British Border Agent Fired for Putting Wife on Terrorist Watch List Wired (hat tip reader furzy mouse)
Watchdog Group questions Google’s relationship with NSA NetworkWorld (hat tip reader May S). They’ve noticed only now?
Lambert Strether is still live blogging Egypt, if you don’t have time to watch AlJazeera and want to keep up to date.
The CIA on Egypt’s Economy, Financial Deregulation and Protest Nomi Prins (hat tip reader furzy mouse). From a few days ago but still relevant.
Revolution Is Bad for Business: No Quick Fix for Arab Youth’s Economic Woes Der Spiegel (hat tip reader Peter J). Ahem, democracy is bad for capitalism! Who’d have thunk it? And you can see where this argument will wind up…..
Empowering Egypt’s new pluralism Paul Amar, AlJazeera (hat tip Richard Kline)
The Empire’s Bagman CounterPunch (hat tip reader May S)
HAMP Paperwork Blizzard Consumer Law and Policy Blog
Exclusive video of HPD beating of teen burglar ABC. Reader doru writes, “This is not the usual fare for your blog, but you will probably be as indignant as I was after watching the HPD at work.”
While we are on the crime beat, The Lords of Rikers, New York Magazine (hat tip reader May S)
Virginia to ask top court to review US health law Reuters (hat tip reader John J)
BP Mediator Feinberg Can’t Call Himself Independent, Judge Says Bloomberg
Regulators press for trader pay ‘clawbacks’ Financial Times. If this happens in a serious way, I will gladly eat crow for having said finreg added up to little. This would give reform efforts some teeth.
JPMorgan Hid Doubts on Madoff, Documents Suggest New York Times (hat tip reader Crocodile Chuck)
Bernanke: Does He Really Think We’re This Dumb? Karl Denninger
Delaware, Rhode Island residents have most debt Reuters
Learning To Walk: Fear, Shame And Your Underwater Mortgage Ryan Grim, Arthur Delaney, Lucia Graves, Huffington Post
The Ruinous Fiscal Impact of Big Banks Simon Johnson, New York Times
Antidote du jour:
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“What cannot but strike the eye in the revolts in Tunisia and Egypt is the conspicuous absence of Muslim fundamentalism.”
Slavoj Žižek writing in the UK Guardian, some words that will come back to haunt him! Of course, the problem for Zisek is that what we want is a real left wing movement, so we do not want liberal democracy, and we do not want Islamism either. So we try to see through the increasingly smoke filled scene our fantasies coming true. Liberal democracy is the villain, it has subverted the authentic left wing voice of the people which installed such gems as the Afgan Communist Party, and thus promoted the rise of the Taliban.
http://www.guardian.co.uk/commentisfree/2011/feb/01/egypt-tunisia-revolt
Not that I have any idea how this is going to turn out, but increasingly suspect that the end game will be both fundamentalist and bloody. More of each the longer this phase goes on.
Lerogue,
I haven’t heard such unenlightened comments since the last time hillary spoke. find an original idea.
On the other hand several journalists have noted the Egyptian Army is on the scene, preventing violence.
From another angle, the Egyptian Army’s preventing the police in plain clothes, the “counter-demonstrators”, from attacking the demonstrators.
From another angle, the Army is protecting the demonstrators.
That’s a whole different direction.
As smug and lazy as that monkey looks, it would still be an insult to him to compare him to the rich parasites of the US.
I’m glad a court has demanded formal identification of the criminal Feinberg.
Re the HAMP:
The blizzard of paperwork is part of the scam. It’s meant to cause attrition within the process, since the whole point was to induce people into the pipeline, induce them to keep paying and not walk away, and then refuse the mod later on down the line.
But this analysis still treats it as just “sloppiness”, i.e. inadvertently poor execution.
No. It’s sloppy, all right. But just like with failure to convey the note, “losing” the note, and robo-signing, the sloppiness is by premeditated design. There’s nothing but malevolent method in the madness.
Re: Ahem, democracy is bad for capitalism! Who’d have thunk it? And you can see where this argument will wind up…..
Yup, it’s always democracy (and sovereignty, to fill out Rodrik’s trilemma) that has to give, right?
We now know once and for all that democracy and capitalism* are mutually exclusive and are mortal enemies.
When are people going to even ask whether they wouldn’t like to recover their democracy, sovereignty, freedom, and economic prosperity? But that means getting rid of capitalism* once and for all.
*That doesn’t necessarily mean the absence of markets among individual self-managing producers and/or co-ops. On the contrary, many concepts of federative economies include market features. But it does mean the end of wage slavery and propertarianism.
“The agent’s act was only detected after he applied for a promotion, and a background check revealed that his wife was on the watch list. He was reportedly sacked for “gross misconduct.”
