August 2011 archive

Down, down, down. Would the fall never come to an end! `I wonder how many miles I’ve fallen by this time?’ she said aloud. `I must be getting somewhere near the centre of the earth. Let me see: that would be four thousand miles down, I think–‘ (for, you see, Alice had learnt several things of this sort in her lessons in the schoolroom, and though this was not a very good opportunity for showing off her knowledge, as there was no one to listen to her, still it was good practice to say it over) `–yes, that’s about the right distance–but then I wonder what Latitude or Longitude I’ve got to?’ (Alice had no idea what Latitude was, or Longitude either, but thought they were nice grand words to say.)

US STOCKS-Wall St slides for fourth straight week

By Ashley Lau, Reuters

Fri Aug 19, 2011 4:39pm EDT

NEW YORK, Aug 19 (Reuters) – Wall Street ended a fourth week of losses on a down note on Friday as most buyers left the market before the weekend on growing fears of another U.S. recession and destabilization in Europe’s financial system.

Could it be because our policy makers in Washington have no idea what Latitude is, or Longitude either, but think they are nice grand words to say?

How Austerity Is Ushering in a Global Recession

Robert Reich

Tuesday, August 16, 2011

Not only is the United States slouching toward a double dip, but so is Europe. New data out today show even Europe’s strongest core economies – Germany, France, and the Netherlands – slowing to a crawl.

We’re on the cusp of a global recession.

Policy makers be warned: Austerity is the wrong medicine.

…

(C)halk up a big part of Europe’s slowdown to the politics and economics of austerity. Europe – including Britain – have turned John Maynard Keynes on his head. They’ve been cutting public spending just when they should be spending more to counteract slowing private spending.

The United States has been moving in the same bizarre direction. Cutbacks by state and local governments have all but negated the federal government’s original stimulus, and no one in Washington is talking seriously about a second. The pitiful showdown over increasing the debt limit has produced the opposite: a Rube-Goldberg-like process for capping spending rather than increasing it, and a public that’s being sold the Republican lie that less government spending means more jobs.

…

With anemic growth in America and Europe, the Japanese economy comatose, and emerging markets (including China) pulling in their reins, the vicious cycle could become worldwide. If global demand for goods and services continues to fall behind the potential supply we’ll see unemployment rise further and growth slow even more – especially in Europe and the U.S.

…

Without an expansionary fiscal policy, low interest rates have little effect. Companies won’t borrow in order to expand and hire more workers unless they have reasonable certainty they’ll have customers for what they produce. And consumers won’t borrow money to spend on goods and services unless they’re reasonably confident they’ll have jobs.

Fiscal austerity is the wrong medicine at the wrong time.

Well we’re not just frustrated with the president — our communities are hurting.  You said it.  16% unemployment but this has been going on for a long time.  We have people who are not even being counted in the African American community anymore.  They’ve been unemployed for years now and so we think in some areas it’s 35 to 40%.  We’ve got to get in this discussion.

…

Take a look at this headline in the Wall Street Journal: ‘Obama aims to keep white voters on board’.  Well, we want to be on board too.

(h/t L.A. Times)

Elmore James (1918-1963).  A Bluesman and poet whose work your Bloguero admires.  It’s work that holds up extraordinarily well after 50 years.

But, Sr. Bloguero, with all due respect, you might ask, what’s Elmore James got to do with this, which is supposed to be your weekly digest?   Your Bloguero could answer this with an elaborate, very contorted, ontological exploration of the theretical connections between the Blues and Haiku, between Elmore James and Basho.  But, no. It’s not an intellectual exercise.  No. It’s just something your Bloguero would like you to hear and enjoy.  It’s that simple.  Your Bloguero plays it over and over and over again. Then he enjoys thinking about how very good, how very powerful, how eloquent  it is.  And then he seeks other pieces that are in their own way as powerful.  Your Bloguero is quite confident that he knows a few.

