Thursday, February 09, 2012

shipping rates go negative

eftdailynews | If the global economy is not heading for a recession, then why is global shipping slowing down so dramatically? Many economists believe that measures of global shipping such as the Baltic Dry Index are leading economic indicators. In other words, they change before the overall economic picture changes. For example, back in early 2008 the Baltic Dry Index began falling dramatically. There were those that warned that such a rapid decline in the Baltic Dry Index meant that a significant recession was coming, and it turned out that they were right. Well, the Baltic Dry Index is falling very rapidly once again. In fact, on February 3rd the Baltic Dry Index reached a low that had not been seen since August 1986. Some economists say that there are unique reasons for this (there are too many ships, etc.), but when you add this to all of the other indicators that Europe is heading into a recession, a very frightening picture emerges. We appear to be staring a global economic slowdown right in the face, and we all need to start getting prepared for that. [Related: Guggenheim Shipping ETF (NYSEArca:SEA)]

If you don’t read about economics much, you might not know what the Baltic Dry Index actually is.

Investopedia defines the Baltic Dry Index this way….

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.

When the global economy is booming, the demand for shipping tends to go up. When the global economy is slowing down, the demand for shipping tends to decline.

And right now, global shipping is slowing way, way down.

In fact, recently there have been reports of negative shipping rates.

According to a recent Bloomberg article, one company recently booked a ship at the ridiculous rate of negative $2,000 a day….

Glencore International Plc paid nothing to hire a dry-bulk ship with the vessel’s operator paying $2,000 a day of the trader’s fuel costs after freight rates plunged to all-time lows.

Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, Steve Rodley, GMI’s U.K. managing director, said by phone today. The daily payments last the first 60 days of the charter, Rodley said. The vessel will haul a cargo of grains to Europe, putting the carrier in a better position for its next shipment, he said.

So why would anyone agree to ship goods at negative rates?

Well, it beats the alternative.

This was explained in a recent Fox Business article….

“They’re doing this because you can’t just have ships sitting. If they sit too long, then that’s hard on the ships. They have to keep them loaded and moving from port to port,” said Darin Newsom, senior commodities analyst at DTN.

If the owner of a ship can get someone to at least pay for part of the fuel and the journey will get the ship closer to its next destination, then that is better than having the ship just sit there.

But just a few short years ago (before the last recession) negative shipping rates would have been unthinkable.

Asian shipping is really slowing down as well. The following comes from a recent article in the Telegraph….

Shanghai shipping volumes contracted sharply in January as Europe’s debt crisis curbed demand for Asian goods, stoking fresh doubts about the strength of the Chinese economy.

Container traffic through the Port of Shanghai in January fell by more than a million tons from a year earlier.

So this is something we are seeing all over the globe.

Another indicator that is troubling economists right now is petroleum usage. It turns out that petroleum usage is really starting to slow down as well.

get ready for another round of pain at the pump: $4 (or higher) gasoline

USAToday | After rising 19 cents a gallon in the past four weeks, regular gasoline now averages $3.48 a gallon, vs. $3.12 a year ago and $2.67 in February 2010.

Prices could spike an additional 60 cents or more by May. "I think it's going to be a chaotic spring, with huge price increases in some places," says Tom Kloza of the Oil Price Information Service. Kloza expects average prices to peak at $4.05, although he and other industry trackers say prices could be sharply higher in some markets.

Rising prices are an annual spring ritual, largely because of seasonal demand. Refiners also switch from winter formulations to more expensive seasonal formulations to meet stringent environmental standards, which can tack on 15 cents a gallon, says Brian Milne of energy tracker Televent DTN.

This year's earlier-than-usual run-up is more about anticipation than current supply and demand. Last week, the Energy Department reported anemic U.S. consumption -- the lowest levels since September 2001. Domestic crude oil prices, now about $98 a barrel, are near six-week lows.

Renewed tensions in the Middle East are bolstering crude prices, while speculators are boosting futures contracts, betting on global supply disruptions and tighter refining capacity. Kloza notes that several U.S. and overseas refiners have experienced temporary or permanent closures.

So far, $4 a gallon has proven to be the upper limit consumers will pay. Last April, national prices peaked at about $3.98 a gallon. In 2008, a sharp run-up ended when prices hit an all-time average of $4.11 a gallon that summer.

"Higher demand, Iran, lost refining capacity are all potential problems," Milne says. "We'll get over $4 a gallon, but it's going to be tough to sustain that level. People will drive less."

Energy analyst Patrick DeHaan of price tracker Gasbuddy.com expects prices to rise to about $3.55 a gallon by the end of February and peak around $4 by Memorial Day weekend.

"You could see prices in Chicago, Los Angeles, New York, Washington and other major metropolitan areas at $4.60 or higher," DeHaan says.

Lisa Margonelli, author of Oil on the Brain: Petroleum's Long, Strange Trip to Your Tank, says consumers will be vulnerable to rising prices until the U.S. develops alternative fuels such as natural gas.

Wednesday, February 08, 2012

how do conservatives and liberals see the world?


billmoyers | Our country is more politically polarized than ever. Is it possible to agree to disagree and still move on to solve our massive problems? Or are the blind leading the blind — over the cliff?

Bill and social psychologist Jonathan Haidt talk about the psychological underpinnings of our contentious culture, why we can’t trust our own opinions, and the demonizing of our adversaries.

“When it gets so that your opponents are not just people you disagree with, but… the mental state in which I am fighting for good, and you are fighting for evil, it’s very difficult to compromise,” Haidt tells Moyers. “Compromise becomes a dirty word.”

Also, a Bill Moyers essay on why Newt Gingrich might be afraid of Saul Alinsky.

the rise of the high frequency trading machine


Zero Hedge | Zero Hedge has not been focusing much on the topic of our broken equity markets recently because if by now, following over three years of coverage, someone is not aware just how fragmented, manipulated and largely broken the market truly is, they never will. Yet every now and then it worth reminding readers who may have stumbled on this blog recently, just how bad things are in graphic format. Our friends at Nanex, who are by far the best forensic analysts of everything that is busted with the US stock market, have completed a masterpiece analysis showing the churning (packet traffic) in the various fragmented US market venues, from the NYSE to the Nasdaq to BATS and so forth, on a daily basis beginning in January 2007 and continuing through today. While the "rise of the High Frequency Trading machine" over the past 5 years, following the adoption of Reg NMS, will hardly be a surprise to most, what is stunning is the first animated confirmation of the market terminally breaking on August 5, 2011, the day the US was downgraded, an observation that first was made right here on Zero Hedge. Which begs the question: what really happened in the stock market on August 5, 2011 when the US was downgraded to AA+, when everything literally broke, who is intervening constantly in the stock market, and why are they doing so via various HFT intermediary mechanisms?

Note the insanity that begins on August 5, 2011.

Tuesday, February 07, 2012

is it safe to resume ignoring the prophets of doom?

NYTimes | I remember the first time I interviewed a relatively unknown economist named Nouriel Roubini. It was 2005, and as we sat in his New York University office, he laid out his scary vision of the future. Roubini is a specialist in the flow of money around the world and the crises that (sometimes) result. But on that day he wanted to talk about the U.S. housing market.

Homeowners, he said, had become too used to financing their lifestyles with money siphoned from overvalued homes. This housing bubble would pop, he warned, and send the world into a vicious recession, possibly even a depression. I remember leaving his office both stunned and confused. Only after calling a few leading economists was I reassured that this Roubini guy was expressing a fringe view that merited little attention. Like a lot of reporters that year, I turned around a tongue-in-cheek story about Dr. Doom and his scary (but probably best ignored) world view. Oops!

A few years later, I interviewed Richard Wolff, who is probably America’s most prominent Marxist economist (though it’s not a hugely competitive field). Wolff also walked me through his view of the next few years. He explained that the puncturing of the housing bubble, then apparent, would lead to a crisis much deeper than anyone understood: it would fracture American confidence in capitalism; the economy would stay stalled for a long time; and there would be global chaos. This time, I didn’t even bother calling other economists to check out Wolff’s story. The guy was a Marxist! Days later, Lehman Brothers collapsed.

