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21:52:58 02/02/12
The Finance Crisis: Part Two
[LESS INFO] 1 VIEWS | ADDED 21:52:58 02/02/12
The Finance Crisis: Part Two
In this panel discussion from "The Finance Crisis: Lessons Learned from Canada and the Way Forward," Reuters' Chrystia Freeland moderates a conversation focused on the success of Canada's financial system through global economic turmoil and what lessons can be learned by countries with less healthy financial systems. Panelists: Ted Price, Assistant Superintendent, Office of the Superintendent of Financial Institutions Canada, Gordon Nixon, President and CEO, RBC Financial Group, CFTC Commissioner Jill Sommers, Tom Glocer, CEO Thomson Reuters and Nicolas Veron, Senior Fellow, Bruegel and Visiting Senior Fellow Peterson Institute. From: ReutersTV Views: 85 0 ratings Time: 01:14:48 More in News & Politics
0 Views
21:52:58 02/02/12
The Finance Crisis: Part Two
[LESS INFO] 0 VIEWS | ADDED 21:52:58 02/02/12
In this panel discussion from "The Finance Crisis: Lessons Learned from Canada and the Way Forward," Reuters' Chrystia Freeland moderates a conversation focused on the success of Canada's financial system through global economic turmoil and what lessons can be learned by countries with less healthy financial systems. Panelists: Ted Price, Assistant Superintendent, Office of the Superintendent of Financial Institutions Canada, Gordon Nixon, President and CEO, RBC Financial Group, CFTC Commissioner Jill Sommers, Tom Glocer, CEO Thomson Reuters and Nicolas Veron, Senior Fellow, Bruegel and Visiting Senior Fellow Peterson Institute.
14 Views
19:00:30 12/28/11
Notable Death of the Year: RIP Austerity Economics, 1921-2011
[LESS INFO] 14 VIEWS | ADDED 19:00:30 12/28/11
"Smokestack Lightnin'," with Hubert Sumlin backing Howlin' Wolf in 1964
This is the time of year when we're reminded of all the famous people who died over the last twelve months, a list which includes two of my favorite guitar players ( Hubert Sumlin and Cornell Dupree ). But there were also some notable non-human deaths in 2011, especially in the world of economic policy.
One of those deaths should have completely altered the political debate in Washington. The name of the deceased was "Austerity Economics," and it was first glimpsed in a 1921 paper by conservative economist Frank Wright. Austerity died of natural causes brought on by prolonged exposure to reality.
But the debate in Washington didn't change nearly enough after its passing. In the nation's capital, dead things still rule the night.
Why Austerity?
"Austerity economics" backers claim that today's economic woes can only be fixed by dramatic reductions in government spending, which will lead to increased private-sector confidence and therefore to greater investment and growth.
But it's never worked. And if investors have lost confidence in the U.S. government's fiscal stability, they're sure not acting that way. There hasn't been this much demand for Treasury bonds since the government began tracking it twenty years ago, and they haven't performed as well since the go-go 1990s.
It's easy to understand austerity's attraction for power elites inside and outside of government. The people who suffer from austerity budgets aren't the kinds of people they know personally, since they're typically public employees like teachers, police, firefighters and the administrators of social programs; people who need government assistance, like the poor; and middle-class people with the temerity to either grow old or become disabled.
Austerity's attraction became even greater in the U.S. because once it became conventional wisdom that tax increases on the wealthy was "politically infeasible." That made it a program whose sole purpose was to cut government spending, lowering the pressure to increase taxes on the wealthy from today's historically low levels.
For a one-percenter, what's not to love?
Austerity Comes of Age
The idea's been around in one form or another since that 1921 paper, and the International Monetary Fund (IMF) had been imposing it on Third World nations for decades.
But 2009 was the year that austerity really came of age. That was the year that a wealthy stockbroker's son named David Cameron began campaigning for Prime Minister of Great Britain on an explicitly pro-austerity platform.
It was also the year that Cameron helped to form a group named European Conservatives and Reformists (ECR) dedicated to electing like-minded politicians across Europe and helping them collaborate on ways to slash government spending. It was also the year that right-leaning Angela Merkel won reelection as the Chancellor of Germany with a stronger mandate than she'd been given in her first term.
With Nicolas Sarkozy as President of France, Great Britain was the only major European power not yet in the hands of the corporate-backed austerity crowd.
The Global Sado-Erotic Thrill Machine
That changed with Cameron's election as Prime Minister in May 2010, an event that threw pro-austerity Americans into throes of near-erotic ecstasy. And if that sounds like hyperbole, consider conservative Anne Appelbaum's reaction to Cameron's budget in September of 2010: >
Vicious cuts." "Savage cuts." "Swingeing (sic) cuts." The language that the British use to describe their new government's spending-reduction policy is apocalyptic in the extreme. The ministers in charge of the country's finances are known as "axe-wielders" who will be "hacking" away at the budget. Articles about the nation's finances are filled with talk of blood, knives, and amputation.
And the British love it.
What can I say? There are people who collect serial-killer memorabilia, too. But Appelbaum wasn't just speaking for herself. It became unacceptable for any politician in Washington, Democrat or Republican, to advocate anything other than an austerity budget for the United States.
