-bin/D.PL?s=sbbwip&d=ww2010.i.basics



This youtube is appx 35 minutes, it is not a video but an audio

&feature=player_embedded

[DemReadingDU]

89. Chris Martenson site has now transitioned to Peak Prosperity

http://www.peakprosperity.com/

[xchrom]

90. good morning!

[DemReadingDU]

98. Big day for Greece - elections

I mentioned to spouse about the big day for the Greeks today and their elections. He gave me a blank stare, he has no clue what is going on. Actually most Americans are clueless about other countries.

There are elections in Egypt too.

[DemReadingDU]

100. Greek exit polls: Top 2 parties neck and neck

6/17/12 @ 12:18
Greek exit polls: Top 2 parties neck and neck

ATHENS, Greece — Greek exit polls are showing the two top contenders in the country's critical elections to be neck-and-neck. They say the conservative New Democracy party is projected to win between 27.5 and 30.5 percent of the vote while the anti-bailout radical left Syriza party may get 27 to 30 percent.

The outcome of Sunday's vote could determine whether Greece remains in the euro or is forced to leave the joint currency, a move which could drag down other European countries and have unforeseen consequences for the global economy. Whichever party comes first in Sunday's vote gets a bonus of 50 seats in the 300-member Parliament.

Syriza head Alexis Tsipras has vowed to cancel the terms of Greece's international bailout deal and repeal its austerity measures – a move many think will force Greece to leave the eurozone. New Democracy leader Antonis Samaras says his top priority is to stay in the euro but renegotiate some terms of the bailout.

more...
http://www.huffingtonpost.com/huff-wires/20120617/eu--greece-election/

[DemReadingDU]

101. Fear and uncertainty on final day of Egypt presidential election

6/17/12
Fear and uncertainty on final day of Egypt presidential election

Egyptians have been voting on the second day of the presidential run-off, amid the tumultuous aftershocks of the country’s revolution.

Ahmed Shafiq, Hosni Mubarak’s ex-prime minister, says he represents a return to law and order.

Those who want stability above all may find that attractive. However, others fear a return to military repression.

Enthusiasm for this vote has dipped compared to previous elections. There have been calls for a boycott, and many have not liked the choice facing them.

Shafiq’s rival, Mohamed Morsi of the Muslim Brotherhood, has tried to moderate his Islamist stance, promising reform.

The election this weekend has been overshadowed by the row over a court decision to dissolve parliament, which the Muslim Brotherhood says is unlawful.

The presidential election may produce a winner – but who wields power in Egypt may still be uncertain.

http://www.euronews.com/2012/06/17/fear-and-uncertainty-on-final-day-of-egypt-presidential-election/

[Demeter]

106. That's why he has you

Complementary marriage is a marvel of division of labor....

[xchrom]

91. 4 Reasons Why China Is Headed For Meltdown

http://www.businessinsider.com/4-reasons-why-china-is-headed-for-meltdown-2012-6

Please allow me to start off with a few explanatory bits. At The Automatic Earth, we have always defined inflation in a different manner from most other sources. That is to say, we define inflation as an increase in money and credit supply (relative to available goods and services), combined with velocity of money, not as simply an increase in - some - prices.

We see this this as significant because if inflation is defined as any price increase, we lose sight of why prices increase, a crucial "detail". Similarly, we don't attach much importance to CPI numbers, since they lack the same attention to detail we find with the definition of "inflation" as it is generally reported and used.

That said, I think it's high time to look at some recent Chinese data and try to draw what - initial- conclusions we can from them. I also think we can peer through them towards a picture of the future that few have acknowledged to date, and perhaps even fewer wish to. If what I'm about to say is even halfway true, the economies of countries like Australia and New Zealand, which we visited recently, as well as many others, are in for a brutal shock.

