Dear readers, I hardly feel entitled to mention my comparatively mild travel hassles today (getting in a bit over four hours late) given the real problems some of you have encountered. But the delay means no proper new posts from me until tomorrow night.
Neanderthals ‘cooked vegetables’ BBC
A Pinpoint Beam Strays Invisibly, Harming Instead of Healing New York Times
Passenger Outrage Rises as Storm Snarls U.S. Travel Bloomberg. Dunno why this story features American as the bad actor in the customer access category when Delta was worse (not providing any information on its website on Monday nor taking calls on its 800 number).
Amazon Mistakenly Reveals Kindle Sales Figures? Beyond Black Friday (hat tip reader David C)
China cuts rare earth export quotas Los Angeles Times (hat tip reader James S)
Chinese missile shifts power in Pacific Financial Times
America’s cracked political system Guardian (hat tip reader May S)
Derivatives Clearing Group Decides Against Registration New York Times
2011 Will Bring More De facto Decriminalization of Elite Financial Fraud Bill Black, New Deal 2.0
Antidote du jour:
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Yves, thank you for notes from the gulog; what passes for an airport transportation system.
Reading about the neglect and treatment of people at airports, on airplanes and in the subways during the emergency at holiday time, it is obvious the human impulse, indeed passion, to mobilize and organize ourselves to come to the aid of our fellows and the assets to do so have been bled out of the system.
They have been bled out of the system by corporate finance cruelty (greed is too trendy a word to convey any meaning anymore); a system organized and run by glorified bean counters criminalized by the banking cartel extraction system they serve. Bleeding them dry takes on new meaning.
I’ll resist the rest of the rant to welcome you back to the city and wish you the best for the holiday and continued success for the New Year.
Thank you for a great blog.
Nothing prevents us from engaging in random acts of kindness. Last summer during the Icelandic volcano eruption, I went to the ‘cot city’ at JFK Terminal 4 and invited a couple of stranded Brits to our house. They enjoyed three days of B&B style vacation, and we enjoyed hosting them.
Bill Black doesn’t mention securitization of mortgages. That is probably the single biggest contributor to the executive’s fraudulent behavior.
They were able to move the first lien loans directly out of the banks books and into securities sold to third-party investors. As a result, it was the gift that kept on giving with little opportunity for the loans to go bad while on the banks books. Ultimately, our best hope is the state AGs since many of the these securitizations and foreclosure proceedings may be running afoul of their state laws while the banks and investors were circumventing recording fees etc.
I suspect that the decriminalization at the federal level will end when the HELOCs blow up on the banks since many of those are still on the bank books. The banks appear to have been trying to push that issue as far out on the time horizon as they could. At that point the FBI investigators may be able to figure out that these executives can actually blow up a bank while pocketing massive bonuses.
I’m a rank amateur, and far be it from me to disagree with Bill Black, but it’s hard to avoid the impression that the wheels are falling off faster than lawmakers can fix things. By all accounts, Dodd-Franke is a codification of the way things are, which we know is unstable. Even slashing the budget won’t fix the banks.
Extend and pretend will ultimately fail, probably sooner rather than later. This will lead to a repeat of the behind-closed-doors bailout negotiations. We won’t get a chance to vote on it. We won’t even know about it until after it’s happened.
So what will we do when we read the news one Monday morning and find out that BofA, Citi, and Chase have all been bailed out again? Would you be willing to strike? Protest?
“The fundamental flaw is that DOJ’s senior leadership cannot conceive of elite bankers as criminals.”
This refusal to look at facts rather than continuing to accept false assumptions is what is fundamentally wrong with the USA in its current fast ride to the bottom.
Bankers cannot, by definition, be criminals. Journalists are, by definition, skeptics eagerly seeking the facts. Political parties are, by definition, equally guilty of demagogy and spin.
There is an entire political movement in the US which keeps its own set of facts – the Teabaggers, who know that Obama is a foreign-born secret Muslim, no matter what the facts may be. Ain’t livin’ long this, are we, baby?
As pointed out in the article, the DOJ doesn’t understand that the CEOs are robbing the shareholders and employees. They think that CEO = owner, so they can’t rob theirself.
If a trader was reported doing something wrong, you can bet the rent-a-cops would be all over them like white on rice.
I think the really interesting cognitive dissonance is in calling Julian Assange a “terrorist” and “traitor” (to whom, exactly?), but nothing being said about the New York Times, or dozens of other papers publishing the material. Do people with white hair and odd accents not get to be journalists? If the NYT paid him a salary, it would cease to be terrifying?
‘Delta was worse (not providing any information on its website on Monday nor taking calls on its 800 number).’
I can corroborate this. My brother-in-law was scheduled to leave Newark Monday on Delta. He couldn’t get through on the phone. So he drove to EWR, used his gold Delta card to skip to the head of the line, and still was only able to secure a flight out on Thursday.
About “Passenger outrage rises”
At the same time that Delta’s online and telephone rebooking systems were down, Delta was selling new tickets for the seats that canceled passengers needed to be rebooked to.
