STOCK MARKET WATCH, Thursday, August 25, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Thursday, August 25, 2011

AT THE CLOSING BELL ON August 24, 2011

Dow 11,320.71 +143.95 (+1.27%)
Nasdaq 2,467.69 +21.63 (+0.88%)
S&P 500 1,177.60 +15.25 (+1.30%)
10-Yr Bond... 2.30 -0.0090 (-0.39%)
30-Year Bond 3.66 +0.01 (+0.16%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Handy Links - Market Data and News:Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
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Handy Links - Economic Blogs:
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Brad DeLong      Bonddad    Atrios    goldmansachs666    The Stand-Up Economist

Handy Links - Government Issues:
LegitGov    Open Government    Earmark Database    USA spending.gov

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 12

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[Pale Blue Dot]

1. Today's Reports - will employment burst the bubble?

Aug 25 08:30 Initial Claims 08/20 400K 400K 408K
Aug 25 08:30 Continuing Claims 08/13 3700K 3700K 3702K

Read more: http://www.briefing.com/investor/calendars/economic/2011/08/22-26/#ixzz1W2WqPHuH

[Po_d Mainiac]

19. initial claims printed at 417K

and last print of 408K was revised up to 412K

[Demeter]

31. Home finances 'fell for 40% of households in August' (UK)

Gee, I wonder why?

http://www.bbc.co.uk/news/business-14608763

Almost 40% of households saw their finances deteriorate between July and August, according to a survey by the financial information company, Markit. The study, of 1,500 adults, showed finances worsened at their fastest pace since February 2009, in the middle of the last recession. Many reported a rise in debt levels and a fall in savings and income.

Just under 6% of households reported an improvement in their financial situation.

Markit uses a Household Finances Index (HFI) which it said fell for the third month running in August to its lowest since it began compiling it in early 2009. It said available cash to spend fell by its fastest pace since the survey began. Savings fell at their steepest amount for almost two and a half years.

North-South split

August also saw the steepest drop in take-home pay for nine months, and this reduced income was then squeezed further by rising prices. All income groups, age ranges and regions reported a worsening in their situation. The south-east of England saw the slowest worsening of household finances, while the three northern English regions saw the fastest rates of deterioration.

[tclambert]

56. They're saying the Verizon workers skewed the numbers.

Can you file for unemployment if you go on strike? Briefing.com says without the Verizon situation, initial claims would have been below the 410K threshold for the "Recovery Zone."

[Demeter]

60. Found You An Answer: Obama's Latest Stimulus: Handing Out Jobless Benefits To Striking Workers

http://www.zerohedge.com/news/obamas-latest-stimulus-handing-out-jobless-benefits-striking-workers


One of the oddities that seemed out of whack in this morning's weekly Unemployment Claims update was the explanation for the spike in this week's receipents of government generosity: apparently it had to do with the BLS handing out weekly benefits checks to striking Verizon workers. We will repeat the key word from that sentence because it bears repeating: "striking." Now, we may be wrong here, but if one is striking, one is not u-n-e-m-p-l-o-y-e-d, and hence the US government should probably not be using taxpayer money to double pay such individuals who have singlehandedly decided to forgo pay in return for making a labor statement. Otherwise, it kinda kills the whole "sacrifice" thing. And, lo and behold, as it turns out, we are not wrong. From JP Morgan: "Striking workers are generally not eligible to receive unemployment insurance benefits, but it looks like about half of the total amount of striking workers filed claims over these two weeks to formally determine their eligibility." Generally... except when the administration is willing to hand out money to anything and everything with a pulse. After all, there is that massive $2.2 trillion Bank of America balance sheet that has to be funded. And with direct reserve funding already failed, as per QE1 and 2, the only other possible way is via deposit increases. Alas, by the time this money could possibly be saved, it has been spent 5 times, the other 4 hitting Bank of America's bad credit card receivables department.

From JP Morgan:

Initial claims increase during week ending August 20, with or without striking workers



Initial claims for the week ending August 20 increased 5,000 to 417,000 from a figure for the prior week that was revised up. The Department of Labor noted that the Verizon worker strike generated about 12,500 claims during the week ending August 13 and about 8,500 claims the week ending August 20 (not seasonally adjusted). Striking workers are generally not eligible to receive unemployment insurance benefits, but it looks like about half of the total amount of striking workers filed claims over these two weeks to formally determine their eligibility. If we remove these striking workers from the claims data to give us a better indication of labor market conditions, claims would have increased about 10,000 to 409,000 between the weeks ending August 13 and August 20; the four-week moving average for claims during these weeks would be around 400,000, showing improvement relative to the July labor market survey week when the four-week moving average was 422,000.



Continuing claims for the week ending August 13 declined 80,000 to 3.641mn. Continuing claims have been basically flat since the end of March, but this was the largest single-week drop reported since mid-February. The insured unemployment rate for the week ending August 13 ticked down from 3.0% to 2.9%, equaling the low for the recovery to date.

[Demeter]

61. It could also be that non-union, non-striking workers

were shut out, locked out, or otherwise unpaid during the strike...that information isn't clear, yet.

[Pale Blue Dot]

2. Oil near $86 as traders eye Libya, Bernanke speech

SINGAPORE – Oil prices rose slightly to near $86 a barrel Thursday in Asia as traders eyed fighting in Libya and an upcoming speech by Federal Reserve Chairman Ben Bernanke.

Benchmark oil for October delivery was up 41 cents to $85.57 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude lost 28 cents to settle at $85.16 on Wednesday.

In London, Brent crude for October delivery was up 81 cents to $110.96 on the ICE Futures exchange.

