08/25/2011 archive

Aug 25 2011

Another Dow(n) Day on Wall Street

Yes, I know the financial markets are only peripherally connected to the actual economy and the Dow is a poor indicator even of that but it’s sometimes amusing to watch the numbers at the big casino.

Thursday is jobless day and once again the number of newly unemployed is over 400,000 with an upward revision of last week’s much better number so that they are now even worse than this week.  Green shoots, Recovery Summer don’t you know.

But these titans are not so much worried about that as they are once again about Greece.

Greek Bond Yields Climb to Record High on Speculation Bailout Will Fail

By Emma Charlton and Keith Jenkins, Bloomberg News

Aug 25, 2011 10:49 AM ET

Greek bonds slumped, with 10-year yields rising for an eighth day to a euro-era record, amid concern Finland’s demands for loan collateral jeopardize Greece’s second bailout package and may trigger a default.

…

“Markets are doubting whether the second bailout package will ever be ratified by all the euro-region member states,” said Marius Daheim, a senior fixed-income strategist at Bayerische Landesbank in Munich. “There’s not much that can worsen the situation from where we are now.”

Greek 10-year bond yields rose 49 basis points to 18.38 at 3:44 p.m. in London, after climbing as high as 18.55 percent.

…

The two-year yield jumped 185 basis points to 45.88 percent, extending a 5.6 percentage point increase over the past two days. It earlier reached a euro-era record 45.91 percent.

The cost of credit-default swaps insuring Greek debt rose three basis points today to 2,253 basis points, the highest in more than a month, according to CMA.

Greek Default Fears Rise

By RIVA FROYMOVICH And MARK BROWN, The Wall Street Journal

AUGUST 25, 2011, 11:33 A.M. ET

BRUSSELS-Euro-zone policy makers appeared nowhere near settling a dispute Thursday over Finland’s collateral demands in exchange for participating in a €109 billion ($157.1 million) bailout for Greece, raising concerns the Mediterranean nation may default.

…

Under that deal, Greece would pay Finland hundreds of millions of euros from its bailout loans as collateral against those same loans at the expense of other euro-zone countries. Since Finland is set to contribute just 2% of Greece’s total rescue package, guarantees from the richer euro-zone nations would be going directly to Finland.

Which leads to headlines like this one in The Telegraph–

Market crash ‘could hit within weeks’, warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

By Harry Wilson, and Philip Aldrick, The Telegraph

9:50PM BST 24 Aug 2011

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender’s bonds against default is now £343,540.

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

…

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

Here’s a bit of video from the BBC of an interview with Nassim Taleb-

(I wanted to include a quote from Robert Alexander Dumas at MyFiredog Lake, but it’s crashing the piece so I’ll try and figure it out later.)

But you shouldn’t worry or fret.  Warren Buffet just dropped $5 Billion of new capital into Bank of America so my advice is that you take all the money you have in the world and view this downturn as a buying opportunity to get long in banks.

Sucker.

Aug 25 2011

Another Dow(n) Day on Wall Street

Yes, I know the financial markets are only peripherally connected to the actual economy and the Dow is a poor indicator even of that but it’s sometimes amusing to watch the numbers at the big casino.

Thursday is jobless day and once again the number of newly unemployed is over 400,000 with an upward revision of last week’s much better number so that they are now even worse than this week.  Green shoots, Recovery Summer don’t you know.

But these titans are not so much worried about that as they are once again about Greece.

Greek Bond Yields Climb to Record High on Speculation Bailout Will Fail

By Emma Charlton and Keith Jenkins, Bloomberg News

Aug 25, 2011 10:49 AM ET

Greek bonds slumped, with 10-year yields rising for an eighth day to a euro-era record, amid concern Finland’s demands for loan collateral jeopardize Greece’s second bailout package and may trigger a default.

…

“Markets are doubting whether the second bailout package will ever be ratified by all the euro-region member states,” said Marius Daheim, a senior fixed-income strategist at Bayerische Landesbank in Munich. “There’s not much that can worsen the situation from where we are now.”

Greek 10-year bond yields rose 49 basis points to 18.38 at 3:44 p.m. in London, after climbing as high as 18.55 percent.

