Perspectives on the global economic meltdown (Jan 26 2010)

abhishek_sharma · Post by **abhishek_sharma** » 31 Aug 2010 08:40

EU Prods China for Faster Yuan Rise: G20 Draft

http://abcnews.go.com/Business/wireStory?id=11504454

Neshant · Post by **Neshant** » 31 Aug 2010 10:36

Nothing. The issue was whether the govt. should stand by and let millions of paid-up insurance polices become worthless, just in the interest of Austrian Free Market religion. There is no way that this would have been responsible behavior from the government, so shoring up AIG was essential.

Its nothing more than robbing Peter to pay Paul. The sillyness of keynesian economics which requires one set of people to be ripped off to cure another rip off is fast approching its mathematical limits. Its like viscious pyramid scheme. It destroys the people who were financially prudent but are hanging on with marginal profitability, teetering on the edge due to all these govt wealth confiscation & destruction schemes.

The responsible thing would have been to let Paul sue S&P, Fitch and Moody's and various Goldman sachs type con man organizations. That would have 2 benefits. One it would help the real economy by shutting down this useless middleman industry which is a needless drain on soceity's wealth. Two it would help Paul recoup some but maybe not all of his losses. All this assumes a straight govt and judiciary which isn't the case.

enqyoob wrote:If they are not going after them, that says that there is no substance to the allegation that there was wrongdoing or even actionably irresponsible behavior

You have not woken up to the level of corruption in the system and seem to think there is some level playing field when it comes to justice. Trillions have evaporated and yet some are still feigning ignorance over the scam that vaporized it.

Plainly speaking, there is no way in hell the US govt is ever going to open up its rating agencies, goldman sachs or anyone else to being successfully sued by locals because it paves the way for a massive lawsuit against them by foreigners who got sold this junk. So the charade of non-accountability continues. Much like India which could have tons of overpriced New York lawyers to sue Union Carbide/DOW, nobody is going to get anything other than a morsel in damages.

Lawyers have gone after these crooks, civil suits are pending but all rulings will go as follows regardless of the facts once the judge gets a visit from goons in govt and is advised to rule in favor of the "greater good". The greater good of what one wonders..

Judge Throws Out Suit Against Moody's and S & P
http://dealbook.blogs.nytimes.com/2010/ ... s-and-s-p/

May I remind you that pension funds are obligated by law to seek ratings from these fraudsters before making investments in "safe" AAA rated products. Where is the fiduciary accountability that sends financial con artists to jail for 20 years?

Way too many banking goons like Rubin, Paulson, Geithner, Summers, Bernanke and various ex-Goldman sachs scammers have created a revolving door between banking careers and govt jobs. They exist only to open loopholes for their cronies to saddle the people with liabilities without legal reprecussions.

Most of these institutions that you condemn so freely, were formed by thoughtful people to prevent a recurrence of the utter devastation that followed the 1929 stock market crash,

You got it backwards, most of these institutions are the cause of the crash both then and now. What pulls the economy out of a rut and holds it up is the innovation and hard work of millions of people in the real economy, not the financing & BSing by money counterfeiting crooks. I notice they are quick to take credit for stuff they have no hand in but never quick to credit themselves for wrecking things as they have. "The Creature from Jekyll Island" is a good book to learn about the Federal Reserve.

Printing and soon major tax increases and other idiotic wealth destroying schemes are coming down the pike to pay for it. I predict by the time this is all over some 5 to 10 years out, the federal reserve and their 'independence' to commit grand theft will be sent packing.

Hari Seldon · Post by **Hari Seldon** » 31 Aug 2010 19:10

Aah....so it begins....

Broke City Breaking Employee Contracts

The city of Miami is so broke it's forcing employees to take pay cuts, even though they're under contract. Mayor Tomas Regalado said he's never seen a financial mess like this before, and his options are grim.

“It's either that or we layoff 1,000 employees or we raise taxes to the max, and we're not raising taxes to the max,” the mayor said.
...
The city is operating under a state of "fiscal urgency," declared earlier this summer. The budget deficit for next fiscal year is about $110 million. The proposed cuts in salary, pension contributions and health insurance costs amounts to about $86 million in savings for the city.

That fiscal urgency declaration allows city commissioners to impose salary cuts on employees, despite their contracts.