And it was more than an economic strategy to its backers. Austerity became a way to demonize those who had suffered most from the banking abuses and self-indulgences of the wealthy, a totemic "blame the victim" response that turned the political debate into a grotesque inversion of morality. Again, Appelbaum: >
"Not only is austerity being touted as the solution to Britain's economic woes; it is also being described as the answer to the country's moral failings."
Bad Metaphors vs. Good Economists
The Democratic President of the United States, Barack Obama, jumped onto the bandwagon with both feet by repeatedly lecturing Americans on the need for government to stop "spending beyond its means." Obama recycled the popular conservative metaphor of a family that has to sit around the kitchen table and decide how much money it has to spend.
That's one of the worst metaphors in modern politics. Does a family establish its own currency -- especially one that has the unique position of the dollar? Can a family borrow money at rates so low they're effectively less than zero? Would a family let Grandma go hungry because Junior bought too many Porsches out of the family kitty and then gambled it away on lousy mortgage investments?
The world's top economists, those who had successfully predicted the crisis of 2008, tried telling the rest of the world what was wrong with the idea: Joblessness and consumer fears were killing any chance of real recovery. More short-term spending was needed to get the economy moving again. Austerity would make things worse, not better.
But nobody listened. Austerity's S%M-like attraction had the world's elites in its grip.
Death of a Delusion
And then something else came into the picture: Reality.
Cameron's austerity budget had a shattering effect on the already-struggling British economy. His government's financial stability was downgraded five times during his first year in power and retail sales had fallen 2.5 percent. Household income was projected to fall an additional 2 percent if his austerity plans were carried forward. Britain's modest employment gains were reversed, youth unemployment reached record levels, and income inequality was the worst it had been in more than half a century.
Anne Appelbaum's erotic dreams had become Great Britain's nightmare.
As Europe's ruling austerity class pushed forward with their plans, even the IMF tried to dissuade them. It was clear to anyone who wasn't blinded by ideology or political cynicism that austerity economics was a failed program. Even in countries like Greece, where government was far graver than elsewhere, the austerity programs imposed from outside threatened to destabilize society while other reasonable measures like improved tax collection were still not taken seriously enough.
And now the entire Eurozone hangs in the balance. Bankers became wealthy by treating governments as if they were mortgages, lending recklessly and pocketing their fees without considering the long-term reliability of their loans. European leaders insisted for months they were take the kind of sensible steps that should've been taken in the United States by requiring bankers to accept at least part of the losses for the bad loans they had issed.
That plan was quietly dropped last month. "Austerity economics" never calls for austerity from those who have gotten rich by being irresponsible, only from those who didn't benefit from it at all.
The Afterlife
President Obama has dropped his austerity rhetoric, at least for the time being, but the Republicans have not. Listening to Mitt Romney discuss economics is like having a doctor wave a dead chicken over your head and saying he's decided to cast a spell on you rather than operate on that thing they found in your X-rays.
Aside from the bill introduced this month by the House Progressive Caucus to almost no media attention, there's no comprehensive plan for dropping this country's ineffective austerity strategy and replacing it with an agenda that works.
Rational solutions to our economic problems are being ignored. There won't be a real debate about alternatives to austerity until an entire political party, not just part of it, adopts this kind of program. Until then there will be chaos. And where there is chaos, austerity's powerful advocates can step in and take charge.
Austerity economics died in 2011 and is survived by the British, German, and French governments as well as the GOP and large portions of the Democratic Party. Instead of sending flowers, the family has asked the public to abandon all hopes of future economic growth.
10 Views
19:00:30 12/28/11
Notable Death of the Year: RIP Austerity Economics, 1921-2011
[LESS INFO] 10 VIEWS | ADDED 19:00:30 12/28/11
"Smokestack Lightnin'," with Hubert Sumlin backing Howlin' Wolf in 1964
This is the time of year when we're reminded of all the famous people who died over the last twelve months, a list which includes two of my favorite guitar players ( Hubert Sumlin and Cornell Dupree ). But there were also some notable non-human deaths in 2011, especially in the world of economic policy.
One of those deaths should have completely altered the political debate in Washington. The name of the deceased was "Austerity Economics," and it was first glimpsed in a 1921 paper by conservative economist Frank Wright. Austerity died of natural causes brought on by prolonged exposure to reality.
But the debate in Washington didn't change nearly enough after its passing. In the nation's capital, dead things still rule the night.
Why Austerity?
"Austerity economics" backers claim that today's economic woes can only be fixed by dramatic reductions in government spending, which will lead to increased private-sector confidence and therefore to greater investment and growth.
But it's never worked. And if investors have lost confidence in the U.S. government's fiscal stability, they're sure not acting that way. There hasn't been this much demand for Treasury bonds since the government began tracking it twenty years ago, and they haven't performed as well since the go-go 1990s.
It's easy to understand austerity's attraction for power elites inside and outside of government. The people who suffer from austerity budgets aren't the kinds of people they know personally, since they're typically public employees like teachers, police, firefighters and the administrators of social programs; people who need government assistance, like the poor; and middle-class people with the temerity to either grow old or become disabled.
