What It's Like To Stand Inside Imploding Texas Stadium
Friday, April 30, 2010
What It's Like To Stand Inside Imploding Texas Stadium
Tuesday, April 27, 2010
Tsunami of red ink - Understanding the national debt (a graphic essay).
Greece completely unraveling and pain is spreading - The Big Picture
Greece Contagion Concerns - Calculated Risk
The Depressing Outlook for Greece and Europe - Felix Salmon, Reuters
Confidence in Greek Debt Sinks Again - New York Times
Greece & Who's Next? Europe's Leaders Are in Denial - Editorial, NY Times
Deflation Remains a Major Global Risk - Vincent Reinhart, The American
The New Tax Math: Single Moms + Big Brother - Phyllis Schlafly, IBD
"Crowd-Sourcing" IBM to Cut 3/4 of its Permanent Staff by 2017? - Mish's Econ Forecast
Friday, April 23, 2010
Thursday, April 22, 2010
Time Magazine (June 1933):
Bank Reaction to Intro of FDIC Deposit Insurance -- From a TIME magazine article in 1933 at introduction of FDIC and deposit insurance:
Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed by both houses of Congress would rivet upon their institutions what they considered a monstrous system of guaranteeing bank deposits. Such a system, they felt, would not only rob them of their pride of profession but would reduce all U. S. banking to its lowest level. They saw their deposits which they had spent a lifetime to build up and protect with their good names confiscated by the Government to pay for the mistakes and dishonesty of every small town bankster.
Nancy Cook / Newsweek Blogs: Obama's Financial-Reform Speech Short on SpecificsMichael Scherer / Swampland: President Obama In New York, On A RollBen Smith's Blog: FinReg, 1933 edition — It's an old device, but an effective one …Jillian Rayfield / TPM LiveWire: Obama To Bankers: ‘Join Us’ In Reforming The Financial System
discussion:Lachlan Markay / NewsBusters.org: Comedy Central Caves, Censors ‘South Park’ from Even Saying ‘Muhammed’Allahpundit / Hot Air: Comedy Central censors all references to Mohammed on “South Park” …Clifton B / Another Black Conservative: Comedy Central (aka Cowardly Central) censors South Park's Mohammed episodeBaron Bodissey / Gates of Vienna: Knee-Jerk Dhimmitude — I've never been a fan of South Park …Little Green Footballs: Comedy Central Backs Down After Islamic Group's Threats Over ‘South Park’The Live Feed | THR: ‘Muhammad’ now a dirty word on ‘South Park’Pamela Geller / Atlas Shrugs: Comedy Central Crushing Censorship: DO NOT SAY THE WORD MUHAMMADSharia …Mallory Simon / This Just In: ‘South Park’ Mohammed issue sparks debate among MuslimsFrances Martel / Mediaite: South Park Creators Defend Their Show Against Comedy Central CensorshipSmitty / The Other McCain: Craven-ness Central: Those Who Hate You Laugh At You, Without HumorDave Itzkoff / New York Times: After Warning, ‘South Park’ Episode Is AlteredTroy Reimink / MLive.com: Did ‘South Park’ go too far with Prophet Muhammad parody?Jesse Walker / Hit & Run: We Shall Not Be Bleeped — On South Park's website right now:Abe Greenwald / Commentary: Tragedy CentralWoody Hochswender / Big Hollywood: Now Is the Time for All Good Men and Women to Come to the Aid of ‘South Park’Left Coast Rebel: South Park Prophet Muhammad Episode 201 Censored?Robert / Jihad Watch: Comedy Central submits to Islamic intimidation …Andrew Sullivan / The Daily Dish: Puss TV UpdateMichael Sheridan / NY Daily News: ‘South Park’ creators warned: Poking fun at Muhammed could invite deadly Muslim rageJoshua Rhett Miller / Fox News: Comedy Central Censors ‘South Park’ Episode After Muslim Site's Threats
The Johnsville News (February 2006):
Danish Muhammed Cartoons and Islamic Vitriol -- The Islamic world is rioting because a few newspapers in Europe published some (12) cartoons with caricatures of Muhammed. Given how may times Jesus, Moses, and Buddha have had their caricatures done in the press it seems unreasonable for Muhammed (also translated as Mohammad) to get a free pass. Compared to some "political" cartoons these seem very tame. Here are the twelve cartoons that have caused the massive controversy...