I single out Australia and New Zealand because their economic growth, indeed by now their entire economic performance, which has been far better than the US and EU in the past 5 years, would be torn and frayed to shreds if the Chinese economy would hit one or more serious snags. And from what I see I can draw just one single conclusion: it will. The consequences down under will be shattering.


Read more: http://theautomaticearth.org/Finance/goodness-gracious-great-walls-on-fire.html#ixzz1y3X4ZifH

[xchrom]

92. Italy selling off state assets to reduce debt mountain

http://www.bbc.co.uk/news/business-18460638

The Italian government hopes to raise 10bn euros (£8.1bn; $12.6bn) selling off three state-owned companies, in a bid to reduce its crippling debt mountain.

Prime Minister Mario Monti described the measures, which include a reduction in the number of state employees, as "very robust".

The companies, Fintecna, Sace and Simsest, are all owned by the country's economy ministry.

More privatisations are likely.

[DemReadingDU]

93. Naomi Klein has baby

via twitter...

6/17/12
Naomi Klein ?@NaomiAKlein Does Twitter do maternity leave? Either way, I'm taking one. His name is Toma, born Wednesday. Much cuter than computer. love 2 all.

[Demeter]

95. Who Dat?

[DemReadingDU]

97. Naomi Klein - Shock Doctrine

The Shock Doctrine
http://en.wikipedia.org/wiki/The_Shock_Doctrine

Naomi Klein
http://en.wikipedia.org/wiki/Naomi_Klein

Her spouse is Avi Lewis
http://en.wikipedia.org/wiki/Avi_Lewis

[snot]

111. I hope you check out Klein's thinking, Demeter;

it's about capitalism and seems extremely insightful to a lot of us non-economists – I think we'd all be v. interested in what you think of it.

[Demeter]

116. I've been following her thinking

just not her personal life.

[snot]

124. Ah, good.

[Demeter]

96. Maiden Lane Loans Repaid, but Assets Still Must Be Sold

http://dealbook.nytimes.com/2012/06/14/maiden-lane-loans-repaid-but-assets-still-need-to-be-sold/

The Federal Reserve Bank of New York announced on Thursday that it had been paid back for loans used to support the government bailouts of Bear Stearns and the American International Group. Even so, vestiges of the sweeping taxpayer bailouts of 2008 remain. In its announcement, the New York Fed said that Maiden Lane and Maiden Lane III, two entities that held securities once owned by Bear Stearns and A.I.G., respectively, still held assets that needed to be sold. A.I.G. confirmed in a separate press release that Maiden Lane III, which was made up of collateralized debt obligations that had been held by a once-troubled unit of the insurer, had paid off its obligations to the New York Fed. The loan was paid off through sales of Maiden Lane III assets and cash flows generated by the derivatives.

The Fed said it had been repaid $53.12 billion for the loans plus interest.

The Maiden Lane assets have been in hot demand. This year, several companies — including A.I.G. — expressed interest in buying at least some of the Maiden Lane III portfolio. Citigroup and others have won pieces of the derivatives book so far. Thursday’s announcement does take the government closer to the day when the 2008 bailouts will be repaid. The New York Fed has already closed out Maiden Lane II, another vehicle created to house A.I.G. assets. “This is a major milestone for the bank and for the public,” William C. Dudley, the New York Fed’s president, said in a statement. “The successful repayment of the New York Fed’s loans to ML LLC and ML III LLC marks the retirement of the last remaining debts owed to the bank that stemmed from the crisis-era interventions with Bear Stearns and A.I.G.”

But the New York Fed and its adviser, BlackRock, must still sell off the assets contained in the remaining Maiden Lane entities.

And the Treasury Department must also dispose of its holdings in A.I.G., principally $30 billion worth of the insurer’s stock, or about 63 percent, after a number of secondary offerings. By the Treasury’s reckoning, its break-even price for selling off A.I.G. shares is about $28.73. On Thursday, the company’s stock closed at $31.03.

