Tag: ek Politics

First a bonus track-

Green Shoots

Doing The Unthinkable

Terence Burnham is dead wrong.  Krugman actually does prefer Option B (“devalue through a new Spanish currency”)-

What are Spain’s alternatives here? Well, if they still had their currency, their own currency, the answer would be devalue, let the peseta drop, Spanish exports would become a lot more competitive, they’d be well on their way to recovery. They don’t have their own currency, so people are saying: Well, you have to do all this stuff to stay within the Euro. At some point you say: Well, you know if your answer to our problem is just ever more suffering, ever more you know… 25 percent, 50 percent youth unemployment. If that’s your notion of a solution, then maybe although it would be a very terrible thing to have the Euro breakup, maybe that’s better than what we’re doing. So that’s becoming a real possibility now.

Slow continued Depression with a 50% chance of another Recession.

Bernanke Continually Keeping Powder Dry, Despite Clear Evidence of Economic Slowdown

By: David Dayen, Firedog Lake

Thursday June 21, 2012 7:38 am

(T)he Fed released another set of data yesterday, its updated forecasts for the economy. And it was really bad.

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Bernanke clearly knows both that the economy has slowed, and that several factors contribute to that: fiscal consolidation at the state and local level, a poor housing market, and headwinds from Europe (Bernanke could aid the first thing, by the way, by having the Fed go into the muni market, saving state and local government’s $85 billion annually). So this was the big question from everyone at Ben Bernanke’s news conference yesterday: because the economic forecasts have been revised downward, what is the rationale for not doing more monetary accommodation at this time? Bernanke attempted to blame Congress, coming close to saying that the bullets are out of the gun on the monetary side and that what we really need is fiscal stimulus.

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There’s an opinion out there that Bernanke paved the way for QE3 in August, after another look at the data. But the forecast alone gives you most of what you need to make that determination. The recent history of the Fed includes a lot of waiting for more data to confirm economic slowdowns. Anticipatory action simply doesn’t happen.

Paul Solmon is an ignoramus who never studied Samuelson.

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.

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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.

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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.

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.

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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.

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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.

To make a long story short I once got assigned to cater a volunteer party out of the otherwise discardable leftovers from the rentier crowd.

Once that was done I swore I’d never eat slave food again.

Not that it’s a reliable source.

How I Became Stephen Colbert’s Lawyer — And Joined the Fight to Rescue Our Democracy from Citizens United

Trevor Potter, Alternet

May 25, 2012

The Colbert Report coverage is so successful because it accurately describes a campaign finance world that seems too surreal to be true.  A system that claims to require disclosure of money spent to elect or defeat candidates, but in fact provides so many ways around that requirement as to make disclosure optional; a system that says that “independent expenditures” cannot be limited as a matter of Constitutional law because they cannot corrupt because they are “totally independent” of candidates and parties-when the daily news reports about these supposedly “independent” groups show that candidates raise money for them, candidates’ former employees run them, and candidates’ polling and advertising vendors advise them.  And the major donors to these “independent” groups are often also official fundraisers for the candidate.  Other major donors have private meetings with the candidates, or travel with them on campaign trips!

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How did we get here? It is often forgotten, but for long periods of the previous Century, we had a pretty well functioning campaign finance system.  In 1904 President Roosevelt called for public funding of the political parties, and a ban on corporate contributions.  In 1907 he got one of those with the passage of the Tillman Act, which banned corporate contributions in federal elections, Congress extended contribution and expenditure restrictions to unions in 1947, and rewrote the laws following Watergate to ensure disclosure, set new individual contribution limits to candidates and parties, and create for the first time a public funding system for presidential elections and establish the FEC as an enforcement and disclosure agency.

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In the last two years, the Supreme Court has allowed unlimited corporate and labor spending in all elections in the U.S., overturning 60 year old federal laws and some older laws in 26 states.  It has declared unconstitutional as a restriction on speech the Arizona public financing system, because it provided additional public funds for more speech to candidates participating in the public funding system, triggered if their opponents spent that amount. The DC Circuit has declared unconstitutional the longstanding $5,000 contribution limit to independent-expenditure only political action committees, which decision has resulted in the creation of what we know as SuperPACs-like Stephen Colbert’s Americans for a Better Tomorrow, Tomorrow.

David Brooks, The Follower Problem, The New York Times

You know, we always called each other goodfellas. Like you said to, uh, somebody, “You’re gonna like this guy. He’s all right. He’s a good fella. He’s one of us.” You understand? We were goodfellas. Wiseguys. But Jimmy and I could never be made because we had Irish blood. It didn’t even matter that my mother was Sicilian. To become a member of a crew you’ve got to be one hundred per cent Italian so they can trace all your relatives back to the old country. See, it’s the highest honor they can give you. It means you belong to a family and crew. It means that nobody can fuck around with you. It also means you could fuck around with anybody just as long as they aren’t also a member. It’s like a license to steal. It’s a license to do anything.