Once the crisis hit, it became popular to scour the past for apocalyptic predictions that had come true. While many gloomy forecasts came from the left — notably Paul Krugman and Dean Baker — there was one particularly prescient voice from the right. As early as 2004, Peter Schiff, a libertarian investor, was arguing that the housing-fueled economic boom was a bubble waiting to burst.

But these successful prognosticators, among others, didn’t just take a bow in 2008. Many predicted that the U.S. economy would worsen or, at best, stall. Perhaps grasping for hope, many smart people, including, apparently, President Obama, spent 2009 thinking those doomsday callers had just been lucky. Maybe they were right about the crisis, but they were surely far too pessimistic about the recovery. Oops again!

For nearly a decade, it turns out, the most accurate forecasts have come from the fringe. So it’s upsetting to learn that many of those same Cassandras now believe, for different reasons, that we are on the brink of another catastrophe that may be far worse. Wolff, the Marxist, fears that China may be entering a significant slowdown, which, combined with Europe’s all-but-inevitable recession, could send the world into an economic tailspin.

Roubini, now one of the world’s most visible economic thinkers, has a similar view, though he sees the timing differently, with the worst coming in 2013 or 2014, when China will face a situation like the one the United States experienced in 2008. Its banks, he says, will reveal huge investments in nonsensical bubble projects. The world will question China’s solvency, and the subsequent chaos will destroy whatever fragile recovery is under way. Schiff also paints a dire picture, but for essentially the opposite reason, saying America’s indebtedness and currency policy will cause another crash.

It’s much less lonely being a doomsayer these days. Steve Hanke, an economist at Johns Hopkins, says there’s a 50 percent chance of a recession this year. Lakshman Achuthan, of the eerily accurate Economic Cycle Research Institute, predicts a return of double-digit unemployment. They are downright rosy compared to George Soros, who has warned of violent riots throughout the world and a possible total global financial collapse. I really hope these guys are wrong.

why economic inequality leads to collapse

Guardian | During the past 30 years, a growing share of the global economic pie has been taken by the world's wealthiest people. In the UK and the US, the share of national income going to the top 1% has doubled, setting workforces adrift from economic progress. Today, the world's 1,200 billionaires hold economic firepower that is equivalent to a third of the size of the American economy.

It is this concentration of income – at levels not seen since the 1920s – that is the real cause of the present crisis.

In the UK, the upward transfer of income from wage earners to business and the mega-wealthy amounts to the equivalent of 7% of the economy. UK wage-earners have around £100bn – roughly equivalent to the size of the nation's health budget – less in their pockets today than if the cake were shared as it was in the late 1970s.

In the US, the sum stands at £500bn. There a typical worker would be more than £3,000 better off if the distribution of output between wages and profits had been held at its 1979 level. In the UK, they would earn almost £2,000 more.

The effect of this consolidation of economic power is that the two most effective routes out of the crisis have been closed. First, consumer demand – the oxygen that makes economies work – has been choked off. Rich economies have lost billions of pounds of spending power. Secondly, the slump in demand might be less damaging if the winners from the process of upward redistribution – big business and the top 1% – were playing a more productive role in helping recovery. They are not.

Britain's richest 1,000 have accumulated fortunes that are collectively worth £250bn more than a decade ago. The biggest global corporations are also sitting on near-record levels of cash. In the UK, such corporate surpluses stand at over £60bn, around 5% of the size of the economy. This money could be used to kickstart growth. Yet it is mostly standing idle. The result is paralysis.

The economic orthodoxy of the past 30 years holds that a stiff dose of inequality brings more efficient and faster-growing economies. It was a theory that captured the New Labour leadership – as long as tackling poverty was made a priority, then the rich should be allowed to flourish.

So have the architects of market capitalism been proved right? The evidence says no. The wealth gap has soared, but without wider economic progress. Since 1980, UK growth and productivity rates have been a third lower and unemployment five times higher than in the postwar era of "regulated capitalism". The three post-1980 recessions have been deeper and longer than those of the 1950s and 1960s, culminating in the crisis of the last four years.

The main outcome of the post-1980 experiment has been an economy that is much more polarised and much more prone to crisis. History shows a clear link between inequality and instability. The two most damaging crises of the last century – the Great Depression of the 1930s and the Great Crash of 2008 – were both preceded by sharp rises in inequality.

failed treasury auction portends egyptian disaster

asiatimes | Egypt faces a disaster of biblical proportions, and the world will do nothing about it. Officially, Egypt's foreign exchange reserves fell by half during 2011, including a $2.4 billion decline during December - from $36 billion to $18 billion, or about four months of imports.

But the situation almost certainly is worse than that. More than $4 billion left the country during December, estimates Royal Bank of Scotland economist Raza Agha, noting that the December drop in reserves was cushioned by a $1 billion loan from the Egyptian army and a $1 billion sale of dollar-denominated treasury bills.

The rush out of the Egyptian pound is so rapid that Egyptian investors refuse to hold debt in their own national currency, even at a 16% yield. After Islamist parties won more three-quarters of the seats in recent parliamentary elections - 47% for the Muslim Brotherhood and 25% for the even more extreme al-Nour Party - the business elite that prospered under military rule is counting the days before exile.

The first reports of actual hunger in provincial Egyptian towns, meanwhile, are starting to trickle in through Arab-language press and blog reports. A shortage of gasoline accompanied by long queues at filling stations and panic buying was widely reported last week.

In some towns, for example Luxor in Upper Egypt, the disappearance of diesel fuel shut down bakeries, exacerbating the spot shortages of bread.

After months of refusing to bargain with the International Monetary Fund (IMF), Egypt's government has begun negotiations for a $3.2 billion loan, or less than the amount of capital flight in December alone. The involvement of the IMF evidently did little to reassure the Egyptian investors who sat out Sunday's Treasury auction.

It seems unlikely that Egypt's central bank will be able to prevent a banana-republic devaluation of the Egyptian pound, and a sharp rise in prices for a population of whom half barely consumes enough to prevent starvation. The difference between Egypt and a banana republic, though, is the bananas: unlike the bankrupt Latin Americans, who exported food, Egypt imports half its caloric consumption.

Meat imports have already fallen by 60% over the past year, the Egypt News website reported on January 22, [1] reflecting the collapse of purchasing power. More alarming is that bread has become scarce in some provincial cities. In Ismailia on the Suez Canal, the Youm7 website reported on January 22, a bread protest burned cars and blocked a main highway. Similar protests took place in other towns close to Cairo, including Zagazig and Ibousoar.

Anything that can be sold for hard currency - wheat, rice, butane, diesel fuel and sugar - has disappeared from government warehouses during the past year, according to a multitude of reports in local Arab-language media summarized in my 2011 essays. (See When will Egypt go broke? Asia Times Online, July 12, 2011.)

It is not clear whether the localized shortages of food and the nationwide shortage of gasoline reflect a buyers' panic, or large-scale theft, or an effort by the central bank to conserve foreign exchange by slowing essential purchases - or all of the above.

Monday, February 06, 2012

exposed: the arab agenda in syria



asiatimes | There was no organized, lethal repression by the Syrian government against peaceful protesters. Instead, the report points to shady armed gangs as responsible for hundreds of deaths among Syrian civilians, and over one thousand among the Syrian army, using lethal tactics such as bombing of civilian buses, bombing of trains carrying diesel oil, bombing of police buses and bombing of bridges and pipelines.

Once again, the official NATOGCC version of Syria is of a popular uprising smashed by bullets and tanks. Instead, BRICS members Russia and China, and large swathes of the developing world see it as the Syrian government fighting heavily armed foreign mercenaries. The report largely confirms these suspicions.

The Syrian National Council is essentially a Muslim Brotherhood outfit affiliated with both the House of Saud and Qatar - with an uneasy Israel quietly supporting it in the background. Legitimacy is not exactly its cup of green tea. As for the Free Syrian Army, it does have its defectors, and well-meaning opponents of the Assad regime, but most of all is infested with these foreign mercenaries weaponized by the GCC, especially Salafist gangs.