[Demeter]

99. Of Flying Cars and the Declining Rate of Profit (TECHNOLOGY DEVELOPMENT)

http://thebaffler.com/past/of_flying_cars

...Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?

We are well informed of the wonders of computers, as if this is some sort of unanticipated compensation, but, in fact, we haven’t moved even computing to the point of progress that people in the fifties expected we’d have reached by now. We don’t have computers we can have an interesting conversation with, or robots that can walk our dogs or take our clothes to the Laundromat...

...The technologies that have advanced since the seventies are mainly either medical technologies or information technologies—largely, technologies of simulation. They are technologies of what Jean Baudrillard and Umberto Eco called the “hyper-real,” the ability to make imitations that are more realistic than originals. The postmodern sensibility, the feeling that we had somehow broken into an unprecedented new historical period in which we understood that there is nothing new; that grand historical narratives of progress and liberation were meaningless; that everything now was simulation, ironic repetition, fragmentation, and pastiche—all this makes sense in a technological environment in which the only breakthroughs were those that made it easier to create, transfer, and rearrange virtual projections of things that either already existed, or, we came to realize, never would. Surely, if we were vacationing in geodesic domes on Mars or toting about pocket-size nuclear fusion plants or telekinetic mind-reading devices no one would ever have been talking like this. The postmodern moment was a desperate way to take what could otherwise only be felt as a bitter disappointment and to dress it up as something epochal, exciting, and new.

...“postmodernism” referS to the cultural logic appropriate to a new, technological phase of capitalism, one that had been heralded by Marxist economist Ernest Mandel as early as 1972. Mandel had argued that humanity stood at the verge of a “third technological revolution,” as profound as the Agricultural or Industrial Revolution, in which computers, robots, new energy sources, and new information technologies would replace industrial labor—the “end of work” as it soon came to be called—reducing us all to designers and computer technicians coming up with crazy visions that cybernetic factories would produce. End of work arguments were popular in the late seventies and early eighties as social thinkers pondered what would happen to the traditional working-class-led popular struggle once the working class no longer existed. (The answer: it would turn into identity politics.)

MUCH MORE AT LINK

YES, INSTEAD OF FLYING CARS AND THE END OF DRUDGERY, WE HAVE PREDATOR DRONES....ASIMOV'S ROBOTS GONE FASCIST.

[Demeter]

102. Terminator Planet: How America Became an Empire of Drones By Pepe Escobar

http://www.alternet.org/story/155900/terminator_planet%3A_how_america_became_an_empire_of_drones?page=entire


"Terminator Planet: The First History of Drone Warfare," by Tom Engelhardt and Nick Turse, chronicles the rise of drone warfare.

As convenient as it is for someone in a cubicle in the Nevada desert to press a button and incinerate a Pashtun wedding party in North Waziristan... now, with only a click, anyone can download a 359 KB file available on Amazon for only $8.99 - including free wireless delivery - and learn everything there is to learn about All Things Drone.

It's fitting that Terminator Planet: The First History of Drone Warfare, 2001-2050 has been put together by Tom Engelhardt - editor, MC of the TomDispatch website and "a national treasure", in the correct appraisal of University of Michigan professor Juan Cole - and TomDispatch's associate editor Nick Turse, author of the seminal 2008 study The Complex: How the Military Invades Our Everyday Lives.

This is essentially Tom and Nick's revised and updated body of work detailing the uber-dystopian Dronescape over the past few years - spanning everything from secret Drone Empire bases to offshore droning; a Philip Dick-style exercise on a more than plausible drone-on-drone war off East Africa in 2050; and a postscript inimitably titled, "America as a Shining Drone Upon a Hill". It does beat fiction because it's all fact-based. An MQ-1 Predator or an MQ-9 Reaper to go?