Half the stranded passengers I know have wound up buying new tickets.
The snow storm caused 2-3 days of problems. The rest was due to the lack of flexibility and extra capacity in the air travel system and by the unwillingness of those airlines hit hardest (Delta because of its main hub in Atlanta) to send passengers to other airlines not hit quite as hard.
From Neanderthals ‘cooked vegetables’ link:
Professor Alison Brooks, from George Washington University, told BBC News: “We have found pollen grains in Neanderthal sites before but you never know whether they were eating the plant or sleeping on them or what.
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Now that they have shown Neanderthals cooked vegetables, will they be able to demonstrate that our nearest relatives gifted us the idea of a roll in the hay, as Professor Brooks hints?
Of course, the real tough question is this: Which came first – rolling in the hay or cooking vegetables?
My guess is they first discovered ‘rolling in the hay’ which one day led, accidentally, to fire in the cave, but, with human discoveries being often serendipitous, also breakfast with cooked vegetables the next morning.
Do we hurt only those close to us, at least initially?
Were the Neanderthals the first victims of our tendenacy to wipe out species?
First these guys, then the Denisovans and the Flores Man – our relatives…all gone today.
Or did they simply succomb to diseases, lack of food or some other causes?
From the ‘but we’ll take any gubmint money we can get’ files:
“If anything, HAMP distracted servicers from developing more targeted techniques to modify the loans and foreclosing or using short sales for the loans that were never going to perform.”
Rough Seas Ahead: Little Relief Projected For Servicing In 2011
http://www.mortgageorb.com/e107_plugins/content/content.php?content.7407
On China’s rare earth quotas from Resource Investor:
“The quotas (China’s) amount to a figure which, if extrapolated for the entire year, would almost approach the 30,000 tons that were set for 2010. This is roughly what the industry expectation was, according to one insider. However, the media seem to have created a version of the story that may have the effect of extending supply fears in the fringes of the industry, and hence further influence the prices of underlying rare earth oxides.”
and
“I believe the 14,508 tons allocated for the first half of 2011 is probably as realistic as it gets with current insight into the market.”
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You can dice it how you like (and China’s opacity and liquidity of REO markets isn’t making the task any easier), but a few things are clear.
-China’s demand for REOs will exceed its own internal supply in 2 to 5 years. Japan and Western countries will need to find additional means to extract and process those ores in the near and long term future.
-Japan, earlier this month, moved aggressively to insure its own non-Chinese supply of these elements – Japanese deal to end China’s supply grip on rare earths. Some have speculated that move has contributed to the panic we see today and much as the quota announcement. Coincidently, Japan appears poised to invest in the Molycorp Mine in Southern CA. which leads to…
-Shares in REO mining ventures have jumped, across the world on this news.
Some speculation on the last point.
Given that China’s tack has been historically to undercut and eventually eliminate the competition through substantially cheaper prices, one has to wonder what is gained by forcing higher costs, thereby bringing those other production and mining sources back on line?
The answer is, China has no ability to endlessly continue the strategy of the past and short term monetary incentives to not. She can’t produce outside her continuing growing internal demand. Internally, demand will in short order (or whatever time frame) exceed supply. Furthermore the additional price upticks will only make REO’s more profitable, something which I doubt is unplanned.
In addition, China does not have monopoly on all REOs. She is primarily a source of light REOs, not more valuable heavy elements in the group. Canada and Australia (among others?) are, and China will need to secure those sources as will any other nation to fulfill expansion and scaling of new technological innovation. It would not behoove her not to extract too great a burden on buyers suffering under the current regime, as that will undoubtedly not be a market of the future…in other words to play (somewhat) fair.
“‘[Now that China can take out any carrier worldwide in 10 minutes], how then do you use carriers differently in the future?’ Mr Gates asked.”
Well, if the USS Midway in San Diego is any guide, carriers make charming museums.
Oh, he means different MILITARY uses. Um, none? World War II, the carrier war, was 70 years ago. Is it a good idea to use a 70-year-old platform as your strategic centerpiece? If WWII naval strategists had done this in 1941, they would have chosen Civil War ironclads. And they would have lost.
How can this be so obvious to even a casual observer, yet invisible to a career military man? Astonishing.
In Naval circles awareness has been widespread for decades that carriers are archaic and in many ways quite vulnerable, and within the Navy their proper role has been debated ad nauseam. But the Byzantine complexity of the politics of long-term military planning and procurement strategy makes simple bureacratic inertia much more potent than logic and analysis. Ultimately, it is precisely because carriers have been the heart of the Navy for so long that it is so hard to move towards doing things any other way. While that longevity means that the Navy knows how to operate a carrier force, they don’t really know how to be effective with hypothesized alternative force structures. The Navy is deeply conservative, and the attitude is “better the devil that you know.” Don’t expect things to change until the sad day that US carriers are actually once again, as in WWII, sunk in combat. In the US Navy, only blood can overcome inertia.