After taking control of most of Libya's capital Tripoli earlier this week, rebels continued to meet sporadic resistance from supporters of Moammar Gadhafi. Rebel leaders were beginning to set up a new government in Tripoli although Gadhafi's whereabouts was still unknown.

http://old.news.yahoo.com/s/ap/oil_prices

[Demeter]

38. Market crash 'could hit within weeks', warn bankers UK

AND THEN, WE WILL SEE THE TRUE DOMINO THEORY IN ACTION...

http://www.telegraph.co.uk/finance/financialcrisis/8721151/Market-crash-could-hit-within-weeks-warn-bankers.html

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago. Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

"The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.

"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

NO, MR. SENIOR LONDON-BASED BANK EXECUTIVE. THE PROBLEM IS INSOLVENCY. YOUR BANK, AND EVERY BANK OF ITS SIZE AND NATURE,IS BANKRUPT. THERE IS NOT ENOUGH MONEY IN THE ENTIRE WORLD ECONOMY TO BAIL EVEN ONE OF YOU OUT, LET ALONE ALL.

IT'S TIME TO DIE.

[Demeter]

39. Greek cbank activates funding scheme for banks-paper

http://www.reuters.com/article/2011/08/25/greece-banks-idUSLDE77O03A20110825

Greece's central bank has activated an emergency liquidity assistance scheme so that it is available if banks need to draw from it, financial daily Imerisia wrote on Thursday without citing any source. The Emergency Liquidity Assistance (ELA) is one of the options the euro zone has at its disposal to keep Greek banks afloat if the country's sovereign debt is pushed into default by a new bailout deal that was put together by EU leaders last month, and the ECB stops accepting it as collateral.

"The ELA has already been activated through the Bank of Greece. All small, medium and large banks (except for National Bank of Greece) have stated they will participate, in order to be able to draw funds if and when they need them," Imerisia wrote without mentionning its source. The Greek central bank declined to comment on the report....

ECB emergency funding to Greek banks stood at 103 billion euros at the end of June, showing that the banks have been cut off from borrowing from other European lenders on the interbank market. The ELA is effectively emergency loans given by euro zone national central banks to strapped commercial banks. The ECB defines it as support given by central banks in "exceptional circumstances and on a case-by-case basis to temporarily illiquid institutions and markets". The loans are given at the discretion of the national central bank although they have to be rubber stamped by the ECB.

Finance Minister Evangelos Venizelos said on Wednesday that a separate, 10-billion-euro Financial Stability Fund set up to recapitalize Greek lenders in case of need can inject capital by buying common shares issued by the banks.

YEAH--SWAPPING ONE PIECE OF WORTHLESS PAPER FOR ANOTHER.

[Demeter]

40. Germany fires cannon shot across Europe's bows

http://www.telegraph.co.uk/finance/financialcrisis/8720792/Germany-fires-cannon-shot-across-Europes-bows.html

German President Christian Wulff has accused the European Central Bank of violating its treaty mandate with the mass purchase of southern European bonds...In a cannon shot across Europe’s bows, he warned that Germany is reaching bailout exhaustion and cannot allow its own democracy to be undermined by EU mayhem.

“I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence,” he said. “This prohibition only makes sense if those responsible do not get around it by making substantial purchases on the secondary market,” he said, speaking at a forum of half the world’s Nobel economists on Lake Constance to review the errors of the profession over recent years.

Mr Wulff said the ECB had gone “way beyond the bounds of their mandate” by purchasing €110bn (£96.6bn) of bonds, echoing widespread concerns in Germany that ECB intervention in the Italian and Spanish bond markets this month mark a dangerous escalation.

He did not explain what else the ECB could have done once the bond spreads of these two big economies began to spiral out of control in early August, posing an imminent threat to monetary union and Europe’s financial system.

GERMAN PETULANCE IS WORLD-FAMOUS...

[Tansy_Gold]

41. .

[hamerfan]

42. LOL!

"Hello. My name is Inigo Montoya. You killed my father. Prepare to die."
Love it! Thanks for the smile.

[Tansy_Gold]

44. As a response to Demeter's comment,

what else can be said?


Although maybe it should be "You killed my job, my economy, my country, my hopes and dreams, world peace, my whole planet's ecology, and my belief in the intrinsic goodness of the human spirit, YOU FUCKING ASSHAT. . . . "


:hi:



Tansy Gold, who -- according to people who know her -- writes exactly the way she talks

[Demeter]

45. Well, I Wouldn't Put It That Way

but...yeah, that sums it up!

[DemReadingDU]

54. +++

[bread_and_roses]

63. to Tansy, Hammer, and Demeter - yes, love it (n/t)

[bread_and_roses]

62. Amen to that, Demeter (n/t)

[Pale Blue Dot]

3. U.S. Stock Futures Fluctuate Before Fed Meeting; Apple Falls as Jobs Quits

Futures on the Standard & Poor’s 500 Index fluctuated as investors sought signs on whether the Federal Reserve will further support the economy. Nasdaq-100 Index futures retreated after Apple Inc. (AAPL)’s Steve Jobs resigned.

Apple, which briefly surpassed Exxon Mobil Corp. this month as the world’s most valuable company, slid 2.6 percent in early New York trading after earlier falling as much as 5.1 percent. Applied Materials Inc. (AMAT) lost 4 percent in Europe after its sales and profit forecasts missed analysts’ estimates.

S&P 500 futures expiring in September rose 0.1 percent at 7:24 a.m. in New York after earlier falling 0.6 percent, while contracts on the Dow Jones Industrial Average gained 20 points, or 0.2 percent, to 11,288. Futures on the Nasdaq-100, which gets 66 percent of its value from computer-related companies, dropped 0.3 percent to 2,132.5.

