Weekend Economists' "Into the Woods" Weekend August 14-16, 2009

[Demeter]

Bet you were wondering where I was. So was I. It got really hot, and I am fighting syncope due to starvation, exhaustion and heat stroke. So let's get the ball rolling, and then you all take over, okay?

"Into the Woods" is a Stephen Sondheim Broadway blockbusting musical which takes several fairy tales (Little Red Riding Hood, Jack and the Beanstalk, Cinderella, Sleeping Beauty, Snow White, Rapunzel, maybe others, I can't quite remember) and goes into the "second act", where the story continues and the consequences of events unfold.

F. Scott Fitzgerald claimed: "There are no second acts in American lives."

Well, for him there wasn't. He self-destructed by age 44, long before getting through the intermission, even. But only the good die young, to pull another cliche out of the bag. We are seeing second acts for a whole bunch of people: Larry Summers, Hillary Clinton, Bill Clinton, Dick Cheney; and corporations, too, are reaping what they've sowed.

One final quote: "The past isn't over. It isn't even past."--William Faulkner

Now Faulkner was from the South, where the elephants NEVER forget OR forgive, but it's pretty much true all over. You can run, but you cannot hide from your history, let alone everybody else's. So let's dig up the dirt, put the picture together, and watch how it all plays out. Popcorn, anyone?

Post them if you've got them. I'll get some musical interludes from the show, but you can add anything that enriches upon this weekend, really!

This is a group effort, especially today.

[Demeter]

1. The Curtain Rises:

Into the woods,
It's time to go,
I hate to leave,
I have to, though.
Into the woods-
It's time, and so
I must begin my journey.

Into the woods
And through the trees
To where I am
Expected ma'am,
Into the woods
To Grandmother's house-

Into the woods
To Grandmother's house-


You're certain of your way?


The way is clear,
The light is good,
I have no fear,
Nor no one should.
The woods are just trees,
The trees are just wood.
I sort of hate to ask it,
But do you have a basket?

Into the woods
And down the dell,
The path is straight,
I know it well.
Into the woods,
And who can tell
What's waiting on the journey?

Into the woods
To bring some bread
To Granny who
Is sick in bed.
Never can tell
What lies ahead.
For all that I know,
She's already dead.

But into the woods,
Into the woods,
Into the woods
To Grandmother's house
And home before dark.

http://www.youtube.com/watch?v=KsFx5835Qrg

[Demeter]

2. And We Have SIGNIFICANT Bank Failures!

Colonial Bank, Montgomery, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking and Trust (BB&T), Winston-Salem, North Carolina, to assume all of the deposits of Colonial Bank...

"The past 18 months have been a very trying period in the financial services arena, but the FDIC and its staff have performed as Congress envisioned when it created the corporation more than 75 years ago," said FDIC Chairman Sheila C. Bair. "Today, after protecting almost $300 billion in deposits since the current financial crisis began, the FDIC's guarantee is as certain as ever. Our industry funded reserves have covered all losses to date. In fact, losses from today's failures are lower than had been projected. I commend our staff for their excellent work in assuring once again a smooth transition for bank customers with these resolutions. The FDIC continues to stand by the nation's insured deposits with the full faith and credit of the U.S. government. No depositor has ever lost a penny of their insured deposits."

............

As of June 30, 2009, Colonial Bank had total assets of $25 billion and total deposits of approximately $20 billion. BB&T will purchase approximately $22 billion in assets of Colonial Bank. The FDIC will retain the remaining assets for later disposition.

The FDIC and BB&T entered into a loss-share transaction on approximately $15 billion of Colonial Bank's assets. BB&T will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement is also expected to minimize the disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $2.8 billion. THAT'S BILLION, WITH A B, FOLKS! BB&T's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Colonial Bank is the 74th FDIC-insured institution to fail in the nation this year, and the first in Alabama. The last FDIC-insured institution to be closed in the state was Birmingham FSB, Birmingham, on August 21, 1992.


OH, AND BY THE WAY, FOR DESSERT:


Dwelling House Savings and Loan Association, Pittsburgh, Pennsylvania, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with PNC Bank, National Association, Pittsburgh, Pennsylvania, to assume all of the deposits of Dwelling House Savings and Loan Association...

As of March 31, 2009, Dwelling House Savings and Loan Association had total assets of $13.4 million and total deposits of approximately $13.8 million. In addition to assuming all of the deposits of the failed bank, PNC Bank, National Association agreed to purchase approximately $3 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6.8 million. PNC Bank, National Association's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Dwelling House Savings and Loan Association is the 73rd FDIC-insured institution to fail in the nation this year, and the first in Pennsylvania. The last FDIC-insured institution to be closed in the state was Metropolitan Savings Bank, Pittsburgh, on February 2, 2007.

# # #

[DemReadingDU]

21. 3 more bank failures

On Friday, August 14, 2009, Union Bank, National Association, Gilbert, AZ was closed by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.
more...
http://www.fdic.gov/bank/individual/failed/union-az.html


On Friday, August 14, 2009, Community Bank of Arizona, Phoenix, AZ was closed by the Arizona Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.
more...
http://www.fdic.gov/bank/individual/failed/community-az.html


On Friday, August 14, 2009, The State of Nevada Financial Institutions Division closed Community Bank of Nevada, Las Vegas, NV and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.
more...
http://www.fdic.gov/bank/individual/failed/community-nv.html

[Demeter]

25. Thanks, DRDU! I Had Gone to Bed Before The Annnouncement

[DemReadingDU]

31. 30 days

Community Bank of Nevada, Las Vegas, Nevada, was closed today by the State Commissioner, by Order of the Nevada Financial Institutions Division, which then appointed Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Las Vegas (DINB), which will remain open for approximately 30 days to allow depositors access to their insured deposits and time to open accounts at other insured institutions. At the time of closing, the receiver immediately transferred to the DINB all insured deposits of Community Bank of Nevada, except for brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs). The receiver also transferred to the DINB all secured public unit deposits.

Nevada State Bank will provide operational management of the DINB under a contract with the FDIC. The main office and all branches of Community Bank of Nevada will open on Monday. Banking activities, such as direct deposit and writing checks, ATM and debit cards, can continue normally for former customers of Community Bank of Nevada during the 30-day transition period. It is also important to note that Community Bank of Nevada official checks will continue to clear and will be issued to customers closing accounts.

All insured depositors of Community Bank of Nevada are encouraged to transfer their insured funds to other banks. They may do so by asking their new bank to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts.


As of June 30, 2009, Community Bank of Nevada had total assets of $1.52 billion and total deposits of about $1.38 billion. At the time of closing, there were approximately $4.2 million in insured deposits that potentially exceeded the insurance limits. Uninsured deposits were not transferred to the DINB. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

more...
http://www.fdic.gov/news/news/press/2009/pr09146.html


30 days to allow depositors access to their insured deposits and time to open accounts at other insured institutions. I found this also occurred in April when New Frontier Bank, Greeley, Colorado, was closed.
http://www.fdic.gov/news/news/press/2009/pr09053.html

[Demeter]

32. Wow. It's the End of the World as We Know It

So bad, nobody could be coerced into taking it on!

[DemReadingDU]

38. Mish: As of Friday August 14, 2009, FDIC is Bankrupt

8/14/09 As of Friday August 14, 2009, FDIC is Bankrupt by Mike Shedlock

Tonight, inquiring minds are asking "Is There Any Money Left In The Fund?" For clues, please consider Saxo Bank Research FDIC’s Shrinking Deposit Insurance Fund – A Testimony of Current Accounting Standards.

http://1.bp.blogspot.com/_nSTO-vZpSgc/SoYymWazPNI/AAAAAAAAGpY/adaz4n4OFVg/s400/FDIC+Reserve+Ratio.png


Total Up The Unseen

* Looming taxpayer bailouts of the FDIC
* Taxpayer bailouts of failed banks
* Taxpayer bailouts of mortgage reductions to keep people in their homes
* Rising property taxes because of increased speculation
* The FDIC's role in the housing boom and bust
* Fraud costs
* Investigatory costs
* Stock market crash
* Cost to pension plans dumb enough to buy debt in failed banks simply because they were "growing"


more...
http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html



edit
5/6/09 US Senate expands relief for homeowners, banks
BANKS SIGH RELIEF
The Federal Deposit Insurance Corp., which guarantees bank deposits, will be able to tap a fresh $500 billion credit line through the end of next year under one measure pushed by the lending industry.
The FDIC's credit line will be permanently increased to $100 billion, from the current $30 billion, under the new bill.
more...
http://www.reuters.com/article/bondsNews/idUSN0627269420090506


From Wikipedia
The 2008 year-end insured deposits were projected to reach about $4.42 trillion
more...
http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation


So the FDIC has a credit limit from Treasury for $500 Billion, but there is almost $5 trillion in insured assets. Hm.

[Robbien]

48. Mish makes an interesting point. FDIC is an enabler of banksters

and lax regulators. Banksters can be bad and regulators can allow banks to be bad because they have the safety net of FDIC who will pull their fat out of the fire when the system sets itself alight.

[Robbien]

28. BB&T refused to assume any assets or liabilities between Colonial and Taylor, Bean

BB&T's statement said it was taking over bank assets, not the assets of the holding company. It specifically said it would not assume any assets or liabilities between Colonial and Taylor, Bean & Whitaker, a Florida-mortgage lender with close ties to Colonial.

BB&T also took steps to distance itself from criminal allegations against Colonial.

"Also excluded are assets and liabilities the FDIC determines are related to fraudulent or criminal activities," BB&T said in its statement.

"BB&T is indemnified by the FDIC for any liabilities not expressly assumed in the transaction, including those related to fraudulent, criminal or inappropriate activities of Colonial."

http://www.montgomeryadvertiser.com/article/20090815/BUSINESS/908150337


Colonial's holding company Colonial BancGroup Inc said last Friday it faced a criminal probe related to accounting irregularities at its mortgage lending unit.

On Thursday, Bank of America Corp won a temporary restraining order against Colonial when a federal judge in Miami ordered it to freeze $1 billion in assets.

BB&T said it will not buy any of the assets or assume any obligations of Colonial's holding company, including any relating to, Taylor, Bean and Whitaker Mortgage Corp.

BB&T said that assets and liabilities that the FDIC determines are related to fraudulent or criminal activities also are excluded from the deal.

http://www.nytimes.com/reuters/2009/08/14/business/business-us-colonial-takeover-bbandt.html


They just want the good stuff.

[Robbien]

29. For Taylor Bean the hits keep on coming

Tennessee-based Henley Holdings LLC bought a bundle of loans from Taylor Bean wholesale mortgage lender in October 2007. Henley arranged for another arm of Taylor Bean to service those mortgages.