The Ancien Régime

Luke Russert, nepotist prince

Luke Russert is being groomed as a simulacrum of his father — but without the inspiring rags-to-riches story

By Alex Pareene, Salon

Thursday, May 24, 2012 11:35 AM EDT

Tim Russert was not the unalloyed saint of tough journalism that his celebrators describe in posthumous tributes, but he was at least a classic American success story, of the sort that we still enjoy pretending is common: Blue-collar kid from Rust Belt town becomes enormously successful thanks largely to brains and hard work. The story of Luke Russert, alas, is a much more common one in American life: No-account kid of successful person has more success thrust upon him.

Pretty much immediately upon the death of his father, Luke Russert inexplicably had a full-time broadcasting job, supplanting his part-time broadcasting job co-hosting a satellite radio sports talk show with James Carville. (That was a real thing that actually existed. Can you imagine a human who would want to listen to that?)

Russert isn’t the only famous child in media. He isn’t even the only famous child at NBC, which also employs Jenna Bush Hager and Chelsea Clinton (who renewed her three-month temporary contract earlier this year, despite barely producing any work for the network). Fox has Peter Doocy, Chris Wallace and, here in New York, Greg Kelly. ABC has Chris Cuomo, and CNN Anderson Cooper. A.G. Sulzberger is a reporter for the New York Times. Some of those people are fine journalists, by the way. Nepotism has always been a major force in journalism and media – it is a fact of life and one that would be exhausting to be continually het up about – and plenty of nepotism beneficiaries are wonderful writers and talented people. If you’re raised by interesting people and get a good education at home and at the finest schools, you really ought to turn out pretty smart. But Russert is emblematic of the sort of nepotism that gives nepotism a bad name. He’s not a wonderful writer or a particularly talented person. And unlike Chelsea Clinton and her very silly “reporting good news about people who do charity or something” beat, he’s actually got a real journalism job that someone else without the name Russert could be doing much more effectively. He’s not even particularly good on TV.

You mean, let me understand this, ’cause, ya know maybe it’s me, I’m a little fucked up maybe, but I’m funny how? I mean funny like I’m a clown? I amuse you? I make you laugh, I’m here to fuckin’ amuse you? What do you mean funny? Funny how? How am I funny?

Sometimes called Realpolitik (use your best Henry Killinger accent)-

Let’s Talk Turkey About Greece

Ian Welsh

2012 May 26

Greece is going to have get hardcore and creative about creating a new economy.  Since the monetary authorities intend to starve them and deprive them of oil, they must retaliate hard.  Greece has a number of options, and this is what Greece should do You don’t play nice with people who are trying to cause a famine in your country.

• Greece has a large fleet.  Use it to strip mine the Mediterranean of all resources possible.  Yes, the Med is a fragile ecosystem.  If the other Euros don’t like it, they can not punish Greece, otherwise Greece will have to feed itself.  The Euros could send fleets, but as the British-Iceland fishing war proved, that’s prohibitively expensive.
• Start gun-running and other black market activities up.  European gun-running currently goes through Albania.  Greece has much better ports.  If the Euros don’t like it, they can militarize Greece’s borders at a cost much higher than feeding the Greeks.
• Become a full on black-hole for banking.  If anyone wants to store money in Greece, they can.  No questions asked, no forms needed.
• Make deals with other “pariah” and semi-pariah nations.  Start with Iran and Russia for oil (Iran will be happy to give oil in exchange for black market help).  Make a deal with various 2nd world nations for food, start with Argentina, they have no reason to love the IMF or the European Union, which promised to “punish” them for nationalizing oil in Argentina.  In exchange Greece can offer use of their fleet, for cheap, and port rights for the Russian navy.  They’ve wanted a true warm water port for some time.  Offer them a nice island in the Med with a 30 year lease.
• Hold on for a couple years.  Odds are that soon enough Ireland, Spain, Portugal and maybe others will leave the Euro.  They won’t be in any mood to screw Greece for their ex-Euro masters.  Heck, odds are 50/50 that there won’t be a Euro zone at all in 3 years, since Germany wants to screw everyone, including France.
• Nationalize basically every industry.  It’s unfortunate, but it’s going to be necessary.  Hundreds of billions of dollars have fled Greece in the past 3 years, in fact that was one of the main reasons for dragging out the “bailouts” (really, bailouts of German banks), to let the money flee.  All Greek assets are going to be frozen overseas, so the Greeks will need to work with what they have.
• No more money goes out of the country.  Slap on currency controls, to make sure what money is there doesn’t leave (this is aimed at Greece’s rich).  If any banker or anyone else circumvents them, throw them in jail, the sentence should be life, generous, since they are committing treason.
• Seriously change the tax system, and insist on really taxing the rich.  Go to heavily progressive taxation, reduce the burden on the poor (a large number of people now), this will buy support.
• A food rationing system, with cards and delivery to every person in the country will be necessary.  It won’t be fun, but combined with the above, you can make sure that no one starves.

Greece has been under siege for years now, and traitors within its own country (its politicians) have betrayed it.  This means Greeks are in serious danger of suffering a famine.  The response to that, by Greeks, will have to be pragmatic and severe.  If non-Greeks don’t like it, that’s too bad.  When millions of people are in danger of starving, a country does what it has to.

What does it say about a president’s policies when he uses a cartoon character, rather than a real person, to justify his record?