The Johnsville News:
Backlash against the backlash
Wednesday, April 21, 2010
Bill Black calls out the crooks and liars during his testimony on the failure of Lehman Brothers before the House Financial Services Committee. Black was a deputy director at the former Federal Savings and Loan Insurance Corp. during the thrift crisis of the 1980s, and now serves as an associate professor, teaching economics and law at the University of Missouri, Kansas City.
Fire Dog Lake:
Transcript & Video: Bill Black Testimony on Lehman Bankruptcy -- Bill Black scorched everyone with his testimony on the failure of Lehman Brothers before the House Financial Services Committee...
Mish's Global Econ. Trend Analysis:
Geithner and the NY Fed Accused of Willfully Ignoring Fraud and Covering Up Lehman's Bad Assets by Senior Regulator During the S&L Crisis
The Big Picture:
Bill Black’s eye-popping statement at House FinServ hearing on Lehman
William Black Tells The Truth On Lehman's Failure: "A Story In Large Part Of Fraud"
Monday, April 19, 2010
Items of Interest:
Dylan Ratigan / Huffington Post:
A Patriot’s Day Call to Arms -- This letter is a call to (electronic) arms on Patriots' Day.
Mr. President, please show the American people the AIG emails.
In the wake of the disclosures associated with Friday's government fraud accusations against Goldman, Sachs & Co., one of our nation's wealthiest, largest and most politically well-connected banks, it is inexcusable the U.S. government still refuses to release the thousands of emails that exist between AIG and Goldman Sachs...
The Goldman Defense: Caveat Emptor – DealBook Blog – NYTimes.com
Goldman Sachs: a history of controversy
Sydney Morning Herald:
ASIC considers joining Goldman Sachs probe
Alice Schroeder / Bloomberg:
Buffett Rented Good Name to Goldman Too Cheap
New York Times:
Top Goldman Leaders Said to Have Overseen Mortgage Unit
Profile: Fabrice Tourre, Goldman Sachs
Friday, April 16, 2010
The SEC charges Goldman Sachs with fraud related to marketing sub-prime securities.
SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages -- The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO...
The SEC's complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.'s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.
The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.'s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.'s interests in the collateral selection process were closely aligned with ACA's interests. In reality, however, their interests were sharply conflicting...
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
GOLDMAN SACHS & CO. and FABRICE TOURRE, Defendants.
Plaintiff, the United States Securities and Exchange Commission ("Commission"), alleges as follows against the defendants named above:
2. GS&Co marketing materials for ABACUS 2007-AC1 – including the term sheet, flip book and offering memorandum for the CDO – all represented that the reference portfolio of RMBS underlying the CDO was selected by ACA Management LLC (“ACA”), a third-party with experience analyzing credit risk in RMBS. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. (“Paulson”), with economic interests directly adverse to investors in the ABACUS 2007-AC1 CDO, played a significant role in the portfolio selection process. After participating in the selection of the reference portfolio, Paulson effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (“CDS”) with GS&Co to buy protection on specific layers of the ABACUS 2007-AC1 capital structure. Given its financial short interest, Paulson had an economic incentive to choose RMBS that it expected to experience credit events in the near future. GS&Co did not disclose Paulson’s adverse economic interests or its role in the portfolio selection process in the term sheet, flip book, offering memorandum or other marketing materials provided to investors.
3. In sum, GS&Co arranged a transaction at Paulson’s request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests, but failed to disclose to investors, as part of the description of the portfolio selection process contained in the marketing materials used to promote the transaction, Paulson’s role in the portfolio selection process or its adverse economic interests.
4. Tourre was principally responsible for ABACUS 2007-AC1. Tourre devised the transaction, prepared the marketing materials and communicated directly with investors. Tourre knew of Paulson’s undisclosed short interest and its role in the collateral selection process. Tourre also misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-AC1 (a long position) and, accordingly, that Paulson’s interests in the collateral section process were aligned with ACA’s when in reality Paulson’s interests were sharply conflicting.
5. The deal closed on April 26, 2007. Paulson paid GS&Co approximately $15 million for structuring and marketing ABACUS 2007-AC1. By October 24, 2007, 83% of the RMBS in the ABACUS 2007-AC1 portfolio had been downgraded and 17% were on negative watch. By January 29, 2008, 99% of the portfolio had been downgraded. As a result, investors in the ABACUS 2007-AC1 CDO lost over $1 billion. Paulson’s opposite CDS positions yielded a profit of approximately $1 billion for Paulson.