This digital file becomes even more crucial now that US and world public opinion knows US President Barack Obama is the certified Droner-in-Chief; the final judge, jury and digital Grand Inquisitor on which suspicious Muslim (for the moment, at least, they are all Muslims) will get his paradise virgins via targeted assassination. Obama owns his newspeak-drenched "kill list". He decides on a "personality strike" (a single suspect) or a "signature strike" (a group). "Nominations" are scrutinized by Obama and his associate producer, counter-terrorism czar John Brennan. The logic is straight from Kafka; anyone lurking around an alleged "terrorist" is a terrorist. The only way to know for sure is after he's dead. And the winner of the Humanitarian Oscar for Best Targeted Assassination with No Collateral Damage goes to… the Barack Obama White House death squad.

Targeted - and dissolved - throughout this grim process are also a pile of outdated concepts such as national sovereignty, set-in-stone principles of US and international law, and any category which until the collapse of the Soviet Union used to define what is war and what is peace. Anyway, those categories started to be dissolved for good already during the Bush administration - which "legalized" widespread CIA and Special Ops torture sessions and death squads. Any self-respecting jurist would have to draw the inevitable conclusion; the United States of America is now outside international law - as rogue a state as they come, with The Drone Empire enshrined as the ultimate expression of shadow war.

... Southcom has announced that Predator, Reaper and Global Hawk drones will be deployed in Central and South America for "anti-drug operations, counter-insurgency and naval vigilance".

...Americans must also worry about the Inland Drone Empire - as the pitifully unpopular US Congress and President Obama have now fully authorized their "integration" into American airspace by 2015; by 2020, they will number at least 30,000. For the moment, the Pentagon has "only" 7,000 drones (ten years ago there were less than 50).

...Predictably, massive corporate lobbying by drone manufacturers such as General Atomics was key for the approval of the new legislation. There's even a drone caucus, with 55 Congressmen (and expanding), and a global lobby with 507 corporate members in 55 countries, the Association for Unmanned Vehicles International, which essentially sets the rules.

....wait for the imminent arrival of nuclear-powered drones, which can go on non-stop for months, and not only days.

MORE

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

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) andRed Zone Blues: a snapshot of Baghdad during the surge. His most recent book, just out, is Obama does Globalistan (Nimble Books, 2009). He may be reached at

[Demeter]

103. Drones Not Used Effectively on U.S. Borders By Aaron Mehta THANK GOD FOR THAT

http://www.nationofchange.org/drones-not-used-effectively-us-borders-1339768661



The key military role played by the over 7,500 drones used by the Pentagon is well-known. But until recently, the deployment of drones by the government inside U.S. borders has attracted little attention or critical oversight. Now a new internal audit from the Department of Homeland Security (DHS) has raised concerns about the utility of those drones, focusing on their high costs and how they have been managed. DHS has spent more than $250 million on its program in the past six years, and currently has nine Predator drones on call. While each drone is purchased at a cost of around $18 million each, the GAO estimated that the hourly charge is $3,234 — or almost $65,000 per 20-hour mission.

The majority of the drones are based on the U.S./Mexico border, where growing has slowly seeped into parts of California and Texas. But drones also scout the border with Canada. Homeland Security Secretary Janet Napolitano testified last month that UAVs were patrolling from North Dakota to eastern Washington State.

The program has had a series of operational troubles, the IG report reveals. For example, the drones have required an hour of maintenance for every hour they fly, significantly increasing their expense. Additionally, inspectors found that the drones were often grounded by bad weather. As a result, in 2011 the drones logged only half the air time expected. During the year-long period inspectors studied, the drones logged only 37 percent of the minimum desired mission needs and 29 percent of the maximum needed.

This failure to meet expectations hasn’t tempered the government’s enthusiasm. In 2011, DHS asked for and received an additional 2 drones for use on the border. The department is expecting another to be delivered in 2012. Some of the conclusions in a draft version of the IG’s report were first disclosed in May by the Los Angeles Times....