Still NATOGCC, blocked from applying in Syria its one-size-fits-all model of promoting "democracy" by bombing a country and getting rid of the proverbial evil dictator, won't be deterred. GCC leaders House of Saud and Qatar bluntly dismissed their own report and went straight to the meat of the matter; impose a NATOGCC regime change via the UN Security Council.

So the current "Arab-led drive to secure a peaceful end to the 10-month crackdown" in Syria at the UN is no less than a crude regime change drive. Usual suspects Washington, London and Paris have been forced to fall over themselves to assure the real international community this is not another mandate for NATO bombing - a la Libya. US Secretary of State Hillary Clinton described it as "a path for a political transition that would preserve Syria's unity and institutions".

But BRICS members Russia and China see it for what it is. Another BRICS member - India - alongside Pakistan and South Africa, have all raised serious objections to the NATOGCC-peddled draft UN resolution.

There won't be another Libya-style no fly zone; after all the Assad regime is not exactly deploying Migs against civilians. A UN regime change resolution will be blocked - again - by Russia and China. Even NATOGCC is in disarray, as each block of players - Washington, Ankara, and the House of Saud-Doha duo - has a different long-term geopolitical agenda. Not to mention crucial Syrian neighbor and trading partner Iraq; Baghdad is on the record against any regime change scheme.

So here's a suggestion to the House of Saud and Qatar; since you're so seduced by the prospect of "democracy" in Syria, why don't you use all your American weaponry and invade in the dead of night - like you did to Bahrain - and execute regime change by yourselves?

the arab revolution forsaken by the west and forgotten by the world



aljazeera | Thousands of Bahrainis have begun a week-long rally in a Shia village, 10 days ahead of the first anniversary of the start of pro-democracy protest which was brutally crushed, activists have said.

"The large number of people who participated yesterday [Saturday] wanted to deliver a message to the government that people are determined to keep up the demands that they made on February 14 last year," Matar Matar, a leading Shia opposition activist, told the AFP news agency on Sunday.

"They will use any venue available," he added.

Mostly-Shia protesters occupied Manama's Pearl Square for about a month last year until they were driven out in a heavy-handed mid-March crackdown.

The "steadfast" rally began in the afternoon in al-Muqsha village, about 7km west of Manama, the capital, and continued until 11:00 pm (2000 GMT).

It will reconvene at the same time on Sunday, according to Matar, a former MP.

Sheikh Ali Salman, a Shia cleric and leader of al-Wefaq, the main Shia opposition grouping, urged demonstrators to rename the rally spot in the village as "Freedom Square," insisting that people have decided that "there will be no return to pre-February 14".

"It is impossible that Bahrain remains without equality between its people," he said, according to the al-Wefaq Facebook page.

Although al-Wefaq said that the protest would last a week, the interior ministry announced on Friday that the demonstration had been authorised for two days only.

Matar said that his party informed the interior ministry that it intends to hold a seven-day rally, after it did not get authorisation to organise an open-ended demonstration.

During the month-long protest last year, the Shia-led opposition demanded significant constitutional changes that would reduce the power of the Sunni al-Khalifa ruling dynasty, including through having an elected prime minister.

Tensions have remained high in Bahrain since the initial deadly crackdown, and sporadic violence has risen in recent weeks as the first anniversary approaches of the launch of the protests.

washington seeks international alliance on syria



Slate | Secretary of State Hillary Clinton said that the Russia and China vetoes of a U.N. resolution calling on Syrian President Bashar al-Assad to step down were nothing short of a “travesty” and called for the formation of an international coalition to support Syria’s opposition.

“Faced with a neutered Security Council, we have to redouble our efforts outside of the United Nations with those allies and partners who support the Syrian people's right to have a better future,” Clinton said, according to the Associated Press. Britain’s Foreign Minister William Hague and France’s Alain Juppe also criticized Russia and China.

Clinton added that the United States will “seek regional and national sanctions against Syria and strengthen the ones we have.”

There is fear that violence will now quickly escalate in Syria as opposition fighters increasingly see an armed struggle as their only option. Before the U.N. vote, both the opposition and the government had an interest in trying to at least appear peaceful. “Now both sides are likely to move quickly toward a bloodier showdown,” writes the Wall Street Journal.

Sunday, February 05, 2012

mitt romney welfare queen...,



aljazeera | Ever since Brown vs Board of Education, conservatives have been complaining about judges "legislating from the bench". It was a brilliant strategy: "We're not racists," they could say. "There's a matter of high principle involved here." But it was not until 56 years later, with the Citizens United decision - and conservative justices ruling the roost - that we got to see what an earth-shattering example of legislating from the bench really looks like - and the Republican presidential primary is the number one surprise casualty. It's just the sort of unintended consequence you'd expect in the absence of a thorough legislative fact-finding process, and the fine-tuning of final legislation. It's not that the legislative process is flawless - far from it. But this sort of staggering bolt-from-the-blue consequence is precisely the sort of thing that the legislative process is intended to avoid, and that the judicial process is ill-equipped to anticipate. Oops!

So now the GOP has gotten a taste of their own medicine, with lurid, hyperbolic attack adds dominating the electoral process. And they do not like it, not one bit. Two deeply flawed candidates have emerged as frontrunners in a process that has exacerbated and amplified those flaws a thousand fold. The tide may have finally turned, Mitt Romney may have finally learned how to punch back, and the tide of establishment money may have finally swamped Newt Gingrich for good as a serious threat - though he's unlikely to quit. But even if Gingrich were to quit today, months and months of videotaped debates, press conferences, attack ads and various other vicious odds and ends are not just going to go away. They'll be back when the general election campaign really heats up next fall.

More importantly, the Republican primary has unwittingly validated the Occupy movement in spades, laying the groundwork for a potentially very different sort of campaign environment not just in the fall, but starting right now. Mitt Romney's limited tax-form release validates what we already knew: He's not just a member of the one per cent, he's in the one per cent of the one per cent - perfectly positioned to illustrate everything that's wrong with the existing system. Seen through the lens of Romney's own example, it's not capitalism per se that's the problem, but the dramatic shift away from a form of capitalism that benefited almost everyone to a form that only benefits a small handful. And it is Gingrich's campaign that has forcefully made this point, on the stump, in debates and in the half-hour video, When Mitt Romney Came to Town, which starts off with a paen to capitalism as the source of the strength of the US, before turning dark with its focus on Wall Street, leveraged buyouts and Romney's Bain Capital in particular.

Although Gingrich attacks Romney for what he's done to US workers, there's an even deeper jujitsu criticism to be made of his business mode: Mitt Romney is a welfare queen. As we'll see below, without the tax-breaks given to interest payment, the private equity business model would never have been born. Those tax-breaks are nothing but a taxpayer subsidy, paid for by everybody else picking up the slack for Mitt Romney and his crony corporate raiders. But let's not spoil our appetites by starting with dessert.

i'm not concerned about the very poor



truthdig | I wish Mitt Romney’s cavalier dismissal of poverty in America could be chalked up as just another gaffe, but it’s much worse than that. The Republican front-runner seems dangerously clueless about the nation he seeks to lead.

When I first heard the now-famous quote—“I’m not concerned about the very poor”—I thought it might be fodder for a snarky column about the wee little Mr. Monopoly who lives inside Romney’s head and blurts out things like “Corporations are people, my friend,” or “I like being able to fire people.” But I realized that being “very poor” is no laughing matter to millions of Americans.

Putting Romney’s words in their full context makes them worse. Here is what he said on CNN:

“I’m in this race because I care about Americans. I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich, they’re doing just fine. I’m concerned about the very heart of America, the 90, 95 percent of Americans who right now are struggling.”

For my part, I’m concerned about what sounds like shocking ignorance about the extent of poverty in this country and an utter lack of urgency about finding solutions.

According to a U.S. Census Bureau report released in September, the poverty rate began rising sharply in 2007 as the recession took hold. By 2010, the report says, 15.1 percent of Americans were living below the poverty line—46.2 million people who apparently do not merit Romney’s attention.

A substantial plurality of these poor people—about 20 million—are non-Hispanic whites. Roughly 13 million are Hispanic and nearly 11 million are African-American. These figures show that minorities are overrepresented among the poor, but also that poverty is by no means some kind of “minority problem.” It’s an American problem.