…

The two-year yield jumped 185 basis points to 45.88 percent, extending a 5.6 percentage point increase over the past two days. It earlier reached a euro-era record 45.91 percent.

The cost of credit-default swaps insuring Greek debt rose three basis points today to 2,253 basis points, the highest in more than a month, according to CMA.

Greek Default Fears Rise

By RIVA FROYMOVICH And MARK BROWN, The Wall Street Journal

AUGUST 25, 2011, 11:33 A.M. ET

BRUSSELS-Euro-zone policy makers appeared nowhere near settling a dispute Thursday over Finland’s collateral demands in exchange for participating in a €109 billion ($157.1 million) bailout for Greece, raising concerns the Mediterranean nation may default.

…

Under that deal, Greece would pay Finland hundreds of millions of euros from its bailout loans as collateral against those same loans at the expense of other euro-zone countries. Since Finland is set to contribute just 2% of Greece’s total rescue package, guarantees from the richer euro-zone nations would be going directly to Finland.

Which leads to headlines like this one in The Telegraph–

Market crash ‘could hit within weeks’, warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

By Harry Wilson, and Philip Aldrick, The Telegraph

9:50PM BST 24 Aug 2011

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender’s bonds against default is now £343,540.

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

…

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

Here’s a bit of video from the BBC of an interview with Nassim Taleb-

Aug 25 2011

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Robert Sheer: Amnesty for the Indefensible

They will get away with it, at least in this life. “They” are the Wall Street usurers, people of a sort condemned in Scripture, who have brought more misery to this nation than we have known since the Great Depression. “They” will not suffer for their crimes because they have a majority ownership position in our political system. That is the meaning of the banking plea bargain that the Obama administration is pressuring state attorneys general to negotiate with the titans of the financial world.

It is a sellout deal that, in return for a pittance of compensation by banks to ripped-off mortgage holders, would grant the banks blanket immunity from any prosecution. That is intended to short-circuit investigations by a score of aggressive state officials, inquiries that offer the public a last best hope to get to the bottom of the housing scandal that has cost U.S. homeowners $6.6 trillion in home equity in the past five years and left 14.6 million Americans owing more than their homes are worth.

New York Times Editorial: Gov. Perry’s Cash Machine

The exchange of campaign contributions for government contracts, favors or positions is all too common in Washington and around the country. It has been developed to an especially high art – or more to the point, a low art – by Gov. Rick Perry in Texas. For a presidential contender who insists that big government is the country’s biggest problem, it is particularly cynical.

There are nearly 600 boards, commissions, authorities and departments in Texas, many of which are of little use to the public and should have long been shut down or consolidated. They are of great use to the governor, who more than any predecessor has created thousands of potential appointments for beneficent backers and several pro-business funds that have been generous to allies.

Jim Hightower: Your Job, Mr. President, Is Jobs

Having just been recently rolled by tea party Republicans in the debt-ceiling circus, Barack Obama now says that his priority is job creation. Wow, what took him so long?

Jobs should have been Priority No. 1 when he first took office. But instead, the Obamacans put Wall Street banksters first, dumping trillions of dollars from our public funds into saving the butts of greedheads who crashed our economy. They bailed out Wall Streeters without even requiring that the bankers invest in job-creating, grassroots enterprises. The jobs will come later, they said. Wrong.

A fragile recovery did sprout in 2009, but, oxymoronically, it was called a “jobless recovery,” and workers keep getting pink slips. Obama himself explained that jobs are “a lagging economic indicator.” Later, he told us.

Ralph Nader: Verizon Goes From Wireless to Shameless

It was only a matter of time before the “pull down” NAFTA and WTO trade agreements on U.S. wages and jobs would be followed by “pull down” contract demands by U.S. corporations on their unionized workers toward levels of non-unionized laborers.

The most recent illustration of this three-decade reversal of nearly a century of American economic advances for employees is the numerous demands by Verizon

Here are just a few of the concessions the new Verizon CEO, Lowell McAdam, is insisting upon:

   -More power to contract out and offshore jobs to add to the 25,000 already in that category; thereby undermining job security.