[Demeter]

104. U.S. SUPPORTS SOME DOMESTIC DRONE USE

http://www.monmouth.edu/assets/0/84/159/2147483694/3b904214-b247-4c28-a5a7-cf3ee1f0261c.pdf

With 30,000 drone aircraft expected to patrol the nation’s skies within a decade, the Monmouth
University Poll finds the American public supports many applications of this technology. Routine
policing, though, is not among them.

A majority of Americans have heard either a great deal (27%) or some (29%) news about the use
of unmanned surveillance drones by the U.S. Military. Another 22% have heard only a little and 22%
have heard nothing at all. The Department of Homeland Security has also been developing drones to
patrol the nation’s borders and the Federal Aviation Administration (FAA) has been revising rules to
widen the use of drones for other domestic purposes.

The poll asked a national sample about four potential uses of unmanned drones by U.S. law
enforcement. An overwhelming majority of Americans support the idea of using drones to help with
search and rescue missions (80%). Two-thirds of the public also support using drones to track down
runaway criminals (67%) and control illegal immigration on the nation’s border (64%).

One area where Americans say that drones should not be used, though, is to issue speeding
tickets. Only 23% support using drones for this routine police activity while a large majority of 67%
oppose the idea.

“Americans clearly support using drone technology in special circumstances, but they are a bit
leery of more routine use by local law enforcement agencies,” said Patrick Murray, director of the New
Jersey-based Monmouth University Polling Institute.
Despite widespread support for certain domestic applications of drone technology, the potential
for more routine use could raise privacy issues. Nearly 2-in-3 Americans express at least some concern in
this area. Specifically, 42% of Americans would be very concerned and 22% would be somewhat
concerned about their own privacy if U.S. law enforcement started using unmanned drones with high tech
surveillance cameras. Another 16% would be just a little concerned and 15% would not be concerned at all. Black (54%) and Hispanic (50%) residents are somewhat more likely than white (39%) and Asian
(38%) residents to say they would be very concerned about privacy issues related to domestic drone use.

MORE

[Demeter]

110. Guarding the Empire from Four Miles Up By John Feffer

http://www.nationofchange.org/guarding-empire-four-miles-1339943861

They are unpopular all over the world, with one exception. According to a new Pew Research Center poll, the only country where a majority of citizens support drone strikes is the country that uses the new technology most regularly: the United States. (A CLEAR CASE OF WHITE EXCEPTIONALISM--"THEY'D NEVER SHOOT THEM THINGS AT ME....I AM A US TAXPAYING CITIZEN! AND I VOTE!" THIS BELIEF IGNORES EVERY HISTORY LESSON NEVER LEARNED, AND EVERY SCI-FI HORROR MOVIE THAT GROSSED GAZILLIONS)

Only 28 percent of U.S. citizens oppose drone strikes, compared to 62 percent who approve of their use. Once again, they prove the exception to the rule. As Nick Turse and Tom Engelhardt write in alternating chapters in their terrifying new book “Terminator Planet”, drones have been part of U.S. exceptionalism from their very beginning. They were introduced in the late 1990s to conduct surveillance during the Kosovo conflict, and they soon became a major element of the U.S. dominance of airspace. As the two authors point out, even before the introduction of drones, U.S. pilots had such overwhelming air superiority that Pentagon chief Robert Gates, in a 2011 speech, could declare that the United States hadn’t lost a plane during air combat or a soldier from enemy aircraft attack in 40 years.

With a persistent economic crisis putting cost-cutting pressure on the Pentagon budget, drones have become a low-cost method of preserving U.S. military dominance and thus the status of the United States as the single global superpower. As Engelhardt points out, drones are an integral part of “guarding the empire on the cheap as well as on the sly, via the CIA.”