And even these numbers are somewhat misleading, since the official poverty threshold is set at a level that many researchers consider unrealistically low. Imagine supporting a family of four on $22,314 a year—food, shelter, clothing, transportation—and being told you’re not poor.

A better measure, in my view, is the number of American families getting by on incomes that equal the poverty level plus an additional 25 percent. By this standard, fully one-fifth of the nation is poor.

the hon.bro.preznit predictably playing pattycakes with wall st.

NYTimes | Even as the Securities and Exchange Commission has stepped up its investigations of Wall Street in the last decade, the agency has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.

By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies, making it easier for them to raise money from investors, for example, and to avoid liability from lawsuits if their financial forecasts turn out to be wrong.

An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.

JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.

Only about a dozen companies — Dell, General Electric and United Rentals among them — have felt the full force of the law after issuing misleading information about their businesses. Citigroup was the only major Wall Street bank among them. In 11 years, it settled six fraud cases and received 25 waivers before it lost most of its privileges in 2010.

By granting those waivers, the S.E.C. allowed Wall Street firms to have powerful advantages, securities experts and former regulators say. The institutions remained protected under the Private Securities Litigation Reform Act of 1995, which makes it easier to avoid class-action shareholder lawsuits.

And the companies continue to use rules that let them instantly raise money publicly, without waiting weeks for government approvals. Without the waivers, the companies could not move as quickly as rivals that had not settled fraud charges to sell stocks or bonds when market conditions were most favorable.

Other waivers allowed Wall Street firms that had settled fraud or lesser charges to continue managing mutual funds and to help small, private companies raise money from investors — two types of business from which they otherwise would be excluded.

“The ramifications of losing those exemptions are enormous to these firms,” David S. Ruder, a former S.E.C. chairman, said in an interview. Without the waivers, agreeing to settle charges of securities fraud “might have vast repercussions affecting the ability of a firm to continue to stay in business,” he said.

S.E.C. officials say that they grant the waivers to keep stock and bond markets open to companies with legitimate capital-raising needs. Ensuring such access is as important to its mission as protecting investors, regulators said.

The agency usually revokes the privileges when a case involves false or misleading statements about a company’s own business. It does not do so when the commission has charged a Wall Street firm with lying about, say, a specific mortgage security that it created and is selling to investors, a charge Goldman Sachs settled in 2010. Different parts of the company — corporate officers versus a sales force, for example — are responsible for different types of statements, officials say.

“The purpose of taking away this simplified path to capital is to protect investors, not to punish a company,” said Meredith B. Cross, the S.E.C.’s corporation finance director, referring to the fast-track offering privilege. “You’re not seeing the times that waivers aren’t being granted, because the companies don’t ask when they know the answer will be no.”

Others, however, argue that the pattern is another example of the government being too soft on Wall Street as it has become a much larger part of the economy in recent decades.

the hon.bro.preznit and catholic charities...,



WSJ | The big story took place in Washington. That's where a bomb went off that not many in the political class heard, or understood.

But President Obama just may have lost the election.

The president signed off on a Health and Human Services ruling that says that under ObamaCare, Catholic institutions—including charities, hospitals and schools—will be required by law, for the first time ever, to provide and pay for insurance coverage that includes contraceptives, abortion-inducing drugs and sterilization procedures. If they do not, they will face ruinous fines in the millions of dollars. Or they can always go out of business.

In other words, the Catholic Church was told this week that its institutions can't be Catholic anymore.

I invite you to imagine the moment we are living in without the church's charities, hospitals and schools. And if you know anything about those organizations, you know it is a fantasy that they can afford millions in fines.

There was no reason to make this ruling—none. Except ideology.

The conscience clause, which keeps the church itself from having to bow to such decisions, has always been assumed to cover the church's institutions.

Now the church is fighting back. Priests in an estimated 70% of parishes last Sunday came forward to read strongly worded protests from the church's bishops. The ruling asks the church to abandon Catholic principles and beliefs; it is an abridgment of the First Amendment; it is not acceptable. They say they will not bow to it. They should never bow to it, not only because they are Catholic and cannot be told to take actions that deny their faith, but because they are citizens of the United States.

If they stay strong and fight, they will win. This is in fact a potentially unifying moment for American Catholics, long split left, right and center. Catholic conservatives will immediately and fully oppose the administration's decision. But Catholic liberals, who feel embarrassed and undercut, have also come out in opposition.

The church is split on many things. But do Catholics in the pews want the government telling their church to contravene its beliefs? A president affronting the leadership of the church, and blithely threatening its great institutions? No, they don't want that. They will unite against that.

The smallest part of this story is political. There are 77.7 million Catholics in the United States. In 2008 they made up 27% of the electorate, about 35 million people. Mr. Obama carried the Catholic vote, 54% to 45%. They helped him win.

They won't this year. And guess where a lot of Catholics live? In the battleground states.

Saturday, February 04, 2012

why is a "smart" species like you humans so far up the creek?


QuestionEverything | Many years ago I believed, as do most people today, that intelligence was the key to solving all of mankind's problems (read: innovation, assumed by technocornucopians to overcome all problems). I spent no small amount of my life pursuing understanding of what intelligence is, and how the brain produces the abilities to solve complex problems. My childhood was spent watching the unfolding explosion in science and technology that culminated in, for example, the landing of humans on the moon. I grew up knowing there were these wondrous electronic brains called computers. Later at a still impressionable age, once the size and prices of computers came down, I got my chance to play with them. I fell instantly in love with a machine that I could program to rapidly solve problems that would have taken me days to accomplish. And I came across the works of Alan Turing regarding the idea that a computing device might be able to emulate human intelligence, dubbed “Artificial Intelligence” (AI). The “Turing Test” posited that we should accord intelligence to machines if in a blind conversation with a real human, the latter could not detect that s/he was talking to a machine. I set out to see how such a wonder might be accomplished.

Many years later I managed to earn a PhD in computer science by programming a computer to emulate not human intelligence, but the intelligence of a neuron with its adaptive synaptic connections. These, I assembled into a computational model of a snail brain, an admittedly moronic one, and showed how such a brain could control behavior and, more importantly, emulate animal-like (biomimic) learning through Pavlovian-style conditioning. Putting this brain into a computer controlling a small Braitenberg robot, I could show how the brain learned features of its experienced environment and adjusted its behavior to conform to the stimuli of that environment (run from pain-causing stimuli and approach rewarding stimuli). That academic exercise started me digging deeper into how biological neural networks in real brains work. I read every book I could get ahold of and many journal articles on various aspects of neuroscience trying to understand how it worked. The obvious goal of AI was to produce human-like intelligence in a machine. The strong version of this program even contemplated producing a conscious machine (e.g. HAL 9000 in A Space Odyssey). The field of AI has evolved from the earliest days and it has produced some useful computational products. And even though Deep Blue (IBM) beat world chess master Garry Kasporov and Watson (also IBM) beat the all-time Jeopardy champs at that game, the fact is that computers still only simulate some aspects of intelligence, and then only in limited expertise domains.

Throughout the evolution of the field, the idea of a machine intelligence spawned considerable interest among psychologists, neurobiologists, and philosophers. Debates about just what intelligence was in the first place were generated each time AI seemed to make progress. Perhaps one of the most important contributions of the field was to show just how different real brains were from the way computers process data. And with each new accomplishment of computers, trying to master tasks that had previously been thought to require intelligence, it became clearer that the human kind of intelligence was far more complex and nuanced than our earlier models accounted for. My own claim that my robot emulated a “moronic” snail might have been valid for a very low level of intelligence, but it only served to underscore how far our computational approaches were from the real thing as far as human-level intelligence.

In any case my initial forays into AI via trying to simulate learning phenomena in neuron-like structures got me hooked on the notion of understanding the real deal. Both psychology and neurobiology had made such important strides toward grasping the nature of human intelligence and consciousness that I essentially ceased worrying about AI and turned my attentions more fully to the pursuit of real human intelligence as an object of study.