6. By engaging in the misconduct described herein, GS&Co and Tourre directly or indirectly engaged in transactions, acts, practices and a course of business that violated Section 17(a) of the Securities Act of 1933, 15 U.S.C. §77q(a) ("the Securities Act"), Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. §78j(b) ("the Exchange Act") and Exchange Act Rule 10b-5, 17 C.F.R. §240.10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, civil penalties and other appropriate and necessary equitable relief from both defendants. [...]
For example, portions of an email in French and English sent by Fabrice Tourre to a friend on January 23, 2007 stated, in English translation where applicable:
“More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”
Blast from the Goldman Testimony Past: CDOs and Bad Brakes
Top CDO Underwriters, 2002-2007
Kevin Depew / Minyanville:
Worth noting that the SEC has apparently only used the word "fraud" in a filing three times in the past 10 years: Worldcom, Enron and now today.David Goldman / Inner Workings:
Pandora’s Box is Open and Woe to the Financials -- This opens Pandora’s Box. Investors who lost a trillion dollars in subprime CDO’s now will descend like Harpies upon the banks that packaged them, with subpoenas for every email and internal memorandum involved. The civil suits that could arise from this are potentially innumerable...
The ProPublica Blog: Other Major Banks Did Deals Similar to Goldman’s
Deal Journal / WSJ.com: SEC v. Goldman: ‘The Fabulous Fab[rice Tourre]‘
Fawn Johnson / Wall Street Journal: Goldman Is Charged With Subprime Fraud
Henry Blodget / Clusterstock: Lack Of Fast Response From Goldman Suggests SEC Sucker-Punched The FirmEdward Harrison / Credit Writedowns: SEC Charges Goldman Sachs With Fraud; May The Perp Walks BeginSEC Sues Goldman Sachs
New York Times:
U.S. Accuses Goldman Sachs of Fraud — Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail...
more discussion:Mikkel Fishman / The Moderate Voice: SEC Files Civil Fraud Charges Against Goldman SachsHenry Blodget / Clusterstock: FRAUD FALLOUT: Fabrice Tourre Is Toast, Goldman Will Be Fine
NY Times (Dec 2009):
Banks Bundled Bad Debt, Bet Against It and Won - Mr. Egol and Fabrice Tourre, a French trader at Goldman, were aggressive from the start in trying to make the assets in Abacus deals look better than they were, according to notes taken by a Wall Street investor during a phone call with Mr. Tourre and another Goldman employee in May 2005...
Susan Pulliam / Wall Street Journal:
Goldman Director to Leave -- Rajat Guptatold Goldman Sachs Group Inc. in March he wouldn't stand for re-election as a director, after receiving notice from prosecutors that they were reviewing recorded conversations between him and Galleon Group founder Raj Rajaratnam, people close to the matter say.
Mr. Gupta, a Goldman director since 2006, said through a spokesman that his decision to step down was because of "other commitments."
The U.S. has charged Mr. Rajaratnam and 20 others in a wide-ranging insider-trading case. Mr. Rajaratnam is fighting the charges; 11 others have pleaded guilty in the case, which is continuing...
Goldman Sachs's New Palace Creates Princes, Serfs -- Goldman Sachs Group Inc.'s new headquarters in lower Manhattan has the kind of amenities befitting masters of Wall Street. The $2.1 billion steel-and-glass building has giant murals, opera-house ceiling heights, and a gym with overachiever fitness classes, like "Awesome Abs."
But a new class of haves and have-nots has emerged—even at Goldman where the notion of have-nots is relative. Outside offices are now reserved only for the firm's more than 300 elite partners. Managing directors, next down in the Goldman hierarchy, almost always get windowless inside offices...
Thursday, April 15, 2010
Items of Interest:
The original Crack Shack or Mansion game.
The game features real Vancouver real estate listings, as of April 10th, 2010.
Can you tell the difference between a crack shack and a Vancouver, BC mansion, listed for one or two million dollars? Find out!
Buyer Panic – “It was pandemonium! A friend of my mother’s listed her small 3 bedroom rancher in Richmond last Thursday for $799K. The open house was Sunday, people lined up to get in. There were 12 offers and it went for $910K. One guy even offered the agent $25K “extra” in her pocket if she’d sell to him.”via Infectious Greed
Wednesday, April 14, 2010
Items of Interest:
WaMu Excluded From ‘Too Clubby to Fail’ Group, Killinger Says -- Kerry Killinger, the former chief executive officer of Washington Mutual Inc., said his company became the largest bank failure in U.S. history in part because it was excluded from a group of financial institutions favored by U.S. policy makers.