But drones have played another key role in extending the tradition of U.S. exceptionalism. The Barack Obama administration, inheriting the counter-terrorism program from its predecessor, expanded the use of drones to kill top Al-Qaeda and Taliban leaders. “No more poison-dart-tipped umbrellas, as in past KGB operations, or toxic cigars as in CIA ones – not now that assassination has taken to the skies as an everyday, all-year-round activity,” writes Engelhardt. The United States has asserted its right to conduct these assassinations outside of war zones in the face of global public opinion, U.N. reports, and international law...The military has come to rely more and more on the new technology. One in three military aircraft are robots. In 2004, Reapers flew 71 hours. In 2006, this number had gone up to 3,123 hours. By 2009, the flying time had increased to 25,391 hours. With manpower tied up in operations in Afghanistan, anti-base movements challenging large concentrations of U.S. soldiers abroad, and bureaucrats in Washington desperately looking for places to cut the U.S. budget, drones appear as an attractive alternative.

“We are moving toward an ever greater outsourcing of war to things that cannot protest, cannot vote with their feet (or wings), and for whom there is no ‘home front’ or even a home at all,” Engelhardt observes.

The global unpopularity of drones stems in large part from their fallibility. The pilots and screeners viewing the footage from the safety of bases in the United States make a lot of mistakes and end up killing a lot of civilians, several hundred in Pakistan alone, including nearly 200 children. So far, U.S. citizens are immune to these effects of drones. They have been reassured by the Obama administration that drones surgically remove the cancer and leave the surrounding healthy tissue intact... The risk of a drone attack on the United States remains low, though the George W. Bush administration justified its attack on Iraq in part on the belief that Saddam Hussein could launch weapons of mass destruction against the United States via drones. But drone attacks have also generated enormous anti-U.S. sentiment, as the Pew poll suggests. The Times Square bomber, whose car bomb failed to detonate in Times Square in New York in 2010, was motivated to act in part because of U.S. drone strikes in Pakistan.

Also, other countries – Israel, Russia, China, even Iran – have entered the drone business. It may only be a matter of time before the United States loses its dominant market share.... modern air defense systems can rather easily bring down these drones. They have been effective only in places where they are largely unchallenged.
..MORE

[snot]

113. Imagining Mitt with drones . . .

[Demeter]

120. AND TO FEED THE HOUNDS OF WAR: US Sets Another Record on Defense Sales, Already

http://truth-out.org/news/item/9834-us-sets-another-record-on-defence-sales-already

The United States is set to far surpass previous records for defence sales this year, according to U.S. officials.

"Despite the global economic strain, demand for U.S. defence products and services is stronger than ever," Andrew J. Shapiro, an assistant secretary in the U.S. State Department, said on Thursday.

He confirmed that the U.S., long the world's largest weapons exporter, has already seen more than 50 billion dollars in government-to-government military sales this fiscal year.

"This represents at least a 20-billion-dollar increase over fiscal year 2011, and we still have more than a quarter of the fiscal year left," Shapiro said, speaking with reporters. The current fiscal year will end in September.

"To put this in context, fiscal year 2011 was a record-setting year at just over 30 billion. This fiscal year will be at least 70 percent greater."

MY CUP RUNNETH OVER....

[Demeter]

122. Revealed: 64 Drone Bases on American Soil

http://www.wired.com/dangerroom/2012/06/64-drone-bases-on-us-soil/

MAP AT LINK

[Demeter]

105. REJOICE WITH ME--IT'S RAINING!

&feature=related

I cannot see the classical Greeks dancing like this...it's just so Slavic, probably a result of the migration out of Macedonia and points further north...

&feature=related

&feature=related

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[Demeter]

107. The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You...

http://boombustblog.com/blog/item/5976-the-biggest-threat-to-the-2012-economy-is???-not-what-wall-street-is-telling-you

...US indoctrinated "GroupThink" prevents many (if not most) from seeing what empirically should be obvious...