What comes immediately to mind is Son House (1902- 1988) .  Sometimes far less is definitely much more:

This Week In The Dream Antilles is usually a weekly digest. Sometimes, like now, it is not actually a digest of essays posted in the past week at The Dream Antilles. For that you have to visit The Dream Antilles. Please leave a comment so that your Bloguero will know that you stopped by. Or, even easier, just click the “Encouragement jar”. Your Bloguero likes to know you’ve visited.

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cross-posted from The Dream Antilles

“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”.

Paul Krugman: A Success Story as Big as Texas? Actually, That’s a Myth

Texas has been adding jobs faster than the rest of the nation, a fact that has become especially notable in the past couple of years – I recently saw it referred to as the Texas “jobs juggernaut” – as overall job growth has been so poor.

But what’s the story here? Oddly, it’s rare to see anyone in this debate talking in terms of models – that is, the kind of stylized, simplified, but internally consistent stories (not necessarily mathematical) that are what economic analysis is all about. So let me try to fill that gap by offering three informal models of what might be going on in Texas.

In each of these stories, I imagine, to clarify things, an initial state in which America is divided into two identical regions; call them Texas and New York. Each of these regions has a labor force that lives in houses; I ignore other factors of production, except that I assume that building houses requires land, which is in limited supply. And we assume that initially everything is in equilibrium: wages and the cost of housing are the same in both regions.

Robert Reich: The President’s Bold Jobs Bill (Maybe)

The President is sounding like a fighter these days. He even says he’ll be proposing a jobs bill in September – and if Republicans don’t go along he’ll fight for it through Election Day (or beyond).

That’s a start. But read the small print and all he’s talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Columbia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank.

An infrastructure bank might be helpful, depending on its size.

Which is the real question hovering over the entire putative jobs bill – its size.

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 19 is the 231st day of the year (232nd in leap years) in the Gregorian calendar. There are 134 days remaining until the end of the year.

On this day in 1909, the first race is held at the Indianapolis Motor Speedway, now the home of the world’s most famous motor racing competition, the Indianapolis 500.

The rectangular two-and-a-half-mile track linked four turns, each exactly 440 yards from start to finish, by two long and two short straight sections. In that first five-mile race on August 19, 1909, 12,000 spectators watched Austrian engineer Louis Schwitzer win with an average speed of 57.4 miles per hour. The track’s surface of crushed rock and tar proved a disaster, breaking up in a number of places and causing the deaths of two drivers, two mechanics and two spectators.

The surface was soon replaced with 3.2 million paving bricks, laid in a bed of sand and fixed with mortar. Dubbed “The Brickyard,” the speedway reopened in December 1909. In 1911, low attendance led the track’s owners to make a crucial decision: Instead of shorter races, they resolved to focus on a single, longer event each year, for a much larger prize. That May 30 marked the debut of the Indy 500–a grueling 500-mile race that was an immediate hit with audiences and drew press attention from all over the country. Driver Ray Haroun won the purse of $14,250, with an average speed of 74.59 mph and a total time of 6 hours and 42 minutes.

Until I can find another embeddable feed for Countdown, I’ll post the YouTube segments for Worst Persons and others that would be interesting.

Worst Persons: Bachmann, Lamborn & entrepreneur Peter Thiel

Evening Edition is an Open Thread

1 Obama says Syria’s Assad must ‘step aside’

By Olivier Knox, AFP

5 hrs ago

This article was authored by our neoliberal Democratic saviors on the new and improved Cat Food Committee (h/t digby). We are so screwed:

Together We Can Beat the Deficit

By PATTY MURRAY, MAX BAUCUS AND JOHN KERRY

Our country has long been a beacon of light in the world because the American people always come together when times are tough. Over the past few months, in debating the debt ceiling and deficit reduction, that light of common cause has appeared to flicker at times in our nation’s capital. As appointees to the Joint Select Committee on Deficit Reduction-12 members of Congress charged with finding $1.5 trillion in deficit reduction over the next decade-we hope to remedy that.

snip

   Make no mistake, this is an important moment for our country. Millions of Americans are still hurting, working overtime to pay the bills, struggling to find a job and a way forward for their families. Trillions of dollars in private capital are sitting on the sidelines because businesses are not yet confident enough in our economy or in their lawmakers to invest in the future. These families and businesses are demanding that this new committee work together to overcome the partisanship and brinksmanship of recent months and put our fiscal house in order.