Austerity's attraction became even greater in the U.S. because once it became conventional wisdom that tax increases on the wealthy was "politically infeasible." That made it a program whose sole purpose was to cut government spending, lowering the pressure to increase taxes on the wealthy from today's historically low levels.
For a one-percenter, what's not to love?
Austerity Comes of Age
The idea's been around in one form or another since that 1921 paper, and the International Monetary Fund (IMF) had been imposing it on Third World nations for decades.
But 2009 was the year that austerity really came of age. That was the year that a wealthy stockbroker's son named David Cameron began campaigning for Prime Minister of Great Britain on an explicitly pro-austerity platform.
It was also the year that Cameron helped to form a group named European Conservatives and Reformists (ECR) dedicated to electing like-minded politicians across Europe and helping them collaborate on ways to slash government spending. It was also the year that right-leaning Angela Merkel won reelection as the Chancellor of Germany with a stronger mandate than she'd been given in her first term.
With Nicolas Sarkozy as President of France, Great Britain was the only major European power not yet in the hands of the corporate-backed austerity crowd.
The Global Sado-Erotic Thrill Machine
That changed with Cameron's election as Prime Minister in May 2010, an event that threw pro-austerity Americans into throes of near-erotic ecstasy. And if that sounds like hyperbole, consider conservative Anne Appelbaum's reaction to Cameron's budget in September of 2010: >
Vicious cuts." "Savage cuts." "Swingeing (sic) cuts." The language that the British use to describe their new government's spending-reduction policy is apocalyptic in the extreme. The ministers in charge of the country's finances are known as "axe-wielders" who will be "hacking" away at the budget. Articles about the nation's finances are filled with talk of blood, knives, and amputation.
And the British love it.
What can I say? There are people who collect serial-killer memorabilia, too. But Appelbaum wasn't just speaking for herself. It became unacceptable for any politician in Washington, Democrat or Republican, to advocate anything other than an austerity budget for the United States.
And it was more than an economic strategy to its backers. Austerity became a way to demonize those who had suffered most from the banking abuses and self-indulgences of the wealthy, a totemic "blame the victim" response that turned the political debate into a grotesque inversion of morality. Again, Appelbaum: >
"Not only is austerity being touted as the solution to Britain's economic woes; it is also being described as the answer to the country's moral failings."
Bad Metaphors vs. Good Economists
The Democratic President of the United States, Barack Obama, jumped onto the bandwagon with both feet by repeatedly lecturing Americans on the need for government to stop "spending beyond its means." Obama recycled the popular conservative metaphor of a family that has to sit around the kitchen table and decide how much money it has to spend.
That's one of the worst metaphors in modern politics. Does a family establish its own currency -- especially one that has the unique position of the dollar? Can a family borrow money at rates so low they're effectively less than zero? Would a family let Grandma go hungry because Junior bought too many Porsches out of the family kitty and then gambled it away on lousy mortgage investments?
The world's top economists, those who had successfully predicted the crisis of 2008, tried telling the rest of the world what was wrong with the idea: Joblessness and consumer fears were killing any chance of real recovery. More short-term spending was needed to get the economy moving again. Austerity would make things worse, not better.
But nobody listened. Austerity's S%M-like attraction had the world's elites in its grip.
Death of a Delusion
And then something else came into the picture: Reality.
Cameron's austerity budget had a shattering effect on the already-struggling British economy. His government's financial stability was downgraded five times during his first year in power and retail sales had fallen 2.5 percent. Household income was projected to fall an additional 2 percent if his austerity plans were carried forward. Britain's modest employment gains were reversed, youth unemployment reached record levels, and income inequality was the worst it had been in more than half a century.
Anne Appelbaum's erotic dreams had become Great Britain's nightmare.
As Europe's ruling austerity class pushed forward with their plans, even the IMF tried to dissuade them. It was clear to anyone who wasn't blinded by ideology or political cynicism that austerity economics was a failed program. Even in countries like Greece, where government was far graver than elsewhere, the austerity programs imposed from outside threatened to destabilize society while other reasonable measures like improved tax collection were still not taken seriously enough.
And now the entire Eurozone hangs in the balance. Bankers became wealthy by treating governments as if they were mortgages, lending recklessly and pocketing their fees without considering the long-term reliability of their loans. European leaders insisted for months they were take the kind of sensible steps that should've been taken in the United States by requiring bankers to accept at least part of the losses for the bad loans they had issed.
That plan was quietly dropped last month. "Austerity economics" never calls for austerity from those who have gotten rich by being irresponsible, only from those who didn't benefit from it at all.
The Afterlife
President Obama has dropped his austerity rhetoric, at least for the time being, but the Republicans have not. Listening to Mitt Romney discuss economics is like having a doctor wave a dead chicken over your head and saying he's decided to cast a spell on you rather than operate on that thing they found in your X-rays.
Aside from the bill introduced this month by the House Progressive Caucus to almost no media attention, there's no comprehensive plan for dropping this country's ineffective austerity strategy and replacing it with an agenda that works.
Rational solutions to our economic problems are being ignored. There won't be a real debate about alternatives to austerity until an entire political party, not just part of it, adopts this kind of program. Until then there will be chaos. And where there is chaos, austerity's powerful advocates can step in and take charge.
