Today is the day we will finally learn the stress tests results for European banks. Rumours are everywhere already. Hypo Real Estate is expected to fail. Slovenia’s largest bank is expected to fail. Many of the Spanish savings banks are expected to fail. Gotta have some failures if you want this to be believable. Timmy G showed us this last year. If you want to keep up-to-date on what’s happening, you might follow the goings on via twitter at Blicklog, a German blog which has a twitter live stream running here. Have a great weekend everyone.
Ed
Obama should be pro-market, not pro-business James Pethokoukis
Fed Holds Mortgage Securities and a Dilemma NYTimes (Hat tip Scott)
Rough justice in America: Too many laws, too many prisoners The Economist (These next three links are on prisons. Also see Wikipedia’s entry on Disenfranchisement – it has a whole piece about felons’ inability to vote)
Penal reform in South Carolina: Prisons full, coffers empty The Economist
Trading prisoners in the Low Countries: It’s a deal The Economist
Fannie Mae and Freddie Mac: Unfinished business The Economist (These next three pieces are on Fannie and Freddie)
America’s housing market: Unnecessary evils The Economist
Why We Have Freddie and Fannie Arnold Kling
BP accused of ‘buying academic silence’ BBC News (Hat tip John)
Statistics Canada chief falls on sword over census Globe & Mail (Hat tip Jessica)
US Government now tracking gross proceeds on gold sales over $600 Credit Writedowns (I think the title tells you what’s up)
Banks Paid $1.6 Billion in Excessive Bonuses, Official to Say NYTimes
Short Sharp Science: Record-breaking heat does not ‘prove’ global warming New Scientist (just because it’s hot or cold for one season doesn’t mean anything. There’s more to global warming than this)
California foreclosures: Mortgage defaults fall to three-year low LATimes
Better housing fights cancer in mice The Scientist (Hat tip Francois)
The Secret of Successful Entrepreneurs Jonah Lehrer
The Advantages of Being Helpless Scientific American (this is on child development. Very interesting)
A double dip is a price worth paying Martin Feldstein, FT (Bound to be controversial)
Guest Blog: Frans de Waal on the human primate: Strength is weakness Scientific American
Afghan Deadline Is Cutting Two Ways NYTimes
Antidote du Jour: Bambi and Lassie friends at last (Nancy, this is fabulous!)
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Thanks again for the links. You save me a lot of trouble sifting through junk online.
Well, Martin Feldstein is a big name economist who definitely speaks for what Econospeak would call the “Finance Interest.” See: http://econospeak.blogspot.com/
What is unusual is his honesty, that he sees this crisis as an opporutnity to gut the welfare state, principally old age pensions and benefits, and also other public services offered to the general public. Parks, good medical care, safe streets and drinking water, and good roads, these are things that should once more be reserve for the elite who can pay for them. And the purpose is to preserve and enhance the value of the principal held by the bond holders and banks, thereby shifting wealth to the rentier class. And when he talks about raising taxes in the context of Europe, I am sure he means the VAT which of course is a very regressive tax. And of course an extensive period of unemployment means declining real wages for the working and middle classes.
If we can export jobs to the cheapest country, we can export prisoners !!!
@NY Times: Banks Paid $1.6 Billion in Excessive Bonuses
After the somewhat hopeful headline, we come across this gem in the innards of the story:
“Mr. Feinberg is expected to call the payouts ill advised but not unlawful or contrary to the public interest, the people with knowledge of his report said.”
THE THEFT OF $1.6 BILLION DOLLARS IS NOT CONTRARY TO THE PUBLIC INTEREST!!!?????
If the New York Times’ reporting is accurate, then Mr. Feinberg’s conclusion is so insane that it almost defies any kind of response.
There is simply a point where things are Right or Wrong. If a government cannot navigate and call out something as wrong Wall Street’s looting of $1.6 billion dollars, then it is more than incompetent, it’s complicit. But then, we all kind of knew that already didn’t we, just from watching what they do. And now it’s what they say, too.
Just like any other Banana Republic or African Jungle paradise.
Feinberg’s really on a roll. He was delegated to tell the destroyed fishermen who BP “hired” to help with the clean-up that anything they were paid for working would come out of any meager compensation they get for having their livelihoods permanently destroyed.
So it was “HA HA, JOKE’S ON YOU, SUCKERS!”
I didn’t hear if Feinberg was laughing while he said it.
re: Banks Paid $1.6 Billion in Excessive Bonuses
Unfortunately such corruption is not limited to the banksters and the US congress. It’s pandemic in our culture. And even when laws are passed to try and curb outrageous pay, people find loopholes.
The above link on “US Government now tracking gross proceeds on gold sales over $600 Credit Writedowns” is a great example of sneaking in legislation where it won’t be noticed.
The city council of Bell, CA, operates similarly to the US congress… sneaking in legislation to benefit the few, paid for by the many.
I’ve no doubt this sort of thing is happening on a large scale throughout the US, at many levels in business and various state and local governments. And it’s all funded by citizen taxation, at which the rich are adept at avoiding via their IRS and other state and local loopholes (the Kerry article below).
Unfortunately I do not see any solution to the corruption and looting as it seems to be getting worse over time. However, as the citizenry becomes more aware of the looting they will be increasingly hostile to tax increases seeing as who’s pocket those $$ ends up in (and probably more likely to cheat the system themselves in self defense).