Washington Mutual wasn’t protected from short sellers and the U.S. Treasury Department excluded the company from information sessions it held with competitors, Killinger said today in written testimony for the Senate Permanent Subcommittee on Investigations. The panel is holding the first in a series of hearings on the collapse of the financial system.
“For those that were part of the inner circle and were ‘too clubby to fail,’ the benefits were obvious,” Killinger, 60, said. “For those outside the club, the penalty was severe.” ...
For WaMu’s Killinger, Wall Street Was ‘Too Clubby to Fail’ -- Killinger says his Seattle thrift wasn’t “saved” like other financial institutions because it wasn’t part of the East Coast, Wall Street club:
“The Company was similarly excluded from hundreds of meetings and telephone calls between Wall Street executives and policy leaders that ultimately determined the winners and losers in this financial crisis. For those that were part of the inner circle and were “too clubby to fail,” the benefits were obvious. For those outside of the club, the penalty was severe.” ...Reuters blog:
Are some U.S. banks “too clubby to fail?” -- Can a bank be “too clubby to fail?” Former Washington Mutual boss Kerry Killinger thinks so — and reckons WaMu’s outsider status explains why it wasn’t bailed out in September 2008. The circumstances of the West Coast lender’s demise do raise legitimate questions. But if anything, WaMu was more sacrificial lamb than outcast...
Two Disgraceful Failures -- How Congress and the Financial Crisis Inquiry Commission are botching their only chance to reform Wall Street.
The Financial Crisis Inquiry Commission has so far been a waste. Some momentary theater has been provided by the witnesses who have tried to excuse, explain, or occasionally admit their role in the cataclysm of the past two years. While this has ginned up some additional public outrage, it hasn't deepened our knowledge about what critical players knew or did. There is a simple reason for this: The commission has not issued a single subpoena. Any investigator will tell you that you must get the documentary evidence before you examine the witnesses. The evidence is waiting to be seized from the Fed, AIG, Goldman Sachs, and on down the line. Yet not one subpoena...
- Paul Cortez was represented by two low-budget attorneys who were held in contempt of court for missing the first three days of trial. After the trial, it was discovered that Paul’s attorney was being prosecuted on drug smuggling charges by the same District Attorney who was prosecuting Paul.
- Inexplicably, Paul’s attorneys did not perform any DNA testing on numerous pieces of evidence, call a single forensic expert or hire a private investigator to explore the inconsistencies and questions in order to construct a basic and standard defense for Paul. A prime example being that despite the fact that Paul has dark brown hair and the murder victim had brown hair as well, Paul’s attorneys did not request a DNA analysis on the blond hairs found intertwined between the victim’s fingers.
The Johnsville News:
The Catherine Woods Case: Was Paul Cortez imprisoned for a murder he did not commit?
Tuesday, April 13, 2010
Items of Interest:
China on ‘Treadmill to Hell’ Amid Bubble -- China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos.
The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.
China is “on a treadmill to hell,” said Chanos, who said in January the nation is Dubai times a thousand. “They can’t afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing.”
Property prices in China rose at the fastest pace in almost two years in February even after officials this year re-imposed a tax on homes sold within five years of their purchase to curb speculation and ordered banks to set aside more funds as reserves to cool lending...
James Chanos, President, Kynikos Associates -- He is the man who predicted the Enron downfall and now predicting a housing bubble in China...
A contrary viewpoint:
Jim Chanos, who is the greater fool? -- One thing that particularly stuck out for me in Chanos' argument is that these properties are shells. They're basically whole floors, no refrigerators, no detailing, barely partitioned. Chanos believes this further indicates that there's no future for the market and here I think he is severely myopic, because this evidence can be interpreted to the contrary especially when compared to the great Bush Real Estate Bubble. Remember shows like Flip this House? There, people weren't just buying properties and waiting for them to appreciate, they took out additional loans to remodel them. There was a huge debt fueled Renovation bubble as well, speculators would buy a house for 100, sink 20 on new sinks and such, and sell it for 200, and a greater fool would come along to take the property along with the renovation. And hence the sullen faces I observe on Core's minions when I think about properties like the Cupola Condo (141 Fifth Avenue).
What's happening in China is fundamentally different, it is infrastructural and capacity centered. Think of a beekeeper putting in beehive frames (empty hexagonal beeswax cells), bees can organically make their own, but when they have this infrastructure they industrialize and fill it with honey or with larvae, the colony grows. China's real estate developers according to Chanos are building the frames, the value here is much more straight forward and the risk of abandonment is low, because they are not filled yet. For Chanos' theory to be correct we'll need to see a flipping scenario develop in China where these frames are bought, hastily filled out and then sold on to the greater foul. I don't see this happening, and I see Chanos loosing...