Taylor Bean put the funds it collected on Henley's behalf into a special a depository account that it established at one of Colonial Bank's Orlando branches. That account grew to $4.7 million.

Henley became alarmed last week when Taylor Bean and Colonial made their troubling announcements. The Knoxville, Tenn., mortgage company asked for all the money in the depository account. The service agreement between Taylor Bean and Henley allows such immediate, drastic action if Taylor Bean defaults on certain requirements.

When Taylor Bean failed to pay up or establish a depository account elsewhere, Henley headed to court.

On Monday, it filed suit in the U.S. District Court for the Middle District of Florida, accusing Taylor Bean of breach of contract. It also sought temporary injunctive relief, asking the court to force Taylor Bean to immediately deposit the $4.7 million into an account at a separate bank.

Henley was worried because Taylor Bean had essentially shut its doors, and because if Colonial failed, only $250,000 of Henley money would be covered by FDIC insurance.

That same day, a federal judge granted Henley's request and ordered at least $4.4 million of the company's funds put into an interest-bearing account within the court registry.

Court records show that Taylor Bean turned over that amount the next day.

http://www.ocala.com/article/20090813/ARTICLES/908131017/-1/SPECIALSECTION15?Title=Judge-ties-up-over-4-million-in-Taylor-Bean-account

Taylor, Bean & Whitaker, which was suspended from Federal Housing Administration-insured originations last week, said at the time it planned to continue its servicing activities.

With Ginnie Mae having stepped in and placed Taylor, Bean & Whitaker’s portfolio of Ginnie securities under the servicing responsibilities of Bank of America (BAC: 17.39 +2.29%), its remaining securities are facing increased scrutiny.

The stability of Taylor, Bean & Whitaker’s servicing platform will influence the performance of its RMBS deals, Moody’s said. The loss severity levels on Taylor, Bean & Whitaker’s RMBS are likely to trend upward in the future, Moody’s said in the first issue of ResiLandscape, a newsletter for investors.

http://www.housingwire.com/2009/08/14/moodys-warns-of-increased-losses-on-taylor-beans-rmbs/


Taylor Bean services about $75 billion worth of mortgages, almost all of them government-insured.

While larger publicly held mortgage lenders and banks have gone under, or were bought before they collapsed, the fall of privately held Taylor Bean is the largest collapse of its kind, said John Bancroft, the editor of Inside Mortgage Finance, a trade publication.

"But there aren't a lot of privately held ," he said.

The collapse of Taylor Bean isn't going to be smooth for its customers like it would be for bank customers, Bancroft said.

"That's because they're not a bank. They're not being taken over by anyone," he said.

http://www.ocala.com/article/20090813/ARTICLES/908131016/-1/SPECIALSECTION15?Title=Feds-pay-TBW-workers-to-help-with-transition



So BAC is taking over the Ginnie Mae RMBS and the FHA mortgages leaving Taylor Bean with the non-governmental RMBS and mortgages or, in other words, the funny stuff.

[Hugin]

30. So, they want any money the FBI finds in the pockets of the corpse?

Charming.

[Demeter]

33. It's Prudent, Actually

No bank wants to take on somebody else's criminal mess.

We are getting into serious failures here. Looks like the FDIC warmed up on the low-hanging fruit. Sheila is starting to throw her weight around, too. Maybe she'd like Bernanke's job. Or Geithner's. Any of those clowns deserve replacement.

[Hugin]

36. I can see where Sheila would have an opinion about Summers...

and not a good one.

[Tansy_Gold]

3. first rec! i'm home! i'm home!

catching up on all that has been happening the past two weeks, and then into the fray once more.


Tansy Gold, who had new books waiting for her on her return including The Eliminationists, Idiot America, and The Great Derangement and can't figure out which to read first. . . . . .

[Demeter]

5. “Of all the gin joints in all the towns in all the world, she walks into mine.”

Such an honor! Welcome home, Tansy! We get a look in even before the books!


Good day, young lady.


Good day, Mr. Wolf.


Mmmh...
Unhh...

Look at that flesh,
Pink and plump.
Hello, little girl...

Tender and fresh,
Not one lump.
Hello, little girl...

This one's especially lush,
Delicious...
Mmmh...

Hello, little girl,
What's your rush?
You're missing all the flowers.
The sun won't set for hours,
Take your time.


Mother said,
"Straight ahead,"
Not to delay or be misled.


But slow, little girl,
Hark and hush-
The birds are singing sweetly.
You'll miss the birds completely,
You're traveling so fleetly.

Grandmother first,
Then Miss Plump...
What a delectable couple:
Utter perfection-
One brittle, one supple-
One moment, my dear-!


Mother said,
"Come what may,
Follow the path
And never stray."


Just so, little girl-
Any path.
So many worth exploring.
Just one would be so boring.
And look what you're ignoring...

Think of those crisp,
Aging bones,
Then something fresh on the palate,
Think of that scrumptious carnality
Twice in one day-!
There's no possible way
To describe what you feel
When you're talking to your meal.


Mother said
Not to stray.
Still I suppose,
A small delay...
Granny might like
A fresh bouquet...

Goodbye, Mr. Wolf.


Goodbye, little girl.
And hello...Lunch!

http://www.youtube.com/watch?v=ZeKF1eYuC78&feature=related

[DemReadingDU]

6. Nice to have you back!

Hope you enjoyed your vacation!

[ozymandius]

17. Welcome back!

I hope this immersion in cold, irreverent reality does not shock your system. I'm glad you're home. :hi:

[Demeter]

4. Citi hires external help to probe management

http://www.ft.com/cms/s/0/a8e71670-8777-11de-9280-00144feabdc0.html


Well, better late than never!

As per Financial Times veddy, veddy polite request, I do not repost, but wittily and succinctly summarize (with all the vinegar and gall at my command, and it is substantial, if I do say so myself):

At the point of the Federales' gun, Citi is evaluating its management at the highest levels for fitness in dealing with The Present Crisis. Whether this is a whitewash remains to be seen, when the report comes in October, maybe. The FDIC is the driving force, and Egon Zehnder, a headhunter and board advisory consultancy, is the probing agent.

I suppose one cannot take $45 billion in taxpayer's money without a few strings attached. Citi is getting special treatment: BofA got to do theirs in house.

[Po_d Mainiac]

58. Aw crap

I was really hoping the "probe" would be something that left scars :evilgrin:

[Demeter]

7. In Case You Think You Are Losing Your Mind: Firm prognosis by Alzheimer’s study

http://www.ft.com/cms/s/0/4b4e9310-885f-11de-82e4-00144feabdc0.html?ftcamp=rss

Scientists in Sweden claim they can now tell reliably which patients with early symptoms of dementia will go on to develop full-blown Alzheimer’s disease. Writing in the Journal of the American Medical Association, they say the clue is a combination of proteins in the patient’s cerebrospinal fluid...

[Demeter]

8. Hey, Who Turned Out the Lights? Q-Cells to cut 500 solar jobs

http://www.ft.com/cms/s/0/447c492c-87e4-11de-82e4-00144feabdc0.html

Q-Cells, the world’s biggest manufacturer of solar cells, on Thursday announced it would sack almost 20 per cent of its workforce in response to a slump in demand and a sharp drop in the price for solar components.


This is alarming, because this is what is needed--we can't lose this newest generation of technology without losing all of it, and reverting back to steam engines and water wheels.

[Dr.Phool]

24. I'll have to revert to hamster wheels.

If nothing else, you can always eat the hamsters.

[Demeter]

9. In Other News: Beer Sales are Down, Walmart's Profits Are from Overseas

Who would have thought there were cheaper beers than Bud? Must taste like paint thinner!

[ozymandius]

18. I had no idea that cutting back by one per day would reverberate so much.

I've had cheaper beer than Bud. After that experience, should a choice be necessary, I'll stick with radiator drippings.

[mrdmk]

20. Paint thinner refers to distilled spirits like moonshine, no taxes are added, nor Federal regulation...

But when ozymandius been drinking that cheap day-glow green $hit over the summer, the economy must be in the crapper. Personally, I like that blue label domestic donkey piss myself!

[Dr.Phool]

22. I had no idea going on a diet would destroy the economy!

I did stop and have a couple of beers today (Bud Light Lime), just to reward myself for taking off another 5 pounds.

And that Bud Lime will do wonders for a diet. You won't want to drink very many.

[Demeter]

34. You Must Be Seriously Considering a Run for Office!

Losing weight, and all.

[Demeter]

10. Merrill ramps up recruitment programme

http://www.ft.com/cms/s/0/6f28a182-8836-11de-82e4-00144feabdc0.html

"Bank of America’s Merrill Lynch unit is offering signing packages greater than those handed out in the bull market of 2006 and 2007, as it ramps up its recruitment programme to replace many financial advisers who have left its “thundering herd” in the past year.

Industry recruiters and people within the company say Merrill Lynch Global Wealth Management is offering signing bonuses of 140 per cent of the previous 12 months’ “production” to lure top advisers, and another 200 per cent over the next five years if the advisers hit aggressive growth targets. “That’s more than they’ve ever offered,” said one recruiter. “It’s huge.”"

Morgan Stanley's Smith Barney is doing the same.

Your tax dollars at work. Hand me one of those off-brand, cheap beers, please.

[Demeter]

13. New York Fed in hiring spree

If a life of crime and the threat of prosecution appeals to you:

The Federal Reserve Bank of New York is aggressively hiring traders as it seeks to manage its burgeoning securities holdings, making the central bank one of Wall Street’s most active recruiters of financial talent.

http://www.ft.com/cms/s/0/0e7071d0-85ca-11de-98de-00144feabdc0.html

[Demeter]

14. Fed holds steady on emergency measures

http://www.ft.com/cms/s/0/7d734a80-8750-11de-9280-00144feabdc0.html


"The Fed said that it “anticipates” completing its planned $300bn Treasury purchases by October – a month later than expected – but there was no echo of the Bank of England’s decision last week to expand its government debt-buying programme. The plans are a way to ease monetary policy even when interest rates are close to zero."

Making a virtue out of necessity, methinks.

[Demeter]

16. There Are Giants In the Sky

http://www.youtube.com/watch?v=-c9KXiOI1yw&feature=PlayList&p=D2C003D4E1A548FB&playnext=1&playnext_from=PL&index=6



There are Giants in the sky!
There are big tall terrible Giants
in the sky!

When you're way up high
And you look below
At the world you left
And the things you know,
Little more than a glance
Is enough to show
You just how small you are.