U.S. stocks rose for a third day yesterday after better- than-forecast durable-goods orders data helped eased concern the economic recovery is at risk. The S&P 500 has still lost 14 percent from this year’s high on April 29 after S&P stripped the U.S. of its AAA credit rating and Europe’s debt crisis spilled into Italy and France.

http://www.bloomberg.com/news/2011-08-24/u-s-stock-futures-retreat-after-jobs-resigns-as-apple-s-chief-executive.html

[DemReadingDU]

24. Karl Denninger: Steve Jobs

A different perspective


8/25/11 Steve Jobs: Do Come On
This morning I needed to reach for the barf-bag when I flipped on the TV and scanned the headlines of the major papers. Steve Jobs, CEO of Apple, had stepped down last night, and you had to be Patrick of "Sponge Bob" fame not to know it.

You can give credit to him for being the "driving force" behind Apple becoming an international powerhouse, but let's temper our accolades for this man, shall we? After all, the facts are what they are:

He tried to cheat death.

Apple has produced nothing of actual societal value.

Stock price is a poor measure of economic value.

Jobs is just a man who managed to create a consumer cult. He was neither the first in doing so nor will he be the last.

Look for real leaders who make a difference in society. Becoming rich on the backs of slave laborers in China and stuffing planned self-destructing devices in your products to spur repeat sales while building a consumer cult around your products doesn't make you great.

It just means you're good at talking people into spending money they don't have and putting forth labor for less than what they should be charging you. Neither is a particularly-laudable achievement.

more...
http://market-ticker.org/akcs-www?post=192950

[Warpy]

4. Good morning, PBD

I got the first rec in for the first time, ever.

Insomnia rules!

Your cartoon is rather insulting to the apes, who mostly mind their own business of hanging out and munching leaves instead of stripping the jungle bare and sucking up to the meanest silverbacks they can find while kicking every other ape in the family in the face.

I keep describing Perry as Gee Dubya, but without the wit, charm, or intelligence. Some people even get it.

And careful of the bears today. I fear they'll be on the prowl.

[Demeter]

46. Congrats! You Get to Pick the Weekend Theme!

What will it be? Which topic, artist, piece of theater or music, history, or whimsy do you want to have featured this weekend?

As always, the quality of the Weekend depends on how much I know or can find about it....and I accept all help!

[Warpy]

58. Make it a Stevie Wonder themed weekend

I just got back from being informed I'm going to need the second corneal transplant sooner rather than later, which means another year of being mostly blind.

Fuuuuuuck.

[Demeter]

59. I thought the success rate and recovery was much better than that

Good luck and keep us posted...

Well, I may have been born and raised in Motown, but that doesn't mean I know much about it...we will do the best we can, and there's lots of tendrils to bring in lots of stuff...yeah, that's a good one! Thanks, Warpy! Don't be shy--you get to contribute, you know. Everybody does.

[Demeter]

5. Bank of America Threatens Foreclosure On Elderly Couple Who Paid Mortgage Early

Bank of America may want to re-check its books before it starts throwing elderly people out on the streets...ABC News reports that the bank made a mistake earlier this year, by initiating the foreclosure process on an elderly couple that had the audacity to submit a mortgage payment a week early.

Late last year, the Florida couple, Sharon Bullington, 70, and her 78-year-old terminally ill husband, were forced, due to mounting health care bills, to apply for mortgage relief under the federal Home Affordable Modification Program (HAMP). After receiving approval for the application, Sharon sent in her first check (for January's rent) for the adjusted amount on December 23, 2010. This, apparently, set off Bank of America's powers-that-be. Official HAMP guidelines dictate that the Bullingtons should have technically made their first adjusted payment on January 1, 2011, and, "by not making January's payment on January 1st, the Bullingtons had failed to comply with HAMP's terms."

The next month, February's rent check was returned and the Bullingtons learned they were kicked out of the HAMP program. It was then that Bank of America turned nasty. Customer "Advocate" Ana Olivera (in the office of the bank's CEO and president) sent the Bullingtons a letter informing them that they no longer qualified for HAMP "'because the first Making Home Affordable Trial payment was due on January 1, 2011, and the payment was made on December 23, 2011 (sic)." Olivera continued, "'If you are not able to make each payment in the month in which is due, you will not be eligible for a modification.'..."As it stands, Bank of America has moved to foreclose on the Bullington home, though officials at the bank did send an email to ABC News reading, in part,"We apologize to the Bullingtons...and we hope to have a response to them shortly."

This is little consolation for the Bullingtons, however, who have lived with the threat of foreclosure for most of 2011.

Read more: http://www.businessinsider.com/bank-of-america-threatens-foreclosure-on-elderly-couple-who-paid-mortgage-early-2011-8#ixzz1W2Z055UR

[Demeter]

34. Berkshire to invest $5bn in Bank of America

Warren Buffett’s Berkshire Hathaway agreed to invest $5bn in Bank of America, delivering a lifeline aimed at restoring confidence in the beleaguered lender

Read more >>
http://link.ft.com/r/QM42II/GDE3ZT/Z87P0/72CYBL/U1TG7B/SN/t?a1=2011&a2=8&a3=25

WELL, HE SAID HE WANTED TO HELP...BUT I DON'T THINK THIS IS HELPING. IN FACT, I AM CERTAIN IT WILL MAKE THINGS WORSE.

[Honeycombe8]

51. This is shameful. We are all just numbers, now. Not even treated like people anymore.

Maybe that's because, like Romney says, "Corporations are people!" now.

[plumbob]

53. Remind me again why it's illegal to shoot bankers on sight.

I can't think of any reason.