Austerity economics died in 2011 and is survived by the British, German, and French governments as well as the GOP and large portions of the Democratic Party. Instead of sending flowers, the family has asked the public to abandon all hopes of future economic growth.
0 Views
16:12:31 11/22/11
The Finance Crisis: Part Two
[LESS INFO] 0 VIEWS | ADDED 16:12:31 11/22/11
The Finance Crisis: Part Two
In this panel discussion from "The Finance Crisis: Lessons Learned from Canada and the Way Forward," Reuters' Chrystia Freeland moderates a conversation focused on the success of Canada's financial system through global economic turmoil and what lessons can be learned by countries with less healthy financial systems. Panelists: Ted Price, Assistant Superintendent, Office of the Superintendent of Financial Institutions Canada, Gordon Nixon, President and CEO, RBC Financial Group, CFTC Commissioner Jill Sommers, Tom Glocer, CEO Thomson Reuters and Nicolas Veron, Senior Fellow, Bruegel and Visiting Senior Fellow Peterson Institute. From: ReutersVideo Views: 0 0 ratings Time: 24:24 More in News & Politics
4 Views
14:00:10 11/23/10
C&L Opening Bell
[LESS INFO] 4 VIEWS | ADDED 14:00:10 11/23/10
enlarge Note: I'm experimenting with a new (hopefully) daily feature that attempts to recap the day's economic news in a way that's informative and entertaining. There's a lot of insane stuff going on in the world of economics and finance and my goal will be to explain it without making your eyes glaze over. So let's get started!
C%L Opening Bell, 11-23-10
* The big news of the day was in Ireland, where the Irish government finally acknowledged that bailing out its banks has rendered it insolvent. Taoiseach Brian Cowen said that he plans to dissolve Parliament and call for new elections juuuuuust after the sure-to-have-its-ass-handed-to-it Fianna Fáil coalition passes its next budget.
And what a budget it's expected to be! In exchange for a loan of up to €90 billion from the European Union and the International Monetary Fund, Ireland will have to implement further austerity measures that involve raising taxes and cutting services. And whose services are getting cut, you're wondering? Do you even have to ask ? >
Deep cuts to the minimum wage and welfare benefits loom as part of the price the country pays for its huge emergency bailout loan as Brian Cowen insisted he was "not the bogeyman" who had led Ireland to financial crisis.
So the poorest people in the country are essentially paying to bail out the Irish banks' creditors. Pretty remarkable.
* Zero Hedge points us to the following video from Jim Rogers that lays out an alternative plan for the Irish: Just declare bankruptcy and restructure your debt already:
Here's the key part: >
This is ludicrous. This will cripple the Irish economy for years to come. In the future Ireland will be crippled because everything they earn will go to pay off old debt. There is no reason why taxpayers around Europe or in Ireland should pay for other people's mistakes. The bondholders and the stockholders of banks should lose money.
And this is what we should keep in mind when we hear about "bailing out Ireland." It's really about bailing out the Irish banks' creditors .
* It also goes without saying that this situation blows a hole in the meme that austerity is the best way to head off a recession. The Irish implemented spending cuts and tax increases long before most of the other PIIGS (Portugal, Ireland, Italy, Greece and Spain) ever did. The result was the country was still deeply in debt and in need of a rescue. More than anything, though, this crisis shows that there are structural flaws in the Eurozone single currency that are probably impossible to resolve. I can't really see anyway for countries to be able to issue their own debts but not their own currencies.
* Over in the States, meanwhile, things aren't exactly better. The banks' fraudulent foreclosure activity (which our own Susie Madrak has covered extensively ) has created a buttload of anxiety in the housing market : >
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and foreclosure sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey. [...]
News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
As I told two friends who were looking to buy a home, you'd have to be N-U-T-S to think of buying a foreclosed home right now.
* On the somewhat-happier side of things, the FBI raided two hedge firms yesterday as part of its sweeping investigation into insider trading. The Wall Street Journal got the scoop on this probe over the weekend: >
Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter.
The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.
The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.
Reading those words gave me a tingly feeling in my pants. I do hope this investigation is legit and that the government won't just take a wad of "We're Sorry!" Cash from the banks and call it a day. We have a wealthy criminal class in this country that never pays for its crimes and is often rewarded for them at taxpayer expense. If we want to keep living in a democracy, this sort of thing will have to stop.
* News of the hedge fund raid sent key financial stocks down today, as Bank of America's shares were down 3%, JP Morgan's were down 2.25% and the Vampire Squid was down nearly 3.5%.
* And finally, let's take a look at what I call the "WE'RE ALL GONNA DIE!!!11!!!" index of key measurements to see how much investors across the world are crapping themselves with fear. Basically, it goes like this: When U.S. Treasury yields go down and the price of gold goes up, that means investors are fleeing risky assets for things they consider to be safe investments. If the reverse is happening, then investors are likely feeling they can handle more risk on a given day.
Gold futures rose 0.4% to $1,357.80 yesterday.
10-year Treasury yields fell 1.41% to close at 2.80% on the day.
In other words, the chances of the world exploding just got greater. Have a happy day!