When you're way up high
And you're own your own
In a world like none
That you've ever known,
Where the sky is lead
And the earth is stone,

You're free, to do
Whatever pleases you,
Exploring things you'd never dare
'Cause you don't care,
When suddenly there's

A big tall terrible Giant at the door,
A big tall terrible lady Giant
sweeping the floor.
And she gives you food
And she gives you rest
And she draws you close
To her Giant breast,
And you know things now
that you never knew before,
Not till the sky.

Only just when you've made
A friend and all,
And you know she's big
But you don't feel small,
Someone bigger than her
Comes along the hall
To swallow you for lunch.

And you heart is lead
And your stomach stone
And you're really scared
Being all alone...

And it's then that you miss
All the things you've known
And the world you've left
And the little you own-

The fun is done.
You steal what you can and run.
And you scramble down
And you look below,
And the world you know
Begins to grow:

The roof, the house, and your Mother at the door.
The roof, the house and the world you never thought to explore.
And you think of all of the things you've seen,
And you wish that you could live in between,
And you're back again,
Only different than before,
After the sky.

There are Giants in the sky!
There are big tall terrible awesome scary wonderful
Giants in the sky!

[Demeter]

11. TV ratings shake-up challenges Nielsen

http://www.ft.com/cms/s/0/fc04615a-8858-11de-82e4-00144feabdc0.html

It's about time Nielsen had some competition. They've been in my bad books ever since Star Trek was canceled.

[Dr.Phool]

23. Fuck Nielsen!

Last year, after the city of Oldsmar, Fl. gave them millions to build a new building and bring in new jobs, they promptly laid off most of their employees, and replaced them with H1-B employees. They're owned by Tata now.

We were a Nielsen family for about a year, and they're a major pain in the ass. If you want to move a TV, or other piece of electronics, or you buy something new, they have to come out and install it or move it. And then the audits.

Edited to add- In a bit of poetic justice, one woman who was a major player in trying to rig the Florida primaries for Hillary worked for Nielsen. Tata was a major Hillary donor. She lost her job in the conversion.

[Demeter]

12. Private equity drive to raise renminbi funds

http://www.ft.com/cms/s/0/9b800024-8834-11de-82e4-00144feabdc0.html

Blackstone and GS's private equity groups are looking for sheep to shear in China...hope they are sheared, instead.

There's a sucker born every minute, as PT Barnum famously did not say...

[Demeter]

15. What's ahead? A "Lost Couple of Decades..." says Comstock partners.

http://dailyreckoning.com/land-of-the-lost-decades/

... we estimated that it would take 19 years for the economy to complete its de-leveraging. It was not a very scientific estimate. But total debt has gone down about $2 trillion over the last 24 months. So, if it continued at that rate, it would take about 19 years to erase the extraordinary amount of debt built up in the bubble years.

Now, along comes the Comstock crowd with roughly the same guess - two decades. They figure that the savings rate will go up to 10% and that the effect of taking that money out of the consumer economy will be to put the United States into a long, soft slump - just as we predicted in our first book.

And there's another reason to expect a very long period of downsizing: that's just the way economies work. Market cycles are very long. Interest rates went up from the Great Depression all the way to the Reagan Administration. Then, they went down...and may still be going down. Stocks go up and down in cycles that last 30-40 years, peak to peak. The peak in '29 was followed by another peak in '66, which was followed by another peak in '99.

Economic cycles are long too. Consumer debt, compared to disposable income, hit a low in 1945. It went up for the next 62 years. It only peaked out in 2007. If the chart were symmetrical, the process of deleveraging (getting rid of debt) would show a downtrend until 2069!

And maybe it will.

But there's no point in looking that far ahead. What we have in front of us is the opening stage of a depression...a market crash followed by a major economic re-adjustment. The new reality is that consumer demand is down...and will stay down for a very long time, at least until debt has reached more manageable proportions. Ken Rogoff says that will take 6-8 years. We say it could take 19 years. There's about $20 trillion in excess private sector debt to be eliminated. It will take time to get rid of it.

And it will take time to re-jig the world's economies to the new economic realities.

John Hussman explains...

"If we knew that this was a standard economic downturn, we might conclude that the recent improvements are durable. However, nothing convinces us that this is a standard economic downturn.

"Call me skeptical. But if you look carefully at the economic data that shows improvement, and correct for the impact of government outlays, it is difficult to find anything but continued deterioration in private demand and investment. What we do see is a government that has run what is now a trillion dollar deficit year-to-date, representing some 7% of GDP. That sort of tab will undoubtedly buy some amount of Kool-Aid, but it has been something of a disappointment to watch how eagerly investors have guzzled it down. It is not at all clear that short-term, deficit-financed improvement necessarily implies sustained growth in the context of a deleveraging cycle. This is like somebody borrowing money from their Uncle and then celebrating that their income has gone up.

"When markets crashes are coupled with changes in the fundamentals that supported the preceding bubble - as we observed in the post-1929 market, the gold market of the 1980's, and the post-1990 Japanese market, and currently observe in the deflation of the recent debt bubble - they typically do not recover quickly. Indeed, the hallmark of these post-crash markets is the very extended sideways adjustment that they experience, generally for many years. "

[mrdmk]

19. Frist, let's recommend a cold rag on Dementer's forehead! Before she melts...

I want to be in charge rag is starting in economic section, yet when something really needed to be done, none of these people did anything...

http://finance.yahoo.com/news/FDIC-chief-says-parts-of-apf-4158324710.html?x=0&sec=topStories&pos=1&asset=&ccode=

WASHINGTON (AP) -- The head of the Federal Deposit Insurance Corp. is arguing against key pillars of the Obama administration's plan to overhaul the financial system, saying they would not survive in Congress and that she has better ideas.

In an interview with The Associated Press, FDIC Chairman Sheila Bair said Congress would not go along with expanding the Federal Reserve's authority to regulate large financial companies or with giving a new consumer protection agency enforcement powers over banks.

Power to enforce rules for banks now belongs to Bair's agency and other bank regulators.

"There's a lot of resistance from a lot of different quarters to a lot of the things the administration has submitted," Bair told the AP on Thursday. "That is a reality the administration needs to deal with."

<more at the link>

First, the regulators need to do their job and congress needs to do theirs. There is enough evidence to start prosecuting a lot of 'I've got mine', bozos. Yet within the above article, "Bank industry groups say the Obama plan, introduced in June, would burden companies and ultimately raise costs for borrowers." Boy, someone has a lot of nerve to put that line in the article. I guess it is still better to be balanced than factual.

[Demeter]

26. It's Demeter--Although Right Now, It Feels Like Dementer!

Thanks for the cold compress. I think I will go lie down, again.

[Demeter]

27. Dogbert Does an AIG

http://dilbert.com/dyn_file/str_strip/63978/gif/strip.print/

[Demeter]

50. How's that Health Care Plan Going?

[Demeter]

51. How Much is Your House Worth?

[Demeter]

35. Troubled Assets Are Ba-ack... By Andy Kroll

http://www.motherjones.com/mojo/2009/08/troubled-assets-are-ba-ack

Remember, for that brief period of time, when the Treasury Department's $700 billion "Troubled Asset Relief Program" was meant to buy up banks' actual troubled assets? You know, those groups of toxic mortgages packaged into securities, or even whole toxic mortgages themselves? (Toxic, that is, because it's doubtful these loans will ever be paid back in full or at all.) Removing those toxic assets, we were told, would bolster banks' balance sheets and free them up to lend more to businesses and consumers and get the economy back on its feet. Yet not long after, the Treasury Dept., led by then-Secretary Hank Paulson, Jr., decided instead to use TARP money to invest directly in crippled institutions. Evidently Paulson hoped this cash infusion would pad their capital reserves, let banks write down losses from these assets, and help them resume lending even with toxic assets still on their books.

The question that has since lingered over the TARP, then, has been this: What happened to those toxic assets? And how are the banks and the government dealing with them now? That's what the Congressional Oversight Panel, one of the leading watchdogs led by Harvard Law Prof. Elizabeth Warren, set out to answer with its August report, released yesterday—along with how financial institutions intend to deal with these assets left on their books going forward.

First, there's the issue of valuing these toxic assets. This is difficult to do, because their value in large part relies on the ability of the loan borrowers to pay back their loan(s). And with the economic future still uncertain right now—unemployment has decreased slightly and several positive signs have emerged, but will the green shoots grow?—it's difficult to discern borrowers' future ability to repay their loans. "No one has a good handle how much is out there," Warren told Reuters Television. "Here we are 10 months into this crisis...and we can't tell you what the dollar value is."

Banks' ability to operate with toxic assets on their books poses another issue. The Treasury Department's stress tests of the biggest bailed-out banks was supposed to determine whether they could weather a worsening economic climate; as a result, some banks were deemed healthy enough with existing capital to deal with further declines in the economy, while others were told to go out and raise more money to boost their coffers. But as the COP and others have pointed out, the various scenarios in the stress tests (e.g., an "adverse" economic scenario and a "worst-case" scenario) have largely been surpassed in the real economy, and could get even worse if this more recent good news proves short-lived. Thus we might need to stress-test banks again, the COP finds.

Worse still, there's the possibility that some of the biggest bailed-out banks—perhaps even those that have repaid their TARP funds—could be forced to ask for government funds again. According to an analysis by MSNBC.com and American University's Investigative Reporting Workshop, many of the biggest banks still have considerably high troubled asset ratios (a comparison of a bank's troubled assets against its ability to withstand losses, i.e., a bank with $20 million in troubled assets and $200 million worth of capital to absorb losses would have a 10 percent ratio) on their books: At the end of the first quarter, JPMorgan Chase's ratio was 23.5 percent, up from 20 percent from the quarter before; Bank of America's was 29 percent, from 22 percent; Wachovia Bank was 29 percent, up from 23 percent; and SunTrust Bank in Atlanta was 37 percent, up from 32 percent last quarter. Granted, a handful of these banks, including JPMorgan Chase, recorded staggering profits not too long ago, meaning they'll be better able to withstand losses from toxic assets.

Finally, the COP's report references the Treasury's plans for valuing and dealing with toxic assets still on banks' books. A centerpiece of this strategy is the Public-Private Investment Program (PPIP), a largely flawed idea that heavily and unnecessarily favors the private sector and that has rightly been ripped by economists and other experts. Here's how Nobel laureate, economist, and Mother Jones contributor Joseph Stiglitz described it:

"Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year's time. The average 'value' of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is 'worth.' Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership!

Assume that one of the public-private partnerships the Treasury has promised to create is willing to pay $150 for the asset. That's 50 percent more than its true value, and the bank is more than happy to sell. So the private partner puts up $12, and the government supplies the rest—$12 in 'equity' plus $126 in the form of a guaranteed loan.