[Demeter]

6. Iceland's On-going Revolution By Deena Stryker

http://www.dailykos.com/story/2011/08/01/1001662/-Icelands-On-going-Revolution

...Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent. The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro. At the end of the year Iceland declared bankruptcy.... Geir Haarde, the Prime Minister of a Social Democratic coalition government, negotiated a two million one hundred thousand dollar loan, to which the Nordic countries added another two and a half million. But the foreign financial community pressured Iceland to impose drastic measures. The FMI and the European Union wanted to take over its debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens....Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros. This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back.

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country. As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)

In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country...But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.) To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections....

[Demeter]

7. The Dumbest Rally of All Time By Mike Whitney

Mike Whitney

TUESday's 322 point surge on the Dow Jones must rank among the dumbest rallies of all time. The proximate trigger for the triple-digit moonshot was the faint hope that Fed chairman Ben Bernanke might pull another rabbit out of his hat at his Jackson Hole confab and announce another round of his bond purchasing program called Quantitative Easing. Keep in mind, that at the same time high-frequency computers were juicing the market with an ocean of liquidity sending near-dead equities into the stratosphere, skittish investors with hard cash were headed for the exits. 2-year Treasuries hit a record low yield of 0.22 percent as the flight-to-safety continued apace a full 3 years after Lehman Brothers crashed. Plunging Treasuries confirm that the economy is still in the throes of a multi-year Depression that hasn't been mitigated by any of interest-hacking strategies of the Fed or by the blinkered budget-cutting antics of our vacationing executive, Barack Hoover Obama.

Is it any wonder why confidence in the markets and the country's main institutions is at an all-time low? Look: Unemployment is tipping 9 percent, GDP has slipped below 1 percent for the last 6 months, the fiscal jet fuel that kept the economy in the black is gone, the credit markets are beginning to refreeze, and Europe's in the shitter. Is there any reason to load up on stocks expecting brighter returns in the future? No. The bond market is blinking "Depression". The benchmark 10-year is hovering around 2 percent as terrified investors load up on risk-free assets that actually lose money when adjusted for inflation. Does that sound like a ringing endorsement of current policy? So what does Obama do? He pushes through a structural adjustment program (The "debt ceiling" agreement) that stuffs the stimulus-starved economy into a fiscal straightjacket, and then crows about how much he "cares about jobs".

Right. How can the government create jobs when the new law forbids expansion of the deficits? It can't be done. So, unemployment will stay unnecessarily high for the foreseeable future, all because of Obama. Is that why the markets are so happy? ... Not only is demand flagging across the industrial world, but political gridlock in the EU and the US has increased the likelihood of another slump. Austerity-obsessed policymakers have slashed spending and implemented belt-tightening measures that are dimming the prospects for future growth. Add to that the fact the EU is in the midst of a credit crunch, and you have all the ingredients for another stomach-churning stock market crash followed by years of vicious contraction. Needless to say, policymakers in the US and EU have no idea of how to put the economy back on track. They remain committed to a flawed ideology that's pushing the world to the brink of disaster.

...TALK OF THE EURO...We can assume that the eurozone will eventually break up, although it could take a year or so. That means the panic in the credit markets will intensify, widening the spreads on bond yields and putting more pressure on the EU banking system which is chock-full of garbage bonds that are set to take hefty haircuts when the sh** hits the fan. Is that why the markets are surging, because traders just love the idea on another credit meltdown? And, while the credit-noose is tightening in the EU, what's going on in the US? Nothing. No jobs programs, no extension of unemployment benefits, the payroll tax break ends on December 30, and Obama refuses to stump for second round of stimulus. How's that for a "pro growth" strategy?


Economist Peter Dorman answers this question in his essay titled "It’s the Political Economy, Stupid!" Here's a short excerpt:

"....We are not living through an epoch of intellectual failure, but one in which there is no available mechanism to oust a political-economic elite whose interests have become incompatible with ours. This is not some sudden development, much less a coup d’etat as is sometimes claimed. No, the accretion of power by the rentiers has been systematic, structural and the outcome of a decades-long process. It is deeply rooted in modern capitalist economies due to the transformation of corporations into tradable, recombinant portfolios of assets, increasing concentration of and returns to ownership, and the failure of regulation to keep pace with technology and transnational scale. Those who sit at the pinnacle of wealth for the most part no longer think about production, nor do they worry very much about who the ultimate consumers will be; they take financial positions and demand policies that will see to it that these positions are profitable....

The real problem is political, and it is profound. Unless we can unseat the class that sees the world only through its portfolios, they may well take us all the way down. Unfortunately, no one seems to have a clue how such a revolution can be engineered in a modern, complex, transnational economy. ("It’s the Political Economy, Stupid!", Peter Dorman, Econospeak)

So, when does discontent turn to open rebellion?

The sooner the better.

[Warpy]

9. There aren't that many places for the big money at the top to go

and that's what's keeping the stock market inflated. My own best guess is that the Dow should be around 7000 points, indexed to inflation. Since big money tends to bid up anything it finds attractive, from resort property to antiques to paintings by dead artists to old wines to equities, we're seeing the effects of our lopsided maldistribution of wealth rather than any rally, correction, or other function of a normal market.

Equities remain attractive because, unlike the antiques or wine, they provide steady income and increases in paper wealth even when they go down in face value.

[Demeter]

11. Putting that money into people and working for the economy would be much more profitable

but then, the poor would start gaining on the Obscenely Wealthy, and their children would displace the Silver Spoon set and we can't have that!

Besides, one would have to side with Mother Teresa, and that's just not posh.

[Warpy]

25. It's also more risky, which is why they won't do it unless forced by taxation

and that's the reason higher taxes on both wealthy individuals and corporations are utterly vital to the survival of this country as anything but a third world pit.