Friday, April 9, 2010
Items of Interest:
John Robb / Global Guerrillas:
Visualizing Breakdowns -- In a little more than a decade after the 2008 financial crisis, the steady hum of portable generators was a common feature of most cities and suburbs in the formerly prosperous nations of the G8. They usually kicked on shortly after lunch, when the central power systems shut down. In some built up areas, particularly in the favelas that had sprung up around many of the major cities, complete multi-megawatt electricity grids had been built with bailing wire and twine.
The arrival of the generators and ad hoc power networks arrived not long after the second financial collapse. In that crisis, many of the less financially able power companies went bankrupt, caught the crossfire between high commodity prices (oil, natural gas, and coal), customers unable to pay, and a global financial market unwilling to extend credit or facilitate transactions. The loss of power only lasted a couple of months, but people remembered, and those able to afford it began buying generators in bulk. Fortunately, the temperatures that summer only reached the mid nineties in most of the country, and the deaths due to heat exhaustion were limited to just over ten thousand, mostly elderly, citizens...
related: Micro Grids
The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going -- In late 2005, the booming U.S. housing market seemed to be slowing. The Federal Reserve had begun raising interest rates. Subprime mortgage company shares were falling. Investors began to balk at buying complex mortgage securities. The housing bubble, which had propelled a historic growth in home prices, seemed poised to deflate. And if it had, the great financial crisis of 2008, which produced the Great Recession of 2008-09, might have come sooner and been less severe.
At just that moment, a few savvy financial engineers at a suburban Chicago hedge fund  helped revive the Wall Street money machine, spawning billions of dollars of securities ultimately backed by home mortgages.
When the crash came, nearly all of these securities became worthless, a loss of an estimated $40 billion paid by investors, the investment banks who helped bring them into the world, and, eventually, American taxpayers...
Felix Salmon: The Magnetar Trade
James Kwak / The Baseline Scenario: Another Great TAL Episode on the Financial CrisisThefourteenthbanker / The Fourteenth Banker Blog: Sensational and Disturbing Headlines TodayIra Stoll / The Future of Capitalism: The AFL-CIO on Carried Interest
Learning From Greece — The debt crisis in Greece is approaching the point of no return.
Arnold Kling / EconLog: Greek by 2030
Union Memo Hints At N.J. Gov.'s Death -- Bergen County Teachers Union's Memo The Latest Salvo In War Of Words With Gov. Christie; Swift Apology Issued
New Jersey Gov. Chris Christie's take-no-prisoners demand for education cuts got him a whole lot more than he bargained for -- a death wish.
It was in a controversial e-mail sent by the Bergen County Teachers Union to its members asking that Christie be "taken" by the Lord...
Left Coast Rebel: Deafening Silence from the Main Stream Media as N.J. TeachersThe Lonely Conservative: NJ Union Memo Prays for Governor Christie's DeathClifton B / Another Black Conservative: NJ teachers union “prays” for Gov. Chris Christie's deathEd Morrissey / Hot Air: A “threat” against Christie from New Jersey teachers union?Aaron Gardner / RedState: Teachers' Union Prays for Gov. Christie's Death
Wednesday, April 7, 2010
The Dylan Ratigan Show / CNBC: Regulating Wall Street and the Economy
Zero Hedge: Dylan Ratigan Discusses The Great Financial Con Job With Alan Grayson And Bill Fleckenstein
Daily Paul: Dylan Ratigan on the FED and "The Greatest Con Job in the History of the World"
New York Times:
Greenspan Rejects Criticism of Federal Reserve at Hearing
Myglesias / Matthew Yglesias: Greenspan's Meta-Defense
Truthdig: Greenspan Defends the Fed to Meltdown Commission
The Big Picture:
Jim Grant Eviscerates Greenspan
No Cushion for Greenie’s Legacy
Paul Krugman / NY Times: Alan Greenspan: Still Not A Mensch
Monday, April 5, 2010
Saturday, April 3, 2010
Items of Interest:
Matt Taibbi / Rolling Stone:
Looting Main Street -- How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece.
If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.
As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears."...