4 Views
14:00:10 11/23/10
C&L Opening Bell
[LESS INFO] 4 VIEWS | ADDED 14:00:10 11/23/10
enlarge Note: I'm experimenting with a new (hopefully) daily feature that attempts to recap the day's economic news in a way that's informative and entertaining. There's a lot of insane stuff going on in the world of economics and finance and my goal will be to explain it without making your eyes glaze over. So let's get started!
C%L Opening Bell, 11-23-10
* The big news of the day was in Ireland, where the Irish government finally acknowledged that bailing out its banks has rendered it insolvent. Taoiseach Brian Cowen said that he plans to dissolve Parliament and call for new elections juuuuuust after the sure-to-have-its-ass-handed-to-it Fianna Fáil coalition passes its next budget.
And what a budget it's expected to be! In exchange for a loan of up to €90 billion from the European Union and the International Monetary Fund, Ireland will have to implement further austerity measures that involve raising taxes and cutting services. And whose services are getting cut, you're wondering? Do you even have to ask ? >
Deep cuts to the minimum wage and welfare benefits loom as part of the price the country pays for its huge emergency bailout loan as Brian Cowen insisted he was "not the bogeyman" who had led Ireland to financial crisis.
So the poorest people in the country are essentially paying to bail out the Irish banks' creditors. Pretty remarkable.
* Zero Hedge points us to the following video from Jim Rogers that lays out an alternative plan for the Irish: Just declare bankruptcy and restructure your debt already:
Here's the key part: >
This is ludicrous. This will cripple the Irish economy for years to come. In the future Ireland will be crippled because everything they earn will go to pay off old debt. There is no reason why taxpayers around Europe or in Ireland should pay for other people's mistakes. The bondholders and the stockholders of banks should lose money.
And this is what we should keep in mind when we hear about "bailing out Ireland." It's really about bailing out the Irish banks' creditors .
* It also goes without saying that this situation blows a hole in the meme that austerity is the best way to head off a recession. The Irish implemented spending cuts and tax increases long before most of the other PIIGS (Portugal, Ireland, Italy, Greece and Spain) ever did. The result was the country was still deeply in debt and in need of a rescue. More than anything, though, this crisis shows that there are structural flaws in the Eurozone single currency that are probably impossible to resolve. I can't really see anyway for countries to be able to issue their own debts but not their own currencies.
* Over in the States, meanwhile, things aren't exactly better. The banks' fraudulent foreclosure activity (which our own Susie Madrak has covered extensively ) has created a buttload of anxiety in the housing market : >
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and foreclosure sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey. [...]
News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
As I told two friends who were looking to buy a home, you'd have to be N-U-T-S to think of buying a foreclosed home right now.
* On the somewhat-happier side of things, the FBI raided two hedge firms yesterday as part of its sweeping investigation into insider trading. The Wall Street Journal got the scoop on this probe over the weekend: >
Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter.
The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.
The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.
Reading those words gave me a tingly feeling in my pants. I do hope this investigation is legit and that the government won't just take a wad of "We're Sorry!" Cash from the banks and call it a day. We have a wealthy criminal class in this country that never pays for its crimes and is often rewarded for them at taxpayer expense. If we want to keep living in a democracy, this sort of thing will have to stop.
* News of the hedge fund raid sent key financial stocks down today, as Bank of America's shares were down 3%, JP Morgan's were down 2.25% and the Vampire Squid was down nearly 3.5%.
* And finally, let's take a look at what I call the "WE'RE ALL GONNA DIE!!!11!!!" index of key measurements to see how much investors across the world are crapping themselves with fear. Basically, it goes like this: When U.S. Treasury yields go down and the price of gold goes up, that means investors are fleeing risky assets for things they consider to be safe investments. If the reverse is happening, then investors are likely feeling they can handle more risk on a given day.
Gold futures rose 0.4% to $1,357.80 yesterday.
10-year Treasury yields fell 1.41% to close at 2.80% on the day.
In other words, the chances of the world exploding just got greater. Have a happy day!
