June 2012 archive

There was a recent kerfluffle at FDL that in the light of presidential election, Jane Hamsher, FDL’s founder, felt it necessary to restate and clarify the site policy regarding diaries and commenting. I agree with what Jane said:

In the contentious 2008 Democratic Presidential primary, there were many members of the FDL community who passionately supported one candidate over another.  We chose as a blog not to endorse either candidate because we did not want to alienate either significant sector of our community.

Moreover, we firmly believe that elections are the time when candidates are the most responsive to the needs of the constituents whose votes they hope to woo. [..]

We believe that the Presidential election should be a time for healthy discussion among those who have different and often passionately held points of view. [..]

Individual writers on FDL may take different positions.  It does not mean that as a blog we endorse any of them.  Our goal is to make a fair home for all sides of this discussion, and not shut it down. [..]

The one thing we have no interest in being is a mind-reading site.   “You just want Obama to win” or “you just want Romney to win” or “you just don’t care about X” furthers no conversation.  Its only intent is to poison the discussion and launch a pie fight. [..]

Our only goal is to foster a vigorous and open debate on FDL in the ensuing months.  The fact that we will not be playing the role of arbiter is not a reflection of any hidden agenda, but rather a continuation of what we have historically sought to be during times when our community is intensely divided:  a town square where a fair discussion of the merits of all sides can take place.

That is what our goal is here at The Stars Hollow Gazette and Docudharma

Thank you, Jane, for all you do.

“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”.

Wednesday is Ladies’ Day.

Follow us on Twitter @StarsHollowGzt

Kaura Flanders: ‘Jamie Dimon, You’re No Good. The People Need a Robin Hood’

Tuesday June 19th, saw the formal launch of an NNU-led national campaign for the Robin Hood Tax. Not just in DC, but all over the country, nurses and their allies showed up at branches and offices of JP Morgan Chase summoning the spirit of the 13th century British bandit.

As National Nurses United President Rose Ann deMoro explains:  “It’s time to pay up for the damage you have done to our communities and our nation.”

It’s an idea whose time has long since come, they say, and there’s no better time to be talking about it than this moment. The Robin Hood tax, or financial transaction tax (also known as the Tobin tax after the US economist who first proposed a version of it,) would impose a levy on financial transactions, like sales of stocks, bonds and derivatives. It would take from the rich and generate revenues for poor public services, and stymie reckless speculation — like the gamble that lost JP Morgan that missing $2 billion —  in the process.

Katrina vanden Heuvel: Progressive action can move the candidates

After a rough few weeks, filled with disappointing economic news and distracting political gaffes, President Obama finally had a rare throw-down-the-mike moment. In a highly anticipated campaign speech in Ohio last Thursday, he clearly and unequivocally framed the November election as a choice, not simply “between two candidates or two political parties, but between two paths for our country.”

The choice is indeed a stark one: a return to the failed Bush policies of unregulated markets and antitax fundamentalism that served the 1 percent as they failed the country; or concerted government action to rebuild the middle class as the foundation for sustained economic growth. As Obama said, “this is not another trivial Washington argument.”

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.

Click on images to enlarge.

June 20 is the 171st day of the year (172nd in leap years) in the Gregorian calendar. There are 194 days remaining until the end of the year.

On leap years, this day usually marks the summer solstice in the northern hemisphere and the winter solstice in the southern hemisphere.

On this day in 1789, Third Estate makes Tennis Court Oath.

In Versailles, France, the deputies of the Third Estate, which represent commoners and the lower clergy, meet on the Jeu de Paume, an indoor tennis court, in defiance of King Louis XVI’s order to disperse. In these modest surroundings, they took a historic oath not to disband until a new French constitution had been adopted.

Louis XVI, who ascended the French throne in 1774, proved unsuited to deal with the severe financial problems he had inherited from his grandfather, King Louis XV. In 1789, in a desperate attempt to address France’s economic crisis, Louis XVI assembled the Estates-General, a national assembly that represented the three “estates” of the French people–the nobles, the clergy, and the commons. The Estates-General had not been assembled since 1614, and its deputies drew up long lists of grievances and called for sweeping political and social reforms.