Timothy Geithner is a Sniveling Scamster -- Whew. That was fast. It didn't take long for Wall Street to figure out how to game Obama's new mortgage modification program, did it? The plan was hyped as help for "struggling homeowners", but it turns out, it's just another stealth bailout for pudgy bank-execs. It's funny, the program hasn't even kicked in yet and, already, bigtime speculators are riffling through their filing cabinets looking any garbage paper they can find to dump on Uncle Sam...
So, the cutthroat speculators and bunko artists who fleeced us all with their dogshit subprimes, have returned for another dip at the public trough. That means taxpayers will get scalped on the same investments a second time. Hey, it's a double-whammy!...
Megan McArdle / The Atlantic:
The Sovereign Debt That Dare Not Speak Its Name -- Timothy Geithner has apparently penned a letter to Representative Scott Jarrett (R-NJ) telling him that Fannie Mae and Freddie Mac's obligations are not sovereign debt. Of course, the United States government believes that supporting this debt is crucial to saving the economy. But just because we're not-so-implicitly guaranteeing this debt, doesn't mean that you should treat it like government debt...
Gallup: Underemployment In The U.S. Rises to 20.3% in March -- Reports from the Labor Department today showed companies in the U.S. created more jobs in March than at any time in the past three years, showing the recovery is broadening and becoming more entrenched.
Payrolls rose by 162,000 workers, the most gain since March 2007, thought the increase included 48,000 temporary Census workers. Unemployment remains at 9.7% for a third month.
Nevertheless, behind the rosy headlines, data from the Bureau of Labor Statistics also give a grim side of the employment picture...
However, the latest Gallup Daily tracking finds that 20.3% of the U.S. workforce was underemployed in March... Gallop concludes its findings as follows:
As unemployed Americans find part-time, temporary, and seasonal work, the official unemployment rate could decline. However, this does not necessarily mean more Americans are working at their desired capacity. It will continue to be important to track underemployment -- to shed light on the true state of the U.S. workforce.
March Non Farm Payrolls: +162K, Below Consensus, Unemployment Rate 9.7%, Ex-Census, Weather and Birth-Death NFP Change Is -67K
David Goldman / Inner Workings:
A Weak Employment Report
U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion -- What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy.
"Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…" said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. "You know what? It doesn't matter. None of this—this so-called 'money'—really matters at all."
"It's just an illusion," a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. "Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless."...
Lasner on Real Estate:
27% more Calif. hotels in foreclosure -- A survey by Atlas Hospitality Group in Irvine shows that the number of California hotels in default and foreclosed on continued to climb in the first quarter of 2010...
Debunking Michael Lewis’ Subprime Short Hagiography -- Lewis’ need to anchor his tale in personalities results in a skewed misreading of the subprime crisis and why and how it got as bad as it did. The group of short sellers he celebrates were minor-leaguers compared to the likes of Goldman Sachs, Deutsche Bank and John Paulson. But no one on the short side of these trades, large or small, should be seen as any kind of a stalwart hero and defender of capitalism...
Lewis’ desire to satisfy his fan base’s craving for good guys led him to miss the most important story of our age: how a small number of operators used a nexus of astonishing leverage and camouflaged risk to bring the world financial system to its knees and miraculously walked away with their winnings. These players are not the ugly ducklings of Lewis’ fairy tale; they are merely ugly. Whether for his own profit or by accident, Lewis has denied the public the truth.
Extremist group demands governors resign, FBI says -- A domestic extremist group has sent letters to more than 30 U.S. governors demanding they resign, the Department of Homeland Security and the FBI said in an intelligence note.
The note, dated Monday, said the letters told the governors to vacate their posts within three days...
Little Green Footballs:
Dozens of US Governors Receive Notes Demanding Resignation in 3 Days
John Robb / Global Guerrillas:
Some random items of interest -- Another example that US insurgents are starting to use stigmergic communication: The FBI is warning police across the country that an anti-government group's call to remove governors from office could provoke violence by others. The use of the media to communicate intent and to share innovation with other insurgent groups is a staple of open source insurgency (a feature of the model that a recent quantitative study featured in Nature magazine confirmed).
More on the Guardians of the Free Republics, the group that sent the letter.
Here's an earlier example of stigmergic communication, although not as slick, from Mike at Sipsey Street Irregulars. Break their windows. Break them NOW...
Thursday, April 1, 2010
- Public sector employees cost too much.
- We can't fire them no matter how bad they are
- They are a permanent lobby
Three Reasons Public Sector Workers Are Killing The Economy
Mish's Global Economic Trend Analysis:
Three Reasons Public Sector Workers Are Killing The Economy