Charlie Cox, who represents about 1,100 general service workers, said employees with valuable knowledge will retire or find work elsewhere. {Really? In this ekhanomy? With a full-service defined-benefit benefits package? wow, tell me about it... the threat to walk away is BS, IMHO}
“We're going to have a ton of people leave the city and the institutional knowledge will be gone,” he said.

Requires only the first few of city and local and maybe even state gubmints to blaze the trail and within a coupla yrs a majority of the rest of the country will follow, IMHO. Unlike local gubmints, states cannot declare bankruptcy, so dunno how contract-breaking will work in that case. This threatens to get ugly real fast. But have no fear, this is more mere D&G mongering only. The sky won't fall or anything. Life will go on for the vast majority of ordinary folk, I suspect.

Requires

Hari Seldon · Post by **Hari Seldon** » 31 Aug 2010 19:14

Meanwhile, more provocation from sri enfant terrible only....
Ron Paul questions whether there's gold at Fort Knox, NY Fed

Yeah, good luck with getting answers anytime soon to that one, Ron....LOL.

Singha · Post by **Singha** » 31 Aug 2010 19:43

heh heh..wrong question to ask.

Hari Seldon · Post by **Hari Seldon** » 31 Aug 2010 20:43

William Black: Theoclassical Law and Economics Makes the Law an Ass

Bill black, a hero of the post '87 S&L crash and cry-sis, is like Smt Liz Warren, seemingly a genuine American patriot. Calls it like he sees it and like it is.

Must read, IMHO.

First, he tells it straight on the economics of buying up judicial election campaigns by corporatist interests....

The Supreme Court’s Citizens United decision allows businesses to make unlimited political contributions to judges and politicians. When judges are elected, the need for these contributions inherently turns judges into politicians. Sympathetic judges are corrupt businesses’ most valuable allies. Corporations and their senior officials can commit civil or criminal wrongs with impunity if their case is assigned to a friendly judge. The Robber Barons often had judges on their payrolls. Judges can serve a corporation as both a shield and a sword. They can declare statutes and regulations unlawful. They can issue favorable decisions when corporations sue their critics, which can intimidate, tie up, or even bankrupt the critics.
AWMTA, NJBRIE gawd, AWMTA

The fact that corporations are “investing” so heavily in getting pro-business judges elected demonstrates that their CEOs believe that the election of friendly judges will increase their incomes and decrease the risk that they will ever be sanctioned. It’s a business decision – not a decision based on which judicial candidate would be more qualified or better serve justice. CEOs want to win cases when doing so would be unjust and contrary to the law, which is why they hire top attorneys and make the contributions necessary to elect judges they believe will be allies.

The empirical evidence in Texas shows that judicial elections and contributions produces perverse dynamics. One study showed that hiring the former law firm of a Texas Supreme Court justice markedly increased the chances that the Texas Supreme Court would exercise its discretion and hear your appeal from an adverse decision. Hiring the former law firm of the Chief Justice of the Texas Supreme Court produced an even greater chance of having one’s appeal heard.

AoA indeed. Seems like only the cheeni judiciary is honest and non-corrupt in the world.

sri Black also describes a sinister plot to takeover univ depts wholesale - the same thingie the arabs and cheenis and packees have suck-cessfully done to sanitize and promote their respective POVs through US academia... Oh, sri Black spares none only. Rips apart the Austrian school for some of its dogma....

The Chamber is one of the points of intersection in the discussions about electing judges and whether law and economics has played a perverse role in causing catastrophic policy, regulatory, and judicial blunders. The Chamber distributed a plan for a hostile takeover of university departments of economics and finance (and the courts and the media) proposed by Lewis Powell (the soon to be Supreme Court Justice). Extremely conservative “law and economics” proved to be central to this effort. The law and economics movement began as a non-ideological approach to explaining and aiding judicial decision-making. The scholars leading the movement had diverse views. The Olin Foundation transformed law and economics into an ultra ideological field dominated almost exclusively by passionate opponents of government “interference” in “free enterprise.” Olin specialized in creating well-funded positions in academia for scholars that had an “Austrian” approach to economics. Austrian economics has, generally, become more extreme since its formative years when Hayek warned that mixed economies (e.g., the U.S. and Europe) were inevitably consigned to the Road to Serfdom.

Theoclassical law and economics scholars continued to chant the second signaling dogma – though falsified throughout the S&L debacle and Enron era accounting control frauds – throughout the nonprime mortgage era. They asserted endlessly that modern executive compensation “aligns” the interests of the CEO with the shareholders’ interests. The reality was that it frequently magnified the long-standing misalignment of those interests.