If, in a year's time, it turns out that the true value of the asset is zero, the private partner loses the $12, and the government loses $138. If the true value is $200, the government and the private partner split the $74 that's left over after paying back the $126 loan. In that rosy scenario, the private partner more than triples his $12 investment. But the taxpayer, having risked $138, gains a mere $37.

In short, it gives private investors all the upside and sticks the public with all the risk and exposure to losses.

Though the COP doesn't come right out and say it, it's clear the Treasury, which has yet to articulate any kind of unwinding plan or endgame for the TARP, needs to develop more fair, equitable strategies for dealing with toxic assets—and preventing banks from suffering further losses because these pools of mortgages remain on their books. Letting private investors buy them on the cheap with generous government backing ain't the answer.

[Demeter]

37. No More Giveaways...No More Recovery

http://dailyreckoning.com/no-more-giveaways-no-more-recovery/


...Yes, now the economy is firing on all cylinders...or just about. Yep. No doubt about it. Still, there are some nagging doubts. The latest figures show foreclosures still increasing - up 7% in July from a year before. And house prices are still going down. And unemployment is still going up. And consumer prices are falling...indicating a Japan- like deflation. And business profits are falling. And consumers are cutting back. But except for that - housing, jobs, sales, profits and deflation - everything is working out beautifully.

Now that we mention it, all the indicators of real economic activity are down.

So, the feds aren't taking any chances. Yesterday came news that the Fed would continue buying bonds at least through October. And they are not likely to raise rates either. The banks can borrow at practically zero interest...and use the money to buy Treasury bonds. The 10-year yields about 3.7%. In effect, they're lending the money back to the people they got it from...and earning 3.7% for their trouble.

But, take away the stimulus spending...and the stimulating low interest rates...and what have you got? You've got is an economy entering a depression.

Oh, there's the rub, isn't it? If the feds hand out money so people can buy automobiles, people buy automobiles. If they don't give out the money, people don't buy automobiles. If they buy automobiles, of course, it looks like the economy is recovering. But take away the giveaways, and the recovery disappears.

Solution: keep giving away money!

Hold on...something wrong here. If you could generate economic prosperity by giving people money so they could buy things...why not give them money to buy everything? Why just autos? Why not give them money to buy financial advisory services? Ah...now we're talking!

..........................

[Demeter]

43. Sticking to the Basics by Bill Bonner

http://dailyreckoning.com/sticking-with-the-basics/

Stock market cycles tend to coincide, more or less, with broad trends in the credit cycle. When people borrow and spend it causes business profits to grow. The businesses then expand; they hire more people; they build more capacity.

Then, when the credit cycle turns, everything goes in the other direction. People stop borrowing and begin paying back. Sales decline. Unemployment grows. Profits fall. Credit contracts.

We are now in the early stages of a major credit contraction. This is not a pause in a credit expansion; it is a change of direction, a credit contraction with all that goes along with it - joblessness, bankruptcies, foreclosures, and so forth.

Bloomberg tells us that the numbers have already been revised - downward. "Worst recession since the Great Depression," says its headline.

It is the worst recession since the Great Depression because it's not a recession at all; it's a depression. And the government is doing its level best to make it a great one.

The key to understanding a depression - or the downswing of the credit cycle - is that demand contracts. Consumers have less to spend. For a very simple reason: they already spent it.

Listen up, because this is important. When you borrow in order to consume, what you are really doing is consuming something today that you would have normally consumed in the future. You spend money you haven't earned yet on something you're not really ready to buy. You've heard the expression, 'time is money.' That's why borrowing money is really borrowing time. Later, you have to make it up. You have pay off the debt. When you do, you take money out of current consumption; you've already consumed it!

This is what economists refer to as "demand destruction." It's what happens in a depression. People are replacing what they took from the future. They're can't consume because they've already spent their money in the last boom. Demand collapses.



We've seen that happen in the last two years. Savings rates went from zero to 7%. Sales have declined (the latest revisions show them off more than was previously thought.) Profits are shrinking.

This is, of course, a completely natural and necessary adjustment. You can't take things from the future without putting them back eventually. The future won't stand for it. But the feds, in their benighted confusion, fight the problem like a farmer who plows backwards to fool the crows. They think the problem is too little demand. So, they try to add demand...with tax cuts...spending programs...low rates...easy credit...cash for clunkers and other fixes. What do these policies achieve? Do they really increase demand? No, they can't do that...that would require a richer population with more money to spend. What they try to do is to move demand forward.

The problem, of course, is that too much demand has already been moved forward. But they're nevertheless trying to steal even more of it...taking away demand that would normally show up two, three, four...ten years from now. That car that you might buy next year, for example. With the 'cash for clunkers' program, you might make the purchase now instead of waiting until you actually have the money. Or, that new parking lot behind the town hall. We won't really need it for a few years, but heck, if they're giving away money now... Or how about that trip to Europe? With a big tax rebate check, you might decide to take it on your 20th wedding anniversary, rather than wait 'til your 25th.

Real demand increases only when real wages increase. Then, people have more purchasing power. Trying to increase demand by borrowing - or stealing - from the future is a scam at best. Even if it works now, it fails later.

[Demeter]

39. A Financial World Gone Mad by Bill Bonner

http://dailyreckoning.com/a-financial-world-gone-mad/

..now we know that even Goldman might have gone under if Paulson - ex-Goldman man - had not engineered a stealth bailout. He brought the feds in to save AIG, and in the process he saved his old alma mater too...AIG's biggest trading partner, Goldman Sachs.

And now Goldman is in the news almost every day. It reported spectacular trading results for the quarter, lifting the entire world stock market. What's good for Goldman must be good for the whole world economy, investors reasoned.

Then it was reported that Goldman made its money in a variety of ways - none of which had anything to do with providing genuine service to the economy. Goldman made a fortune on the feds' own money raising, it came out. And then it came out ...Goldman was making billions by trading at lightning speed - clipping investors for fractions of pennies each time a transaction passed through the markets.

Goldman... Goldman... Goldman... The Italians think Goldman runs their country. They've got the top three posts in Rome...Premier Romano Prodi is an ex-Goldman guy. So is the headman at the Treasury. And the chief of the central bank, too.

They think Goldman is like a cult...a semi-secret society of insiders with the power to rule the country - surreptitiously. Like the free masons...the Jesuits...or the Illuminati.

Goldman has its boys in important posts in the United States too - but not at the same level as in Italy. Tim Geithner is not a Goldman graduate. Neither is Ben Bernanke. But both have plenty of input from ex-Goldman associates, colleagues and handlers.

We confess an interest - we have relatives working at Goldman. But we doubt that Goldman rules the world. Just look what they said and did over the last couple of years; they had no more idea of what was going on than anyone else. No, they don't rule the world...but they do manage to persuade it in their direction from time to time...

During the bubble years, they urged consumers, bankers, and investors to borrow...to speculate...and to ruin themselves. Naturally, Goldman made out like...well...like a bandit.

And now Goldman guys urge the government to ruin itself too. Yes, dear reader, the Bubble Era is not quite over. Now, there's a bubble in government debt. Here as well, Goldman makes money...like a bandit. The more the feds borrow...the more debt there is to buy and sell. And the more the feds stimulate...the more acts of reckless speculation there are to finance.

And the more money Goldman makes...the more politicians the firm is able to buy. Of course, they welcome campaign contributions.

And of course, Wall Street is spending record amounts in lobbying. But the real appeal is the lure of being able to join Goldman itself...of being able to spend some time in Washington...pushing business Goldman's way...and then cash in big by joining the firm and getting a piece of the action...

[Demeter]

40. The FDIC Is in Trouble by Bud Conrad

http://dailyreckoning.com/the-fdic-is-in-trouble/


As we all know, the Federal Deposit Insurance Corporation (FDIC) guarantees depositors that they'll get their money back if a bank fails, at least up to a certain amount. To fund its operations, the FDIC collects small fees from the banks that are held in reserve for the purpose of taking over troubled banks and paying off depositors.

Since the Great Depression, a period marked by widespread runs on banks, the FDIC has done a good job of fulfilling its mandate. So how are they doing in this crisis?

"...using any reasonable accounting method, the FDIC is already bankrupt and will require hundreds of billions of dollars in government bailouts just to keep the doors open."

In a nutshell, they are in trouble.

The FDIC insures 8,246 institutions, with $13.5 trillion in assets. Not all of them are going bankrupt, of course. Yet as of late July, a disturbing 64 banks had gone belly up this year - the most since 1992 - costing the FDIC $12.5 billion. At the end of Q1, the agency was already asking for emergency funding.

And worse, much worse, is likely yet to come. The following chart shows the total assets on the books of the FDIC's list of 305 troubled banks. The list doesn't include the biggest banks that are considered too big to fail, as they are being separately supported with bailouts. By contrast, if the banks on this list fail, the FDIC is on the hook to have to step in and take them over and, of course, make depositors whole.

SEE LINK FOR CHARTS AND GRAPHS

Other measures of how serious the losses at banks are becoming can be seen in the chart below, which shows charge-offs and non-current loans at all banks. You can see that the Net Charge-offs remain stubbornly high, with banks charging off almost $40 billion in bad loans in the last two quarters alone. And the number of non-current loans - loans where payments are not being kept up - is soaring.

Together, these measures indicate the potential for more big failures and more big bailouts coming down the pike.



Into the battle against bank insolvency the Fed brings a level of reserves that can best be described as paper-thin. From almost $60 billion last fall, the FDIC's reserves have been drawn down to only about $13 billion today, a 16-year low. A quick look at the FDIC's own data shows us how inadequate those reserves are compared to the deposits they are now insuring.

The chart below says it all:



As you can see, the Federal Deposit Insurance Corporation currently covers each dollar on deposit with a trivial 2/10ths of a penny.

And even that understates the seriousness of the situation: the $4.8 trillion in deposits the FDIC is providing coverage on doesn't include the expansion that now extends insurance coverage from $100,000 to $250,000 for normal bank accounts. That likely brings the exposure of the FDIC closer to $6 trillion. But that's pretty inconsequential at this point: using any reasonable accounting method, the FDIC is already bankrupt and will require hundreds of billions of dollars in government bailouts just to keep the doors open.

So, given the dire shape of its finances, what measures is the FDIC taking, you know, to batten down the hatches and all that?

For starters, they are expanding their mandate by guaranteeing bank loans - $350 billion and counting at this point. And the government has tapped the FDIC to play a pivotal role in guaranteeing the loans issued to buy toxic waste through the government's highly problematic and fraud-prone new Private Public Investment Partnership (PPIP). The FDIC's commitment to the PPIP is and may become limited based on its resources.