Well, I’m sure our government has much, much, much better methods and algorithms and whatnot to make sure this kind of thing never happens. Ask yourself one question: What if it had not been his wife – just someone he hated – how would it have been discovered?
There seems to be some confusion as to whether he applied for promotion, or he was selected for promotion by his superiors. If the former, then I must say he is such a dumb ass to not cover his background check before applying for promotion that it isn’t even funny. If the latter, then it is good fortune for the current Con+LD government to dig even more dirt on Labour, and the Labour party deserved it since it was them who for no reason (except to create another ministerial post and waste UK public money) decided to split the Home Office resulting in this mess plus others.
The whole point of that watch list is to discriminate overtly against Muslims in the name of “terrorist”. However, the average Daily Mail reader (aka Englishmen with inferiority complex) doesn’t know any Pakistani/Arabs/… so I suspect they won’t know anyone to put on watch list that wouldn’t flag the alarm bell immediately.
I live…Yashi…you folks are just going to have to carry on, whilst over hear, we contend with a bit of weather.
Hay Bruce what did I tell ya, asset D and wage I incoming all compounded by probably 50BB needing to be washed and dried before its all over (more rain and other goodies to come).
Skippy…Its all right, we’ll get there, as long as we look out for each other…these are the tests that matter the most.
I agree that the manner in which you and your mates handle this will be an indicator of societal resiliency in this time.
Good luck with that. Having spent two months in your country on both coasts and through the outback into Alice Springs, I don’t doubt the pluck is there. The challenge will be to manage the BS and spin along the way.
I can hear the “No worries Mate” in my mind and smile…..onward!!!
This Consumer Watchdog is an astroturfer with connections to Grassroots Enterprises – one of GE customers is Microsoft. No wonder they are on war path with Google.
http://news.cnet.com/8301-30684_3-20024449-265.html?part=rss&subj=news&tag=2547-1_3-0-20
http://www.wired.com/epicenter/2010/09/in-defense-of-google/comment-page-1
Re: Lambert Strether (and other articles on Egypt):
Obama speaking at a National Prayer Breakfast Thursday morning:
“We pray that the violence in Egypt will end, and that the rights and aspirations of the Egyptian people will be realized, and that a better day will dawn over Egypt,”
Translation: “We pray that Mubarek can get back to looting Egypt and increase his fortune from the currest estimate of around $40 billion to over $100 billion, and that the Egyptian people who have been earning less than $2 a day should learn to live on less than $1 a day. And not protest about their lot in life, so Mubarek doesn’t have to get violent again.”
The article from Der Spiegel is by far the best I have read about the arab crisis. And, by the way, it never said that democracy is bad for capitalism. It said that revolution is bad for business and therefore lessens the chances of the young poeple to find a job.
The positive point, although a bit cynical, mentioned in the article, is that being poor, young men cannot marry and therefore breed more young future unemployed.
As I mentioned yesterday, demography is at the core of the problem and that is not going to be solved quickly whatever solution is tried.
Dar spiegel article,
The implicit point of this article is that the population striving for democracy is bad for them as it is bad for the economy. OMG, where does one start in criticizing this perspective. There are too many 30 years olds, only a portion of them should expect to make a living the remainder should accept subsistence living. I can’t imagine a better way to foment violent radicalization. Its a species neo-liberal economic argument. This is the same logic that justifies the US fed being insulated from the democratic system. It is simply cloaking the true intent which is that those in power have no patience for even the slightest imposition on their will from the society in which they exist. One of the great sustainable perspectives of our time.
Demography is also a result of low incomes, since poor families often have more children to ensure that some of the children get a job and therefore the family unit can survive. Revolution, democracy and capitalism are not mutually exclusive, however if you are talking about neo-liberal capitalism, which has no basis in reality (doesn’t take into account social factors, nor the lack of complete information in any market, nor any kind of cartel, all of which exist in every market in the world), then of course they are mutually exclusive.
I don’t share your enthusiasm for the Der Spiegel article. Largely its a rehash of problems and forces going on in Egypt and the middle east already observed many weeks ago.
As to solutions, returning to pre-protest variations of neo-liberal methodology (read Mubarak’s reign) is exactly what is not needed. A third way must be found. That will by and large be local, but the purging must be done first. Whether this is in economic short-term best interests is moot to overall success (or failure) of a nation and its people.
The positive point, although a bit cynical, mentioned in the article, is that being poor, young men cannot marry and therefore breed more young future unemployed.
Some research suggests young unmarried men breed social unrest and violence instead of offspring. I would only call that a net positive if the unrest is in defense of liberty, and the violence is in response to brutal dictators. Then their children, when they have children, will have greater opportunity than their poor unemployed fathers.