As much as has been elucidated, especially over the last few decades, about human intelligence, most of the world still holds that intelligence is our greatest mental achievement. Coupled with its twin mental capacity for creativity, intelligence is seen as the epitome of cognition; a genius is one who has ample portions of both compared with ordinary humans. The human brain is held to provide cleverness in solving complex problems. We often equate intelligence with rational thinking (e.g. deductive logic) and hold accomplishments in mathematics or science as evidence that we are an incredibly smart species. The mere fact of the existence of our technological prowes proves that we are smarter than any mere ape.

But there is a fly in the ointment of this palliative thought. If you try to objectively account for the state of the world today as the result of our being so smart you have to ask a very important question: If we are so smart, why do we humans find ourselves in such a terrible predicament today? Our species is facing a constellation of extraordinary and complex problems for which no one can suggest feasible solutions (see below). The irony is that these problems exist because our cleverness, our being so smart, created them. Our activities, clever as we have thought them to be, are the causes of the problems, which, collectively, threaten the very existence of humanity! This seems a paradox. We were smart enough to create the problems, but we're not smart enough to fix them. My own conclusion was that maybe smartness wasn't enough. Maybe something even more important to cognition had been missing that allowed this predicament to develop. That has been the thought that has been motivating my own search for an answer.

the vampire-squid killed innovation too?



Innovation drives economic growth and welfare, and the industrial corporation drives innovation, says William Lazonick. But just how do corporations innovate? The key idea is commitment. People with knowledge of and experience in particular industries commit to a business model that ventures into unknown territory. The main problem is that modern financiers are not prepared to support commitment, and the modern executive pushes for stock buy-backs -- that is how Wall Street undermines innovation. Understanding how organization drives innovation -- this is new economic thinking.

the billions of bodies can be converted to "fossil" fuels

TheOnion | Saying there's no way around it at this point, a coalition of scientists announced Thursday that one-third of the world population must die to prevent wide-scale depletion of the planet's resources—and that humankind needs to figure out immediately how it wants to go about killing off more than 2 billion members of its species.

Representing multiple fields of study, including ecology, agriculture, biology, and economics, the researchers told reporters that facts are facts: Humanity has far exceeded its sustainable population size, so either one in three humans can choose how they want to die themselves, or there can be some sort of government-mandated liquidation program—but either way, people have to start dying.

And soon, the scientists confirmed.

"I'm just going to level with you—the earth's carrying capacity will no longer be able to keep up with population growth, and civilization will end unless large swaths of human beings are killed, so the question is: How do we want to do this?" Cambridge University ecologist Dr. Edwin Peters said. "Do we want to give everyone a number and implement a death lottery system? Incinerate the nation's children? Kill off an entire race of people? Give everyone a shotgun and let them sort it out themselves?"

"Completely up to you," he added, explaining he and his colleagues were "open to whatever." "Unfortunately, we are well past the point of controlling overpopulation through education, birth control, and the empowerment of women. In fact, we should probably kill 300 million women right off the bat."

Because the world's population may double by the end of the century, an outcome that would lead to a considerable decrease in the availability of food, land, and water, researchers said that, bottom line, it would be helpful if a lot of people chose to die willingly, the advantage being that these volunteers could decide for themselves whether they wished to die slowly, quickly, painfully, or peacefully.

Friday, February 03, 2012

oooohhh LAWD!!!!!!!!!!

low IQ and conservative beliefs linked to prejudice

Livescience | There's no gentle way to put it: People who give in to racism and prejudice may simply be dumb, according to a new study that is bound to stir public controversy.

The research finds that children with low intelligence are more likely to hold prejudiced attitudes as adults. These findings point to a vicious cycle, according to lead researcher Gordon Hodson, a psychologist at Brock University in Ontario. Low-intelligence adults tend to gravitate toward socially conservative ideologies, the study found. Those ideologies, in turn, stress hierarchy and resistance to change, attitudes that can contribute to prejudice, Hodson wrote in an email to LiveScience.

"Prejudice is extremely complex and multifaceted, making it critical that any factors contributing to bias are uncovered and understood," he said.

Controversy ahead
The findings combine three hot-button topics.

"They've pulled off the trifecta of controversial topics," said Brian Nosek, a social and cognitive psychologist at the University of Virginia who was not involved in the study. "When one selects intelligence, political ideology and racism and looks at any of the relationships between those three variables, it's bound to upset somebody."

Polling data and social and political science research do show that prejudice is more common in those who hold right-wing ideals that those of other political persuasions, Nosek told LiveScience. [7 Thoughts That Are Bad For You]

"The unique contribution here is trying to make some progress on the most challenging aspect of this," Nosek said, referring to the new study. "It's not that a relationship like that exists, but why it exists."

Brains and bias
Earlier studies have found links between low levels of education and higher levels of prejudice, Hodson said, so studying intelligence seemed a logical next step. The researchers turned to two studies of citizens in the United Kingdom, one that has followed babies since their births in March 1958, and another that did the same for babies born in April 1970. The children in the studies had their intelligence assessed at age 10 or 11; as adults ages 30 or 33, their levels of social conservatism and racism were measured. [Life's Extremes: Democrat vs. Republican]

In the first study, verbal and nonverbal intelligence was measured using tests that asked people to find similarities and differences between words, shapes and symbols. The second study measured cognitive abilities in four ways, including number recall, shape-drawing tasks, defining words and identifying patterns and similarities among words. Average IQ is set at 100.

Social conservatives were defined as people who agreed with a laundry list of statements such as "Family life suffers if mum is working full-time," and "Schools should teach children to obey authority." Attitudes toward other races were captured by measuring agreement with statements such as "I wouldn't mind working with people from other races." (These questions measured overt prejudiced attitudes, but most people, no matter how egalitarian, do hold unconscious racial biases; Hodson's work can't speak to this "underground" racism.)

As suspected, low intelligence in childhood corresponded with racism in adulthood. But the factor that explained the relationship between these two variables was political: When researchers included social conservatism in the analysis, those ideologies accounted for much of the link between brains and bias.

People with lower cognitive abilities also had less contact with people of other races.

"This finding is consistent with recent research demonstrating that intergroup contact is mentally challenging and cognitively draining, and consistent with findings that contact reduces prejudice," said Hodson, who along with his colleagues published these results online Jan. 5 in the journal Psychological Science.

A study of averages
Hodson was quick to note that the despite the link found between low intelligence and social conservatism, the researchers aren't implying that all liberals are brilliant and all conservatives stupid. The research is a study of averages over large groups, he said.

has any economist ever gotten it so wrong?



truthdig | That Lawrence Summers, a president emeritus of Harvard, is a consummate distorter of fact and logic is not a revelation. That he and Bill Clinton, the president he served as treasury secretary, can still get away with disclaiming responsibility for our financial meltdown is an insult to reason.

Yet, there they go again. Clinton is presented, in a fawning cover story in the current edition of Esquire magazine, as “Someone we can all agree on. ... Even his staunchest enemies now regard his presidency as the good old days.” In a softball interview, Clinton is once again allowed to pass himself off as a job creator without noting the subsequent loss of jobs resulting from the collapse of the housing derivatives bubble that his financial deregulatory policies promoted.

At least Summers, in a testier interview by British journalist Krishnan Guru-Murthy of Channel 4 News, was asked some tough questions about his responsibility as Clinton’s treasury secretary for the financial collapse that occurred some years later. He, like Clinton, still defends the reversal of the 1933 Glass-Steagall Act, a 1999 repeal that destroyed the wall between investment and commercial banking put into place by Franklin Roosevelt in response to the Great Depression.

“I think the evidence is that I am right about that. If you look at the big players, Lehman and Bear Stearns were both standalone investment banks,” Summers replied, referring to two investment banks allowed to fold. Summers is very good at obscuring the obvious truth—that the too-big-to-fail banks, made legal by Clinton-era deregulation, required taxpayer bailouts.

The point of Glass-Steagall was to prevent jeopardizing commercial banks holding the savings of average citizens. Summers knows full well that the passage of the repeal of Glass-Steagall was pushed initially by Citigroup, a mammoth merger of investment and commercial banking that created the largest financial institution in the world, an institution that eventually had to be bailed out with taxpayer funds to avoid economic disaster for millions of ordinary Americans. He also knows that Citigroup—where Robert Rubin, who preceded Summers as Clinton’s treasury secretary, played leading roles during a critical time—specialized in precisely the mortgage and other debt packages and insurance scams that were the source of America’s economic crisis.