European Banks Now Get Loans From Cash-Rich Firms

Blue-chip names like Johnson & Johnson, Pfizer, and Peugeot are among firms bailing out Europe's ailing banks in a reversal of the established roles of clients and lenders.
Euro bills and U.S. dollars being exchanged. One source with knowledge of the so-called repo deals, or short-term secured lending, said the two U.S. pharmaceutical groups and French car maker were the latest to sign up for them. Europe's banks are struggling to secure the cash to fund their day-to-day business and have largely stopped lending to each other for fear Europe's sovereign debt [cnbc explains] crisis could land any of their peers in trouble.

As a result a group of well-known, cash-rich companies with solid cash flows has stepped in the repo market, which provides a form of lending so far almost exclusively in use between banks, and between banks and central banks. One market participant said in one key area of lending companies now accounted for 25 percent of these deals. Repos provide the new financiers with the strict guarantees they need before parting with their cash, answering worries that the crisis has weakened Europe's banks to the extent that they might not be able to pay the money back.
"Companies in the past were ... happy to deposit cash on an unsecured basis to a bank for an interest payment," said Frank Reiss, who oversees some of the repo business at Euroclear, the Brussels-based settlement house owned by a group of banks. "Now following the crisis, we have seen that companies are engaging in repos secured with collateral against the cash they are lending," said Reiss. Euroclear is the largest administrator of repo trades in Europe. At the moment the European Central Bank provides the main lifeline for banks and has pumped hundreds of billions of euros of cash into the market. But the banks are parking most of the money they borrow back at the ECB [cnbc explains] rather than trusting to lend to each other.

Yes, this appears to be the fact... Deposits at ECB Hit New High

Commercial banks' overnight deposits at the European Central Bank hit a new record high of 464 billion euros, data showed on Monday, and traders said they could hit half a trillion euros by next week. High deposits indicate banks prefer the safety of the central bank for their funds to higher rates they could get by lending to each other.

Banks are awash with cash after taking an unprecedented 489 billion euros in the ECB's [cnbc explains] first-ever three-year liquidity operation late last month, and are mulling what to do with the money in the longer term. The liquidity operation was designed to underpin banks' finances and hopefully repair some confidence in the sector, but the sovereign debt crisis means many institutions still lack enough trust to lend to each other and prefer to stash their money at the ECB.

"The market is more or less closed, all the over-liquidity is going back to ECB," the trader said. "Slowly people are getting some longer funding, but there is no easing in the short end."

Now, Germany has acted as stalwart stopgap in the sovereign debt carnage of the EU nations. It's perceived as the strongest, most stable and most disciplined economy. As such, there has been a massive flight to quality trade that has pushed German bunds to negative yields. That's right! As in the US, you literally have to pay Germany for the privilege of lending it your hard earned money.

MORE

[Demeter]

108. Rodney King Dies At 47

http://www.npr.org/blogs/thetwo-way/2012/06/17/155222771/rodney-king-dies-at-47?ft=1&f=1001

Rodney King was found dead at the bottom of a swimming pool Sunday, California police told CNN. He was 47.

King's beating by police in 1992 was caught on videotape and then sparked riots in Los Angeles when accused police were acquitted.

[DemReadingDU]

114. Another version of his death

very weird

http://www.tmz.com/2012/06/17/rodney-king-dead-drowned-drinking-smoking/

[Demeter]

117. When you live on the Left, you are asking for disappointment

It appears that Angela bought herself a puppet regime....

GREECE: Conservatives Win The Vote, But There's Still No Government

Read more: http://www.businessinsider.com/greek-election-results-2012-6#ixzz1y5PU7Ciy


If you thought for a moment that the Greek election would end in a clean outcome tonight, the joke was on you. In the first wave of exit polls that came out at 12:00 PM ET, the pro-bailout, conservative New Democracy party held a razor thin 0.5% lead over the leftist SYRIZA party. Then an hour and a half later, it became clear that New Democracy would come in first, and that it (along with PASOK) would have enough seats to garner a majority in the Hellenic Parliament.

