T'was The Night Before Weekend Economists December 24, 2010

[Demeter]

Well, folks, no need to go into withdrawal just because of a major religious holiday...we got your dissolving economy watch right here!

This is just the hors d'oeuvres, the main dish starts tomorrow with a bang! So have a sample of all the season has to offer:



It's a potluck, so don't forget to bring something to the table!

For entertainment, any silly or sentimental seasonal offering will be accepted. Here's one to start:



How Clement Moore Defined Christmas Eve

http://www.jonathancrossfield.com/blog/2008/12/how-clement-moore-defined-christmas-eve.html

Although a staple Christmas story for nearly two centuries, the full significance of Clement Moore's poem is often forgotten.

Published in 1822, 'Twas the Night Before Christmas' crystalised for many what would become the widely understood depiction of Santa Claus. This particular incarnation would later become intertwined with the European Father Christmas, creating the international figure we know today.

In fact, Moore remained anonymous as the author at first, worried that the secular nature of the poem could cause controversy for his position as a Baptist Minister. Once the popularity of the poem was assured though, Moore's name became known and he forever became famous as the man who designed a central part of our modern day Christmas.

But Moore was not just a Baptist Minister. In writing this poem for his children, he drew upon his knowledge of anthropology and his fascination for ancient traditions at this time of the year. In weaving some of these traditions into his tale, many took on a new significance.

There are so many Christmas traditions and concepts that find their beginning in Moore's poem that it seems appropriate, particularly on this Christmas Eve, to pick through the verses and illustrate just how much our modern day Christmas owes to these 56 lines.

THE NIGHT BEFORE CHRISTMAS
by Clement Clarke Moore

'Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse;

The stockings were hung by the chimney with care,
In hopes that St. Nicholas soon would be there;

(Actually, the hanging of stockings had been around for some time by this point and is linked to the original tales of Saint Nicholas. Not surprisingly, Saint Nicholas was a very popular historical figure for his tendency for generosity to the disadvantaged. One such story tells of how he was passing through a poor village when he overheard the troubles of one family. A father had three daughters, but unable to afford a dowry to secure a suitable husband for each of them, it was becoming increasingly likely that they would be forced into prostitution. Therefore, as each girl reached the appropriate age, Saint Nicholas passed by and dropped a bag of gold through their bedroom window. Each time, the family was able to use the gold as a dowry and the girl was able to marry.

One variation on the tale has it that Saint Nicholas tossed the bags of gold through the window and they landed in the girl's stocking, which had been hung out to dry. It is from this that we developed the tradition of hanging a stocking for Saint Nicholas to demonstrate his generosity.)

The children were nestled all snug in their beds,
While visions of sugar-plums danced in their heads;

And mamma in her 'kerchief, and I in my cap,
Had just settled down for a long winter's nap,

When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.

Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow
Gave the lustre of mid-day to objects below,

When, what to my wondering eyes should appear,
But a miniature sleigh, and eight tiny reindeer,

With a little old driver, so lively and quick,
I knew in a moment it must be St. Nick.

(This is the first ever mention of St Nick using reindeer as a mode of transport, but it was not a random choice. Firstly, Moore was familiar with the Northern European Christmas celebrations and their Christmas gift-givers such as Father Christmas and Old Man Winter. He also drew many of his inspirations from Lapland, as a suitably wintery climate, and therefore included the traditional use of a sleigh with reindeer to reflect how a mythical figure from that part of the world would travel.)

More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name;

"Now, Dasher! now, Dancer! now, Prancer and Vixen!
On, Comet! on Cupid! on, Donder and Blitzen!

To the top of the porch! to the top of the wall!
Now dash away! dash away! dash away all!"

(Some people may be surprised to see Rudolph is not included amongst Santa's roll-call of reindeer. In fact, Rudolph was a commercial creation that came about approximately a century later as part of an advertising campaign for a department store. Once the song became popular, Rudolph cemented himself as the most famous of Santa's reindeer, despite never appearing in the 'official' line-up.

The choice of eight reindeer is also significant. Actually, eight reindeer would be incredibly impractical in pulling a sleigh, but Moore was slipping in an obscure reference to another Northern European Christmas tradition. Before Christ, the Norse winter festival of Yule took place at the winter Solstice and is responsible for providing many of our modern traditions. One of them, and a precursor to the idea of the Christmas Eve visitor, is that the God Odin would ride around the world at night on the festival, deciding who deserves good or bad luck for their crops for the year ahead. Bestowing prosperity or hardship on the people he visits, the Odin tradition can be seen as a possible origin for the idea of Santa drawing up a list of who has been naughty or nice. The part of the Odin myth that Moore was interested in was to do with his horse. Odin rode a massive eight legged horse on his annual journey, and by selecting eight reindeer for his poem, Moore was able to slip in a reference to one of the original Christmas gift-givers.)

As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky,

So up to the house-top the coursers they flew,
With the sleigh full of toys, and St. Nicholas too.

And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.

(So why the roof? Is there any significance to this? If we return to Lapland again and Northern climates, many traditional dwellings were built into the ground, with a covering of skins and other materials to keep out the elements. This meant that the roof rose out of the ground and it was therefore possible for a visiting sleigh to arrive on your roof, although what damage that would do, I am unsure...)

As I drew in my hand, and was turning around,
Down the chimney St. Nicholas came with a bound.

(The chimney is one of the more bizarre aspects of the Santa Claus myth. Why would anyone choose this method to gain entry? Again, Moore was showing his knowledge of Lapland housing. With Lapland dwellings built low into the ground, there was only one opening in the middle of the roof that served as both entry and exit, as well as the chimney for the fire. So by entering a Lapland house, you were actually bounding down the chimney. A clue to this is contained in the poem as St. Nicholas doesn't climb down the chimney, but enters with one bound.)

He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot;

(At this period in history, there was no single image of how Santa Claus looked. He was just as likely to be depicted as a wine-soaked party-goer on a sled pulled by turkeys than he was a bearded old man in a cloak, and hundreds of other variations besides. Continuing his theme of borrowing from the Lapland tradition, Saint Nicholas is dressed as you would expect someone from that part of the world. Notably, Moore does not describe the colours of Santa's outfit, and the images inspired from this poem were free to use any colours they felt appropriate. It wasn't until Coca-Cola adopted Santa Claus for their annual Christmas advertising campaigns in the 1930s that he became commonly associated with the red and white outfit we know today, selected to reflect the Coca-Cola brand. Yet another example of commercial advertising shaping Christmas.)

A bundle of toys he had flung on his back,
And he looked like a peddler just opening his pack.

His eyes -- how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a cherry!

His droll little mouth was drawn up like a bow,
And the beard of his chin was as white as the snow;

The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath;

(Commonly, Father Christmas or Santa was depicted actually wearing a wreath about his head, made of holly or other Christmas greenery.)

He had a broad face and a little round belly,
That shook, when he laughed like a bowlful of jelly.

He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself;

(Although Moore describes Saint Nicholas as a 'right jolly old elf', this has been taken to mean that Santa is actually a magical elf. This is most likely the origination of the idea of elves assisting Santa at Christmas Eve as well as the other-worldly nature of the big man himself, but this is definitely an extreme extrapolation from Moore's poem. It is quite clear that the narrator is not necessarily defining Santa as an elf but is likening him to one due to his jolly nature. Also, Moore does not provide any other background for his creation - no North Pole refuge for example. All of these magical elements were later added by modern commercial depictions and Hollywood.)

A wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread;

He spoke not a word, but went straight to his work,
And filled all the stockings; then turned with a jerk,

And laying his finger aside of his nose,
And giving a nod, up the chimney he rose;

(Santa's exit up the chimney is also more interesting when put into the context of the Lapland dwelling. Although the poem implies magic has taken place in Santa rising back up the chimney, in Lapland, rising up the chimney means no more than leaving through the front door, as they are one and the same.)

He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle.

But I heard him exclaim, ere he drove out of sight,
"Happy Christmas to all, and to all a good-night."

And with that, Clement Moore shaped our Christmas Eve celebrations for ever. Don't forget to pull down a copy of the poem to read to your children in bed tonight and when you do, reflect on how different Christmas would be if Clement Moore hadn't decided to imbue the occasion with his fascination for ancient traditions and true Christmas spirit.

Please share this post with others

[Demeter]

1. The ‘Subsidy’: How a Handful of Merrill Lynch Bankers Helped Blow Up Their Own Firm

http://www.propublica.org/article/the-subsidy-how-merrill-lynch-traders-helped-blow-up-their-own-firm

Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank's own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating.

Bank executives came up with a fix that had short-term benefits and long-term consequences. They formed a new group within Merrill, which took on the bank's money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them. The division creating the securities passed portions of their bonuses to the new group, according to two former Merrill executives with detailed knowledge of the arrangement.

The executives said this group, which earned millions in bonuses, played a crucial role in keeping the money machine moving long after it should have ground to a halt...Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.

The group, created in 2006, accepted tens of billions of dollars of Merrill's Triple A-rated mortgage-backed assets, with disastrous results. The value of the securities fell to pennies on the dollar and helped to sink the iconic firm. Merrill was sold to Bank of America, which was in turn bailed out by taxpayers...What became of the bankers who created this arrangement and the traders who took the now-toxic assets? They walked away with millions. Some still hold senior positions at prominent financial firms...

MUCH MORE AT LINK, PLUS SEVERAL BRANCH LINKS TO EXPAND THE STORY

THIS IS OUR MAIN COURSE TONIGHT; THE MEAT, IF YOU WILL

[Demeter]

2. Max Blumenthal, The Great Fear

http://www.tomdispatch.com/post/175334/tomgram:_max_blumenthal,_the_great_fear_/

Moments of imperial and economic decline -- according to a recent poll, 65% of Americans now believe this country to be “in a state of decline” -- can also be periods of cultishness, even of madness incarnate. Such a mood now seems to be spreading through the United States. It’s not so surprising, really. Since the attacks of September 11, 2001, fear has been injected into this “homeland” like a drug and a penumbra of official secrecy has settled over the land in a way that makes the secrecy of the Cold War years (when this country faced a superpower, not a ragtag set of jihadis, guerrillas, and terrorists) seem like an era of sunshine.

In an atmosphere of swirling fears and hysteria amid declining living conditions, “explanations” that at other times might have remained confined to tiny crews of conspiracy-mongers can suddenly gain a patina of plausibility and so traction. No wonder then that, as hard times hit, as the financial system seemed on the verge of collapse, as unemployment soared and a massive wave of home foreclosures swept into view, increasing numbers of Americans became prey to any wacky explanation for our troubles, none more so than the idea that Islam was somehow responsible, that mosques and Islamic centers meant for a sliver of a minority here were capable of imposing anything, no less a way of life on this country, or that Sharia law (of all things) might somehow worm its way into state legal systems, or that YouTube was a hotbed of terrorism worthy of suppression, or... well, you name it.

Max Blumenthal, author of the bestselling book Republican Gomorrah: Inside the Movement That Shattered the Party, has done the necessary legwork to take us deep into one of those crews of conspiracy-mongers who, at another time, just about no one would have paid much attention to, but in twenty-first-century America have gained a remarkable audience. They are a chilling barometer of the changing weather in America...

MAX HAS BROUGHT A LOVELY COMPOTE OF FRUITS AND NUTS!

[Demeter]

3. 51 million, mostly lower-income, will do worse under new tax law

http://blogs.consumerreports.org/money/2010/12/50-million-households-will-do-worse-less-money-new-tax-bill-poor-take-making-work-pay-credit-expire-.html

The federal tax bill passed by Congress yesterday includes some extras for the middle class and lots of goodies for the wealthy. But individuals making less than $20,000 and households making less than $40,000 a year will actually get less tax relief in 2011 than they got in 2010 and 2009.

That's because the Making Work Pay credit, a temporary tax credit that's been in effect for the past two years, is going away as of January 1. That credit provides up to $400 per individual, $800 per household, for all eligible workers. And it adds more to the pockets of households making between $20,000 and $40,000 than the new, 2-percent drop in the Social Security payroll tax.

Why is the payroll-tax cut not as beneficial to those workers? Because at lower income levels, a 2-percent decline doesn't add up to much.The Tax Policy Center, a non-profit, non-partisan research organization, estimates that 51 million households, including many making $40,000 or less, would do worse under the new law. (On the Tax Policy Center's table illustrating that point, see the fourth column from the right, in the row labeled "All," for the total number of households benefiting more from Making Work Pay than from the Social Security payroll tax cut; the number is in thousands, so add three zeros to it.)

With the Making Work Pay tax credit, individuals between $6,452 and $75,000, have been eligible for up to $400 a year. Couples making between $12,903 and $150,000 have recieved up to $800. But, as Roberton Williams, a senior fellow with the Tax Policy Center, points out, the 2-percent drop in the payroll tax doesn't yield $400 until a worker makes $20,000. So workers making less won't get as much under the new system.

To confirm the TPC's assertions, I checked with both Barbara Weltman, a tax attorney and author of J.K. Lasser's 1001 Deductions and Tax Breaks, and John W. Roth, a senior tax analyst with CCH Wolters Kluwer, publisher of tax information and software. Both agreed with the TPC's assertion. "The net will be a negative for the lower working class," Roth said.

To be sure, middle Americans will benefit from the new package. With a 35-percent tax on estates and a $5 million-per-person, $10-million-per-couple estate-tax exemption the law for the next two years, the wealthy will fare far better than they would have, had the estate-tax law reverted to its pre-Bush-tax-cut level or even to the level at which the estate tax stood in 2009.

But if Congress truly wanted to stimulate the economy with this package, it would have provided even more tax breaks to the poor, who spend every dollar of what they get, Williams noted. Middle- and upper-income workers could very well use the extra money in their paychecks to pay down debt and save, not to spend to prop up the economy. "We'll get more stimulus," Williams said. "But in terms of bang for the buck it's not as efficient."—Tobie Stanger

THIS IS FOR THOSE ON A DIET---THE ECONOMIC EQUIVALENT OF CELERY STICKS

[Demeter]

4. US Army smartphone war draws closer by John Lister

http://mobile.blorge.com/2010/12/14/us-army-smartphone-war-draws-closer/

The U.S. Army is seriously considering the idea of issuing every soldier with a smartphone and picking up the bills. The move looks set to further enhance the Apple-Android battle in the military world.

The director of the Army Capabilities Integration Center told Army Times that making smartphones a standard part of the military kit bag is under consideration. Lt Gen Michael Vane said one possibility would be to give each soldier a monthly budget that they could spend on calls and apps in their own chosen ratio.

As part of work to explore the issue, a brigade at Fort Bliss, Texas is to be “modernized” through a range of electronic devices that will include not just smartphones but tablet devices, e-reader and mini-projectors. Another project will see special card readers given to soldiers to allow secure access to data on smartphones.