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Even Clinton, in a rare moment of honest appraisal of his record, conceded that his signing of the Commodity Futures Modernization Act (CFMA), legalizing those credit default swaps and collateralized debt obligations, was based on bad advice. That advice would have had to come from Summers, his point man pushing the CFMA legislation, which Clinton signed into law during his lame-duck days.

When the British interviewer reminded him of Clinton’s comment, Summers, as is his style, simply bristled: “Again, you make everything so simple, when in fact it’s complicated. Would it have been better if the whole financial reform legislation had passed in 1999, or 1998, or 1992? Yes, of course it would have been better. But … at the time Bill Clinton was president, there essentially were no credit default swaps. So the issue that became a serious problem really wasn’t an issue that was on the horizon.”

That is a lie. Credit default swaps had been sold at least since 1991, and collateralized debt obligations of all sorts quickly became the rage during the Clinton years. Summers surely remembers that Brooksley Born, the legal expert on such matters that Clinton appointed to head the Commodity Futures Trading Commission (CFTC), warned about the ballooning danger of those unregulated derivatives. Born, who served with Summers as one of four members of the President’s Working Group on Financial Markets, tried repeatedly and in vain to get her colleagues to act. When her pleas fell on deaf ears, she issued a “concept release” calling attention to an unregulated derivatives market that was even then spiraling out of control.

Thursday, February 02, 2012

voting is an act of political theater

truthout | Voting will not alter the corporate systems of power. Voting is an act of political theater. Voting in the United States is as futile and sterile as in the elections I covered as a reporter in dictatorships like Syria, Iran and Iraq. There were always opposition candidates offered up by these dictatorships. Give the people the illusion of choice. Throw up the pretense of debate. Let the power elite hold public celebrations to exalt the triumph of popular will. We can vote for Romney or Obama, but Goldman Sachs and ExxonMobil and Bank of America and the defense contractors always win. There is little difference between our electoral charade and the ones endured by the Syrians and Iranians. Do we really believe that Obama has, or ever had, any intention to change the culture in Washington?

In this year’s presidential election I will vote for a third-party candidate, either the Green Party candidate or Rocky Anderson, assuming one of them makes it onto the ballot in New Jersey, but voting is nothing more than a brief chance to register our disgust with the corporate state. It will not alter the configurations of power. The campaign is not worth our emotional, physical or intellectual energy.

Our efforts must be directed toward acts of civil disobedience, to chipping away, through nonviolent protest, at the pillars of established, corporate power. The corporate state is so unfair, so corrupt and so rotten that the institutions tasked with holding it up—the police, the press, the banking system, the civil service and the judiciary—have become vulnerable. It is becoming harder and harder for the corporations to convince its foot soldiers to hold the system in place.

I sat a few days ago in a small Middle Eastern restaurant in Washington, D.C., with Kevin Zeese, one of the activists who first called for the Occupy movements. Zeese and others, including public health care advocate Dr. Margaret Flowers, set up the Occupy encampment on Freedom Plaza in Washington, D.C. They got a four-day permit last fall and used the time to create an infrastructure—a medic tent, a kitchen, a legal station and a press center—that would be there if the permit was not extended. The National Park Service did grant them an extended permit, and Freedom Plaza is one of the encampments that has not been shut down.

“We do have a grand strategy,” he said. “Nonviolent movements shift power by attacking the columns that hold the power structure in place. Those columns are the military, police, media, business, workers, youth, faith groups, NGOs and civil servants. Every time we deal with the police, we have that in mind. The goal is not to hit them, hit them, hit them and weaken them. The goal is to pull people from those columns to our side. We want the police to know that we understand they’re not the 1 percent. The goal is not to get every police officer, but to get enough police so that you have a division.”

“We do this with civil servants,” he went on. “We do whistle-blower events. We go to different federal agencies with protesters blowing whistles and usually with an actual whistle-blower. We hand out literature to the civil servants about how to blow the whistle safely, where they can get help if they do, why they should do it. We also try to get civil servants by pulling them to our side.”

“One of the beautiful things about this security state is that they always know we’re coming,” he said. “It’s never a secret. We don’t do anything as a secret. The EPA, for example, sent out a security notice to all of its employees—advertising for us [by warning employees about a coming protest]. So you get the word out.”

Individuals become the media,” he said. “An iPhone becomes a live-stream TV. The social network becomes a media outlet. If a hundred of us work together and use our social networks for the same message we can reach as many people as the second-largest newspapers in town, The Washington Examiner or The Washington Times. If a thousand of us do, we can meet the circulation of The Washington Post. We can certainly reach the circulation of most cable news TV shows. The key is to recognize this power and weaken the media structure.”

the price of your soul: how the brain decides whether to sell out

ScienceDaily | A neuro-imaging study shows that personal values that people refuse to disavow, even when offered cash to do so, are processed differently in the brain than those values that are willingly sold.

The brain imaging data showed a strong correlation between sacred values and activation of the neural systems associated with evaluating rights and wrongs (the left temporoparietal junction) and semantic rule retrieval (the left ventrolateral prefrontal cortex), but not with systems associated with reward.

"Most public policy is based on offering people incentives and disincentives," Berns says. "Our findings indicate that it's unreasonable to think that a policy based on costs-and-benefits analysis will influence people's behavior when it comes to their sacred personal values, because they are processed in an entirely different brain system than incentives."

Research participants who reported more active affiliations with organizations, such as churches, sports teams, musical groups and environmental clubs, had stronger brain activity in the same brain regions that correlated to sacred values. "Organized groups may instill values more strongly through the use of rules and social norms," Berns says.

The experiment also found activation in the amygdala, a brain region associated with emotional reactions, but only in cases where participants refused to take cash to state the opposite of what they believe. "Those statements represent the most repugnant items to the individual," Berns says, "and would be expected to provoke the most arousal, which is consistent with the idea that when sacred values are violated, that induces moral outrage."

The study is part of a special issue of the Philosophical Transactions of the Royal Society, titled "The Biology of Cultural Conflict." Berns edited the special issue, which brings together a dozen articles on the culture of neuroscience, including differences in the neural processing of people on the opposing sides of conflict, from U.S. Democrats and Republicans to Arabs and Israelis.

"As culture changes, it affects our brains, and as our brains change, that affects our culture. You can't separate the two," Berns says. "We now have the means to start understanding this relationship, and that's putting the relatively new field of cultural neuroscience onto the global stage."

faux populism and the sell-out G.O.A.T



truthdig | I’ll admit it: Listening to Barack Obama, I am ready to enlist in his campaign against the feed-the-rich Republicans ... until I recall that I once responded in the same way to Bill Clinton’s faux populism. And then I get angry because betrayal by the “good guys” for whom I have ended up voting has become the norm.

Yes, betrayal, because if Obama meant what he said in Tuesday’s State of the Union address about holding the financial industry responsible for its scams, why did he appoint the old Clinton crowd that had legalized those scams to the top economic posts in his administration? Why did he hire Timothy Geithner, who has turned the Treasury Department into a concierge service for Wall Street tycoons?

Why hasn’t he pushed for a restoration of the Glass-Steagall Act, which Clinton’s deregulation reversed? Does the president really believe that the Dodd-Frank slap-on-the-wrist sellout represents “new rules to hold Wall Street accountable, so a crisis like this never happens again”? Can he name one single too-big-to-fail banking monstrosity that has been reduced in size on his watch instead of encouraged to grow ever larger by Treasury and Fed bailouts and interest-free money?

When Obama declared Tuesday evening “no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas,” wasn’t he aware that Jeffrey Immelt, the man he appointed to head his jobs council, is the most egregious offender? Immelt, the CEO of GE, heads a company with most of its workers employed in foreign countries, a corporation that makes 82 percent of its profit abroad and has paid no U.S. taxes in the past three years.

It was also a bit bizarre for Obama to celebrate Steve Jobs as a model entrepreneur when the manufacturing jobs that the late Apple CEO created are in the same China that elsewhere in his speech the president sought to scapegoat for America’s problems. Apple, in its latest report on the subject, takes pride in attempting to limit the company’s overseas suppliers to a maximum workweek of 60 hours for their horribly exploited employees. Isn’t it weird to be chauvinistically China baiting when that country carries much of our debt?