   -a freeze on pensions;

   -elimination of the sickness and death benefit program;

   -reduction in sick days; and

   -a major increase in employee contributions to and deductibles under their health insurance coverage.

Mr. Lowell McAdam would surely have trouble feeling the pain of his workers who brave the elements storm or shine to afford him a salary of over 1.5 million dollars PER MONTH plus perks and benefits.

Phil Radford: Koch Industries Lobbying Puts Over 4 Million Americans in Danger

Recent Greenpeace analysis of lobbying disclosure records reveals that since 2005, Koch Industries has hired more lobbyists than Dow and Dupont to fight legislation that could protect over 100 million Americans from what national security experts say is a catastrophic risk from the bulk storage of poison gasses at dangerous chemical facilities such as oil refineries, chemical manufacturing facilities, and water treatment plants. Koch lobbyists even outnumber those at trade associations including the Chamber of Commerce and American Petroleum Institute. Only the American Chemistry Council deployed more.

In 2010 Koch Industries and the billionaire brothers who run it were first exposed as a major funder of front groups spreading denial of global warming in a Greenpeace report, which sparked an expose in the New Yorker. Since then, the brothers have been further exposed as a key backer of efforts to roll back environmental, labor, and health protections at the state and federal levels. Through enormous campaign contributions, an army of lobbyists, and funding of think tanks and front groups, David and Charles Koch push their agenda of a world in which their company can operate without regard for the risks they pose to communities, workers, or our environment.

John Feffer: Governments Kill

We make a bargain with our governments. We pay taxes and expect a set of government services in return. And in return for a guarantee of some measure of security, we grant the government a monopoly on legitimate violence. In theory, then, we forswear mob rule and paramilitary organizations, we occasionally accept the death penalty as an appropriate punishment, we delegate the responsibility to declare and prosecute war to our legislative and executive branches, and we put guns into the hands of the army and the police.

Governments, in other words, kill on our behalf. This arrangement is a form of social contract, which means that governments are basically contract killers. Some states, like Nazi Germany, use the tremendous power of arms and bureaucracy to transform their territories into slaughterhouses. Regimes that are merely authoritarian can be equally brutal but display a greater selectivity in their tyranny. In our more decorous democracies, meanwhile, we perfume our conversations with words like “justice” and “national security” to mask the odor of death.

Sally Kohn: Profit on Wall Street, Recession on Main Street

In America’s deeply dysfunctional economy, unemployment is stuck at a ‘new normal’ of 9%, while corporate profits race ahead

n the past few weeks alone, Bank of America, Goldman Sachs, Cisco Systems and Borders have all announced massive layoffs. Borders is closing its retail stores, auctioning off its holdings and letting go 10,000 employees as, due to online competition, the company is no longer profitable and filed for bankruptcy earlier this year. In contrast, Bank of America, Goldman Sachs and Cisco Systems have all posted profits in the last few quarters – in some cases, record highs. Alhough according to the latest data, 9.1% of Americans are unemployed, major US corporations are slashing jobs not out of necessity but out of greed. The revived focus in Washington on creating jobs may be pointless if corporate America no longer needs workers.

A new report by Northeastern University’s centre for labour market studies shows (pdf) that corporate downsizing, work hour reductions and the correlated growth of corporate profits directly led to the recession. Big business in America shed jobs and squeezed increased productivity from their remaining workers, but report authors Andrew Sum and Joseph McLachlan write: “None of these productivity gains was shared by wage and salary workers in the form of higher real weekly earnings.” Instead, corporations increased their profits “at a higher relative rate than in any other post second world war recession.”

Aug 25 2011

On This Day In History August 25

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

August 25 is the 237th day of the year (238th in leap years) in the Gregorian calendar. There are 128 days remaining until the end of the year.

On this day in 1768, James Cook began his first voyage to travel to the Pacific Ocean to observe and record the transit of Venus across the Sun. This would be the first of three voyages that would be hailed as  heroic by the scientific community.

Photobucket

The routes of Captain James Cook’s voyages. The first voyage is shown in red, second voyage in green, and third voyage in blue. The route of Cook’s crew following his death is shown as a dashed blue line.