It is hard to draw any other conclusion but that hundreds of billions in new funding will be required to keep the FDIC operating. Given the catastrophic consequences of the FDIC failing, starting with a bank run of biblical proportions, there's no question it will get whatever funding it needs. By loading the new loan guarantee responsibilities and the PPIP onto the FDIC's back, the administration will go back to Congress and ask for the next large bailout.

Of course, in the end, all of this falls on the taxpayer, either directly in the form of more taxes or indirectly via the destruction of the dollar's purchasing power. Another bale of straw on the camel's back, and another reason to be concerned about holding paper dollars for the long term.

[DemReadingDU]

46. Yeh, scary

I posted something similar by Mish, post # 38.

:scared:

[Po_d Mainiac]

57. more fuel for your blaze

http://bloomberg.com/apps/news?pid=20601087&sid=aXsSaA6DJw_4

The agency’s insurance fund fell to $13 billion as of March 31 and is likely to suffer a “big hit” from Colonial’s failure, Patten said. Colonial’s loan portfolio was “junk in the trunk that nobody wants to touch,” he said. Note: Said agency being FDIC

Now note the date on the Bloomberg piece....Aug 14? nothing like having current data huh? :sarcasm:

Last week the balance (FDIC) was $800 million change. A pittance with the looming CRE collapse.

Major point... The FDIC waved fund payments from a majority of banks back in the mid 90's. Wow, that move sure paid off the US taxpayer in spades?? :puke:

[Demeter]

41. Hunky Dory by James Howard Kunstler

http://dailyreckoning.com/hunky-dory/


Whenever the herd mentality lines up along a compass point leading to "permanent prosperity," or a yellow brick road lined with green shoots, or something like that, I tend to see the edge of a cliff up ahead. We are now completely in the grips of the deadly diminishing returns of information technology. The more information comes to us about How Things Are, especially from TV, the more confused or wrong the conventional view gets it.

A broad consensus has formed in the news media and among government mouthpieces and even some "bearish" investors on the street that "the worst is behind us" in this tortured economy. This view is completely crazy. It will only lead to massive disappointment a few weeks or months from now, and that disappointment might easily transmute to political trouble. One even might call the situation tragic, except a closer look at the sordid spectacle of what American culture has become - a non-stop circus of the seven deadly sins - suggests that we deserve to be punished by history.

The reason behind this mass delusion is not hard to find: it's based on wishing, especially the wish to retain all the comforts, conveniences, luxuries, and leisure that had become normal in American life. These are now ebbing away in big gobs for most of the population - while a tiny fraction of the well-connected pile on ever-larger heaps of swag, enjoying ever more privilege. Those in the broad bottom 95% were content as long as there was a chance that they, too, could become members of the top 5% - by dint of car-dealing, or house-building, or mortgage-selling, or some other venture enabled by easy credit and a smile. Those days and those ways are now gone. The bottom 95% are now left with de-laminating houses they can't make payments on, no prospects for gainful work, repo men hiding in the bushes to snatch the PT Cruiser, cut-off cable service, Kraft mac-and-cheese (if they're lucky), and Larry Summers telling them their troubles are over. (If I were Larry, I'd start thinking about a move to some place like the Canary Islands.)

Too many disastrous things are lined up in the months ahead to insure that we're entering a new phase of history: The Long Emergency.

# Government at every level is worse than broke.
# Our currency, the US dollar, is hemorrhaging legitimacy.
# Inability to service old debt at all levels or incur new debt.
# Bad (toxic) debt lurking off balance sheets everywhere.
# The housing bubble fiasco is far from over.
# Commercial real estate fiasco just getting started.
# Unemployment rising implacably.
# So-called "consumers" unable to consume consumables.
# Crucial energy import supply lines fragile.
# Food supply subject to energy problems and climate abnormalities.
# A world full of other societies who would enjoy watching us fail and suffer.

When The Long Emergency was published in 2005, I said then that the greatest danger this society faced would be its inclination to gear up a campaign to sustain the unsustainable at all costs - rather than face the need to make new arrangements for daily life. That appears to be exactly what has happened, and it didn't happen under the rule of some backward-facing, right-wing, Jesus-haunted crypto-fascist, but rather a "progressive" party led by a dynamically affable young man unburdened by deep cultural allegiance to Wall Street. Barack Obama has been sucked in and suckered. "Change you can believe in" has morphed into "a status quo you will bend heaven and earth to hold onto."
"We’re prisoners of our wishes, living in a strange dream-time, oblivious to the forces gathering at the margins of our vision, lost in a wilderness of our own making."

Whatever else you might think or feel about Mr. Obama's performance so far, this strategy on the broader question of where we go as a nation pulses with tragedy. What's remarkable to me, to go a step further, is the absence of comprehensive vision - not just in the president, but in all the supposedly able and intelligent people around him, and even those leaders not in government but in business and education and science and the professions.

History is clearly presenting us with a new set of mandates: get local, get finer, downscale, and get going on it right away. Prepare for it now or nature will whack you upside the head with it not too long from now. Attempting to maintain anything on the gigantic scale will turn out to be a losing proposition, whether it is military control of people in Central Asia, or colossal bureaucracies run in the USA, or huge factory farms, or national chain store retail, or hypertrophied state universities, or global energy supply networks.

These imperatives are so outside-the-box of ordinary experience right now, that to drag them into the arena of politics can only evoke blank stares or nervous giggling. But whether we like it or not, these are the things that will really matter in the years ahead - not whether General Motors can ever make a profit again, or what Target Store's sales figures are next quarter, or whether the latest high-rise condo- and-gambling complex in Las Vegas will be successfully marketed.

Here, in the dog days of summer, it seems to me that the situation in the USA is so fundamentally bad, so unpromising, so booby-trapped for failure, that I wonder if there has ever been a society so badly deluded as ours. We're prisoners of our wishes, living in a strange dream-time, oblivious to the forces gathering at the margins of our vision, lost in a wilderness of our own making.

Anything can happen now. I certainly wouldn't rule out international mischief as we arc around into fall. The air is so full of black swans that the white swan now seems like the exceptional thing. Whatever else happens, it sure will be interesting to see the public's reaction to Wall Street's announcement of Christmas bonuses. The folks at Rockefeller Center better be thinking about getting a fireproof tree.

Regards,

James Howard Kunstler

[Demeter]

42. I guess this is goodbye

And the Baker gave Jack five beans in exchange for his cow,
keeping one for himself.


I guess this is goodbye, old pal,
You've been a perfect friend.
I hate to have to part, old pal,
Some day I'll buy you back.
I'll see you soon again.
I hope that when I do,
It won't be on a plate.

http://www.youtube.com/watch?v=nkgdY973KFE

[Demeter]

44. Requiem for Ben Bernanke and his Second “Great Depression” By Byron King

http://dailyreckoning.com/requiem-for-ben-bernanke-and-his-second-great-depression/

“I was not going to be the Federal Reserve chairman who presided over the second Great Depression,” declared Federal Reserve Chairman Ben Bernanke this past Sunday (July 26th). Well, he sure had me fooled.

My gut reaction to Mr. Bernanke’s statement was to recall the famous words of former President Nixon, who said of the Vietnam conflict, “I’m not going to be the first American president to lose a war.” And we know how that turned out.

Poor Mr. Bernanke. Does he really not understand his fate? I’ll grant that he was dealt a bad hand – a draw of pure, malevolent evil – by his incompetent predecessor at the Fed, Alan Greenspan. But when you volunteer to run the nation’s central bank, you’re asking for a seat at the table of history. When history deals, you play the cards that you’re dealt. And sometimes history holds all the trumps, if not a few aces up its sleeve.

This past weekend Mr. Bernanke “appeared stoic at times,” according to The Wall Street Journal, as he met with 190 people in a town hall-style forum at the Federal Reserve Bank of Kansas City. Over the course of an hour, at an event moderated by PBS correspondent Jim Lehrer, the Fed chairman answered 20 questions from attendees.

The unusual setting allowed the former Princeton professor to speak outside of his usual comfort zone. The give-and-take in Missouri – aka “flyover country” to many Washingtonians – was far removed from Fed chief’s normal, well-scripted congressional testimony, or his occasional academic presentations to roomfuls of big shot bankers and professional economists.

Continuing the Nixonian theme, the Kansas City forum was an opportunity to find out what Mr. Bernanke knew, and when did he know it.

Mr. Bernanke defended himself and the Fed against suggestions that he was too eager to aid large financial institutions last fall and winter, while sacrificing the interests of small businesses and everyday American citizens. “It wasn’t to help the big firms that we intervened,” argued Mr. Bernanke as he discussed intervening to help the big firms – y’know, the financial firms that are supposedly too big to fail.

Using a Discovery Channel analogy, Mr. Bernanke said, “When the elephant falls down, all the grass gets crushed as well.” Thus did he justify unprecedented levels of federal aid to the very Wall Street banking houses that contributed so mightily to the bubble economy of recent years. In essence, the Fed had to feed the beast and save the big guys to protect the little guys. But have the little guys really benefited?

Mr. Bernanke claimed that he was “disgusted” by circumstances under which the Fed rode to the rescue of several large financial firms. “Nothing made me more frustrated,” he said, “more angry, than having to intervene” when big banks were “taking wild bets that had forced these companies close to bankruptcy.”

Then Mr. Bernanke argued – strangely – in favor of new laws to let financial firms other than banks fail WITHOUT going into bankruptcy. Huh? What’s wrong with bankruptcy? It’s been around since the days of the Roman Empire.

I practiced bankruptcy law in my pre-Agora career as an attorney. (I’m a recovering attorney now.) I don’t understand Mr. Bernanke’s viewpoint at all. Why shouldn’t big financial firms go bankrupt when they deserve it? OK, there’s the usual canard: because it would be difficult or impossible for a bankruptcy court to “unwind” all the open trades in the sweatshops and boiler rooms of big outfits like AIG. I disagree.

Mr. Bernanke’s comment makes me wonder how well he understands the intent (let alone the history and legal process) of bankruptcy. Or does the Fed boss just always default to handing out special deals to the big-money guys?

Still, I have to give Mr. Bernanke credit for showing up to speak with a couple hundred informed citizens. The Fed certainly deserves the exposure.

According to a recent Gallup poll, a mere 30% of Americans believe that the Fed is doing a “good” or “excellent” job (down from 53% as recently as 2003). About 57% of Americans believe the Fed is doing a “fair” or “poor” job.