The Tennis Court Oath (French: serment du jeu de paume) was a pivotal event during the first days of the French Revolution. The Oath was a pledge signed by 576 of the 577 members from the Third Estate who were locked out of a meeting of the Estates-General on 20 June 1789 so they made a makeshift conference room inside a tennis court.

In 17 June 1789 this group, led by Honoré Gabriel Riqueti, began to call themselves the National Assembly. On the morning of 20 June, the deputies were shocked to discover that the chamber door was locked and guarded by soldiers. Immediately fearing the worst and anxious that a royal attack by King Louis XVI was imminent, the deputies congregated in a nearby indoor real tennis court where they took a solemn collective oath “not to separate, and to reassemble wherever circumstances require, until the constitution of the kingdom is established” It later transpired that the most probable reason why the hall was closed was that the royal household was still in mourning the death of the Dauphin (the king’s oldest son) two weeks earlier; ordinarily, political matters could not be conducted until the King had emerged from mourning. The oath is therefore a contentious point in French political history, since pro-monarchists then and now characterize it as a duplicitous and hysterical over-reaction which deliberately made capital out of a private tragedy in the royal family. Other historians have argued that given political tensions in France at that time, the deputies’ fears, even if wrong, were reasonable and that the importance of the oath goes above and beyond its context.

The deputies pledged to continue to meet until a constitution had been written, despite the royal prohibition. The oath was both a revolutionary act, and an assertion that political authority derived from the people and their representatives rather than from the monarch himself. Their solidarity forced Louis XVI to order the clergy and the nobility to join with the Third Estate in the National Assembly.

The only deputy recorded as not taking the oath was Joseph Martin-Dauch from Castelnaudary. He can be seen on the right of David’s sketch, seated with his arms crossed and his head bowed.

Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.

Alabama Appeals Court Reverses Decision on Chain of Title Case, Ruling Hinges on Question of Bogus Allonges

Yves Smith, Naked Capitalism

Friday, June 8, 2012

We’d flagged this case as important because to our knowledge, it was the first to argue what we call the New York trust theory, namely, that the election to use New York law in the overwhelming majority of mortgage securitizations meant that the parties to the securitization could operate only as stipulated in the pooling and servicing agreement that created that particular deal. Over 100 years of precedents in New York have produced well settled case law that deems actions outside what the trustee is specifically authorized to do as “void acts” having no legal force. The rigidity of New York trust has serious implications for mortgage securitizations.

…

It’s difficult to know when the breakdown occurred, but it appears that well before 2004-2005, many subprime originators quit bothering with the nerdy task of endorsing notes and completing assignments as the PSAs required; they seemed to take the position they could do that right before foreclosure. Indeed, that’s kosher if the note has not been securitized, but as indicated above, it is a no-go with a New York trust. There is no legal way to remedy the problem after the fact.

The solution in the Congress case appears to have been a practice that has since become troublingly become common: a fabricated allonge. An allonge is an attachment to a note that is so firmly affixed that it can’t travel separately. The fact that a note was submitted to the court in the Congress case and an allonge that fixed all the problems appeared magically, on the eve of trial, looked highly sus(pect). The allonge also contained signatures that looked less than legitimate: they were digitized (remember, signatures as supposed to be wet ink) and some were shrunk to fit signature lines.

…

The court found that the judge put an improperly high burden of proof on Congress, applying a “clear and convincing evidence” standard. The court said that was a misapplication of precedent based on cases dealing with recorded deeds. The document under dispute was an allonge to an unrecorded note. The appeals court found the evidentiary hurdle should instead be that of a preponderance of evidence. In addition, the court also found that the lower court incorrectly focused on the issue of the validity of the signatures. The appeals court found that even though Congress seemed to be contesting the validity of the signatures (the appeals court notes the argument at points seemed to be a bit confused), her real bone of contention was that the allonge was bogus (emphasis original):

Congress appears to be arguing not that signatures on the allonge are forged or otherwise invalid to prevent enforcement of the note, but that the allonge was fabricated or, essentially, created after the first trial in order to remedy the apparent defect in the chain of indorsements.