In 1766, the Royal Society hired (James) Cook to travel to the Pacific Ocean to observe and record the transit of Venus across the Sun. Cook was promoted to Lieutenant and named as commander of the expedition. The expedition sailed from England in 1768, rounded Cape Horn and continued westward across the Pacific to arrive at Tahiti  on 13 April 1769, where the observations were to be made. However, the result of the observations was not as conclusive or accurate as had been hoped. Cook later mapped the complete New Zealand coastline, making only some minor errors. He then sailed west, reaching the south-eastern coast of the Australian continent on 19 April 1770, and in doing so his expedition became the first recorded Europeans to have encountered its eastern coastline.

On 23 April he made his first recorded direct observation of indigenous Australians at Brush Island near Bawley Point, noting in his journal: “…and were so near the Shore as to distinguish several people upon the Sea beach they appear’d to be of a very dark or black Colour but whether this was the real colour of their skins or the C[l]othes they might have on I know not.” On 29 April Cook and crew made their first landfall on the mainland of the continent at a place now known as the Kurnell Peninsula, which he named Botany Bay after the unique specimens retrieved by the botanists Joseph Banks and Daniel Solander. It is here that James Cook made first contact with an Aboriginal tribe known as the Gweagal.

After his departure from Botany Bay he continued northwards, and a mishap occurred when Endeavour ran aground on a shoal of the Great Barrier Reef, on 11 June, and “nursed into a river mouth on 18 June 1770.” The ship was badly damaged and his voyage was delayed almost seven weeks while repairs were carried out on the beach (near the docks of modern Cooktown, at the mouth of the Endeavour River). Once repairs were complete the voyage continued, sailing through Torres Strait and on 22 August he landed on Possession Island, where he claimed the entire coastline he had just explored as British territory. He returned to England via Batavia (modern Jakarta, Indonesia), the Cape of Good Hope and the island of Saint Helena, arriving on 12 July 1771.

Aug 25 2011

NYPD: CIA Blue

Since the attacks of Sept. 11, 2001, the New York Police Department has been aggressively gathering domestic intelligence. With help from the CIA, the department’s intelligence unit dispatches undercover officers to keep tabs on ethnic neighborhoods – sometimes in areas far outside their jurisdiction. Keith discusses the details with Associated Press reporter Matt Apuzzo, who exposed the story with his colleague Adam Goldman.

NYPD CIA Anti-Terror Operations Conducted In Secret For Years

NEW YORK – Since the Sept. 11 terrorist attacks, the New York Police Department has become one of the nation’s most aggressive domestic intelligence agencies, targeting ethnic communities in ways that would run afoul of civil liberties rules if practiced by the federal government, an Associated Press investigation has found.

These operations have benefited from unprecedented help from the CIA, a partnership that has blurred the line between foreign and domestic spying.

The department has dispatched undercover officers, known as “rakers,” into minority neighborhoods as part of a human mapping program, according to officials directly involved in the program. They’ve monitored daily life in bookstores, bars, cafes and nightclubs. Police have also used informants, known as “mosque crawlers,” to monitor sermons, even when there’s no evidence of wrongdoing.

Neither the city council, which finances the department, nor the federal government, which has given NYPD more than $1.6 billion since 9/11, is told exactly what’s going on.

Many of these operations were built with help from the CIA, which is prohibited from spying on Americans but was instrumental in transforming the NYPD’s intelligence unit.

My City Council representative will be getting a call, so will Mayor Bloomberg

Aug 25 2011

DocuDharma Digest

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Featured Essays-

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Aug 25 2011

Evening Edition

Evening Edition is an Open Thread

From Yahoo News Top Stories

1 First proof that climate is a trigger for conflict: study

By Richard Ingham, AFP

6 hrs ago

Climate shift has at times been fingered as a culprit in triggering conflict, fuelling for instance the 1789 French Revolution by wrecking harvests and driving hungry peasants to the city.

Evidence to back the theory has often been contested as sketchy or anecdotal — but the case has been boosted by the first scientific study to declare an unmistakeable link between climate fluctuations and violence.

