Reads to start your Friday morn off:
• IMF loses all faith in the euro project (Telegraph) see also Euro Falls Versus Most Major Peers Before Confidence Data (Bloomberg)
• LUCK, & HELPFUL ILLUSIONS (Stumbling And Mumbling)
• Housing: Not So Fast (Northern Trust) see also Why the bright spot in housing won’t save the economy (Fortune)
• Plotting a Securitization Sequel (WSJ)
• World braced for new food crisis (FT.com) see also Corn Prices Hit All-Time High; Time to Harvest Profits in ETFs? (WSJ)
• The end of decoupling (Foreign Policy)
• Bartlett: Will Defense Cuts Kill the Anti-Tax Pledge? (The Fiscal Times) see also Top 2% Not Job Creators Or Millionaires In Tax Debate (Bloomberg)
• Why does this look so familiar? Manipulation of California energy market gives consumers a jolt (LA Times)
• Old Records Are Outselling New Ones for the First Time (OC Weekly)
• Poll: John Roberts more popular among liberals than conservatives (CBS News)
What are you reading?’
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U.S. Speeds Its Selloff of Bailout Securities
Source: WSJ
Category: Financial Press
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
We can’t have widespread corporate corruption without a corrupted government. One of America’s great competitive advantages was our society had a much lower level of corruption than our major world competitors. We also had a Free Enterprise / Capitalistic Economy. A corrupt economy eventually did Russia in and it is a major handicap to China.
Mr. Ritholtz could you come up with a Corruption Scoreboard?
Regulators such as the Comptroller of the Currency & the Federal Reserve chose not to enforce regulations prescribed by law. There was plenty of evidence of wide spread fraud provided by the FBI long before the crisis blew up. They chose to ignore the abuses & the risk. They even protected the financial industry from state attorney generals.
The “MERS” system ignored property law. Early in the process the courts were used to run up the liens against defaulting properties. It was quite profitable.
We have testimony to Senate & House investigating committees providing evidence of wrongdoing & possible perjury & nothing meaningful comes of it?
We have designer accounting rules where we use to mark to market while values went up, but now we have mark to an opaque “model”. We have “off the balance sheet” financing & entities.
While Congress debated TARP the Federal Reserve & Treasury were secretly lending billions around the world. “Nonbanks’ were able to become banks so they could enjoy the subsidy of taxpayer support & protection, without congressional approval.
We have “designer taxes” whereby the super well connected are able to designate their “carried interest” for capital gain like treatment even though they do not have investment at risk.
Large financial behemoths have their financing cost subsidized by the protective arm of the taxpayer. This results in a misallocation of resources & levers up the risk. Economic decisions are skewed. This is a big number!
How is the massive transfer of income from the “savers” to the finance community (who caused the problem) good for the long term wealth of the country? Be it China or the US, the artificially low interest rates for an extended period of time is not a hidden tax, it is corrupt theft
Negative real interest rates in the face of a deleveraging private sector are not resulting in growth, but it is transferring wealth from savers to borrowers. Is this a free enterprise system?
The taxpayers made good AIG’s derivative contracts. Was there ever a full accounting of who got what and how profitable it was for the counter parties? No haircuts were negotiated.
Along the derivative line of thinking, is it representing the people that Greenspan, Summers & Congress ran Brooksley Born out of town? With 700 trillion notational dollars of contracts outstanding can we rest gently? No more black swans? Whose best interest were they representing & whose are being best represented now?
What Sheila Bair had not played a stalling game when WS wanted to have the same leverage controls that European banks had? Oh, the profits of 30 to 1 leverage on subsidized borrowing.
What part of our capitalistic system calls for the bondholders & stockholders to be protected by the good faith & credit of the US taxpayer? Is it right? Is all the Fed & Treasury done legal, without congressional approval….much is kept secret?
Bid rigging for municipal debt, the taxpayer losses & nobody goes to jail.
What of the merry-go-round between Wall Street, regulators, congressional, administration staffers & lobbyists? WS is equal donors to all to make sure they are always well represented.
It is documented in 2007 the Fed knew the Libor rate was being manipulated. Nothing impactful was done. We don’t hear about it until it blows up in Britain. This shouldn’t be a surprise.
Inequality in America is growing. 80 – 90% of Americans are experiencing a decline in their standard of living. Education is becoming less affordable. These are not short term trends.
Mr. Ritholtz is corruption the right word? Is America becoming more corrupt? Is America a country where the “well connected” are subsidized? Are we no longer a country where there is equality under the law? Do we no longer have a free enterprise, capitalistic economy?