The big question for the smartphone industry is which phones would be used if there was a force-wide rollout. Those involved say there’s no certainty it would be a single model, but say its highly unlikely that the Army will either develop its own model or contract a manufacturer to make radical changes to an existing handset. Instead any changes would be limited to some software tweaks and physical reinforcements so that the handsets can stand up better to rough conditions.

Those sections of the military that already use smartphones as part of operations have mainly used either iPhones or Android handset. The company that developed the Patriot missile system has created several dedicated military apps for both systems, including one that allows soldiers to track colleague’s locations on the battlefield.

Raytheon has previously argued that the iPhone, while generally seen as a consumer device, can be particularly useful for the military, mainly because most soldiers need little or no training in how to use it. However, there have been questions about the fact that the standard Apple battery is non-replaceable: plugging the phone in to recharge isn’t always a viable option in the middle of combat.

A POWER SHAKE FOR THE NUTRITIONALLY OVER-ACHIEVERS

[Demeter]

5. Latvia provides no magic solution for indebted economies Michael Hudson and Jeffrey Sommers

http://www.guardian.co.uk/commentisfree/2010/dec/20/latvia-debt-economy-europe-austerity

Despite being hailed by bankers as a shining example of how to pay off debts, the true picture in Latvia is far from rosy...

The "Latvian option" is the buzzword of the moment among European bankers and financial journalists. In October, the Latvian people voted in a coalition headed by the incumbent prime minister Valdis Dombrovskis, whose government had savaged social benefits, cut pay and inflated unemployment in 2009. Was this proof that austerity measures could not only work, but actually be popular? Was Latvia the model that Greece, Ireland and Spain should emulate?

The Wall Street Journal, for one, has published several articles promoting this view. Most recently, Charles Doxbury advocated Latvia's internal devaluation and austerity strategy as the model for Europe's crisis nations to follow. The view commonly argued is that Latvia's economic freefall (the deepest of any nation from the 2008 crisis) has finally stopped and that recovery (albeit very fragile and modest) is under way.

On politics, the standard narrative (as rolled out in the Economist recently) is that Latvia's taciturn and honest prime minister, Valdis Dombrovskis, won re-election in October even after imposing the harshest tax and austerity policies ever adopted during peacetime, because the "mature" electorate realised this was necessary, "defying conventional wisdom" by voting in an austerity government.

The problem with this interpretation is that the election was not a referendum on economic policy, but a contest primarily driven by ethnic considerations and the desire to punish a select group of oligarchs. Bankers, the financial press, and Latvia's Central Bank, however, would like to portray Latvia's October election as a vindication for austerity policies. Bankers want to get paid. The financial press pines for a return of the fairytale that markets self-correct and austerity brings prosperity. Latvia's Central Bank, about which even the IMF has expressed concern over the stridency of its neoliberal radicalism, wishes to run a victory lap, thus absolving itself for policies that imposed massive suffering on Latvia's people.

Despite these ringing endorsements for Latvia's austerity policies, they are not replicable. First, Latvia has no labour movement to speak of, thus little possibility of mobilising people against austerity. Indeed, there is little tradition of activism based on anything other than ethnicity. Therefore, countries with labour movements and traditions of activism on economic issues can expect very different results. Latvia's election turned on ethnic issues, as its politics have since 1991. Indeed, the election results were not a referendum on economic policy, but on ethnicity. Ethnic Latvians (the majority) voted for the ethnic Latvian parties (mostly neoliberal), while the sizeable 30% minority of Russian speakers voted with similar discipline for their party, Harmony Centre (loosely Keynesian). Three days before the election a spate of stories were released suggesting Kremlin ties to Latvia's ethnic Russian-dominated party that opposed austerity measures. These reports may, or may not, eventually be confirmed; however, released right before the election they moved many ethnic Latvians who were on the fence regarding who to vote for away from Harmony Centre....MORE

ONE OF THOSE "HEIRLOOM" RECIPES SOME ELDERLY AUNTIE ALWAYS BRINGS...THE LUTEFISK

[Demeter]

6. Will Santa Save Us? Be Very Afraid of Climate Change

http://www.newsdissector.com/blog/2010/12/24/will-santa-save-us-be-very-afraid-of-climate-change/

Sorry to be the bearer of bad news but Santa will not save us.

Tomorrow is Merry Christmas Day, and it seems like the country has been in a “shop until you drop” mode. Lets see how much of these goodies get returned when the credit card bills come due. In the mean time, Washington has shut down for a recess after the passage of some bills that has led supporters to position him as the “second coming.” Yet, so much of it is suspect.

On the other hand, the Boston Globe reports credit card use at an all time low with consumers relying on cash and debtit cards. The paper also reports a hike in sales of luxury goods to the rich....

THE WHINE OF THE EVENING...

[Demeter]

7. Adam Smith’s view of slaves as property

http://www.paecon.net/PAEReview/issue55/Brown55.pdf

In a previous issue of the Review, both Thomas Wells and Bruce Elmslie argue that I got it wrong when I pointed out in “Free Enterprise and the Economics of Slavery” that in The Wealth of Nations, Smith treated slaves as property.

I argued that since they were property—one could buy and sell them—one could ignore their human misery. I used Smith, as well as John Locke, to illustrate this peculiar Anglo-American tradition of basing freedom (free enterprise) on property and property rights. (On the European continent, freedom was generally based on the human will (Rousseau) or the moral will (Kant).

So, did Smith treat slaves as property in The Wealth of Nations or did he not?

In Civilizing the Economy, where I provide more details about Smith’s treatment of slaves in The Wealth of Nations, I quote his comparison of the treatment of cattle and slaves:

In all European colonies the culture of the sugarcane is carried on by negro slaves . . . . But the success of the cultivation which is carried on by means of cattle, depend very much upon the good management of those cattle; so the profit and success of that which is carried on by slaves, must depend equally upon the good management of those slaves, and in the good management of their slaves the French planters, I think it is generally allowed, are superior to the English...

MAKES YOU WONDER WHAT HAPPENED IN HAITI, DOESN'T IT? GET THE PEPTO-BISMOL!

[Hissyspit]

8. Regarding Clement Moore:

http://en.m.wikipedia.org/wiki/A_Visit_from_St._Nicholas?wasRedirected=true

Moore's connection with the poem has been questioned by Professor Donald Foster, an expert on textual content analysis, who used external and internal evidence to argue that Moore could not have been the author.<5> Major Henry Livingston, Jr., a New Yorker with Dutch and Scottish roots, is considered the chief candidate for authorship, if Moore did not write it. Livingston was distantly related to Moore's wife.<5>

Evidence in favor of Moore

Moore is credited by his friend Charles Hoffman as author in the December 25, 1837, Pennsylvania Inquirer and Daily Courier. Further, the Rev. David Butler, who allegedly showed the poem to Sentinel editor Orville L. Holley, was a relative of Moore's. A letter to Moore from the publisher states "I understand from Mr. Holley that he received it from Mrs. Sackett, the wife of Mr. Daniel Sackett who was then a merchant in this city". Moore allowed the poem to be included in his anthology in 1844, at the request of his children. Moore preferred to be known for more scholarly works.

Evidence in favor of Livingston

Moore "tried at first to disavow" the poem.<6> He claimed that only two changes were introduced in the first printing, yet it differs from his own on 23 points. It is also said that Moore falsely claimed to have translated a book.<7> Document historian Seth Kaller has challenged this claim as a misinterpretation of a book dedication.<8> According to Kellar, Moore signed the translation as a gift to the New-York Historical Society, as one might dedicate a book they give to another person, but did not claim authorship.