Keep in mind that Alabama is hardly a consumer friendly jurisdiction; it’s former status as one of the preferred states for launching class action suits, thanks to favorable state statutes and easily riled juries, has led to a concerted effort to elect and place business friendly judges on the bench (Alabama has far and away the most costly Supreme Court elections in the entire nation). The fact that a higher court has finally decided to place the question of the legitimacy of suddenly-appearing allonges at the heart of a ruling is a welcome development.

We are halfway through the year and are ready to celebrate the first harvest amidst climate disruption, natural disasters compounded by man’s foolish idea that he could harness the devil. I spent some time this morning weeding my herb garden, snipping the flower buds from the huge pot of sweet basil so the energy goes to the flavorful leaves and a short walk on the beach. Tomorrow morning I will watch the sun rise for the last few hours of Spring and later watch it set on the first few hours of Summer which ushers in at 7:09 PM EDT as the Earth tilts towards the sun at its Northern maximum, the Tropic of Cancer. It is a but a moment in time significant for so many cultures, religions and countries. Here in the US there are many cities that will light huge fires in public places to celebrate the longest day of the year, Midsummer. The fires will be lit in the stone fire pit in my yard. We’ll eat some of the newly harvested vegetable that are available at the local markets and eat food cooked with the herbs from my garden.

ONCE, HUMANS were intimate with the cycles of nature, and never more than on the summer solstice. Vestiges of such awareness survive in White Nights and Midnight Sun festivals in far northern climes, and in neo-pagan adaptations of Midsummer celebrations, but contemporary people take little notice of the sun reaching its far point on the horizon. Tomorrow is the longest day of the year, the official start of the summer season, the fullest of light – yet we are apt to miss this phenomenon of Earth’s axial tilt, as we miss so much of what the natural world does in our surrounds.

In recent months, catastrophic weather events have dominated headlines as rarely before – earthquakes and tsunami in Asia; volcanic cloud in Europe; massive ice melts at the poles; tornadoes, floods, and fires in America. “Records are not just broken,” an atmospheric scientist said last week, “they are smashed.” Without getting into questions of causality, and without anthropomorphizing nature, we can still take these events as nature’s cri de coeur – as the degraded environment’s grabbing of human lapels to say, “Pay attention!”

The Greeks choice of staying with the pain of austerity measures may have helped divert a crisis for the Euro Zone, but not for long. There is still Spain.

Spain bailout fears mount

Fears of a full-scale bailout for Spain have mounted as its borrowing costs spiked to danger levels on concern over the nation’s stricken banks and fast-rising debt. [..]

Tapping the markets for the first time since the Greek vote on Sunday, Spain raised 3.04 billion euros, beating its 2.0-3.0 billion euro target in an auction of 12- and 18-month notes.

But it had to pay exorbitant rates to lure investors – 5.074 per cent for 12-month debt and 5.107 per cent for 18-month debt.

The yield on Spanish benchmark 10-year government bonds shattered the 7.0 per cent barrier on Monday for the first time since the creation of the euro in 1999, pushing above 7.2 per cent.

On Tuesday, the yield on 10-year bonds was at 7.003 per cent. [..]

Spanish borrowing costs at ominous levels

Spain, on the edge of losing debt-market access, paid around 200 basis points more in interest rates Tuesday than a month ago to lure investors to its Treasury bill sale, an ominous sign ahead of a critical government bond auction Thursday.

The latest surge in the country’s borrowing costs comes a day after fresh central-bank data showed Spanish lenders were sitting on the highest level of bad loans in 18 years, raising fresh worries over the battered sector’s capital needs.

The Fat Lady isn’t singing yet.