Is America in decline? Inequality is a factor for failing nations. Is America becoming a “Failing Nation”?
Some more financial fraud:
http://www.latimes.com/health/la-me-lopez-erfollowup-20120401,1,4107078,print.column
One way to eliminate inventory… Guess who pays?
http://www.bloomberg.com/news/2012-07-19/ireland-bulldozes-ghost-estate-in-life-after-real-estate-bubble.html
not sure that the low interest rates would be that much higher even if the Fed changed theirs. the market for loans and bonds is on its back. there is no interest in loans by buyers (aka consumers) or by business (probably because of the former). and governments would rather not (state and local aren’t interested in loans, and if the Fed do implement austerity then expect loans rates to go even lower). banks dont use the old style of banking any more. they dont take in deposits and make loans using that. they are much more interested in fees, and investment in come. and low interest rates on savings accounts have been that way since the 1990s. the only that was driving loans was the credit and housing bubbles (one driven by that income disparity you mentioned the other by banks wanting have loans to sell to investors (aka suckers)). are we in decline? not sure but we certainly do have our problems. but then when did we not? the real question is will we get them under control? cause it seems like our government has been hijacked (by wall street and the banks). then a lot of that was regulators treating them as customers. when they ain’t. whle we had to save them (or see the great depression eclipsed. and then only the government could have done any thing at all, and we would have seen a rerun of the great depressions solutions. but hopefully WW3 wouldn’t be needed this time around). now you do know that savers are bond holders too right?
Student Loans..
http://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-Student-Loans.pdf
RE Bruce Bartlett’s nice piece (“Will Defense Cuts Kill the Anti-Tax Pledge?”), for every dollar the US Treasury collected in revenue in 2011 30 cents went to defense spending, a total of $700 billion. To call this defense spending is being charitable, because it could just as easily be labeled government welfare for the defense industry, despite the anguished sky is falling howls coming from hypocritical lawmakers and well-heeled corporate chiefs. Personally, I’m not so sure the automatic spending cuts scheduled to take place Jan 1, 2013 aren’t such a bad idea, because if there’s ever been an area of bloated, wasteful spending, it’s been for defense.
From the “Old Records” story:
———-
Jason Hughes, owner of Ballard’s Sonic Boom, says $12.99 should be the ceiling for new records, but dropping them any lower is a slippery slope. “As you lower the price of the CD, you’re lowering the value of someone’s art,” Hughes says. “At what point do you say ‘We’re going to sell them for $9.99 and [artists are] not going to be able to make a living off their music, or they’re going to have to tour 11 and a half months a year?’”
———-
This guy is unclear on the concept. How much does the artist make if ZERO music is sold because it is considered too expensive?
How is it the US needs to spend more money on defense than all of the rest of the world combined? We don’t even have a meaningful discussion of priorities. We are sheep, controlled by others.
We have our debt growing beyond our ability to pay when the artificially low rates expire. Our debt will crush growth Are we Greece? No, but we may be Japan.
Whatever wars we are fighting, we may lose by failing from within.
While our infrastructure is grade D and falling apart let alone building for the future. Our education is also falling behind.
As for electric markets,
Solar Panels and a Volt protect you from energy market, Electric and Oil, FRAUD.
As for defense, you could give the military a 20% raise and SAVE MONEY, if you increased enlistment, and Killed Outsourcing to Blackwater, Ze, or whatever they’ve named themselves this week.
Barry should do a story on Bain, how they make their money:
- Taxpayer.
- Breach of Trust by breaking contracts with: Suppliers, Workers, Bondholders and Shareholders.
Did I leave anyone out.
And then the profits go to the Cayman Islands: Trickle OUT of the Country.
Which means “Trickle Down” is Dead.
Three numbers on Global Warming.
http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719
As always
http://www.skepticalscience.com/
Krugman smackdown?
http://www.businessweek.com/articles/2012-07-19/krugmenistan-vs-dot-estonia
Canada’s Housing bubble? (short on analysis)
http://www.businessweek.com/articles/2012-07-19/krugmenistan-vs-dot-estonia
The OC Weekly story is really a find. Sweet.
banks try to repeat their mortgage fraud scheme?
http://www.reuters.com/article/2012/07/20/us-banking-libor-settlment-idUSBRE86J00H20120720?wpisrc=nl_wonk
i thought investors elected board members?
http://www.bizjournals.com/austin/news/2012/07/19/dell-ceo-gets-second-most-votes.html?ana=yfcpc
guess not any more
There are no Neo-Sultans of Swing