[Fuddnik]

17. Oct 6 2011

[Tansy_Gold]

22. :thumbsup: n/t

[Fuddnik]

26. I'm booked!

I found a place on the Oct. 2011 website that pointed this place out.

http://www.hiwashingtondc.org/

You can sleep indoors, on a bed, with wi-fi and a continental breakfast (coffee YES!) for $33 a night. And it's only a couple of blocks from the plaza where the occupation will be.

I'm booked to arrive Oct 5th, and staying for at least a week.

Let's go get'em people!

[DemReadingDU]

27. +++

[xchrom]

32. ...

:applause: :woohoo:

[Demeter]

48. Go safe, come back in one piece, call for help

and go get 'em, tiger!

[Po_d Mainiac]

8. trivia

If the figure published by the goobermint is factual (IIRC the last physical audit was in the mid 80's)...there is supposed to be 260.256M ozT of Au held in reserve. The population of the Country is 312M(change) ..so if the gold was dispersed to 'we the people' everyone's share wood be 4/5ths of a Troy ounce.

The total world Au supply is estimated at 4.3B ozT...total world population is approx 7B...or approx 3/5ths ozT Au for everyone

The combined populations of India and China is approx 2.5B ....Enough Au in the world for 1.7ozT per

[Demeter]

10. Climate cycles are driving wars

Poorer countries are especially prone to armed battles in times of extreme weather, suggests US research linking El Niño to conflict
Read more >>
http://link.ft.com/r/CTBPCC/II9PA9/OFBYP/PRSGWX/C4XK9P/JY/t?a1=2011&a2=8&a3=25

STATISTICAL CORRELATION BETWEEN BAD WEATHER, STARVATION, POVERTY AND WAR.


WHO WOULD HAVE THOUGHT IT?

I HEARD THIS ON THE BBC LAST NIGHT, TOO.

[Po_d Mainiac]

15. As Bob Marley stated.. "A hungry mob is a angry mob" n/t

[DemReadingDU]

18. yep

Desperate people do desperate things

[Demeter]

12. BofA moves to counter more blog rumours

Bank seeks to calm investors’ fears for the second day by dispelling talk of an emergency takeover by JPMorgan

Read more >>
http://link.ft.com/r/H60H77/FKIFQZ/7ZY85/0GHM3K/8ZM5QA/1G/t?a1=2011&a2=8&a3=25

IF THEY HAD JUST LAUGHED IT OFF...NOW I'M BEGINNING TO THINK...BUT OBAMA, TIMMY AND UNCLE BEN COULDN'T BE THAT STUPID...

OR MAYBE THEY ARE PLAYING "GOOD BANK/BAD BANK"?

[DemReadingDU]

21. Chris Whalen Said BofA (BAC) Should File Bankruptcy

8/25/11 Chris Whalen Said BofA (BAC) Should File Bankruptcy

Chris Whalen of Institutional Risk Analytics is saying Bank of America (NYSE: BAC) should file Chapter 11 bankruptcy on Bloomberg. Whalen believes the bank will not be able to service the litigation claims against it.

The comments are doing little to impact the stock. Shares are actually up another 2.4 percent this morning.

http://www.streetinsider.com/Trader+Talk/Chris+Whalen+Said+BofA+%28BAC%29+Should+File+Bankruptcy/6742548.html

[banned from Kos]

33. Whalen gets the Idiot of the Day Award then

Buffett just invested $5 billion in BAC.

[Demeter]

35. One Doesn't Eliminate the Other

Waren Buffett has an even tighter fist on the US jewels now, if he's not gone senile...

AND Warren wouldn't have done this unless his country asked him to...and I'm sure he will be handsomely rewarded for his "sacrifice", which negates the sacrifice, for those who aren't bedazzled by the legerdemain...

[girl gone mad]

65. DOUG KASS: "Bank Of America Got Fleeced By Buffett"

Warren Buffett is making a 10.5% annual return on his Bank of America investment once you account for the value of his stock options, investment manager Doug Kass says. This, Kass adds, is the equivalent of Bank of America having sold stock to Buffett at $4 a share.

Bank of America chose to do this deal when it can "borrow" nearly unlimited cash from depositors and the government at close to 0% interest rates. So in case you were still questioning whether Bank of America really needed the money, you now have your answer.

Kass concludes:

"Moynihan got fleeced by Buffett, the savviest of wolves who slipped out of his bathtub wearing sheep’s clothing."

The other interpretation is that this was the best deal they could get.

Read more: http://www.businessinsider.com/doug-kass-bank-of-america-got-fleeced-by-buffett-2011-8#ixzz1W810EpYs

[Demeter]

57. Bank of America: time everyone took a long cold shower and sobered up

http://brontecapital.blogspot.com/2011/08/bank-of-america-time-everyone-took-long.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+BronteCapital+%28Bronte+Capital%29

Forward: this was printed about four hours before Berkshire Hathaway took a $5 billion stake in Bank of America under sweetheart terms. Firstly Buffett got better terms than me - it helps being known as the world's greatest investor. Second, the rapid appreciation in my position is dumb luck....