The following points have been advanced in order to credit the poem to Major Henry Livingston, Jr:

Livingston also wrote poetry primarily using an anapaestic metrical scheme, and it is claimed that some of the phraseology of A Visit is consistent with other poems by Livingston, and that Livingston's poetry is more optimistic than Moore's poetry published in his own name. But Stephen Nissenbaum argues, in his Battle for Christmas, that the poem could have been a social satire of the Victorianization of Christmas.<8> Furthermore, Kaller claims that Foster cherry-picked only the poems that fit his thesis and that many of Moore's unpublished works have a tenor, phraseology and meter similar to A Visit.<8> Moore had even written a letter entitled "From Saint Nicholas" that may have predated 1823.<8>

[DemReadingDU]

15. First I've heard of Henry Livingston

We sure learn interesting tidbits here
:)

[Hugin]

16. How about that! I was unaware of the mysteries of it's origins.

I guess that's one of the things which makes it truly magical. I've noticed many legends have similar cloudy origins.

Thanks for putting us in the know, Hissyspit. :)

[Demeter]

19. I wouldn't be surprised

Victorians, like the modern prigs, were frauds and thieves at heart.

[Demeter]

9. U.S. “quantitative easing” is fracturing the Global Economy Michael Hudson

http://www.paecon.net/PAEReview/issue55/Hudson55.pdf

Great structural changes in world trade and finance occur quickly – by quantum leaps, not by slow marginal accretions. The 1945-2010 era of relatively open trade, capital movements and foreign exchange markets is being destroyed by a predatory financial opportunism that is breaking the world economy into two spheres: a dollar sphere in which central banks in Europe, Japan and many OPEC and Third World countries hold their reserves the form of U.S. Treasury debt of declining foreign-exchange value; and a BRIC-centered sphere, led by China, India, Brazil and Russia, reaching out to include Turkey and Iran, most of Asia, and major raw materials exporters that are running trade surpluses.

What is reversing trends that seemed irreversible for the past 65 years is the manner in which the United States has dealt with its bad-debt crisis. The Federal Reserve and Treasury are seeking to inflate the economy out of debt with an explosion of bank liquidity and credit – which means yet more debt. This is occurring largely at other countries’ expense, in a way that is flooding the global economy with electronic “keyboard” bank credit while the U.S. balance-of-payments deficit widens and U.S. official debt soars beyond any foreseeable means to pay. The dollar’s exchange rate is plunging, and U.S. money managers themselves are leading a capital flight out of the domestic economy to buy up foreign currencies and bonds, gold and other raw materials, stocks and entire companies with cheap dollar credit.

This outflow from the dollar is not the kind of capital that takes the form of tangible investment in plant and equipment, buildings, research and development. It is not a creation of assets as much as the creation of debt, and its multiplication by mirroring, credit insurance, default swaps and an array of computerized forward trades. The global financial system has decoupled from trade and investment, taking on a life of its own.

In fact, financial conquest is seeking today what military conquest did in times past: control of land and basic infrastructure, industry and mining, banking systems and even government finances to extract the economic surplus as interest and tollbooth-type economic rent charges. U.S. officials euphemize this policy as “quantitative easing.” The Federal Reserve is flooding the banking system with so much liquidity that Treasury bills now yield less than 1%, and banks can draw freely on Fed credit. Japanese banks have seen yen borrowing rates fall to 0.25%.

This policy is based on a the wrong-headed idea that if the Fed provides liquidity, banks will take the opportunity to lend out credit at a markup, “earning their way out of debt” – inflating the economy in the process. And when the Fed talks about “the economy,” it means asset markets – above all for real estate, as some 80% of bank loans in the United States are mortgage loans.

One-third of U.S. real estate is now reported to be in negative equity, as market prices have fallen behind mortgage debts. This is bad news not only for homeowners but also for their bankers, as the collateral for their mortgage loans does not cover the principal. Homeowners are walking away from their homes, and the real estate market is so thoroughly plagued with a decade of deception and outright criminal fraud that property titles themselves are losing security. And despite FBI findings of financial fraud in over three-quarters of the packaged mortgages they have examined, the Obama Justice Department has not sent a single bankster to jail.

Instead, the financial crooks have been placed in charge– and they are using their power over government to promote their own predatory gains, having disabled U.S. public regulatory agencies and the criminal justice system to create a new kind of centrally planned economy in the hands of banks...

MUCH MORE AT LINK...A FEAST IN ITSELF

[Demeter]

10. Matt Taibbi's Great Squid Hunt

http://www.alternet.org/story/149161/matt_taibbi%27s_great_squid_hunt?page=entire

In Griftopia Matt Taibbi argues that America has been corrupted by the merger of government and finance...

The epic failure of America's financial system in 2008 was, among other things, a sobering gloss on the American romance with technical expertise. The tidal onrush of securitized debt that kept the housing bubble afloat was more than the simple byproduct of decades of deregulation in the nation's financial sector; it was also the handiwork of a new generation of market analysts known as the Quants. These ingenious souls harnessed arcane financial instruments like collateralized debt obligations (CDO) and credit default swaps (CDS) to magically scrub bad housing debt of all apparent risk as it was traded up the Wall Street food chain.

The rickety structure was bound to collapse, but the amazing thing is that even though the Quants and all their schemes have been exposed as fraudulent, the cult worship of market savants has gone on unabated. Look no further than the Obama administration, which met the challenge of leading the economy out of the worst recession in seventy years by retaining Ben Bernanke, the Fed chair who'd presided over the meltdown; promoting Timothy Geithner, a principal architect of the shoddy TARP bailout of Wall Street, to treasury secretary; and recruiting Larry Summers, a stalwart advocate of Clinton-era deregulation during his own treasury tenure, as its chief economic adviser. (Summers announced that he would decamp from his post at the head of the Council of Economic Advisers in September, only to return to that other citadel of technocratic hubris he had long ago captained and, not incidentally, helped steer into its own economic peril: Harvard University.) It was a bit like the government subcontracting all future deepwater drilling oversight to BP....

SUSHI! (I MAY HAVE POSTED THIS PREVIOUSLY...BUT IT'S NUTRITIOUS!)

[Demeter]

11. Corporate America's Plan to Loot Pensions Latest Battle in Assault on Middle Class By Arun Gupta

http://www.informationclearinghouse.info/article27099.htm

The severe economic crisis, now in its fourth year, is being used to batter the remnants of the social welfare state. Having decimated aid to the poor over the last 30 years, especially in the United States, the economic and political elite are now intent on strangling middle-class benefits, namely state-provided pensions, health care and education.

The initial neoliberal assault under Ronald Reagan and Margaret Thatcher reorganized the capitalist economy and hammered private-sector unions into submission. This was accomplished by putting labor back into competition with itself by off-shoring industrial production, through deregulation and with frontal assaults on labor rights, organizing and solidarity.

Similarly, the current attack is a two-pronged effort to reorganize state social services, either by eliminating or privatizing them, and decimate public-sector unions whose workers provide those services. While the safety net is being withered by attrition, police and spying agencies are getting more powers and funding, and the wealth of the super-rich and record corporate profits are deemed off-limits to taxation to close any government budget gap.