Bernanke: Does He Really Think We’re This Dumb?
Simple answers to simple questions:
Yes.
We are actually dumber – being Homo Not-So-Sapiens Not-So-Sapiens.
The unrest in Egypt is all about food. The price of food is all about speculation.
People like Krugman or publications like The Economist will tell you there’s no such thing as speculation, it’s all about demand from China and India.
Ellen Brown debunks that in her piece: “The Egyptian Tinderbox: How Banks and Investors Are Starving the Third World”.
http://www.truth-out.org/the-egyptian-tinderbox-how-banks-and-investors-are-starving-third-world67424
“Some economists said the hikes were caused by increased demand by Chinese and Indian middle-class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.”
“An August 2009 paper by Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi, compared food staples traded on futures markets with staples that were not. She found that the price of food staples not traded on futures markets, such as millet, cassava and potatoes, rose only a fraction as much as staples subject to speculation, such as wheat.”
During the French Revolution the most hated people were grain speculators.
Thanks, well said. Trading commodities transfers and magnifies the inflation into the commodity item. Each trade should be taxed by 3-5% to discourage speculation for its own sake. calling traders parasitic is a disservice to parasites At least parasites only kill their hosts, not bleed every other organism in the eco system.
Yes, the French problem was that when they abolished internal trade barriers, wheat would go to where there was demand and so prices would equalize. The result was local famines in the poorer areas. Something similar happens with lowering of global barriers to trade in food.
Its not necessarily speculators. It is simply the effect of equalization of prices. I am not sure that a 5% transaction tax would help. It would certainly raise prices and limit mobility of supply. But would that really help? There might, as in France, be unintended consequences….
There might, as in France, be unintended consequences….
Would the unintended consequences be worst than mass starvation and death in the developing world? You sound like a concern troll.
I think his point was pretty clear, that there would be more mass starvations since most of the developing world doesnt feed itself. Closing the food market is equivalent to closing the oil market, some places would be awash with cheap oil/food and some places would not.
Its all fun and games promoting socialism until you look at the underlying demographics and soil quality and realize that large parts of the developing world’s population levels are only sustainable thanks to food and medical aid and access to cheap, subsidized Western crops. Especially in the Middle East.
Yes, a tobin tax would help greatly. Food prices dropped for decades until the 90’s, there was no issue of scarcity for the developed world. Right now, the “unintended” consequences of commodity trading in an environment of over-liquidity is putting wheat, soy and corn out of reach for some and claiming disproportionate discretionary money from many. Its exactly speculators, nothing else.
Wheat went to where there as demand in france? where isn’t there demand for food staples? unicorn world? No,they eat it too.
Trading can be really profitable, everyone understands that, there’s no reason to draw historical pseudo-economic parallels.
I forget the exact details about France. From a less than precise memory what happened was the ancien regime in the interests of efficiency abolished the internal tariff barriers to shipping wheat in the country. This might have been great long term, but in the short term, when there were bad harvests, wheat was shipped to those who could pay, so the result was much greater inequality of distribution, hunger and unrest which contributed to the revolution.
A bit like third world countries exporting food when their people are starving.
What consequences? Well, first of all, you would raise the price of wheat. I can see a small transaction tax, which might as with stocks damp pure speculation, but a % sales tax on every transfer seems like it might just increase the price of food. Also the commodity markets are used partly for farmer hedging. Probably we need that to happen.
Most honest traders are in favor of a Tobin Tax. I, among many others have promoted the idea to the sec and the cftc. As you say Rogue, it need not be large, even 10 cents per contract would discourge the HFT’s. But, much more is needed to prevent abusive trade practices, and governments need to be taken out of the equation completely. This morning I read on WL Central, How the US government interfered with Uranium sles by a Canadian company, yet did not prevent British firms from breaking sanctions on neuclear technology.. http://wlcentral.org/node/1202
Western governments allow or even assist their corporations in turning foreign farmland from food production to exotic crops which are valuable in the markets. Everybody wins except the poor who had relied on these lands.
Since our anotidotal primate is a living god, I assume the tithes and offerings he gets are all tax-free.
Denninger makes a very interesting observation, which I don’t think I’ve seen elsewhere. Am wondering what the implications are for the wider economy. Also, does this leveraging occur mostly in financials, or in other sectors too?
Continuing, my own nomination for the best analysis of the evolving Egyptian drama, its actors and interests, is the Al-Jazeera article by Paul Amar, “Empowering Egypt’s new pluralism”.