Indeed, according to Gallup, the Fed is the least-trusted of nine government agencies. The Fed lags far behind on a list that includes agencies such as NASA and the FBI, as well as traditional bête noires such as the Central Intelligence Agency, the Internal Revenue Agency and the Food and Drug Administration.

Mr. Bernanke’s tenure at the US central bank faces intense scrutiny, and not just from the serial bashing that he receives from the writers at Agora Financial. He has only six months left in his term as Fed chairman. Mr. Bernanke will soon learn whether President Obama will reappoint him to another four-year term or replace him with another Fed chairman wannabe.

Does Mr. Bernanke really want to continue at the Fed? Why? If Mr. Bernanke doesn’t want to preside “over the second Great Depression,” as he claims, then he should get the hell out now and try to salvage some measure of his professional reputation – if not his old job and paycheck at Princeton. Or does Mr. Bernanke want to continue on the pathway of becoming the central bank equivalent of Gen. William Westmoreland?

The questioners in Kansas City were on the right track. They certainly raised better issues than we see in the softball questions Mr. Bernanke routinely receives from members of Congress and senators.

Here’s the key point. Mr. Bernanke and the Fed had a clear policy choice last fall. They could do a big bailout or not. The Fed chose to open Door No. 1 and bail out Wall Street. This was at the expense of Main Street, let alone the national balance sheet.

But the “Second Great Depression” was not going to be stopped so easily. You don’t just throw money at a Great Depression, especially money that you don’t have. Mr. Bernanke ought to know this, based on his studies of the first Great Depression.

Instead of the bailout last fall, Mr. Bernanke and the Fed should’ve let the big guys fail. The Fed should’ve upset the whole stinking mess on the card table and reset the US monetary system. The Fed had the chance to make a statement and choose a new path, and to cast the money-changers out of the temple, so to speak.

Mr. Bernanke and the Fed should’ve allowed the failed banks to go down. The Fed should’ve sent the bubble perps down the street to the US Bankruptcy Court in lower Manhattan, along with all their fraudulent paper such as MBSs, CDOs, SIVs, etc.

Would large-scale bankruptcies have been a shock to the US and world financial system? Of course. That’s the idea. It would have been very ugly. But it would’ve helped to clean up the US economy for a couple of generations.

Would Mr. Bernanke be despised by many people? Yep. Burned in effigy, a la Paul Volker? Yes, and it comes with the job. The Fed chairman should not try to be Mr. Popularity.

By now, almost a year later, we’d have some semblance of financial finality. That’s because bankruptcy courts have the legal power to void bad contracts and discharge unpayable debt. Instead, we still have the problem of bailed-out zombie banks with massive levels of unmarketable paper and unpayable debt on their books. Right now, the “dead banks walking” are doing little but sucking capital out of the system while the Fed tries to reinflate more bubbles.

Would finance and commerce have proceeded during a banking bankruptcy? Yes, because there’s an entire economy out there, with hundreds of millions of people expressing needs and wants in the marketplace. If you believe in the basic idea of Capitalism, then you have to believe that we would have adapted, and learned new ways to meet the needs and wants absent the big, failed banks.

And it’s worth pointing out that plenty of people and companies do business while they’re in bankruptcy court. There’s nothing quite like the stroke of the pen of a federal judge to cut through the crap.

When Ben Bernanke says that he doesn’t want to preside over the second Great Depression, he’s missed a critical point. He’s already there.

Whether it was Pres. Nixon and his policies, mired in the rice paddies in Southeast Asia many decades past, or the current fever-swamps of the Potomac River, there are some bullets that have your name on them. You can’t duck and dodge.

Right now, many years of monetary malpractice are roiling the American economy. To quote a famous Chicago preacher, “The chickens have come home to roost.” The second Great Depression is happening, and it’s happening on Mr. Bernanke’s watch. Did he really expect to skate through a couple of terms as post-Greenspan Fed chairman and not get blown up?

Sad to say, Mr. Bernanke bailed out the big banks. Now the damage is done. We’re still in for that “Second Great Depression.” And Mr. Bernanke will forever be associated with it.

Ben Bernanke could have been a heroic figure. He could have refused the bailout and repudiated several generations of bad monetary ideas. He could have launched a new movement – something like monetary perestroika in the US – and moved the country ahead into a future of increased productivity and financial solvency. Instead, Mr. Bernanke is just a bit actor in a historical tragedy.

There’s no armor against the arrows of fate. Mr. Bernanke has lost his chance. Perhaps he can take solace in the words of Robert Louis Stevenson from his classic “Requiem”: “Home is the sailor, home from the sea.”

That’s all for now. Thanks for reading…

[Demeter]

45. Taking a Break Here--Reality Calls

or what passes for it. Have a great Saturday, just to spite the bastards!

[Hugin]

47. I had a WEE OP all queued up for this week and you went and started it anyway!

Thanks! :D (Couldn't stay away... Could ya? ;) )

But, I'm still going to post the core piece of it here in a little while. As, I've seen other posts of a similar vein of thought.

[Demeter]

49. Please Do! I Could Use Another Lie-Down

I can't do heat, not even as much as I used to....

[snot]

52. (hey, anyone know WHEREm (which book or whatever) Faulkner said that --

-- "The past isn't over. It isn't even past." -- William Faulkner --?? Thanks.)

[Demeter]

55. I found it!

"The past is never dead. It's not even past."

Gavin Stevens (Act I Scene III of Requiem for a Nun)



BTW, I'm down to 58 emails! Much irrelevant or outdated stuff got deleted today. Doubt that I'll get through it all, but here's to trying!


Here's another great quotation for Madoff, GS and Sarah Palin, among others:



"The essence of immorality is the tendency to make an exception of myself."

Jane Addams

[snot]

60. wow, thanks!

[Demeter]

53. Financial Circulatory System By The Mogambo Guru

http://dailyreckoning.com/financial-circulatory-system/

I was surprised to see that the government made $81.4 billion in cash out of papers, inks, and base metals in the last year, taking the total Cash in Circulation (essentially the M1 money supply) to $907.4 billion, whereas the M2 money supply is about $8.3 trillion (9 times larger) and (saving the best for last) the M3 money supply, which counts everything that can possibly be construed as “money” in the most liberal sense and making all kinds of assumptions, is almost $15 trillion, as close as anyone has been able to figure out, meaning that the money supply, at least as measured by M3, is now larger than the economy of USA!

For all you “velocity” freaks out there – and there are quite a few of them – substitute GDP as the “P” times “Q” part of Fisher’s famous equation MV=PQ (or, Money supply times Velocity of money equals Price of everything sold times Quantity of things sold) and you get a Velocity of less than 1! Hahaha! What in the hell is a velocity of less than 1? Hahaha!

Before you fire off another venom-laced email where you insult my intelligence just because I sound so stupid, act so stupid and look so stupid, I already know it doesn’t mean anything that I can understand, mostly because I am kind of, well, stupid.

But it is only an example of the kind of weird, strange crap you will see from now on, especially when all those trillions of dollars that have been created are exchanged for toxic assets, and all the future trillions of dollars to be printed by the Federal Reserve to finance the government’s massive deficit-spending, start burning a hole in somebody’s pocket, probably thanks to Congress coming up with some new “Get ’em buying!” tax scheme that will, inevitably, backfire and make everything worse and worse until it all collapses into what we hotshot professional economists call a Big Worthless Pile Of Financial Crap (BWPOFC).

And the reason that I am so sure of things turning into a BWPOFC is that, as Milton Friedman so famously said, “Inflation is always and everywhere a monetary phenomenon,” which seemingly guarantees inflation in consumer prices as a result of all of this new money flooding into the world’s economy, which is a monetary phenomenon in itself, in that it has only been tried by desperate countries in a last-ditch, kamikaze blaze of what they hoped would be glory, but was instead, always and everywhere, turned out to be just stupidly suicidal.

And how much inflation can one expect? Good question! The answer is remarkably symmetrical, as Howard Katz of thegoldbug.net says, “Over the past year, the amount of money in the U.S. has increased by almost exactly $1 trillion. This is a 70% increase from a year ago,” and “it will cause an approximately 70% increase in prices with a 1-2 year lag time,” which, looking at my watch before realizing it does not have a calendar, has already been 1 year of this “1-2 year lag.”

Billionaire Warren Buffet, who is not given to hyperbole and outlandish forecasts, says that he expects inflation to be as bad as it was in the ’70s. And how bad was that? Mr. Katz says, “The greatest price increase in American history was 13.3%, in 1979.”

And if you don’ think that gold will shoot up when inflation starts roaring like that, then you are obviously new at this investing business and you haven’t had time to look at what happened to the price of gold when it was $35 an ounce in 1970 and over $800 an ounce by 1980 when the inflation (from the vast expansions of the money supply needed to simultaneously finance the War on Poverty and the War in Vietnam) was rising along this same parabolic ride.

Until next time,

The Mogambo Guru

[Demeter]

54. Total Non-sequitor

http://www.capsteps.com/sounds/palin-neimans.mp3

[Hugin]

56. The Story of the Little Bird.

I was originally going to post this story as part of the WEE OP for this weekend... But, Demeter found the strength (somewhere) to post instead.

This story is the central theme of a Western Movie... Quite literally a spoof of Spaghetti Western Movies made by the originators of many of the honest-to-goodness Spaghetti Westerns.

That movie is, "My Name is Nobody."

First... A little bit of the plot.

"Jack Beauregard (Henry Fonda) is a tired, aging legendary gunslinger who just wants to retire in peace in Europe to get away from young gunmen constantly trying to test themselves against the master. The film opens with three rascals ambushing Beauregard in a barbershop. After Beauregard has dispatched them, the barber's son asks his father if there is anyone in the world faster than Beauregard, to what the barber replies "Faster than him? Nobody!"

'Nobody' (Terence Hill) idolizes Beauregard and wants to see him retire after a blaze of glory going against the infamous Wild Bunch single-handedly. The Wild Bunch are a gang of bandits who launder their loot of stolen gold via a fake goldmine. The owner sends them after Beauregard because the latter's now-dead brother was in on the deal.

Nobody dogs Beauregard through the west, encountering many who wish him dead, and pesters him to let him stage his grand finale. Eventually, the grand shoot-out does take place by a railway line. Nobody arranges for Beauregard to shoot at the Wild Bunch's mirrored-concho-decorated saddles. Which, he's discovered, contain sticks of dynamite, thus letting a few good shots eliminate many of the men. To escape, the two board a train that Nobody has stolen.

Finally, Nobody fakes a very public showdown with Beauregard, "killing" him and allowing him to slip away quietly. A street sign, marking where the gunfight took place, says "Nobody Was Faster On The Draw". Beauregard boards a boat for Europe and a quiet retirement, while Nobody takes up his own life of adventure."