This is the outcome that markets have most wanted to see, as New Democracy and PASOK have generally signalled a willingness to go along with the current bailout path, and not buck the rest of Europe. The leftist leader Alex Tsipras, on the other hand, had threatened to tear up the bailout agreement (though he had always promised not to leave the Eurozone).

So at first it all seemed good... but then around 9:00 PM in Athens, word came that the leader of PASOK, Venizelos, was threatening to withhold support for a new government unless SYRIZA also joined as part of a broad coalition...The politics are understandable. It's very easy for SYRIZA to gain popularity will staying in the opposition, railing against the establishment parties and the bailout without having to take any responsibility for what happens. The meme in Athens is that SYRIZA leader Alexis Tsipras didn't even want to win, and always wanted to come back and run again in 4 to 8 months after the establishment parties lost standing.

So suddenly what looked like a solid result had gone sour. But Athens insiders figured right away that Venizelos HAD to be bluffing, and that ultimately he would join the coalition. And that now seems to be the case. According to reports, Venizelos is signaling an agreement to join the government, but it's not clear how he will. Most likely, it seems, he will join the government, but only by providing votes... not actually having any PASOK leaders take on ministerial positions.

The mood here now is fatigue. Everyone expects elections soon, and nothing at all has really changed.

Markets may be temporarily relieved that SYRIZA did not win, but this is far from a powerful market positive. It just averts what might have been a disaster. In his victory speech, New Democracy ldear Antonis Samaras said Greeks have voted for growth and the euro. How that can be delivered on (especially the growth part) is a huge challenge.



Greek Election Results: New Democracy Wins

http://www.huffingtonpost.com/2012/06/17/greek-election-results-new-democracy-wins_n_1603971.html

Greek election results unlikely to slow crisis

Greece's pro-bailout New Democracy party narrowly won a victory Sunday in an election once seen as critical to Europe's economy. Despite all the attention, the issue of whether the Greeks remain in the euro is now a secondary concern. Its importance has been entirely eclipsed by the increasing danger of Spain's economic collapse.

An early official projection from the interior ministry Sunday showed New Democracy taking 29.5 percent of the vote. This put it narrowly ahead of anti-bailout SYRIZA, which was in second place with 27.1 percent. However, New Democracy's ally, the Socialist PASOK party, was in third place with 12.3 percent. The projection was based on votes counted at about 12 percent of polling stations and sent to the ministry via text message. It proved highly accurate in predicting the outcome of last month's inconclusive election.

If these numbers hold up, it will mean 128 seats for New Democracy and 33 seats for PASOK, giving them an 11-vote majority in the 300-seat Parliament. Projections by other groups also showed New Democracy and PASOK winning, although with slightly smaller number of seats.

Although New Democracy has said it will not reject the bailout agreements between Greece and the EU, European Central Bank and the IMF, it has promised to renegotiate their terms.

[Demeter]

118. And so, we've been bought respite for a few months

until the next leak in the dike

[Demeter]

119. EURO-DATES: Here Are The Next 7 Crucial Events In The Euro Debt Saga

http://www.businessinsider.com/9-euro-debt-crisis-calendar-dates-2012-6#thursday-june-14-italian-bond-auctions-1

Sunday, June 17: French elections (Oh, how could we forget about France?)

Monday and Tuesday, June 18-19: G20 meeting

Thursday, June 21: Eurogroup meeting

Friday, June 22: EU finance ministers meeting

Thursday, June 21: Spanish bond auction

Friday, June 22: EU leaders will meet

Thursday and Friday, June 28-29: EU leaders summit


AND AFTER THE ELITISTS HAVE SPENT THE MONTH OF JUNE CONGRATULATING EACH OTHER AND INTIMIDATING SAMARAS...

ALL HELL BREAKS LOSE.

[Demeter]

121. And that's a wrap for this weekend

Have a safe and healthy week (don't punch anyone, unless it's essential).