   The Standard & Poor’s downgrade of America’s credit rating was an unprecedented wake-up call for those who have for too long acted as if overheated rhetoric and dysfunction in Washington has no consequences for Main Street and working families. The shockwaves that roiled financial markets after the downgrade was a condemnation of Congress’s inability to address the unsustainable trajectory of our current fiscal policies.

snip

   None of us ran for office arguing that the United States should see its credit rating downgraded. Nobody ever campaigned in favor of mountains of debt or championed the idea that every American’s interest rates should go up. And no one has ever gone into a debate pledging that China and India should own this economic century because we can’t make our democracy work here at home.

   This moment demands leadership, but it also demands consensus. The Joint Select Committee on Deficit Reduction was set up to require bipartisanship, and we are going to work hard to achieve it. We know that each of us comes into this committee with clear ideas on the issues and what our priorities are for our nation. But a solution can only be found by merging these priorities across party lines and finding a solution that works for the American people.

   We know that our goal is to reduce spending. But we also know that America faces not just a budget deficit but also a jobs deficit. Nobody on this committee would be happy if we reduced the budget deficit but even more Americans end up losing their jobs.

   So we are ready to get to work with our colleagues on both sides of the aisle to report out a balanced plan, with the shared sacrifices this moment requires. One that moves past the partisan rancor, puts our nation back on strong fiscal footing, and allows us to continue shining bright in the world in this generation and for generations to come.

Like digby said: “Confidence Fairy, “shared sacrifice”, “balanced approach”, China bashing, the whole nine yards.”

Then there is Obama’s less than inspiring not a plan yet and the Chamber of Commerce clamoring for “for “reform of entitlement programs” like Medicare and Medicaid (which means cutting spending on these programs).”

The stocks of the maker of Preparation H may just save the tanking stock market  

Frank Luntz is a whore and we even know the price- $1000.

I’m only half kidding.  Stephen is using his PAC money to educate us.  We should pay attention.

Where did he get those words that are going to be the basis for his transformative campaign?  I suspect most of you already know the answer-

This is a start. But will it even get off the ground considering that it might lead to the prosecution of the banksters that are the root cause of this recession.

U.S. Inquiry Is Said to Focus on S.&P. Ratings

By Louise Story

The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews.

The investigation began before Standard & Poor’s cut the United States’ AAA credit rating this month, but it is likely to add fuel to the political firestorm that has surrounded that action. Lawmakers and some administration officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.

In the mortgage inquiry, the Justice Department has been asking about instances in which the company’s analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S.& P. business managers, according to the people with knowledge of the interviews. If the government finds enough evidence to support such a case, which is likely to be a civil case, it could undercut S.& P.’s longstanding claim that its analysts act independently from business concerns.

At Rolling Stone, Matt Taibbi has a in depth article of how the SEC, itself, ending and covering up investigations into Wall St. and the banking industry, as well as, the destruction of the evidence, over the last to decades that contributed to the financial crisis:

For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency’s records – “including case files relating to preliminary investigations” – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term “Orwellian,” devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or “Matters Under Inquiry” – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission’s internal website. “After you have closed a MUI that has not become an investigation,” the site advised staffers, “you should dispose of any documents obtained in connection with the MUI.”

Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.

The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission’s records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the

The article is five fascinating pages that lays out the the revolving door of the SEC managers from the agency to the banks and Wall St. positions and back to the SEC as investigators. Another case of the felons in charge of the investigation of their own criminal activity.