Oh, how I wish somebody would take on the Wild Bunch. (Many of you know of whom I'm alluding.)

Anyway, back to the story of the Little Bird. (Which Nobody tells to Jack early in the movie... Omitting the moral. As, Jack is a smart man... He'll figure it out. ;) )

The Little Bird by Nobody

Late one evening a little bird fell out of his nest due to a gust of wind. After the bird regained his senses after hitting the ground, he started to get very cold... As he was not in his nice warm nest.

The little bird began running about yelling, "HELP! HELP! I've fallen out of my nest! I'm cold! Help! I'll freeze!"

A cow happened to be grazing near by and came over to see what all of the fuss was about.

"What seems to be the problem, Little Bird?", asked the cow.

"HELP! HELP! I've fallen out of my nest! I'm cold! Help! I'll freeze!" screamed the Little Bird.

The cow responded, "Oh, my... That is a problem. I would try to put you back in your nest, but, I'm not tall enough to lift you back in. You should quiet down, though. A coyote is likely to hear you yelling and will come gobble you up. Hmm... I'm trying to think of a way to help you."

Meanwhile, the Little Bird kept running and yelling.

Then the cow came up with a plan... "I know what I'll do to keep you from freezing." She said.

The cow turned around facing away from the Little Bird, lifted her tail... and dropped a big steamy hot cow pie on the Little Bird.

The Little Bird yelled, "Hey! What was that for?"

"It's to keep you from freezing... Now, be quiet or the coyote will come gobble you up.", she replied.

Then the Little Bird started yelling again, "HELP! HELP! A giant cow dumped a big pie on me! Help!"

This surprised the cow, so she asked, "I thought you were freezing and it's the best I can do... Which is pretty good, really. Aren't you nice and warm?"

The Little Bird stopped yelling long enough to say, "Yes, it is warm. BUT, IT'S A COW PIE!" and then he resumed yelling and fussing.

"HELP! HELP! A giant cow dumped a big pie on me! Help!"

The cow nodded her head in wonder and walked away into the night...


A little while later a coyote wandered up to the still yelling Little Bird. "Why are you upset Little Bird?", he asked.

"HELP! HELP! A giant cow dumped a big pie on me! Help!", screeched the Little Bird.

"Oh, is that all?", chuckled the coyote.

Then the coyote picked up the Little Bird and dusted off every tiny bit of that cow pie.

"Thank you Mr. Coyote! Thank you for pulling me out of that cow pie!" said the Little Bird.

...

...

...

The coyote nodded and gobbled up the Little Bird.






I'll post the moral of this fable a little later... But, I suspect you already know it. ;)

[Po_d Mainiac]

59. Ayuh, I know the moral

But who are the actual human characters behind the cow, the little bird and the coyote?

edit note....forgot the bird!

[Hugin]

61. As any good fable... It can fit many situations.

Initially, what reminded me of it was the clamor early in the week calling out the regular posters in the SMW and WEE. Labeling them gloom-n-doomers and stating everything was obviously coming up roses. Saying the regulars were "Mentally Masturbating" hoping for a failure of the economy... (To paraphrase the zeitgeist.)

Then, this post of a comment on a website about a donkey's ears, Right Wingers, and health care reform put another angle on it for me... Someone was thinking along the same lines.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x471945#471972

[Hugin]

62. The moral of "The Little Bird Story" in Jack's words.

"Jack Beauregard: Folks that throw dirt on you aren't always trying to hurt you, and folks that pull you out of a jam aren't always trying to help you. But the main point is when you're up to your nose in shit, keep your mouth shut."

http://www.imdb.com/title/tt0070215/quotes

[DemReadingDU]

64. I had not seen this before

very good!

[bread_and_roses]

63. I missed the calling-out clamor

I've hardly been here this week - and so little over the past two weeks I didn't even realize Tansy was away - glad she's back. Anyway, if you have that thread, I'd be curious to read it. Having just been nodding "yes" through the Byron King posted by Demeter, and thinking about how the Kuntsler line about "a strange dream time" resonates with my own perceptions, I'd be curious about the rational used - particular amid the supposedly "progressive" sub-culture that comprises this board. I admit that my ulterior motive is to amass more evidence for my theory that the vast majority on DU are no more aware of the realities of working and "under" class life than are the insulated beltway pundits who define our reality for us on TV. To how many of them, I wonder, does it occur that the "Cash for Clunkers" program as enacted is neither getting the worst old cars off the road nor providing "stimulus" to those who need it most? Given that you have to buy a NEW car - which means you have to have good credit and a good income.

[DemReadingDU]

65. we did do the clunker thing

Traded in big old 1995 Ford van with fuel ignition problems, reeking of gasoline. Horrible gas mileage. Paid cash for Chevy Aveo. Most people think they got a good discount on a new car, it really doesn't occur to them, spouse included, that they are adding to the debt their grandchildren will have to pay off.

Additional info - We had to show the title in our name, and that the car had insurance for the past 2 years. You can't just go to the junkyard and get a clunker to trade it in.

Then the dealers have a week after they get the rebate money before the clunkers are disabled. I'm wondering if the money isn't received from the government, could the dealers re-sell the clunkers?

8/5/09 'Clunkers' Pile Up On Auto Dealer's 'Death Row'
On Friday, the government changed the rules to give dealers seven days after they receive refunds to disable the cars.
http://www.npr.org/templates/story/story.php?storyId=111561543

[bread_and_roses]

86. I'm glad you got the benefit from it

I don't begrudge any individual using it. My complaint is that the bill could have been written to have broader application and at least benefited some more of the low-income workers.

[Demeter]

87. What? The Undesrving Poor, As GB Shaw Called Them?

[DemReadingDU]

88. oh, it's really not to benefit the car owners

It's really to benefit the car companies, the loan companies, the insurance companies. Most people probably had a paid-off vehicle clunker, and they now probably have a new car loan.

We got into this mess because of too much debt, and now these people have even more debt. Crazy.

[bread_and_roses]

66. "US Economic Myths Bite the Dust"

http://www.commondreams.org/view/2009/08/14-6

US Economic Myths Bite the Dust

by Mark Weisbrot
The Great Recession is allowing some widely held beliefs about the US economy – which were the source of much evangelism over the last few decades – to run up against a reality check. ...

This month my CEPR colleagues John Schmitt and Nathan Lane showed that the United States is not the nation of small businesses that it is regularly dressed up to be for electoral campaign speeches and editorials. If we look at what percentage of our overall labour force is self-employed, or what percentage of manufacturing workers or high-tech workers are employed in small businesses – well, the US ranks at or near the bottom among high-income countries.

A number of other alleged advantages of America's "economic dynamism" are also mythical. Most people think that there is more economic mobility in America than in Europe. Guess again. We're also near the bottom of rich countries in this category, for example as measured by the percentage of low-income households that escape from this status each year.

The idea that the US is more "internationally competitive" has been without economic foundation for decades...

On the other hand, most Americans pay a high price for the institutional arrangements that bring us these mythical successes. We have the dubious honour of being the only "no-vacation nation", ie no legally required paid time off and of course some weeks fewer actual days off per year than our European counterparts enjoy. We have a broken healthcare system that costs about twice as much per capita as that of our peer nations and delivers worse outcomes, as measured by life expectancy and infant mortality. We are near the top in terms of inequality among high-income countries and at the bottom for parental leave policies and paid sick days. The list is a long one.

We estimated that the US would consume about 20% less energy if it had the work hours of the EU-15. This would have a significant impact on world carbon emissions.

Before our old computer died, I had a chart saved from years ago showing economic mobility in the Western industrial countries - with US last. The data on small businesses is new to me, though it doesn't surprise me.

How did it happen, that in US the working class has become the stooges for corporations? Years ago, I had a piece bookmarked that I keep losing - an - Australian? - writer who died young and without completing a particular piece on the history/influence of corporate mass marketing on social policy - it was excellent, and I can never remember the writers name or the name of the uncompleted book - Chomsky, I'm fairly sure, has quoted it - but it outlined perhaps the most comprehensible explanation for how this happened. If anyone knows who I mean, please help me out - I've searched it out several times, but is hellish hard to find.

[kickysnana]

67. Not what you are looking for but "The media is the Message".

I cannot break through to my sister 15 years younger than I am or my kids and we talked about all of this as they were growing up. But when they started working after college they changed.

We seem to really have different realities. My kids answer was that I don't understand that things are different. I kept saying that the basics are the same that you have to see the truth in the middle of all the lies and see what worked before and what hasn't.

[DemReadingDU]

68. I can't get thru to any of my family either

In my family it isn't right-wing talk radio, they do all lean to the left. They just have other priorities such as work, family, hobbies and vacations. They don't pay enough attention to what is going on around them, because they haven't been hit in the wallet, yet. Yeh, their 401k and ira have taken a hit, but that's not needed today. Besides, the stock market always comes back. Nothing to worry about as long as they have a good job and lots of discretionary income to eat in restaurants and travel. I had one sibling tell me it doesn't matter how much money the government uses to bailout banks because it keeps the economy flowing. It hasn't registered, at all, that these bailouts are being added to the debt for their kids and grandkids to pay off. Hey, their life is humming along very nicely, so far, so they see nothing to worry about. The fake feel-good propaganda is working very well.

[snot]

69. Not the piece you wanted, but

have you seen this lecture by Eliz. Warren? Lots of great stats and observations about how the middle class has been screwn during the last few decades. http://c-cyte.blogspot.com/2009/06/elizabeth-warren-on-us-middle-class.html

[bread_and_roses]

74. I found it again! Alex Carey

Alex Carey is an Australian activist academic who died in 1988. Noam Chomsky and Edward Herman dedicated their classic book Manufacturing Consent to his life.

In the foreword to the posthumously published anthology of Alex Carey's work, Taking the Risk out of Democracy: Corporate Propaganda versus Freedom and Liberty (University of Illinois Press, 1995)

[Hugin]

79. Hey! Cool, I'll check it out.

Sounds very compelling. :)

[Demeter]

71. After What Boy George, His Daddy, and St. Ronnie Did to the Economy

most of the smallest businesses were squeezed to death.

[DemReadingDU]

70. TAE: FDIC

8/16/09 Ilargi's intro today at The Automatic Earth, is about FDIC

Ilargi: When it comes to finance, and the economy in general, there are two prevailing questions these days, or so it seems. First, how long can the stock market rally last? And second, how many bank failures still lie ahead of us? Actually, as a sort of cross-over third question, you might ask: what will banks stocks do?