1 Views
01:32:06 11/17/10
Video: Budget cuts worry educators, judges
[LESS INFO] 1 VIEWS | ADDED 01:32:06 11/17/10
Judges and educators from across the state visited the capitol on Tuesday to attend budget hearings of the legislative finance committee imploring lawmakers not to cut their budgets further. The Richardson Administration now says the projected deficit is $450 million, almost $200 million larger than expected, and public school spending devours the lion's share of the budget--well over 40 percent. Lawmakers are deeply divided over the issue of cutting school spending, some saying no cuts at any cost, others saying it's inevitable in a recession-fueled budget crisis. Over a two year period the state budget has shrunk by $800 million. Now lawmakers are looking at what may be another $450 million they'll have to chop. mos>l3rd_2line_no_open:sen. clint harden|(r) clovis ] " q: is it do-able? a: in my opinion yes - i'm not a proponent of cutting education - i believe that we need to look at making up those decreases in expenditures in other areas besides education Susana Martinez pledged not to cut school spending or Medicare in her successful campaign for governor. Along with educators, judges from all over the state told lawmakers about cost-cutting in the courthouses - everything from paper towels to video hearings - many districts had to impose furloughs and many judges are donating part of their paychecks to avoid them. all morning long and into the afternoon the parade of presiding judges went on-- the budget cuts they're already under are bad enough - the ones that almost surely lie ahead may be disastrous. Bernalillo County Metro Court’s Chief Judge Judith Nakamura asked the legislature for a $900,000 increase in funding to head off more furloughs for court employees. "We can't shut down and say we're not going to accept more criminal [and civil] cases. We have to deal with what's coming in and we are not seeing decreases in caseloads throughout the state,” said Nakamura. Meanwhile the recession seems to be lingering longer in New Mexico, squeezing the economy and shrinking state tax revenues. Senate Finance Chair John Arthur Smith thinks more problems are ahead. Asked if the state is climbing back after hitting bottom he replied, "I'm not certain we're bouncing back. My sense is that we're starting to hug the bottom, but I think we're going to stay on pretty low numbers for quite a duration." The legislature convenes in mid-January for a sixty day session as lawmakers grapple with an ongoing budget crisis that will be in its third year in 2011
2 Views
09:13:00 11/12/08
Imaginary Money Graveyard
[LESS INFO] 2 VIEWS | ADDED 09:13:00 11/12/08
Imaginary Money Graveyard by d-oo-b.cc Music: Ghosts by http://nin.com flickr.com/photos/arcorosca/sets/72157608868260247/show/w... www.flickr.com/photos/roxelo/3020310910 The recent Financial Global climate is affecting us all in some way. From mortgage prices to investments, businesses fail and people loose their homes, jobs and lives as a result. The severe lack of forsight by those in control this has led to the potential crash of the neo-conservatives. We now see the wealth of the world in a different light. An uncertain future is all we have to look forward to. Europe was caught out by the financial crisis and did not see recession looming, the head of the Eurogroup of nations conceded today, amid estimates that the EU has plunged into a downturn. OCt 08 'Recession awaits us, and we didn't think that recession lay in waiting,' euro zone chairman Jean-Claude Juncker told members of the European Parliament in Brussels. Oct 08 'We were badly mistaken with the different sequences of this crisis,' said Juncker, who is also the premier and finance minister of Luxembourg. Oct 08 The European Commission in early November 2008 warned that the worst financial crisis for generations has driven the EU economy into recession and that economic growth would come close to a standstill next year. "Increasingly, the signs point to a deep and synchronised global recession that began last quarter and has gathered momentum," said Bruce Kasman, an economist at JPMorgan Chase in New York. November 08 The eurozone’s second-biggest economy will grow by just 0.2-0.5 percent next year instead of the 1 percent previously predicted, Economy and Finance Minister Christine Lagarde told the Senate. The minister said the growth forecast for next year 2009 was “the lowest ever by a government in France” but that it was realistic. “The international economic outlook has deteriorated much more than was expected, which will impact growth in Switzerland over the next several quarters,” the Swiss National Bank said in a statement in October 08 The sharp falls came after the Dow Jones index slid 5.05 percent on Wall Street November 7th 08 as investors braced for a gloomy economic ride after the euphoria of Obama’s election victory faded. “Now that the event is over, investors are sobering up and looking at the economic gloom,” said Mizuho Investors Securities broker Masatoshi Sato. Billionaire philanthropist George Soros conceded in OCtober 08 that US influence was waning: "It has already declined. For the past 25 years, we have been running a constant current account deficit. The Chinese and the oil-producing countries have been running a surplus. We have consumed more than we produced. While we have run up debt, they have acquired wealth with their savings. Increasingly, the Chinese will own a lot more of the world because they will be converting their dollar reserves and US government bonds into real assets." Japan By James Kirkup and Julian Ryall in Tokyo Last Updated: 4:00PM BST 16 Oct 2008 Telegraph.co.uk "To cope with the current crisis, further steps may be needed," Mr Aso told members of the Japanese parliament. "However, I still believe this package will be effective to a certain degree." Mr Aso's budget package will be mean direct financial support for farmers and fishermen paying higher fuel bills, and for Japanese consumers. The emergency budget is part of a wider 11.7-trillion-yen package announced in August. The Bank of Japan also made another 300 billion-yen of emergency loans to Japanese banks, hoping to unblock the Tokyo money markets. The central bank has been offering extra liquidity on an almost daily basis for a month. euro Author: ČTK www.ceskenoviny.cz/news/index_view.php?id=338324 Prague - The current situation on financial markets will affect the agenda of Czech EU presidency in the first half of 2009, deputy prime minister for EU affairs Alexandr Vondra said. The financial crisis has become a new priority of the European Union, Vondra said. "When you are making preparations for a football match, you sometimes base your