I’m also getting tired of the exhortations to improve the nation’s schools, certainly a worthy endeavor, but this economic crisis is the result not of high school dropouts as Obama suggested, but rather the corruption of the best and brightest graduates of our elite academies. As Obama well knows from his own trajectory in the meritocracy, which took him from one of the most privileged schools in otherwise educationally depressed Hawaii to Harvard Law, the folks who concocted the mathematical formulas and wrote the laws justifying fraudulent collateralized debt obligations and credit default swaps were his overachieving professors and classmates.

If he doesn’t know that, he should check out the record of Lawrence Summers, the man he picked to guide his economic program and who had been rewarded with the presidency of Harvard after having engineered Clinton’s deregulatory deal with Wall Street.

Wednesday, February 01, 2012

where did all the workers go?

is now the time to exit the killing-fields?



endoftheamericandream | As the U.S. economy falls apart and as the world becomes increasingly unstable, more Americans than ever are becoming "preppers". It is estimated that there are at least two million preppers in the United States today, but nobody really knows. The truth is that it is hard to take a poll because a lot of preppers simply do not talk about their preparations. Your neighbor could be storing up food in the garage or in an extra bedroom and you might never even know it. An increasing number of Americans are convinced that we are on the verge of some really bad things happening. But will just storing up some extra food and supplies be enough? What is going to happen if we see widespread rioting in major U.S. cities like George Soros is predicting? What is going to happen if the economy totally falls to pieces and our city centers descend into anarchy like we saw in New Orleans during the aftermath of Hurricane Katrina? In some major U.S. cities such as Detroit, looting is already rampant. There are some sections of Detroit where entire blocks of houses are being slowly dismantled by thieves and stripped of anything valuable. Sadly, the economy is going to get a lot worse than it is at the moment. So is now the time to move away from major U.S. cities? Should preppers be seeking safer locations for themselves and their families? Those are legitimate questions.

According to a recent Gallup poll, satisfaction with the government is now at an all-time low. Americans are rapidly losing faith in virtually every major institution in society.

Anger and frustration are rising to very dangerous levels, and we are rapidly approaching a boiling point.

When people feel as though they have lost everything, they get desperate.

And desperate people do desperate things.

In many communities in the United States today, crime has become so terrifying that people are literally sleeping with their guns.

The following is a story from Rancho Cordova, California that one of my readers recently sent me....

When I first moved here, it was not a bad place, it was quiet and clean.

However, over the past three years this place has gone to the dumps there are thugs and unruly people everywhere.

I have prevented two car break-ins by scaring these thugs away.

While I was home on thanksgiving weekend, someone decided to break into my apartment.

They trashed my place stole all my items and even took my law enforcement (LE) vehicle to include my equipment.

I m sure they had been watching me for a while because they did not take items that contained my identification.

Thank god, I had my weapon with me.

In many areas of the country, law enforcement resources are being dramatically cut back due to budget problems at the same time that crime is rapidly rising.

Right now, the city of Detroit is teetering on the verge of bankruptcy. Officials there recently announced that due to budget constraints, all police stations will be closed to the public for 16 hours a day. From now on, they will only be open to the public from 8 AM to 4 PM.

But in Detroit the police are needed now more than ever. The following is what one British reporter found during his visit to Detroit....

Much of Detroit is horribly dangerous for its own residents, who in many cases only stay because they have nowhere else to go. Property crime is double the American average, violent crime triple. The isolated, peeling homes, the flooded roads, the clunky, rusted old cars and the neglected front yards amid trees and groin-high grassland make you think you are in rural Alabama, not in one of the greatest industrial cities that ever existed.

The population of Detroit is less than half of what it used to be. Over the past few decades people have left in droves, and large sections of the city are in an advanced state of decay.

Not too many people want to buy homes in Detroit now. At this point, the median price of a home in Detroit is just $6000.

uh.., when we get to see corzine perpwalk?



cafeamericain | Much of the financial press picked up this story from the Wall Street Journal, Money From MF Global Feared Gone. Much of the mainstream media in the US and the UK these days is just a conduit for sound bites from the monied interests.
"Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation."
And as we have heard, quite a bit of that money was also diverted in the last few days into the pockets of MF Global's bank, JP Morgan, which still reportedly holds much of it. Now whether they are legally entitled to keep that money is another matter. But this entire charade has been cloaked with a public relations campaign using terms like 'missing,' 'vaporized,' and 'mystery' to describe the customer assets as if no one really knows where the funds had gone, which the CFTC has explicity stated months ago is not the case. And that the handling of the bankruptcy and the method of ordering customers with creditors is in violation of the CFTC's rule 190, as is evident from the precedents and intentions which established it.

What the press apparently has not yet heard or is not reporting is that vulture funds are now contacting the MF Global customers, however they may have obtained their names, and are offering them 85 cents on the dollar for their claims. Most of the claim holders are reported to expect or to have been payed 72 cents on the dollar as things now stand. The Wall Street Journal certainly casts gloom on their prospects for a full recovery and hopes of justice, based on the report from an unnamed source.

This is creating a difficult position for these much abused customers because of the need to settle their income tax obligations for 2011. Until they can prove the funds are not 'recoverable' they bear the responsibility for their tax obligations on the full amount. But if they settle with the vulture funds they can take the loss and move on, capitulating to the despair and the anxiety of having been cheated and abused by the partnership between government and Wall Street.

Tuesday, January 31, 2012

ta loco..., self-guided bullets on top of autonomous drones...,



io9 | There was a time when increasing the distance between yourself and a sharp shooter bent on your extermination would significantly improve your chances of survival. But that time is coming to an end.

Government engineers have designed a bullet that can aim itself, correcting its own path mid-flight in order to connect with targets over a mile away. Is this the future of armed warfare?

The formidable projectile was designed by engineers Red Jones and Brian Kast of Sandia National Laboratories. And while this bullet is technically a prototype, preliminary tests cleary demonstrate that it has the potential to revolutionize the design of smart ammunition. Here's how it works:

Your traditional small-caliber projectile has grooves — called "rifling" — that cause it to spin and fly true as it passes through the air. The physical principles behind this behavior are the same ones governing the flight of a spiral pass in a game of football. Fist tap John.

american jews confront internal rancor over israel



CNN | When the editor of a Jewish newspaper here wrote this month that the Jewish state might consider assassinating an American president, his column made national headlines and provoked a Secret Service inquiry.

The most striking criticism came from the Jewish community itself, which collectively held its nose and harshly denounced the column by Andrew Adler, who is also the owner of the weekly paper, the Atlanta Jewish Times. Anti-Defamation League national director Abraham Foxman called Adler's words "irresponsible and extremist."

Adler apologized and resigned as editor, but some see the episode as the latest example of an increase in divisive, over-the-top rhetoric within American Jewish communal life, revolving largely around the hot-button issue of Israel and its policies toward the Palestinians.

The tensions have provoked Jewish groups across the country to launch programs aimed at lowering the political temperature in their own religious communities.

Israel is not "one of the great unifying factors" that it once was in the Jewish community, said Samuel Freedman, author of "Jew vs. Jew: the Struggle for the Soul of American Jewry.”

"Since the Lebanon invasion and the First Intifada, it has become a dividing line,” he said, referring to the Palestinian uprising against the Israeli occupation in the late 1980s. “It's probably deeper now than I've ever seen it."

Tensions within American Judaism are rising as some Jews detect an "existential threat" to Israel, with Iran's nuclear aspirations and Islamist parties coming to power during the Arab uprisings, he says.

Freedman also sees broader trends at work, including the fading line between private and public talk dissolving in the era of blogging and tweeting. The Atlanta Jewish Times incident, he says, is a reminder that words that sound bold in private will "resonate really differently when they are out in public."

Ethan Felson, vice president of the Jewish Council for Public Affairs, says emotions have been much more "intense and destructive" lately as ideological camps within the American Jewish community harden their views over the contentious U.S. presidential campaign, tensions between Israel and Iran, and issues from health care to marriage.