Just an interesting aside about interest rates, David Dayen points out this exchange from today’s House hearings with none other than the Obama administration’s favorite banker, Jaime Dimon:

But the two stars of the show thus far were Democratic Reps. Gary Ackerman and Brad Sherman. Ackerman asked point-blank if there’s any difference between gambling and investing. Dimon replied that with gambling, the house usually won, to which Ackerman quipped “That has been my experience in investing.” But he got at the central point, that hedging, which entails making a bet that would counteract any other actions in the markets, really bears reveals no difference from gambling. He emphasized that “with hedging, if you’re right, only you win, and if you’re wrong, we all lose.” Precisely. There’s no productive business being done with hedging.

Dimon replied to this by saying that they do a lot of other productive business with the rest of their $2 trillion in assets, so the gentleman from New York should kindly shut his mouth (that’s a paraphrase). And Brad Sherman followed up on that very well. He first said that hundreds if not thousands of small businesses need loans, and instead of accommodating them, “you took $350 billion to London.” Sherman added that JPMorgan holds a $14 billion subsidy through their implicit Too Big to Fail guarantee. This elicited an amusing moment, as Dimon said “We borrow in the marketplace, with the smartest people in the world, with 200 basis points over Treasury.” Sherman replied that “after you lost so much money in London, I would be surprised if people lent you money for less than that.”

Well.

“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”.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial: Egypt’s Democracy Interrupted

he once-promising democratic transition in Egypt is in peril after a power grab by the generals and the courts – holdovers from Hosni Mubarak’s repressive regime. This is not what Egyptians rallied and died for in Tahrir Square. It guarantees more turmoil. Given Egypt’s importance in the Arab world, it sets a terrible example for other societies trying to get beyond autocratic rule. [..]

American officials were right to warn the generals on Monday that they risk losing billions of dollars if they don’t swiftly transfer power to the president, ensure elections for a new Parliament and begin writing a new constitution with help from a broad range of Egyptians. The United States needs to work with Egypt to maintain the peace treaty and a stable border with Israel. But an undemocratic Egypt in perpetual turmoil is no help to its own people or Israel or the rest of the region.

Ari Melber: Do Liberals Support Obama’s Kill List?

President Obama is wielding several security powers that have been historically controversial among Democrats, from indefinitely detaining Guantánamo prisoners to shutting down torture lawsuits as “state secrets” that cannot be addressed in court. There has not been a major Democratic backlash, but all the recent attention on Obama’s “kill list”-a set of targets that has included American citizens as young as 16 years old-seemed like an opening for a new chapter in challenging the administration’s security policies.

For starters, the kill list is just different. Many divisive security measures linked to the Bush administration have been inherently convoluted-Obama’s team had to clean up a mess while developing new policies on the fly. For example, take the Bush-era detainees. Some are difficult to convict in civilian courts because the evidence against them was gathered through torture. Obama supporters understand that the administration’s options are more limited on this score, a predicament Daniel Klaidman stresses in his new chronicle of Obama’s terror policies, Kill or Capture.

The drone program, however, goes far beyond what Bush ever did. It was not required by the past. And it sets a stunning precedent for the future.

Guilt

I am guilty,

But not in the way you think.

I should have earlier recognized my duty;

I should have more sharply called evil evil;

I reined in my judgment too long.

I did warn,

But not enough, and clear;

And today I know what I was guilty of.

Albrecht Haushofer

PBS News Hour

A Mythical Anniversary

June 18, 2012, 3:34 pm

I tried to knock down the simply insane conventional wisdom then gelling among Very Serious People. Intellectually it was, I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.

But I had no success in deflecting the terrible wrong turn in policy. Moreover, as far as I can tell none of the people responsible for that wrong turn has paid any price, not even in reputation; they’re still regarded as Very Serious, treated with great deference.

Rachel Maddow

Myths of Austerity

Published: July 1, 2010

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

…

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination – specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.

…

So the next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you’ll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we’re bad and the confidence fairy will reward us if we’re good.