tactics more on offensive while another time you are more defensive. It is evident that in the economic situation in which Europe will be finding itself next year, emphasis will be rather placed on the protection and defence of what has already been attained," Vondra said. Posted by Kevin Anderson Sunday October 12 2008 06.50 BST Homelessness, the economic crisis and voting Homelessness is on the rise in the US, and the newly homeless could find their votes challenged. In Reno Nevada, joblessness has jumped 60% and a tent city of 170 people grew. Reno is trying to shut down the tent city and move people to newly opened shelters. CBS News has reported tent cities in Seattle, Portland, Fresno, Columbus, and Chattanooga. There are also reports of encampments in Seattle, San Diego, and Columbus, Ohio, Santa Barbara and Fresno California. The wave of foreclosures, which in some areas of the country disproportionately affect black voters, could also come into play. The Republican Party of Macomb County Michigan, one of three counties that make up Detroit, is planning to use list of foreclosed homes to challenge people who try to vote using those addresses. Republicans claim that they are trying to prevent voter fraud. Homeless and voting rights advocates are trying to make sure that people don't lose their homes and their right to vote. USA As veteran curator of that realm of American national power upon which all others ultimately depend, Greenspan has inspired remarkable deference. He long ago tamed the legislature, to the point that, instead of exercising oversight over his tenure, Congress has ritually idolized rather than interrogated him. Greenspan's aura has extended even to presidents of the United States. Bill Clinton went so far as to ask Greenspan in 2000 if he would like to be appointed to a fourth term as chairman, or whether he'd prefer to "go out now on top." The then 73-year-old replied: "Oh, no. This is the greatest job in the world. It's like eating peanuts. You keep doing it, keep doing it, and you never get tired." BY PETER HARTCHER American Interests www.the-american-interest.com Winter Issue “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform. Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.” Mr. Greenspan said that he had publicly warned about the “underpricing of risk” in 2005 but that he had never expected the crisis that began to sweep the entire financial system in 2007. “This crisis,” he told lawmakers, “has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.” NEW YORK TIMES (US) Greenspan’s sins return to haunt us By David Blake Published: September 18 2008 18:39 | Last updated: September 18 2008 18:39 Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”. Even as things went completely wild, Mr Greenspan dismissed those who warned that a new bubble was emerging. It was just a case of a little “froth” in a few areas. Later, after waiting until 2007, two years after he left office, he conceded that “froth” had been his euphemism for “bubble”. “All the froth bubbles add up to an aggregate bubble,” he told the Financial Times...... Mr Greenspan realises that something big has happened and describes it as a “once in a hundred years” event. But then, you do not get Alan Greenspans coming along every day. Finincial Times (UK) Copyright The Financial Times Limited 2008 Neoliberalism, White (Male) Privilege & the Current Financial Crisis by Jessie on Sep 30, 2008 at 11:29 am Make no mistake, all the available evidence suggests that the American political economy is headed for a major crash. Some are even speculating that this is the end of American economic dominance in the world’s financial market. But don’t be deceived by the blame-the-victim rationalizing that’s being floated now. Let’s be clear about what policies and which people are behind the current financial crisis: neoliberal policies and the overwhelmingly majority of economically privileged white men (photo from same link) who created, implemented and benefited from those policies. Neoliberalism refers to a set of policies that encourage “less government” and unfettered (and unregulated) capitalism. The key elements of neoliberalism include: 1) the rule of the market, 2) reducing government expenditures on social services, 3) deregulation, 4) privatization, and 5) gutting the notion of “the public good.” The end result of neoliberal policies is that while a handful of people get very, very rich, these policies simultaneously exacerbate the suffering of just about everyone else and increase domestic and international instability. So, what we’re seeing now is just the logical, perhaps inevitable, result of these policies.
2 Views
09:13:00 11/12/08
Imaginary Money Graveyard
[LESS INFO] 2 VIEWS | ADDED 09:13:00 11/12/08
Imaginary Money Graveyard by d-oo-b.cc Music: Ghosts by http://nin.com flickr.com/photos/arcorosca/sets/72157608868260247/show/w... www.flickr.com/photos/roxelo/3020310910 The recent Financial Global climate is affecting us all in some way. From mortgage prices to investments, businesses fail and people loose their homes, jobs and lives as a result. The severe lack of forsight by those in control this has led to the potential crash of the neo-conservatives. We now see the wealth of the world in a different light. An uncertain future is all we have to look forward to. Europe was caught out by the financial crisis and did not see recession looming, the head of the Eurogroup of nations conceded today, amid estimates that the EU has plunged into a downturn. OCt 08 'Recession awaits us, and we didn't think that recession lay in waiting,' euro zone chairman Jean-Claude Juncker told members of the European Parliament in Brussels. Oct 08 'We were badly mistaken with the different sequences of this crisis,' said Juncker, who is also the premier and finance minister of Luxembourg. Oct 08 The European Commission in early November 2008 warned that the worst financial crisis for generations has driven the EU economy into recession and that economic growth would come close to a standstill next year. "Increasingly, the signs point to a deep and synchronised global recession that began last quarter and has gathered momentum," said Bruce Kasman, an economist at JPMorgan Chase in New York. November 08 The eurozone’s second-biggest economy will grow by just 0.2-0.5 percent next year instead of the 1 percent previously predicted, Economy and Finance Minister Christine Lagarde told the Senate. The minister said the growth forecast for next year 2009 was “the lowest ever by a government in France” but that it was realistic. “The international economic outlook has deteriorated much more than was expected, which will impact growth in Switzerland over the next several quarters,” the