Simply put, the elderly are superfluous to capitalism. With high rates of joblessness the “new norm,” more and more people are being made disposable. This leads to an efficient if brutal logic: cutting old-age income and health care will make it easier to scrap old, useless workers. In fact, this reality is already coming to pass. One study published in 2008 found that over a 16-year period life expectancy had declined for many poor American women — precisely those who are disproportionately represented among the elderly heavily dependent on Social Security and Medicare...

ALL RIGHT, WHO BROUGHT LIVER?

[Demeter]

12. (I'm getting hungry--but go ahead without me)

I'll be back after a bit...

[enough]

13. Wow Demeter, thanks for the thread. I was getting shaky. Feel better now. (nt)

[bread_and_roses]

14. A musical joke from Mozart

http://www.youtube.com/watch?v=MLfD0a0sYxA

Though not specifically seasonal, it is quite festive! And since we have an economy, an administration, and a mainstream media that are all a grim joke, it strikes me as fitting - though this one is far more elegant and entertaining.

oh, and PS - I love "The Night Before Christmas: - great choice!

[DemReadingDU]

17. Charles Hugh Smith: The Last Christmas in America

12/23/10 The Last Christmas in America

The end of cheap oil, the end of work and the end of affluence: welcome to The Last Christmas in America (TLCIA).
.
.
The death throes of the debt-based consumerist lifestyle are already visible beneath the glossy propaganda of "rising revenues this Christmas season." My friend Richard Metzger (founder of the amazing Dangerous Minds website) neatly summarized the reality of our "consumerist paradise":

Christmas 2010 will be the historical bookend of the consumer era. The last gasp. I don't see any possible chance of its return. This culture of spending, the conditions won't be there for it, nor the desire to consume like that again. I think it's simply being beaten out of us.

But, further to this point, with the tremendous implosion in the FIRE economy and the huge aggregate losses in the GDP from Wall Street, the banking sector and the real estate bubble (all essentially non-productive enterprises seen from hindsight, none likely to rebound for decades), when these losses get combined with a massive, massive slowdown in US consumer spending --which serves as a sort of gigantic furnace for much of world manufacturing and trade, of course-- we'll have an America where the GDP returns to the level of... what year?

You often read economists writing about real estate saying that housing prices might eventually return to pre-bubble levels by 2014, but what about the GDP? A lot of the Ponzi scheme profits of Wall Street and the hedge funds can now be seen to never have existed in the first place. There's been unprecedented wealth destruction in real estate. In practical terms for a reasonable guesstimate of the true United States Gross Domestic Product, might this mean a return to the GDP of, of say, pre-dotcom bubble America, taking the years 1994 to 1996 as an arbitrary yardstick?

Subtract the FIRE industries, throw in the consumer/debt shut down and how much THAT will subtract (I can't guess at that number) we are looking at one hell of a haircut for the GDP. It won't be anything like a 4% contraction-- already an epic nightmare-- it'll be an abrupt implosion of some high percentage of the GDP.

And when America's rapidly growing national debt is measured against a GDP that looks closer to 1996's tally than to 2006's, this is when the word DEFAULT will be on everybody's lips. It will begin to seem advantageous to repudiate the debt before there is no possibility of any sort of governmental spending beyond servicing it. What will that do to the currency, what will this do to world trade, etc.? So many more onion layers keep presenting themselves and it all looks doomed.

Excellent summary, Richard, thank you.
.
.
more...
http://www.oftwominds.com/blogdec10/last-christmas12-10.html

[DemReadingDU]

18. Charles Hugh Smith: Why The Status Quo Is Unsustainable

"Straight Talk" features thinking from notable minds that the ChrisMartenson.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

12/5/10 Straight Talk with Charles Hugh Smith: Why The Status Quo Is Unsustainable
This week's Straight Talk contributor is Charles Hugh Smith, who has been an independent journalist for 22 years. His weblog, www.oftwominds.com, is a daily compendium of observations and analysis on the global economy and financial markets, as well as notable political, social, and cultural trends.

1. Of the many forces at play that you write about within the economy, society, and politics, which ones do you see as the most defining for the future? How do you expect things to unfold?

CHS: Clearly, demographics and Peak Oil are forces which cannot be massaged away by policy tweaks or financial engineering. I think the exhaustion of Global Neoliberal Capitalism and State Capitalism is apparent, as is the bankruptcy of the two ideologies that more or less define our politics. The reliance on expansion of credit and State power is a dynamic with only unhappy endings.

The reliance on propaganda, for instance, has become so pervasive that the notions of truth and honesty have been hollowed out. Nobody expects the President or Ben Bernanke to speak honestly, as the truth would shatter an increasingly fragile status quo. But this reliance on artifice, half-truths, and propaganda has a cost: People are losing faith in government, in all levels of authority, and in the Mainstream Media—and for good reason.

5. How does the general citizenry take power back from the plutocracy you write about that has amassed a supermajority of wealth and power in the world?

CHS: I think voting against conventional politicos who are indebted to the status quo Power Elites and voting for any politico who dares to speak honestly about power structures and sacrifice is worth a try, as it is essentially cost-free.

Voting for third-party candidates seems quixotic, but as the public loses faith in the traditional sources of authority, then viable third-parties might arise, at least locally.

“Starving the beast” by eliminating debt and financial churn is also a two-fer: It reduces the income streams of the Plutocracy and accumulates capital for households. A society without mortgages or credit cards would also be a society without “too big to fail” banks. Commercial credit of the sort needed for business does not require global investment banks or shadow banking empires.

10. What question didn’t we ask, but should have? What’s your answer?

CHS: One such question might be: What are the foundations of my general optimism about the Great Transformation ahead?

One is the process of evolution has expanded from the genome to culture and technology. All species must adapt or perish, and individuals have to adapt to changing circumstances. At a system level, there are feedback loops, positive and negative, which mean that extrapolating the present into the future is not very accurate. New feedback loops can be added, and the value systems of cultures can also adapt.

lots more...
http://www.chrismartenson.com/blog/straight-talk-charles-hugh-smith-status-quos-trajectory-unsustainable/49100

[Demeter]

20. "Nobody expects the President or Ben Bernanke to speak honestly"

Nobody expects the President or Ben Bernanke to speak honestly, as the truth would shatter an increasingly fragile status quo. But this reliance on artifice, half-truths, and propaganda has a cost: People are losing faith in government, in all levels of authority, and in the Mainstream Media—and for good reason....

“Starving the beast” by eliminating debt and financial churn is also a two-fer: It reduces the income streams of the Plutocracy and accumulates capital for households. A society without mortgages or credit cards would also be a society without “too big to fail” banks. Commercial credit of the sort needed for business does not require global investment banks or shadow banking empires....


a Xmas present in every paragraph...thanks!

[Demeter]

21. On a Personal Note

Last night, my sister put my father in the hospital (third time this year) and she's going for the nursing home and exercising her power of attorney. He doesn't want or is unable to take of himself, and she sure can't do it herself. Our current game plan is to use the next 4 days to get him the basic care he's refused previously, locate a nursing situation there, since he's in no shape to travel, and sell the house.

Fortunately, hotmail saves all the emails I've sent, so I could locate the nursing home information I sent her back in July when he first was hospitalized...I will be kibitzing (among other things) long distance on this.

So, Merry Christmas, and God Bless us everyone. We are going to need it.