The situation is unsurprisingly, more complex than the standard we-them, Islamic vs. secular, pro government vs. anti, democracy opposes totalitarianism polemic appearing on the surface (and making such salable sound bites). That economics is a core element of the conflict and needs to be resolved on a base level is recognized by groups fermenting the unrest from M.B. to ‘leftist’ to yes, even a segment of Egypt’s military.
I suspect opposition groups have been waiting in the shadows, some for quite a long time, albeit not passively. Now is time for their place in the sun. Whether they whither on vine or prosper, this route must be tried.
Also on the subject of Al-Jazeera, another article from Michael Moran at MSN with a brief overview of the news organization (Cairo office just destroyed by presumably pro-Mubarak forces).
And yet another article from the Christian Science Monitor on the “pro-democracy” movement:
Egypt’s true revolution? “A leaderless movement, fueled by universal values”
Flattery for agitators. Something going on here.
Job title be damned! Monkeys know *nothing* about how to put up a house.
Jeez, furries are in the backwoods too.
Jamie Dimon, hyena. I understand that Dimon suffers ego damage easily, so will if any Dimon golfing buddies or family members read this blog, will they be good enough to forward that link on to him? Thanks!
guardian:
Food speculation: ‘People die from hunger while banks make a killing on food’:
http://www.guardian.co.uk/global-development/2011/jan/23/food-speculation-banks-hunger-poverty
aletheia; there are no depths to which some people will not sink, in the name of a one cent profit. But, it important to read the ‘whole’ article. Trading is not the problem. Rather, it is the artificial structure which sees a real world commodity turned into bits of code and multiplied so much that the real commodity is only worth a small fraction of the “investment/speculation vehicle”. Many commodities trade in excess of 10X the underlying asset. And then you add derivatives.
There are many causes for this unecessary suffering. Another major one is developed world subsidies. We live in cheap plenty because our governments support agriculture, but some of this same food finds it’s way into exports, where it competes with small scale farming. Result: the small scale farmer goes broke and when food prices rise, the local people starve because that ‘local’ farmer is nolonger there. We do the same with food that China does with manufactured goods.
The article cited raises a lot of questions, does it not? It confuses hedging and speculation to start with.
“There has always been modest, even welcome, speculation in food prices and it traditionally worked like this. Farmer X protected himself against climatic or other risks by “hedging”, or agreeing to sell his crop in advance of the harvest to Trader Y. This guaranteed him a price, and allowed him to plan ahead and invest further, and it allowed Trader Y to profit, too. In a bad year, Farmer X got a good return but in a good year Trader Y did better.
“When this process of “hedging” was tightly regulated, it worked well enough. The price of real food on the real world market was still set by the real forces of supply and demand.”
This is not how futures markets work, nor is the account of who profits correct. Ever since they were implemented, there has been a mixture of speculation and hedging. Farmers who are sellers hedge by selling crops in advance, and buyers buy them in advance, and the result is that each accepts potentially lower returns but eliminates uncertainty. You could not abolish futures markets and hedging today without dramatically raising costs, because the cost you’d raise would be that of uncertainty.
There is no particular pattern to who wins or loses, it depends on how markets move. Prices fluctuate up and down over the season. Basically, if you’re a farmer you lock in a price, and depending on weather and demand, you may or may not make the right decision, so you might have sold too low. As a buyer you might have bought too high. But at least you have fixed your price or your cost.
In addition to the hedging, there has also always been speculation. That is, people who had no interest or ability to take delivery bought future contracts, and people who had nothing to deliver sold them. Historically these people contributed to market liquidity, and acted to arbitrage price differences. To some extent the smooth functioning of the market required them. It is clear that at the moment, trading in commodities as in stocks is dominated by speculation – that is, buying and selling of futures contracts or instruments on them by people who have no possibility of taking delivery or making delivery.
But the article is completely wrong in suggesting that buying and selling futures by speculators is something that started in the 1990s. It has been around since at least 1900. Read about Jesse Livermore’s career.
Is it likely that this speculation is leading to higher prices? One would like to see the evidence, and the article does not cite any. It could well lead to volatility and price peaks and drops. But in the end, you buy October wheat, come October you either take delivery or you sell to someone who takes delivery. Commodities are expensive and difficult to store, and the problem is, more come on the market every growing season.
It would be quite sensible to have a small Tobin tax on commodity futures as well as on stock trading and currencies to eliminate high frequency trading. But it must be doubtful that doing that would have much or any effect on the overall level of food prices. As Paul Repstock says, the truly damaging thing we do is subsidize and protect our own farmers.
But you also have to consider that to the extent that this leads to lower food prices all over the world, abolishing it is going to have unintended consequences too, namely higher prices in the short term.
Doing good in this area is very complicated, and the first rule ought to be to do no harm. A 5% transaction tax, if it could even be enforced, would do immense harm and probably benefit no-one.