As for bank failures, in the US I’ve long had the impression -and I'm by no means the only one- that the FDIC (Federal Deposit Insurance Corporation) is simply not doing what it's supposed to do: liquidate failing banks. That may be to a large extent due to the lack of both qualified personnel on the one hand and sufficient funds on the other; a lack of political will could also play a part. Whatever the reasons are, a very odd and possibly borderline illegal situation is being created and maintained.

If a bank does not comply with the standards set by law (and by FDIC regulations), it should be closed down. If that doesn't happen, both depositors and shareholders risk putting their money where they wouldn't have put it had they known the true extent of a given bank's financial troubles, and risk losing (part of) that money.

If you have a banking regulator, it surely should serve to warn the public about dangers in the system, in order to facilitate the best informed decisions possible with their funds. And there's precious little evidence out there that says that is what the FDIC is presently trying to do.

If you look for instance at what's happened with Colonial Bank, which was closed on Friday in the biggest US bank failure in 11 months, it's hard not to wonder how long it had been in serious trouble before it was seized. A bank that size automatically poses huge headaches for the FDIC, so much is clear. Still, if they knew months ago Colonial was beyond rescue, what are the ethical and legal implications of letting it continue until a solution is found, and without informing the public ahead of time?

And, by now more importantly, how many banks are there that are in more or less equally deep trouble but continue to function as though there were nothing wrong, selling shares, accepting deposits and opening their doors every morning with a sunny face??

The FDIC added dozens of banks to its "endangered" list in one big move a while back, making it very obvious that many of the "newly endangered" should have been added earlier. So when will we see the next update to the list? How many banks out there are already marked down as dead by the FDIC? I don't want to go all the way back to the administration's promises of transparency, but aren't investors and depositors simply entitled to the most accurate and the most current information available?

If the FDIC would in reality need to close down 100 banks tomorrow morning, then it should do that. But that's not the impression that you get from looking at what goes on. Maybe it's time for bank shares to plunge in the near future, so Sheila Bair's hands are forced. And for a true realization across the board about the deep doodoo commercial real estate is in, a little nuisance that all by itself is capable of finishing of hundreds of small and intermediate banks.

You think perhaps it's time to get serious about the FDIC and its tasks? To close a bank when the laws and regulations say it should be, and not when the FDIC just so happens to have some time in its schedule? I don't mean to imply that the FDIC is the main culprit here, don’t get me wrong. It's the government, and in particular the Treasury, that should act here.

There are over 300 banks on the FDIC endangered list. 150 banks, according to Bloomberg, are known to have over 5% nonperforming loans (I'd volunteer to make that 1500, and easily).

Every single day now I see people asking which banks are still safe to put their money in. You’re building a giant confidence crisis here. That's what you get from a lack of transparency. And yes, I do know it would change the whole picture we have of the economy if everyone came clean, we'd go into painting with a much darker palette of colors. But if that's all there truly is in reality, wouldn't it be better to be brave and stand tall in front of it, instead of running away like so many cowards?

What happened to all that courage America was supposedly built upon? Can't even face yourselves anymore? When businesses fail, you close the doors, it happens all the time, what's the big deal all of a sudden? You’re broke, as a nation, as individuals, very broke, awfully terribly broke. Deal with it like real men do. Real men pay their debts and move on. They don't play Mr. Big off their children's piggy banks. It's a matter of honor. Quit lying to yourself, quit whining, get over it and get to work. I'd say, the sooner the better. You're in for troubled times no matter what, that much is cast in stone.

Might as well do it with your heads held up high.

Click to see picture, related articles, followed by the comments section
http://theautomaticearth.blogspot.com/2009/08/august-16-2009-real-men-pay-their-debts.html

[Demeter]

72. Sigh. Those Who Cannot Learn From History Are Doomed To Repeat It

and we are well aware that most of this nation is intellectually challenged. Even (and especially) the so-called educated elite. They don't want to have to deal with reality, so they don't. Until Reality deals with them.

[Demeter]

75. Children will listen

http://www.youtube.com/watch?v=Gey1PtXYwLI


How do you say to your child in the night?
Nothing's all black, but then nothing's all white
How do you say it will all be all right
When you know that it might not be true?
What do you do?

Careful the things you say
Children will listen
Careful the things you do
Children will see and learn
Children may not obey, but children will listen
Children will look to you for which way to turn
To learn what to be
Careful before you say "Listen to me"
Children will listen

Careful the wish you make
Wishes are children
Careful the path they take
Wishes come true, not free
Careful the spell you cast
Not just on children
Sometimes the spell may last
Past what you can see
And turn against you
Careful the tale you tell
That is the spell
Children will listen

How can you say to a child who's in flight
"Don't slip away and i won't hold so tight"
What can you say that no matter how slight Won't be misunderstood
What do you leave to your child when you're dead?
Only whatever you put in it's head
Things that you're mother and father had said
Which were left to them too
Careful what you say
Children will listen
Careful you do it too
Children will see
And learn, oh guide them that step away
Children will glisten
Tample with what is true
And children will turn
If just to be free
Careful before you say
"Listen to me"

Children will listen (repeat 3x)

[DemReadingDU]

73. How troubled is your bank or credit union?

Really good statistics!

Track your bank here
http://banktracker.investigativereportingworkshop.org/banks/

Track your credit union here
http://banktracker.investigativereportingworkshop.org/credit-unions/


I see that while my banks troubled asset ratio is double the national median, my credit union troubled asset ratio is just slightly above the national median. However, the CU's ratio has doubled from a year ago when it was lower than the national median.
uh oh.


edit
Here is the link for the big Colonial Bank that closed this weekend
http://banktracker.investigativereportingworkshop.org/banks/alabama/montgomery/colonial-bank/

Now that bank was troubled
:(

[Demeter]

77. I Checked It Out

The bank for our condo association is at 73% troubled assets. YIKES!

Thanks for the links!

We should get Ozy to include it in his masthead.

[Hugin]

80. Most definately.

Good resource. :thumbsup: :thumbsup: :thumbsup:

[DemReadingDU]

81. much better than bankrate.com

BankTracker is very good!

Check out the home page for methodologies
http://banktracker.investigativereportingworkshop.org/

[Hugin]

84. Oops... Uh, oh! it's spelled d-e-f-i-n-i-t-e-l-y!

http://www.d-e-f-i-n-i-t-e-l-y.com/ :blush:

In my (weak) defense I shall state that neither the FireFox internal spell-check or DU's own built in check caught that blooper.

I shall go turn myself in to the spelling police!

:yoiks:

[snot]

83. sorry i'm math-retarded, but

it says my credit union's troubled asset ratio is 2.7.

Loans are $247,844,492.

Loans 90 days or more past due are $579,555. So are my union's troubled assets at 23.38%?

(I'm hoping for a healthy rating, since I just went to the trouble of switching over from BoA.)

thanks!

[DemReadingDU]

85. Here is their methodology

Maybe the methodology will help to figure how they determined the troubled asset ratio

BankTracker methodology
http://banktracker.investigativereportingworkshop.org/stories/2009/mar/16/banktracker-methodology/

Methodology for credit union analysis
http://banktracker.investigativereportingworkshop.org/stories/2009/jun/11/methodology-credit-union-analysis/

[Demeter]

76. Is it Monday, Yet?

I'm not up to doing more today...I'll just post the musical excerpts.

When I started bagging and throwing papers at 11:30PM, deserted by the 20-something who was supposed to be assisting, I didn't finish until 9AM.

So, here's an endpoint, if not a finale:


http://www.youtube.com/watch?v=rAxXmHxAgyU&feature=related

NARRATOR
And it came to pass, all that seemed wrong
was now right, and those who deserved to
were certain to live a long and happy life.
Ever after...

COMPANY
Ever after!

NARRATOR
Journey over, all is mended,
And it's not just for today,
But tomorrow, and extended
Ever after!

COMPANY
Ever after!

NARRATOR
All the curses have been ended,
The reverses wiped away.
All is tenderness and laughter
For forever after!

COMPANY
Happy now and happy hence
And happy ever after!

NARRATOR
There were dangers-

COMPANY
We were frightened-

NARRATOR
And confusions-

COMPANY
But we hid it-

NARRATOR
And the paths would often swerve.

COMPANY
We did not.

NARRATOR
There were constant-

COMPANY
It's amazing-

NARRATOR
Disillusions-

COMPANY
That we did it.

NARRATOR
But they never lost they're nerve.

COMPANY
Not a lot.

NARRATOR AND COMPANY
And they/we reached the right conclusions
And they/we got what they/we deserved!

ALL
Not a sigh and not a sorrow,
Tenderness and laughter.
Joy today and bliss tomorrow,
And forever after!

FLORINDA
I was greedy.

LUCINDA
I was vain.

FLORINDA
I was haughty.

LUCINDA
I was smug.

BOTH
We were happy.

LUCINDA
It was fun.

FLORINDA
But we were blind.

BOTH
Then we went into the woods
To get our wish,
And now we're really blind.

WITCH
I was perfect.
I had everything but beauty.
I had power,
And a daughter like a flower,
In a tower.
Then I went into the woods
To get my wish,
And now I'm ordinary.
Lost my power and my flower.

FLORINDA AND LUCINDA
We're unworthy.

FLORINDA, LUCINDA, WITCH
We're/I'm unhappy now, unhappy hence,
As well as ever after.
Had we used our common sense,
Been worthy of our discontents,
We'd be happy.

ALL
To be happy, and forever,
You must see your wish come true.
Don't be careful, don't be clever.
When you see your wish, pursue.
It's a dangerous endeavor,
But the only thing to do-

Though it's fearful,
Though it's deep, though it's dark,
And though you may lose your path,
Though you may encounter wolves,
You mustn't stop,
You mustn't swerve,
You mustn't ponder,
You have to act!
When you know your wish,
If you want your wish,
You can have your wish,-
No, to get your wish

You go into the woods,
Where nothing's clear,
Where witches, ghosts
And wolves appear.
Into the woods
And through the fear,
You have to take the journey.

Into the woods
And down the dell,
In vain, perhaps,
But who can tell?
Into the woods to lift the spell,
Into the woods to lose the longing,
Into the woods to have the child,
To wed the Prince,
To get the money,
to save the house,
To kill the Wolf,
To find the father,
To conquer the kingdom,
To have, to wed,
To get, to save,
To kill, to keep,
To go to the festival!

Into the woods,
Into the woods,
Into the woods,
Then out of the woods
And happy ever after!

[DemReadingDU]

78. Thanks, Demeter

Appreciate your weekend efforts!

[Po_d Mainiac]

82. Nice work, Thanx n/t