[DemReadingDU]

22. Hope things go smoothly

Keeping you and your sister in my thoughts during the holidays.
:hug:

[Demeter]

23. As Wall Street Tries to Strong-arm Consumers, Will WikiLeaks Bring BOA to Its Knees?

http://www.alternet.org/story/149302/as_bank_of_america_tries_to_strong-arm_consumers%2C_will_wikileaks_bring_it_to_its_knees?page=entire

Wall Street has worked hard to keep its inner workings from seeing the light of day. But one of the worst offenders in the financial crisis may be about to face the kind of public disrobing that government regulators, the corporate media and transparency activists are incapable of performing. If the rumors that have been swirling around in recent months prove true, Bank of America's dirty secrets may soon be exposed for the world to see, courtesy of the whistle-blower site Wikileaks.

The banks prefer not to give out information, even when required to do so by law. Consider their potentially illegal response to a campaign by the service employees union, SEIU called, “Where's the Note?” that helps homeowners request a copy of their mortgage-holder's proof that it actually holds the note on their properties. According to SEIU – and confirmed anecdotally by others – borrowers who take advantage of SEIU's system have faced retaliation in the form of lower credit ratings: they send in the request, and see their credit scores fall. It's a likely violation of the Fair Lending Act, and as Roosevelt Institute fellow Mike Konczal noted, it's a serious threat:

In the middle of a foreclosure fraud crisis where people aren’t sure who owns their mortgage, a simple ask of “can you show me the contract I signed with you, just to make sure it is there if there is a dispute” is being used to threaten someone’s credit score.... Since credit scores impact everything else in your life, from being able to turn on your lights and electricity to renting an apartment to purchasing things, this is a serious threat, one of the more grievous ones a private company can deliver.

David Dayen at Firedoglake adds that the heavy-handed response to SEIU's campaign “is part of a broader trend, where the servicers and big banks, having been exposed by the foreclosure fraud crisis, are now lashing out at their critics.”

THE SOONER, THE BETTER--I CAN'T THINK OF ANY REASON TO DELAY IT, NOT EVEN A DEATH THREAT OR A NUCLEAR HOLOCAUST

[Demeter]

24. AIG to pay $100 million in workers' compensation fines

http://news.yahoo.com/s/nm/us_aig;_ylt=AuBYvpolwklbvr6bm2Idq9us0NUE;_ylu=X3oDMTNhdGk0MWxpBGFzc2V0A25tLzIwMTAxMjIzL3VzX2FpZwRjY29kZQNtb3N0cG9wdWxhcgRjcG9zAzcEcG9zAzQEcHQDaG9tZV9jb2tlBHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNhaWd0b3BheTEwMG0-

Bailed-out insurer American International Group will pay $100 million in fines in a settlement with all 50 states over reporting errors for premiums on workers' compensation insurance.

The Pennsylvania Department of Insurance announced the settlement on Wednesday on behalf of the other jurisdictions.

In addition to the fines, AIG will pay $46.5 million in taxes and assessments and has agreed to a potential $150 million in extra fines if it does not follow a compliance plan.

Pennsylvania authorities said the primary violation was the misreporting of more than $2 billion in workers' comp premiums as general or commercial auto liability premiums.

The examination focused on actions between 1975 and 1996, the same period that was the subject of the 2006 regulatory settlement between AIG and New York state, AIG spokesman Mark Herr said in a statement...

HOW LONG IS THIS GOING TO BE TOLERATED?

[Demeter]

25. "Europeans Are Starting to Wonder ... Does America Obey the Rule of Law?"

VIDEO INTERVIEW OF ASSANGE

http://www.alternet.org/newsandviews/article/405959/watch_assange_interview%3A_%22europeans_are_starting_to_wonder_..._does_america_obey_the_rule_of_law%22/

[Demeter]

26. Exclusive Julian Assange Interview With Cenk Uygur (Video)

http://www.truth-out.org/exclusive-julian-assange-interview-with-cenk-uygur-video66217

SAME INTERVIEW, BIGGER SCREEN AND TRANSCRIPT

[Demeter]

27. Obama to the Corporate Powers: I Feel Your Pain

http://www.truth-out.org/obama-corporate-powers-i-feel-your-pain66205

Guess who's whining the loudest these days, wailing that they're getting a raw deal from Barack Obama.

Not the unemployed and barely employed - even though the White House has blithely ignored their critical need for a national jobs program. Not the poor, even though their ranks are swelling as millions of Americans fall out of the middle class.

No, no, the most insistent demand for attention is coming from way above the poor and the middle class. Believe it or not, it's the CEOs of Americas biggest corporations and the top bankers of Wall Street who're stamping their little Gucci-clad feet, bawling that they should be getting more love and support from the president.

It seems that the feelings of these precious ones have been hurt by Obama's occasional condemnation of the stupefying greed that's been shown by the likes of health insurance executives and Wall Street banksters. As one CEO put it, Obama's attitude "felt too much like we were the bad guys."

[hamerfan]

43. Of course

the corporations are going to whine.
They have bought our government, one politician at a time. That costs money and by gosh, they want a return on that investment!

[Demeter]

28. Free Trade Won't Cure Unemployment by: Paul Krugman

http://www.truth-out.org/free-trade-wont-cure-unemployment66203

Now that there seems to be no hope of using reasonable fiscal policy to fix the United States’s economy, I’ve been hearing a different idea lately: that trade can be a driver of economic recovery. Namely, the suggestion that the trade proposal South Korea and the United States recently agreed on can serve as a form of macroeconomic policy.

Um, no.

The problem in the United States is insufficient spending on American-produced goods and services — that is, a lack of demand.

Think of the situation in these terms: Y = C + I + G + X – M

In this equation, C is consumer spending, I is investment spending, G is government purchases of goods and services, X is exports and M is imports. Trade agreements raise X, but they also lead to higher M. On average, it’s a wash.

This, by the way, explains why claims that the Smoot-Hawley Tariff Act caused the Great Depression are nonsense. Signed into law in 1930, this was basically an effort to protect American businesses and farms by raising duties on imports to record levels. To be clear, I don’t think the Smoot-Hawley tariff was a good thing. But did it and other trade restrictions cause the Depression? No.

According to textbook economics, protectionism causes a misallocation of resources, reducing the economy’s efficiency. But it does not cause mass unemployment....

[Demeter]

29. A Year Undercover in the Jobs Most Americans Won't Do

http://www.alternet.org/story/149235/working_in_the_shadows%3A_a_year_undercover_in_the_jobs_most_americans_won%27t_do

An award-winning writer immersed himself in work at the bottom of the scale in terms of pay, rights, and working conditions. Here's what he found.
December 24, 2010 |


“Please don’t make me do this again—it is really, really hard.” That’s what Stephen Colbert said to a Congressional committee on immigration, recounting his day as a farm worker. Colbert was responding to the claim—often repeated but rarely explored—that undocumented migrant workers take jobs that would otherwise go to American citizens.

Gabriel Thompson’s response to the debate over immigration and employment was to embark on a serious piece of investigative journalism. He immersed himself in work at the bottom of the scale in terms of pay, rights, and working conditions. His experience, described in Working in the ​​Shadows, makes it clear why these are not only the jobs most Americans don’t do, but also the jobs most won’t do.

Thompson, an award-winning writer, went undercover to investigate the underside of the American economy. Presenting himself as a drifter with a sketchy resume, he took jobs cutting lettuce in the fields of Arizona, processing chickens in a plant in Alabama, and delivering food in New York City. It’s evident from the first day in each new setting that, although an impressive resume is not required, each job is extremely demanding in its own way.