It says tropical countries affected by the notorious El Nino weather event are twice as likely to be hit by internal unrest compared to the phenomenon’s cooler, wetter counterpart, La Nina.

Aug 25 2011

Libya: Not Quite Mission Accomplished Or Legal

While the world will not miss Mommar Gadaffi, there are some very serious questions about how this was achieved, particularly for Americans who were opposed to Pres. George W. Bush military intervention policies while excusing Obama’s violation of the law.

Glenn Greenwald makes two salient points in his critique of an article by Michael Tomasky in the Daily Beast that argues “the war in Libya highlights how “one can see how he (Obama) might become not just a good but a great foreign-policy president” and how some intellectual progressives conceive of the Obama presidency”.

First, this is not “mission accomplished” by any means:

No matter how moved you are by joyous Libyans (just as one was presumably moved by joyous Iraqis); no matter how heinous you believe Gadaffi was (he certainly wasn’t worse than Saddam); no matter how vast you believe the differences are between Libya and Iraq (and there are significant differences), this specific Iraq lesson cannot be evaded.  When foreign powers use military force to help remove a tyrannical regime that has ruled for decades, all sorts of chaos, violence, instability, and suffering — along with a slew of unpredictable outcomes — are inevitable.

Greenwald’s second point is the illegality:

The Atlantic‘s Conor Freidersdorf argues that no matter how great the outcome proves to be, Libya must be considered a “Phyrrhic victory for America” because:

   Obama has violated the Constitution; he willfully broke a law that he believes to be constitutional; he undermined his own professed beliefs about executive power, and made it more likely that future presidents will undermine convictions that he purports to hold; in all this, he undermined the rule of law and the balance of powers as set forth by the framers.

snip

The New Yorker‘s Amy Davidson warns of the serious precedential dangers not only from Obama’s law-breaking but from our collective willingness to overlook it.  Honestly: can anyone claim that if George Bush had waged an optional war without Congressional approval — and continued to wage it even after a Democratic Congress voted against its authorization — that progressives would be lightly and parenthetically calling it “ridiculous” on their way to praising the war?  No, they’d be screaming — rightfully so — about lawlessness and the shredding of the Constitution; that this identical contempt for the law by Obama has become nothing more than a cursory progressive caveat (at most) on the way to hailing the glorious war is astounding.

(emphasis mine)

The Nation’s Jeremy Scahill appeared on MSNBC’s Morning Joe discussing Libya setting Gov. Howard Dean and Newsweek‘s Tina Brown straight. He says what’s happening in the country is essentially “a NATO enforced regime change” and that President Obama is “implementing the Bush domino agenda in the Middle East”. Scahill also expresses concern that the US is making future enemies across the Middle East.

This article was a tough call for me to write because like so many I would rejoice to see Gadaffi in shackles at The Hague and that this revolution was initiated by the Libyan people. That said and as Glenn also points out in his article:

Does anyone know how many civilians have died in the NATO bombing of Tripoli and the ensuing battle?  Does anyone know who will dominate the subsequent regime? Does it matter?

 

But my, how soon some have forgotten the Bush regime’s policies.

Aug 25 2011

My Little Town 20110824: “Funny” Scout Leader

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile of so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a redneck sort of place, and just zoom onto my previous posts to understand a bit about it.

This is an installment about my fifth grade teacher and Boy Scout leader.  I was a bit hesitant to write about this, as I am not sure that he is quite dead yet, but my doing the maths places his age at at least 80 years, give or take a couple.  The last part of the post may be disturbing for some, and is not suitable for little ones.

I attended Hackett School from the end of first grade through the seventh grade.  The school was quite dismal at the time.  In all fairness, the district has greatly improved over the years, I am told, so any comments about it are strictly from those days from around 1964 to 1970.

Aug 25 2011

Countdown with Keith Olbermann: Worst Persons 8.23.11

Find out why Roger Ailes from “Fixed” News is WORSE, Gov. Jan Brewer from Arizona is WORSER, and Tea Party chair Sherry Lanford Smith is the WORST PERSON IN THE WORLD for August 23, 2011.