"This is going to be a brutal year," he says. "We're looking at a scorched earth political environment."

it suits israel that we never forget nuclear iran...,



The Independent | Turning round a story is one of the most difficult tasks in journalism – and rarely more so than in the case of Iran. Iran, the dark revolutionary Islamist menace. Shia Iran, protector and manipulator of World Terror, of Syria and Lebanon and Hamas and Hezbollah. Ahmadinejad, the Mad Caliph. And, of course, Nuclear Iran, preparing to destroy Israel in a mushroom cloud of anti-Semitic hatred, ready to close the Strait of Hormuz – the moment the West's (or Israel's) forces attack.

Given the nature of the theocratic regime, the repulsive suppression of its post-election opponents in 2009, not to mention its massive pools of oil, every attempt to inject common sense into the story also has to carry a medical health warning: no, of course Iran is not a nice place. But ...

Let's take the Israeli version which, despite constant proof that Israel's intelligence services are about as efficient as Syria's, goes on being trumpeted by its friends in the West, none more subservient than Western journalists. The Israeli President warns us now that Iran is on the cusp of producing a nuclear weapon. Heaven preserve us. Yet we reporters do not mention that Shimon Peres, as Israeli Prime Minister, said exactly the same thing in 1996. That was 16 years ago. And we do not recall that the current Israeli PM, Benjamin Netanyahu, said in 1992 that Iran would have a nuclear bomb by 1999. That would be 13 years ago. Same old story.

In fact, we don't know that Iran really is building a nuclear weapon. And after Iraq, it's amazing that the old weapons of mass destruction details are popping with the same frequency as all the poppycock about Saddam's titanic arsenal. Not to mention the date problem. When did all this start? The Shah. The old boy wanted nuclear power. He even said he wanted a bomb because "the US and the Soviet Union had nuclear bombs" and no one objected. Europeans rushed to supply the dictator's wish. Siemens – not Russia – built the Bushehr nuclear facility.

And when Ayatollah Khomeini, Scourge of the West, Apostle of Shia Revolution, etc, took over Iran in 1979, he ordered the entire nuclear project to be closed down because it was "the work of the Devil". Only when Saddam invaded Iran – with our Western encouragement – and started using poison gas against the Iranians (chemical components arriving from the West, of course) was Khomeini persuaded to reopen it.

All this has been deleted from the historical record; it was the black-turbaned mullahs who started the nuclear project, along with the crackpot Ahmadinejad. And Israel might have to destroy this terror-weapon to secure its own survival, to ensure the West's survival, for democracy, etc, etc.

For Palestinians in the West Bank, Israel is the brutal, colonising, occupying power. But the moment Iran is mentioned, this colonial power turns into a tiny, vulnerable, peaceful state under imminent threat of extinction. Ahmadinejad – here again, I quote Netanyahu – is more dangerous than Hitler. Israel's own nuclear warheads – all too real and now numbering almost 300 – disappear from the story.

fighting sanctions with sanctions



Reuters | Fighting sanctions with sanctions in a test of strength with the West over its nuclear ambitions, Iran warned on Friday it may halt oil exports to Europe next week in a move calculated to hurt ailing European economies.

The Tehran government grappling with its own economic crisis under Western trade and banking embargoes, will host a rare visit on Sunday by U.N. nuclear inspectors for talks that the ruling clergy may hope can relieve diplomatic pressure as they struggle to bolster public support.

Since the U.N. watchdog lent independent weight in November to the suspicions of Western powers that Iran is using a nuclear energy program to give itself the ability to build atomic bombs, U.S. and EU sanctions and Iranian threats of reprisal against Gulf shipping lanes have disrupted world oil markets and pushed up prices.

Amid forecasts Iran might be able to build a bomb next year, and with President Barack Obama facing re-election campaign questions on how he can make good on promises - to Americans and to Israel - not to tolerate a nuclear-armed Islamic Republic, a decade of dispute risks accelerating towards the brink of war.

The U.S. Treasury Department said on Friday it would send its undersecretary for terrorism and financial intelligence, David Cohen, to Britain, Germany and Switzerland next week to talk about how to enforce sanctions against Iran's central bank. Fist tap Dale.

massive ordinance penetrator: not so much...,



AFP | The US military has concluded that its largest conventional bomb is not capable of destroying Iran's most heavily fortified underground facilities suspected to be used for building nuclear weapons, according to The Wall Street Journal.

But citing unnamed US officials, the newspaper said the military was stepping up efforts to make it more powerful.

The 13.6-ton "bunker-buster" bomb, known as the Massive Ordnance Penetrator, was specifically designed to take out the hardened fortifications built by Iran and North Korea, Friday's report said.

But initial tests indicated that the bomb, as currently configured, would not be capable of destroying some of Iran's facilities, either because of their depth or because Tehran has added new fortifications to protect them, the paper noted.

In a report issued in November, the International Atomic Energy Agency said intelligence from more than 10 countries and its own sources "indicates that Iran has carried out activities relevant to the development of a nuclear device."

It detailed 12 suspicious areas such as testing explosives in a steel container at a military base and studies on Shahab-3 ballistic missile warheads that the IAEA said were "highly relevant to a nuclear weapon programme."

Iran, which has come under unprecedented international pressure since the publication of the report, with Washington and the EU targeting its oil sector and central bank, rejected the dossier as based on forgeries.

Meanwhile, doubts about its bomb's effectiveness prompted the Pentagon this month to secretly submit a request to Congress for funding to enhance the bomb's ability to penetrate deeper into rock, concrete and steel before exploding, The Journal noted.

The Defense Department has spent about $330 million so far to develop about 20 of the bombs, which are built by Boeing Co., the report pointed out.

The Pentagon is seeking about $82 million more to make the bomb more effective, The Journal said.

Defense Secretary Leon Panetta, in an interview with The Journal Thursday, acknowledged the bomb's shortcomings against some of Iran's deepest bunkers.

He said more development work would be done and that he expected the bomb to be ready to take on the deepest bunkers soon.

"We're still trying to develop them," Panetta said.

keeping work wet worldwide

Guardian | Iran's nuclear scientists are not being assassinated. They are being murdered. Killing our enemies abroad is just state-sponsored terror – whatever euphemism western leaders like to use. On the morning of 11 January Mostafa Ahmadi Roshan, the deputy head of Iran's uranium enrichment facility at Natanz, was in his car on his way to work when he was blown up by a magnetic bomb attached to his car door. He was 32 and married with a young son. He wasn't armed, or anywhere near a battlefield.

Since 2010, three other Iranian nuclear scientists have been killed in similar circumstances, including Darioush Rezaeinejad, a 35-year-old electronics expert shot dead outside his daughter's nursery in Tehran last July. But instead of outrage or condemnation, we have been treated to expressions of undisguised glee.

"On occasion, scientists working on the nuclear programme in Iran turn up dead," bragged the Republican nomination candidate Rick Santorum in October. "I think that's a wonderful thing, candidly." On the day of Roshan's death, Israel's military spokesman, Brigadier General Yoav Mordechai, announced on Facebook: "I don't know who settled the score with the Iranian scientist, but I certainly am not shedding a tear" – a sentiment echoed by the historian Michael Burleigh in the Daily Telegraph: "I shall not shed any tears whenever one of these scientists encounters the unforgiving men on motorbikes."

These "men on motorbikes" have been described as "assassins". But assassination is just a more polite word for murder. Indeed, our politicians and their securocrats cloak the premeditated, lawless killing of scientists in Tehran, of civilians in Waziristan, of politicians in Gaza, in an array of euphemisms: not just assassinations but terminations, targeted killings, drone strikes.

Their purpose is to inure us to such state-sponsored violence against foreigners. In his acclaimed book On Killing, the retired US army officer Dave Grossman examines mechanisms that enable us not just to ignore but even cheer such killings: cultural distance ("such as racial and ethnic differences that permit the killer to dehumanise the victim"); moral distance ("the kind of intense belief in moral superiority"); and mechanical distance ("the sterile, Nintendo-game unreality of killing through a TV screen, a thermal sight, a sniper sight or some other kind of mechanical buffer that permits the killer to deny the humanity of his victim").