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

I am long Bank of America on my own behalf and on the part of my clients. It has not been a fun experience. (We have had great returns at Bronte but) Bank of America is one of two stocks on which Bronte has lost more than 3 percent of the portfolio.* So you can see this note as written from the perspective of a Bank of America loser...Still, I am bullish on BofA at these prices. Very bullish. I think the politically driven finance bloggers (Yves Smith at Naked Capitalism) should be seen for their (I think justified) anti-bank agenda. Most of the rest are fitting their analysis around the stock price. There is an awful lot of stock-price doing the analysis here...You might ask if I am putting my money where my mouth is – and I am a little. We purchased some more BofA below $7 but not much. Why not much? Risk control. Nothing else. Like most “value investors” we believe the right response to a stock we like going down is to buy more of it. As people who are (sometimes painfully) aware of our fallibility, we know repeatedly doubling up on a stock with tail risk is a way of getting pole-axed. So we added but did not pile in...That said, I should explain how I think about Bank of America right now...The problem everyone is talking about is liability for fraudulently originated mortgages – mostly mortgages originated at Countrywide. Bears argue (correctly I think) that BofA has under-reserved for liability problems associated with past mortgage origination. Some bears suggest large numbers ($50 billion is often quoted) for the real liability. They argue that BofA will be forced either to insolvency, a further bail-out or to raise a lot of capital under highly unfavorable terms (thus crunching the existing equity holders). There are other bear cases – and I will get to them – but I want to deal the the main bear case up front.

...If a bank takes its losses slowly enough it can shield very big losses this way (albeit at the cost of appearing zombie-like for years). The champions in slow-loss revelation are Japanese banks who spread losses over more than fifteen years and never breached stated regulatory guidelines on their accounts. Because banks have quite a lot of discretion about how they book their losses and most losses can be spread over-time just running out of stated capital is not the common way for a bank to get into trouble. {The exception is small banks with guarantees as per the US and the only way they ever seem to leave is by rolling losses until they are comically enormous compared to stated capital.]..You see banks deferring losses every cycle. When the crisis hits everyone screams the bank is under-reserving and guess what – everyone is right. But the bank gets to take its losses over time and that suits the bank because the bank tends to have high pre-tax pre-provision earnings in a crisis and time cures things. When you take losses is subjective most of the time. In bad times banks lie about losses because they can and it is their interest to lie. This is – as Buffett has noted – a self-assessed exam where the penalty for failure is death. Of course if the losses are too fast and too sudden the bank can't spread them. When someone is not paying their mortgage extend and pretend is an option. When someone actually throws back the keys and walks out you have to take the losses. Enough of them at once and you get the Nick Leeson situation, big losses which you have to book now. But it is easy to extend and pretend so banks do.

The more common way banks get into trouble is when people don't trust them any more and they can't fund themselves. This happened a surprising amount in the crisis. Sometimes we discovered the “bank” was grotesquely insolvent (Lehman Brothers). Sometimes it was only marginally problematic (Bear Stearns). I still believe Washington Mutual was solvent and the run was a panic...You can't measure bank capital accurately but there is a way in which banks can have too little capital. They have too little capital when they can't convince regulators or creditors that they are themselves a good credit... I lean on the fact that the “too big to fail” rules of the game are well understood at the moment whether Yves Smith or Paul Krugman likes them or not. No big bank in America is going to be let fail. Ultimately the credit of Bank of America is synonymous with the credit of the United States of America and last I looked at US bond pricing that credit was good.

In other words BofA has enough capital to raise money in the bond market because its real capital is not something on its book. Its real capital is faith and credit of the United States. And because of that the bank won't fail through a wholesale run. Besides Bank of America has a lot of short-term liquidity. Not enough to save them from a mega-catastrophic run of course but they can deal with most things and a mega-run relies on the too-big-to-fail consensus breaking down. The only capital risk to BofA then is one that regulators find them poorly capitalized and force them to raise capital or the like. That is definitely possible but in my view unlikely...It would happen if BofA were to book a sudden 50 billion in provisions for mortgage-fraud settlements. But that is the legendary self-assessed exam where the penalty for failure is death....You see these are litigation losses not credit losses and the one thing that everyone agrees on about litigation is that it is slow....For Bank of America slow is good. Very good. You see BofA has more than 10 billion dollars in pre-tax pre-provision earnings every quarter. This number is falling but it still very large...If Bank of America really has 50 billion – no – lets get really bearish – 70 billion in additional losses to take but the litigation lasts seven years it will eat only a quarter of the pre-tax, pre-provision earnings over that period. It will dampen earnings but can't cause BofA to run short of regulatory capital. And I am pretty sure they could stretch the litigation five years if not seven. I have seen court cases where discovery lasts that long. So in summary, Bank of America won't fail because the market does not want to fund it. It is “too big to fail” and its credit is really the credit of the US Government. And it can't fail because it needs to take too many losses too fast and runs out of regulatory capital. These are litigation losses and they offer plenty of time for deferral against future income. In other words this Bank of America panic is just a panic. And at the risk of sounding like Jim Cramer: Buy.

Where I can be wrong: SEE THE LINK--THERE'S A LOT MORE

[Demeter]

13. New S&P chief to draw on Japan experience

Peterson handled Citi’s turbulent period in the country, which is likely to hold him in good stead as the rating agency faces up to questions from watchdogs in the US


Read more >>
http://link.ft.com/r/H60H77/FKIFQZ/7ZY85/0GHM3K/7A7ME4/1G/t?a1=2011&a2=8&a3=25

NO RELATION TO PETER PETERSON I HOPE...

[Demeter]

14. US budget watchdog cuts debt forecast

Congressional analysts paint rosier picture of America’s fiscal outlook for the next decade on the back of debt deal to increase the debt ceiling

Read more >>
http://link.ft.com/r/A1TNOO/627KNN/MJTKN/FX4F2F/MSRFGQ/N9/t?a1=2011&a2=8&a3=25

[xchrom]

16. morning!!!

:donut:

[Tansy_Gold]

23. indeed!!!