Thompson catalogues the hardships of these jobs: the need for physical strength and endurance when bending, cutting, and bagging in the lettuce fields; the likelihood of an industrial accident during an exhausting night shift in the chicken processing plant; the frantic pressure of restaurant delivery work. Despite discomfort—at times, outright pain—Thompson remains clear about the difference between his choice and the financial realities that compel others to do this backbreaking work: “This book was an exhausting learning experience for me; for my coworkers, it’s life.”

[Demeter]

30. How I Gave Up Christmas and Saved My Sanity

http://www.alternet.org/story/149291/how_i_gave_up_christmas_and_saved_my_sanity

Yes, Virginia, there is a sanity clause: Give Christmas the heave ho-ho!

I can't remember exactly when it was that I gave up Christmas, but I've never regretted it. While my friends and family run around in a frenzy of mall purchases and the attendant anxiety of how to pay for it all, I bask in the serenity of having let it all go -- well, most of it.

It seemed to happen in stages. One year, I asked my brothers that they stop buying gifts for me and to forgive me for not buying gifts for them. It took a while for that to take. One brother refused to buy into the pact. Another has a wife from a non-Western country who, in dealing with her in-laws, expresses her love by thoroughly embracing the traditions of her new homeland. But, as time went on, everybody seemed to accept, however grudgingly, that I was not taking part.

Eventually, I stopped making the 300-mile trek to go home for Christmas. I made a point of getting there every Thanksgiving instead, a holiday for which the company of family is its own reward, and love is shown through the preparation and sharing of food. Sometimes we even pull out the guitars and make bad music together, passing out rhythm instruments to the kids. NOW THAT'S MY IDEA OF A HOLIDAY!

Christmas, on the other hand, held such expectations of material splendor that it was impossible to have any quality time with my nieces and nephews, wound up as they were on the highs of the day, with their exhausted parents busy trying to police the pandemonium. And so, one year, I decided to stay home and cook myself a duck. I could have gone to the families of friends nearby, but that would have been just another permutation of what I had escaped, so I opted for solitude. It was delicious -- both the duck and the solitude.

[Demeter]

31. Oliphant's take

http://imgsrv.gocomics.com/dim/?fh=19fd9db8f7633b9db70d17d699a29443&w=750.0

[Demeter]

32. and Mark Fiore's

http://www.markfiore.com/political-cartoons/watch-dogboy-and-mr-dan-christmas-holiday-shopping-consumerism-animated-video-mark-fiore-political-animation

[DemReadingDU]

37. This sounds like me

Years ago, I decided to stop sending Christmas Cards to my family. Heck, I see them all the time.

A few years ago, I stopped sending cards to people in town.

Last year I didn't send any cards. None this year either.

Along the way, I also stopped buying gifts. I give cash instead. Perhaps it's boring, but everyone can buy what they want and need. And I make a donation to help the needy in my community.

I do give my toddler grandbabies some books. Their parents and the other grandparents go overboard with the presents, to me it is silly to contribute any more nonsense. But books are precious. You never outgrow your need for real books.

Happy Holidays to Everyone!

[Demeter]

33. Economic Outlook: 5 Things that Could Happen in 2011 by Bill Bonner

What might happen (BECAUSE OF QE2)? Here are some guesses:

1) It will create more speculative bubbles. We wouldn't be at all surprised to see oil go to $100 and above, for example. The Fed's money is, so far, not making it into the real economy. But it is available to speculators. And speculators are betting that they can make more money in commodities than in US T-bills. So, keep an eye open. Most likely, you'll see some bubbles in 2011.

2) Emerging market stocks could soar. Imagine that you're 'trading' for Goldman Sachs. You can borrow dollars for nothing. What do you do with them? Invest them in the world's fastest growing economies! If you're lucky, you'll get 10%...maybe 20% return - on someone else's money. And if you're unlucky? Who cares? It's not your money. And you won't go broke. The Fed will give you more money.

3) Gold to $1,500. Why not? The IMF just completed selling. China, India and other emerging economies are adding to their stash. Speculators are getting in on the biggest and most reliable bull market in the financial world. Heck, even individual investors are catching on.

Passing through the airport in Miami last week, we noticed a gold vending machine! We had heard they were around. But this was the first time we saw one. How surprising would it be if more and more ordinary people started imitating the rich, who've been buying gold for years? Suppose people realize that their central bank is now working against them...and that they have to maintain their own real money reserves? We could easily see gold over $1,500 in 2011.

4) US bond yields rise; the bond market begins to break down. It looked like it was beginning a week or two ago. Bonds were going down just as Ben Bernanke was trying to push them up. Sooner or later, it's bound to happen. Investors must eventually realize that buying US debt is a dangerous proposition; the Fed is actively trying to reduce its value. And if there is one thing the Fed ought to be able to do it's to undermine the value of US debt. After all, the feds control the currency it's calibrated in.

5) In contrast to this bubbly and bodacious outlook is a not-insignificant risk that the whole shebang will blow up. US stocks could crash. Bubbles can explode. Unemployment, housing, sales, consumer price inflation - all could get worse. Then what? Then, the US dollar and US debt will go up!

Well, which is it, you're probably wondering. Inflation or deflation? Boom or bust?

Our answer? Yes!

[Demeter]

34. Inside Job’s Charles Ferguson on the Corruption of Academic Economics

VIDEO

http://www.nakedcapitalism.com/2010/12/inside-jobs-charles-ferguson-on-the-corruption-of-academic-economics.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[Demeter]

35. Fraud Ruling Against Wells Fargo in Minnesota Points to Widespread Abuses in Securities Lending Prog

http://www.nakedcapitalism.com/2010/12/fraud-ruling-against-wells-fargo-in-minnesota-points-to-widespread-abuses-in-securities-lending-program.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A fraud and breach of fiduciary duty ruling against Wells Fargo in a major scandal in Minnesota may have much broader ramifications for this sanctimonious bank.

The facts are not pretty. Wells Fargo, in its investment management operation, used securities lending to boost returns. But the returns it increased appeared to be only those of the bank. Institutional investors in various programs lost money as a result of this activity. Four Minnesota plaintiffs, including two of the state’s high profile charities, sued. A jury had already awarded the plaintiffs $29.9 million for fraud. A post trial ruling by the judge has added costs, interest, and reimbursement of fees that looks set to more than $15 million to the total.

District Judge M. Michael Monahan concurred with the jury’s main findings:

Wells Fargo breached its duty of full disclosure by not adequately disclosing that it was changing the risk profile of the securities lending program, that it breached its duty of impartiality by favoring certain participants over other participants, and that it breached its duty of loyalty by advancing the interest of the borrowing brokers to the detriment of one or more of the plaintiffs.

What makes this ruling interesting is that although it set aside a minor part of the jury award, a $1.6 million issue, to be subject to a new trial, is that it was punitive as a result of the judge’s determination that the fraud was systematic. It is unusual to award the payment of the plaintiff’s attorney’s fees, or to order disgorgement of fees paid for services (the other component of the additional $15 million plus is interest on the $29.9 million). The basis for awarding attorneys’ fees? The bank is such a menace to society that having counsel root it out is a public service...

[Demeter]

39. New York Foreclosures Are Down 88% Since Robo-Signing Gate

On October 20 a New York judge ruled that foreclosures require a signature from bank's attorneys affirming that they have checked all paperwork. Since then weekly foreclosures have tumbled from 800 to 100, according to the New York Law Journal.

The 88-percent decline is more than foreclosure lawyers expected. It's also much greater than the normal Christmas slowdown.