Colbert Report

Interest Rates: Varieties of Error

June 19, 2012, 8:57 am

Originally, claims that deficits would drive up rates weren’t based on arguments about solvency; they were based on the “crowding out” claim that the government would be competing with the private sector for a limited supply of savings. Then, when the promised rate spike failed to materialize, this was attributed to Fed purchases, with the claim that rates would spike when those came to an end. Wrong, and wrong again. As I wrote at the time, all this represented a basic misunderstanding of how the economy works.

Now, maybe there’s a solvency issue, and bond vigilantes will turn on America over that – although of course this keeps not happening either to us or to anyone else with their own currency. But you do need to know that many of the people making the solvency argument originally made a completely different argument – one that was completely wrong.

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.

Click on images to enlarge.

June 19 is the 170th day of the year (171st in leap years) in the Gregorian calendar. There are 195 days remaining until the end of the year.

On this day in 1964, the Civil Rights Act of 1964 is approved after surviving an 83-day filibuster in the United States Senate.

Passage in the Senate

(President Lyndon B.) Johnson, who wanted the bill passed as soon as possible, ensured that the bill would be quickly considered by the Senate. Normally, the bill would have been referred to the Senate Judiciary Committee, chaired by Senator James O. Eastland , Democrat from Mississippi. Given Eastland’s firm opposition, it seemed impossible that the bill would reach the Senate floor. Senate Majority Leader Mike Mansfield took a novel approach to prevent the bill from being relegated to Judiciary Committee limbo. Having initially waived a second reading of the bill, which would have led to it being immediately referred to Judiciary, Mansfield gave the bill a second reading on February 26, 1964, and then proposed, in the absence of precedent for instances when a second reading did not immediately follow the first, that the bill bypass the Judiciary Committee and immediately be sent to the Senate floor for debate. Although this parliamentary move led to a filibuster, the senators eventually let it pass, preferring to concentrate their resistance on passage of the bill itself.

The bill came before the full Senate for debate on March 30, 1964 and the “Southern Bloc” of 18 southern Democratic Senators and one Republican Senator led by Richard Russell (D-GA) launched a filibuster to prevent its passage. Said Russell: “We will resist to the bitter end any measure or any movement which would have a tendency to bring about social equality and intermingling and amalgamation of the races in our (Southern) states.”

The most fervent opposition to the bill came from Senator Strom Thurmond (D-SC): “This so-called Civil Rights Proposals, which the President has sent to Capitol Hill for enactment into law, are unconstitutional, unnecessary, unwise and extend beyond the realm of reason. This is the worst civil-rights package ever presented to the Congress and is reminiscent of the Reconstruction proposals and actions of the radical Republican Congress.”

After 54 days of filibuster, Senators Everett Dirksen (R-IL), Thomas Kuchel (R-CA), Hubert Humphrey (D-MN), and Mike Mansfield (D-MT) introduced a substitute bill that they hoped would attract enough Republican swing votes to end the filibuster. The compromise bill was weaker than the House version in regard to government power to regulate the conduct of private business, but it was not so weak as to cause the House to reconsider the legislation.

On the morning of June 10, 1964, Senator Robert Byrd (D-W.Va.) completed a filibustering address that he had begun 14 hours and 13 minutes earlier opposing the legislation. Until then, the measure had occupied the Senate for 57 working days, including six Saturdays. A day earlier, Democratic Whip Hubert Humphrey of Minnesota, the bill’s manager, concluded he had the 67 votes required at that time to end the debate and end the filibuster. With six wavering senators providing a four-vote victory margin, the final tally stood at 71 to 29. Never in history had the Senate been able to muster enough votes to cut off a filibuster on a civil rights bill. And only once in the 37 years since 1927 had it agreed to cloture for any measure.

On June 19, the substitute (compromise) bill passed the Senate by a vote of 71-29, and quickly passed through the House-Senate conference committee, which adopted the Senate version of the bill. The conference bill was passed by both houses of Congress, and was signed into law by President Johnson on July 2, 1964.