:donut:

[Festivito]

20. Debt: 08/23/2011 14,649,289,670,347.85 (UP 36,854,172,009.23) (Tue, UP a little.)

(UNDER the new 2011 debt limit of 14.694-trillion dollars by 355.290-billion dollars. Good day.)
Today is looking better.
(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 9,973,104,150,361.44 + 4,676,185,519,986.41
UP 814,357,949.50 + UP 36,039,814,059.73

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 313-Million person America.
If every American, man, woman and child puts in $3.20 THAT'S 1B$, and $3,197.62 makes 1T$.
A family of three: Mom, Dad, Child: $9.59, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 12 seconds we net gain another American, so at the end of the workday of the report, there should be 312,732,992 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $46,842.8.
A family of three owes $140,528.41. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 13,322,421,317.60.
The average for the last 30 days would be 10,213,856,343.50.
The average for the last 32 days would be 9,575,490,322.03.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 222 reports in 327 days of FY2011 averaging 4.90B$ per report, 3.33B$/day.
Above line should be okay

PROJECTION:
There are 516 days remaining in this Obama 1st term.
By that time the debt could be between 15.4 and 19.6T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/23/2011 14,649,289,670,347.85 BHO (UP 4,022,412,621,434.77 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +1,087,666,639,456.10 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof11 +1,214,062,151,074.85 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/03/2011 -000,098,125,325.28 ----
08/04/2011 -012,807,553,395.89 -
08/05/2011 +020,147,316,949.47 ------------**********
08/08/2011 +000,521,563,614.23 ------------******** Mon
08/09/2011 +000,429,866,034.74 ------------********
08/10/2011 +000,350,635,620.42 ------------********
08/11/2011 +004,850,153,175.74 ------------*********
08/12/2011 +000,032,128,181.66 ------------*******
08/15/2011 +025,439,150,731.40 ------------********** Mon
08/16/2011 -000,111,149,424.58 ---
08/17/2011 -000,155,359,363.72 ---
08/18/2011 +006,258,648,233.06 ------------*********
08/19/2011 +019,892,825,521.14 ------------**********
08/22/2011 -000,213,053,000.99 --- Mon
08/23/2011 +000,814,357,949.50 ------------********

65,351,405,500.90 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4971562&mesg_id=4971886

[Tansy_Gold]

28. Does not compute

The other day I bought a couple of typewriter ribbons. Yes, typewriter ribbons, because I have a specific application that just doesn't work with the computer and printers and labels and all that. The BF has a barely used Brother typewriter that's been sitting in a box in the workshop, and a quick check online showed ribbons should be readily available. I walked into the local Staples and sure enough, found a package of two ribbons for a price just slightly below outrageously obscene. Had the Brother name on it, and a little American flag. And immediately under the little American flag was printed very clearly "Assembled in Mexico" along with the Brother motto "We're at your side."

[Demeter]

29. Close enough, I guess

Did it have date of manufacture? I thought Mexico had already been abandoned for cheaper labor....isn't Brothers a Japanese firm?


Brother International Corporation is one of the premier providers of products for the home, home office and office. Our U.S.A. corporate office, located in Bridgewater, New Jersey, was established in the US on April 21, 1954 and markets many industrial products, home appliances, and business products manufactured by its parent company, Brother Industries, Ltd., of Nagoya, Japan. These products include an award-winning line of Multi-Function Center® and printers. Brother also provides the number one line of facsimile machines in the U.S. and is the leader in electronic labeling, with its full line of P-touch® Electronic Labeling Systems. With revenues of approximately $1.5 billion in fiscal year 2006, Brother and its subsidiaries employ over 1,100 people in the Americas. Visit our corporate information site to view our Investor Information....http://www.brother-usa.com/Brother.aspx

[Tansy_Gold]

37. I think it's a matter of translation

"We're at your side" does not mean quite the same thing as "We're on your side" even though the prepositions out of context might be sometimes confused. "At that date" and "On that date" mean pretty much the same thing. "On the corner" and "At the corner" are also pretty close if not exact.

But "At your side" and "On your side" have distinct connotations. I'm not sure the ad people who thunk up the motto were really concerned about that, but it takes on an entirely different aspect when coupled with an American flag and the note "Assembled in Mexico." What really is the purpose of having the American flag there at all? Is it simply to trick consumers into buying something that they at first believe to have been made by in the US by American workers?

The specific application for which I need the typewriter is so limited that these two ribbons will probably last me into the 2040s. But obviously there is sufficient demand for this product that Staples carries it and many other similar models. At a time when workers in all countries are being exploited by the stockholders, I consider this deceptive advertising.


TG

[Demeter]

30. Celebrate! It's a REALITY Day!

Gotta get my jollies where I can...Schaudenfreude, it's what's for breakfast.

[Demeter]

36. Mohamed El-Erian - Bernanke must not push QE3 at Jackson Hole

The Fed chairman is far away from the world of first-best policies. He operates with imperfect tools and has little support from other policymakers. He also faces an increasingly hostile political environment and recent history is against him. As such, expectations are far ahead of what he can reasonably deliver in terms of economic outcomes. At best, he could try to provide another bridge for other policymakers; but he should only do so if he is confident that they will finally awaken from their slumber.


Read more >>
http://link.ft.com/r/J0VG55/0805Y7/T10SH/JIDUZI/R3UTVB/VU/t?a1=2011&a2=8&a3=25

THEREFORE, THAT IS EXACTLY WHAT UNCLE BEN WILL DO...

[RUMMYisFROSTED]

43. D'oh!

[Demeter]

47. I think it's time to take a bath...

what say you?