Other rulings have clogged the filings, including a Dec. 1 ruling in Suffolk county that threw out 127 foreclosures for failing to file affirmations, according to Daily Finance.

A similar phenomenon is happening nationwide, with foreclosures at a two-year low after new regulations and uncertainty following with foreclosure-gate. Remember, every week toxic assets are stuck on bank balance sheets adds to servicing costs and may delay the housing recovery.


Read more: http://www.businessinsider.com/new-york-foreclosures-are-down-88-since-robo-signing-gate-2010-12#ixzz194ZzP0UM

[DemReadingDU]

36. HELLO MR. CHENY,

This is a comment in New York Times about Dick Cheney concerning Nigeria Dropping Bribery Charges Against Cheney...

from Bob Philadelphia
December 24th, 2010
2:51 pm

HELLO MR. CHENY,

FELICITOUS CONGRATULATION RE. BEATING THIS BAD RAP FROM CORRUPT GOVT. I REPRESENT INTERIOR MINISTER OF FORMER GOVT. AND WRITE TO REMIND YOU RE. 95 MILLION ($95,000,000) SUM PAYMENT MADE EARLIER BY HALIBURDON TO OUR GOVT., NOW IN EXILE. BE ADVISED I HAVE CONNECTIONS TO REFUND SAID SUM TO YOU AS HALIBURDON REPRESENTIVE. TO FURTHER THIS PLAN, WE SIMPLY REQUEST YOUR PEROSNAL BAKN ACCT INFORMATION. EG ACCT NUMBER ROUTING NUMBER AND TO PLEASE SIGN DOCUMENTS OF TRANSFER TO BE SENT YOUR ATTENTION AT SOONEST. DO NOT BE CONCERNED THIS SCHEME IS FULLY LEGAL AND WILL REWARD YOU FOR WORK ON BEHALF OF NIGERIAN PEOPLE.

ALSO BE ADVISED OF OPPORTUNTY TO ACHIEVE RECOVERY OF WEAPONS OF MASS DESTRUCTION EARLIER RETRIEVED FROM IRAQ AND SEQUESTRED @ SECRET NIGIERIA SITES. ONLY ASK FOR EXPENSE REIMBURSEMENTS IN RETURN FROM YOU.

WITH BEST REGARDS AND WISHES FOR SPEEDY CONSUMATION,

JOE NGELEY,
INTERIOR MINISTRY

click here to read short article and a few additional comments
http://green.blogs.nytimes.com/2010/12/24/nigeria-drops-bribery-charges-against-cheney/

[Po_d Mainiac]

38. Glad I didn't have on a new diaper.

Best regards, Dick

:rofl:

[Demeter]

40. How the Fed let small banks take on too much debt, then fail

The Federal Reserve Board, chastised for regulatory inaction that contributed to the subprime mortgage meltdown, also missed a chance to prevent much of the financial chaos ravaging hundreds of small- and mid-sized banks.

In early 2005, at a time when the housing market was overheated and economic danger signs were in the air, the Fed had an opportunity to put a damper on risk taking among banks, especially those that had long been bedrocks of smaller cities and towns across the nation.

But the Fed rejected calls from one of the nation's top banking regulators, a professional accounting board and the Fed's own staff for curbs on the banks' use of special debt securities to raise capital that was allowing them to mushroom in size.

Then-Chairman Alan Greenspan and the other six Fed governors voted unanimously to reaffirm a nine-year-old rule allowing liberal use of what are called trust-preferred securities...


Read more: http://www.mcclatchydc.com/2010/12/22/105708/fed-could-have-saved-many-smaller.html#ixzz194aEyvyz

THIS IS A MUST-READ KIND OF ARTICLE

[Demeter]

41. Dear Friends and Neighbors, Fellow Citizens of Country and/or World

I cannot recall a Christmas when I had less spirit, but I wish you all a light in the darkness, an orange in the toe of your stocking, peace on earth, and goodwill to all people.

We will get through this. And as long as I am writing it, and you are reading it, or vice versa, neither of us is going through it alone.

I will be back tomorrow with a new thread, and perhaps a new outlook. In any event, we will gather at the glowing screens.

Off to sing a few carols now. Sleep well and keep warm.

[hamerfan]

44. Thank you, Demeter,

Best wishes for you and yours! Stay warm.
hamerfan

[DemReadingDU]

46. an orange in the stocking

We received the biggest oranges and apples at Christmas in our stocking. I'm not sure where my mom bought them, but they were about as big as our heads! Well, they seemed that big when we were smaller.
:)


Nowadays kids want I-pods and other techie gadgets.

[bread_and_roses]

42. And for the pundits singing the "we're in recovery now" song - a NEW FASHIONED FRUITCAKE

You know what I mean by new fashioned - those nasty concoctions full of maraschino cherries and stale nuts that are justly derided - that's all they deserve, with their canned, artificial beltway pap and pablum

.... now, for us, I prescribe a traditional fruitcake, which is (believe it or not) quite delicious. One recipe contains the following:

1 pound butter 1 pound brown sugar 12 eggs separated 4 cups flour 2 teaspoons each cinnamon, mace, cloves (this is what makes it dark) 1 teaspoons each allspice, nutmeg, salt (this too) 1 pound mixed candied fruit 1 pound candied cherries 1 pound seeded raisins 1 pound seedless raisins 1 pound currants 1 pound pitted dates, cut in pieces 1/2 pound diced citron (optional) I would leave this out citron is very strong tasting and this is what people usually do not like in fruitcake. Use candied pineapple instead. 1 pound broken walnuts 1 cup rum or brandy 1/2 cup double-strength coffee grated peel and juice of 3 medium sized oranges grated peel and juice of 1 lemon

This is from http://www.bigoven.com/recipe/117181/old-english-fruit-cake where you can find the rest of the recipe instructions, for next year :)


I am quite sure that there were candied cherries in the middle ages, but I doubt they tasted anything like the maraschino of today. In fact, http://www.practicallyedible.com/edible.nsf/pages/candiedcherries tells me they've been around since at least the 1300's; the same site tells me NOT to use maraschino cherries as a substitute.

Of course, for those who cannot abide the thought of any sort of fruitcake, however sanctioned by tradition and history, I would make my apple-cranberry-walnut cake, which is also dark and moist, but only slightly fragrant with cinnamon and has not a hint of any candied fruit.

Whatever your solstice treat and tradition, may the season be abundant for you in whatever ways give most joy to your heart.
edit for misplaced quote divider

[DemReadingDU]

45. If fruitcake didn't have all that candied fruit

I would love it!
:)

[ozymandius]

47. Reminder: Pizza makes a great stocking stuffer.

And what goes with pizza?

http://3.bp.blogspot.com/_dfbI8SIJWek/TRK9zsOlVfI/AAAAAAAAANQ/4LB5uu36sTc/s1600/dad%2527s+gift.jpg

[Po_d Mainiac]

48. And now we know they knew, and it was not "unpredictable"

For the first imperative, King suggested developing a pooling and auction process to unblock the large volume of financial investments for which there is currently no market. For the second imperative, King suggested that the U.S., UK, Switzerland, and perhaps Japan might form a temporary new group to jointly develop an effort to bring together sources of capital to recapitalize all major banks.

http://www.guardian.co.uk/world/us-embassy-cables-documents/146196

So the plan has always been to unblock the large volume of financial investments for which there is currently no market Read: take the shit off all the major banksters books :grr:

[Demeter]

49. Mass insanity

A big bonfire would at least produce heat and light...