Outrageous pay in Bell, CA… Calif. council accepts resignations of 3 managers http://news.yahoo.com/s/ap/20100723/ap_on_re_us/us_bell_salaries
Three administrators whose huge salaries sparked outrage in this small blue-collar suburb of Los Angeles have agreed to resign, the City Council said Friday. … Rizzo was the highest paid at $787,637 a year — nearly twice the pay of President Barack Obama — for overseeing one of the poorest towns in Los Angeles County. Spaccia makes $376,288 a year and Adams earns $457,000, 50 percent more than Los Angeles Police Chief Charlie Beck. … “I’m happy that they resigned but I’m disappointed at the pension that they’re going to receive,” said Ali Saleh, a member of the Bell Association to Stop the Abuse or BASTA.
Bell council used little-noticed ballot measure to skirt state salary limits http://www.latimes.com/news/local/la-me-0723-bell-charter-20100723,0,3917129.story?track=rss
A state law enacted in 2005 limits the pay of council members in “general law” cities, a category that includes most cities in Southern California. That law was passed in reaction to the high salaries that leaders in South Gate had bestowed on themselves earlier in the decade. But the year that law passed, the Bell City Council authorized a special election with only one item on the ballot — a measure calling for Bell to convert to a “charter” city. The move was billed as one that would give the city more local control. The ballot language included no mention of the effect the change would have on council members’ salaries.
Sen. John Kerry skips town on sails tax http://www.bostonherald.com/track/inside_track/view/20100723senator_skipper_skips_town_on_sails_tax/srvc=home&position=0
Sen. John Kerry, who has repeatedly voted to raise taxes while in Congress, dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I.
Mass. Sen. Kerry docks yacht in RI, saving $500K http://www.washingtonpost.com/wp-dyn/content/article/2010/07/23/AR2010072302191.html
Massachusetts Sen. John Kerry is docking his family’s new $7 million yacht in neighboring Rhode Island, saving roughly $500,000 in Bay State taxes. If the boat were docked at the couple’s summer vacation home on Nantucket, they would be liable for $437,500 in one-time sales tax. They’d also have to pay $70,000 in annual excise taxes. Instead, Rhode Island has repealed those taxes.
Re: Rough Justice
What are the psychology and emotional state(s) that underlie the absurd incarceration rate?
“Penal reform in South Carolina
Prisons full, coffers empty”
So S Carolina and other states release prisioners early. These guys/gals now have a lifetime tag of ‘convicted felon’ branded onto them and are in a job market where one in five non felons are finding jobs. Also, the felons are ineligible for any job in government, where most of the jobs are to be found now.
Is it fair to brand these ex cons for life because they sold a bag of pot or committed some other such offense when they were under 25 years of age? Once they exhaust all possibilities of employment guess what they will do? Return to crime!
I am not surprised by anything our governments do today. This is typical of what I have come to expect. Prisons are simply another business and the prisioners are simply consumers with zero choice as opposed to the prisioners living in suburbia that can choose where they want to do their time. We are all captives of a system that is FUBAR.
To clarify: the psychological and emotional states of the people who CREATED the Prison-Industrial Complex. US.
“Do you love it, do you hate it?
There it is the way you made it
WOW”
fr/ “Plastic People” Frank Vincent Zappa
This being the internet, many of us are nopt US citizens nor residents.
So: speak for yourself – we had NOTHING to do with the US Prison system.
Re Bailout, Fed-style:
A fire sale also could damage the banking industry by driving down the value of the comparable mortgage securities that banks hold in large quantities.
That would violate the #2 purpose of the whole Bailout, using stolen taxpayer money to prop up all the worthless toxic crap on the insolvent banks’ balance sheets.
(#1 of course was to continue looting on a personal level, “bonuses.”)
They can never sell that stuff. Nobody other than themselves using stolen public money would ever buy it. On the contrary, if the Bailout is to continue, they’ll have to resume buying.
Which was the theme of Bennie’s recent testimony.
http://www.nytimes.com/2010/07/23/business/23fed.html?_r=1&ref=business
How Bennie Will Continue the Bailout, er, “fight unemployment”.
He laid out 3 options for what the Fed could do, in response to a phony coded question nominally about unemployment (you know it’s phony because it was asked by Senator Mel Watt (D-BofA). The real question was, how do you plan to continue the Bailout? Resuming the great capital crime of MBS buys was option 3.
That Unnecessary Evils article on Fannie and Freddie is total BS.
“If the GSEs were not there to securitise and guarantee prime American mortgages, private firms would take their place.”
You believe that, let’s talk, I have a bridge to sell. BTW what is a prime American mortgage anymore? We should get rid of Fannie and Freddie that are behind 95% of the housing market because there are what? 10 “prime” mortgages out there.
C’est l’ultimate antidote du jour!!
ps Great Links, too, Ed. Thank you
Papers are funny.
My local went through an extended BK protection (Canwest), it seemed that the editorial boys changed gears during this period and delivered an improved daily.
Then they were taken over by some Wall St type and things were looking pretty crappy. Nothing but cheerleaders. The day after it became clear who was walking away from court with Canwest we even had some special column inches for the ambassador of Israel (!).
But then the current scandal popped up (the Globe and Mail link above) and suddenly the paper has got some fire in it again. I actually read an editorial that I was (strangely) proud of.
There is hope.