[Demeter]

49. Want to Wreck Things and Rake In Millions? Become a Pfizer CEO

http://brodyhooked.blogspot.com/2011/08/want-to-wreck-things-and-rake-in.html

Let me tell you a little story, that has very broad implications about national economic policy, and eventually get around to saying something that relates to the pharmaceutical industry:

Andrew Carnegie, who in his day was sort of Bill Gates and Warren Buffett wrapped into one, wrote an essay called "The Gospel of Wealth." As rich guys go Carnegie was not a bad sort; he believed that the rich should give away most of their wealth to community charities such as libraries and museums. But Carnegie also had pretty strict views about why you should not give direct charity to the poor. He described an instance in which a philanthropist he knew gave a quarter to a beggar. Carnegie was outraged, and insisted that that single stupid act was bad enough to undo all the good work this philanthropist had achieved over a lifetime. First, he was quite sure that the beggar would use that quarter for some immoral purpose--and those were the days when a quarter would actually buy something. But more important, Carnegie was sure that giving assistance to a poor person was a sure way to sap that individual's sense of responsibility, and lead inexorably to what today people would term the "culture of poverty," always waiting around for a handout and doing nothing to pull oneself up by those proverbial bootstraps.

I don't think that Carnegie had a name for this phenomenon, but when conservative economists started creating the theories that led to Reaganism and supply-side policies in the late 1970s, somebody came up with the term "moral hazard." The basic idea is that if people are in unfortunate straits and you give them some sort of aid, all you do is increase the rewards for being in those straits and make that behavior even more attractive in the future, which works directly against the unfortunate bettering themselves. So basically any federal program to help the needy in any way is a bad idea.

Okay, now back to Pharma. Dr. Roy Poses over at Health Care Renewal--http://hcrenewal.blogspot.com/2011/08/what-pfizer-iii-enormous-pay-for-poor.html--
in turn drawing on a report in Fortune magazine/CNN Money--http://hcrenewal.blogspot.com/2011/08/what-pfizer-iii-enormous-pay-for-poor.html--
tells us about the deeds and reimbursement of the most recent crop of CEOs at Pfizer. The basic bottom line is that the investigation viewed their performance as abysmal; their annual pay was in each case in excess of $10M; and during the time they were doing their best to ruin the company, they were actually granted annual raises. One former CEO, "Hank" McKinnell, more or less threw up his hands and declared his job impossible in 2002. He then sort of went missing and left a power vacuum that created severe headaches in the upper reaches of the company until he finally was forced to "retire" in 2006. He was paid $10.7M in 2003, $11.3M in 2004, and $12.8M in 2005.

This says something about bloated CEO pay throughout US corporations. This also says something about ineffective leadership at some large drug firms. But the particular lesson I wish to draw is about moral hazard. Notice that according to the gurus of our economy, if you give a poor man a quarter, you will probably ruin him for life and incidentally cause the collapse of Western civilization. If you pay a CEO extra millions of dollars every year for destroying his company, however, you are apparently following good economic principles; no "moral hazard"
here.

In other words, there are rules for the rich and rules for the poor. And the rich are in charge. And don't you forget it.

[Demeter]

50. Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit

http://www.nakedcapitalism.com/2011/08/bombshell-admission-of-failed-securitization-process-in-american-home-mortgage-servicinglps-lawsuit.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

AHMSI is a servicer (the successor to Option One, and it may also still have some Ameriquest servicing). AHMSI is mad at LPS because LPS was supposed to prepare certain types of documentation AHMSI used in foreclosures. AHMSI authorized the use of certain designated staffers signing with the authority of AHSI (what we call robosinging, since the people signing these documents didn’t have personal knowledge, which is required if any of the documents were affidavits). But it did not authorize the use of surrogate signers, which were (I kid you not) people hired to forge the signatures of robosigners.

The lawsuit rather matter of factly makes a stunning admission (note that PSA here means Professional Services Agreement, and it was the contract between AHSI and LPS (ORIGINAL CONTRACT AT LINK)...

Did you get it? They said that these procedures were standard between the two companies, which was to “..to memorialize the transfer of ownership lender to the securitization trust” right before initiating foreclosure. If you are a regular reader of this blog, you know that is impermissibly late. The note and mortgage had to get to the trust by a clearly specified date, usually 90 days after closing. As we’ve written numerous times, in the overwhelming majority of cases, the securitization entity was a New York trust, and New York trusts are like computer code, they can only operate exactly as stipulated. The exception was trusts by Chase and WaMu, which did allow for the originator to serve as custodian for the trust.

So AHMSI has just admitted that all of its foreclosures done with LPS were completed by the wrong party. In Alabama, wrongful foreclosures are subject to statutory damages of three times the value of the house, and recent cases have awarded much higher multiples of the property’s value. This little paragraph is a litigation goldmine for the right attorneys. I hope they have fun with it.

[Demeter]

52. Obama Goes All Out For Dirty Banker Deal MATT TAIBBI

http://www.rollingstone.com/politics/blogs/taibblog/obama-goes-all-out-for-dirty-banker-deal-20110824

GOOD SUMMARY OF THE SITUATION FROM BEGINNING TO PRESENT DAY, AND THEN THE ANSWER:

Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.

Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.

DISAPPOINTING? HE'D BE CROOKEDER THAN NIXON AND JOHNSON COMBINED!

[DemReadingDU]

55. Yep

[muriel_volestrangler]

64. Germany rating reaffirmed; short-sell rumor denied

The three major rating agencies reaffirmed Germany's rating and outlook on Thursday, after the country's main stock index fell sharply on market speculation that a downgrade was on the cards.

Spokesmen from Fitch, Moody's and S&P told CNBC they reaffirmed the triple A ratings on the country's debt and the DAX moved off the session's lows but was still more than 2% lower half an hour before closing.

The markets were awash with speculation throughout the afternoon, with German regulator BaFin earlier denying earlier rumors that a ban on short selling will be implemented for the DAX.

http://www.moneycontrol.com/news/worldnews/germanyratingreaffirmedshort-sellrumordenied_580168.html

Rumours still being spread to game the market, it seems.