Swiss National Bank said in a statement in October 08 The sharp falls came after the Dow Jones index slid 5.05 percent on Wall Street November 7th 08 as investors braced for a gloomy economic ride after the euphoria of Obama’s election victory faded. “Now that the event is over, investors are sobering up and looking at the economic gloom,” said Mizuho Investors Securities broker Masatoshi Sato. Billionaire philanthropist George Soros conceded in OCtober 08 that US influence was waning: "It has already declined. For the past 25 years, we have been running a constant current account deficit. The Chinese and the oil-producing countries have been running a surplus. We have consumed more than we produced. While we have run up debt, they have acquired wealth with their savings. Increasingly, the Chinese will own a lot more of the world because they will be converting their dollar reserves and US government bonds into real assets." Japan By James Kirkup and Julian Ryall in Tokyo Last Updated: 4:00PM BST 16 Oct 2008 Telegraph.co.uk "To cope with the current crisis, further steps may be needed," Mr Aso told members of the Japanese parliament. "However, I still believe this package will be effective to a certain degree." Mr Aso's budget package will be mean direct financial support for farmers and fishermen paying higher fuel bills, and for Japanese consumers. The emergency budget is part of a wider 11.7-trillion-yen package announced in August. The Bank of Japan also made another 300 billion-yen of emergency loans to Japanese banks, hoping to unblock the Tokyo money markets. The central bank has been offering extra liquidity on an almost daily basis for a month. euro Author: ČTK www.ceskenoviny.cz/news/index_view.php?id=338324 Prague - The current situation on financial markets will affect the agenda of Czech EU presidency in the first half of 2009, deputy prime minister for EU affairs Alexandr Vondra said. The financial crisis has become a new priority of the European Union, Vondra said. "When you are making preparations for a football match, you sometimes base your tactics more on offensive while another time you are more defensive. It is evident that in the economic situation in which Europe will be finding itself next year, emphasis will be rather placed on the protection and defence of what has already been attained," Vondra said. Posted by Kevin Anderson Sunday October 12 2008 06.50 BST Homelessness, the economic crisis and voting Homelessness is on the rise in the US, and the newly homeless could find their votes challenged. In Reno Nevada, joblessness has jumped 60% and a tent city of 170 people grew. Reno is trying to shut down the tent city and move people to newly opened shelters. CBS News has reported tent cities in Seattle, Portland, Fresno, Columbus, and Chattanooga. There are also reports of encampments in Seattle, San Diego, and Columbus, Ohio, Santa Barbara and Fresno California. The wave of foreclosures, which in some areas of the country disproportionately affect black voters, could also come into play. The Republican Party of Macomb County Michigan, one of three counties that make up Detroit, is planning to use list of foreclosed homes to challenge people who try to vote using those addresses. Republicans claim that they are trying to prevent voter fraud. Homeless and voting rights advocates are trying to make sure that people don't lose their homes and their right to vote. USA As veteran curator of that realm of American national power upon which all others ultimately depend, Greenspan has inspired remarkable deference. He long ago tamed the legislature, to the point that, instead of exercising oversight over his tenure, Congress has ritually idolized rather than interrogated him. Greenspan's aura has extended even to presidents of the United States. Bill Clinton went so far as to ask Greenspan in 2000 if he would like to be appointed to a fourth term as chairman, or whether he'd prefer to "go out now on top." The then 73-year-old replied: "Oh, no. This is the greatest job in the world. It's like eating peanuts. You keep doing it, keep doing it, and you never get tired." BY PETER HARTCHER American Interests www.the-american-interest.com Winter Issue “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform. Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.” Mr. Greenspan said that he had publicly warned about the “underpricing of risk” in 2005 but that he had never expected the crisis that began to sweep the entire financial system in 2007. “This crisis,” he told lawmakers, “has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.” NEW YORK TIMES (US) Greenspan’s sins return to haunt us By David Blake Published: September 18 2008 18:39 | Last updated: September 18 2008 18:39 Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”. Even as things went completely wild, Mr Greenspan dismissed those who warned that a new bubble was emerging. It was just a case of a little “froth” in a few areas. Later, after waiting until 2007, two years after he left office, he conceded that “froth” had been his euphemism for “bubble”. “All the froth bubbles add up to an aggregate bubble,” he told the Financial Times...... Mr Greenspan realises that something big has happened and describes it as a “once in a hundred years” event. But then, you do not get Alan Greenspans coming along every day. Finincial Times (UK) Copyright The Financial Times Limited 2008 Neoliberalism, White (Male) Privilege & the Current Financial Crisis by Jessie on Sep 30, 2008 at 11:29 am Make no mistake, all the available evidence suggests that the American political economy is headed for a major crash. Some are even speculating that this is the end of American economic dominance in the world’s financial market. But don’t be deceived by the blame-the-victim rationalizing that’s being floated now. Let’s be clear about what policies and which people are behind the current financial crisis: neoliberal policies and the overwhelmingly majority of economically privileged white men (photo from same link) who created, implemented and benefited from those policies. Neoliberalism refers to a set of policies that encourage “less government” and unfettered (and unregulated) capitalism. The key elements of neoliberalism include: 1) the rule of the market, 2) reducing government expenditures on social services, 3) deregulation, 4) privatization, and 5) gutting the notion of “the public good.” The end result of neoliberal policies is that while a handful of people get very, very rich, these policies simultaneously exacerbate the suffering of just about everyone else and increase domestic and international instability. So, what we’re seeing now is just the logical, perhaps inevitable, result of these policies.