Mike Jenson's folly. And Fama pitched in driving the lastest nail into sanity's coffin on that one.

Sorry neshant bhai, but do let me know if sri Black is referring to a different Austrian school to the one we profess....

The third “signaling” dogma, however, is never discussed today by theoclassical law and economics scholars. The Austrians generally ignore the endemic accounting control fraud (their heroes have always been business cowboys) in their explanation of why we suffer recurrent, intensifying financial crises. The Austrians love to blame the Federal Reserve and “easy money” for producing low interest rates. The Austrians claim this led to excessive leverage, and blame the global crisis on extreme leverage. It is inconvenient to this new meme to recall that the extreme law and economics scholars used to light candles to leverage and chant its praises as a unique signal of honesty. Accounting control frauds do optimize fictional accounting income by engaging in extreme leverage. The leverage is a tactic of the accounting control frauds that drive modern crises, not the cause of the crisis. Because accounting control fraud produces exceptional reported income it is easy for the frauds to borrow enormous amounts (lenders virtually break down the frauds’ doors in their eagerness to lend). The more money an accounting control fraud borrows, the greater the sums the CEO can loot.

Michael Milken was the original high priest of the extreme leverage dogma and the claim that it signaled honesty (Fischel was his acolyte). Milken was, of course, an expert at signaling honesty while practicing control fraud. His time in prison only increased his hate for U.S. government “interference” in “free markets.”

And so on and on. Read it all, only.

Jai ho.

Pulikeshi · Post by **Pulikeshi** » 01 Sep 2010 00:47

Neshant wrote: Printing and soon major tax increases and other idiotic wealth destroying schemes are coming down the pike to pay for it. I predict by the time this is all over some 5 to 10 years out, the federal reserve and their 'independence' to commit grand theft will be sent packing.

Neshant,

Your arguments are logical.
However, no matter the form, institutions will exist in one form another.
Two things are missing currently as you point out accountability and competition.

Each of major institutions set up were put in place to solve one set of problems -
The problem set has obviously changed since the early part of the last century.
If the Fed, WB, IMF, etc. disappear, new ones will take their place - cynical but true.
It is easy to rant against what is not working ala Marx and provide no solution.

What will be more useful (I suspect I am not smart enough yet to figure out the answer) -
is to argue what the world and its institutions ought to look like to make it work better.
Especially, if dollar will no longer be the only wapum - what other institutions need to come
about in order suit a multi-polar world.

Even if a meltdown occurs what do we want the post meltdown world to look like?
Something to think about...

Neshant · Post by **Neshant** » 01 Sep 2010 05:07

Hari Seldon wrote:Meanwhile, more provocation from sri enfant terrible only....
Ron Paul questions whether there's gold at Fort Knox, NY Fed

Yeah, good luck with getting answers anytime soon to that one, Ron....LOL.

This isn't new. He's been asking for an audit of the gold at Fort Knox for a long time (decades). Interestingly an audit has not been conducted in over 50 years. The reason given is that an audit would be too expensive.

RP goes after these issues not because he expects any breakthrough but to highlight the fraud going on to the public.

His recent Audit-the-Fed bill got sabotaged when 140+ senators who voted to co-sponsor the bill when people were watching, quietly changed their stanze and voted against it when nobody was watching. Again he never expected it to pass but he uses the opportunity to expose the fraud so people see who really pulls the strings.

Neshant · Post by **Neshant** » 01 Sep 2010 05:24

Pulikeshi wrote:Two things are missing currently as you point out accountability and competition.

Not sure I understand your points here. Currently there is no accountability and the competition is to see which bank can game the system and maximize profits through thieving. Proxy organizations like the federal reserve (printing) and govt (taxing, bailouts, spending) have turned into conduits of the people's money to these scamming companies. I can't see how this is a good idea.

Pulikeshi wrote:Each of major institutions set up were put in place to solve one set of problems -

Sorry I disagree. The only reason the federal reserve was set up by banks is to pass their losses to suckers so they can perpetuate their role as middle men. It solve no problem but rather creates one.

Pulikeshi · Post by **Pulikeshi** » 01 Sep 2010 07:26

Neshant,

What is the alternative? What system enables the free flow of credit?
Should all countries disband central banks?
Perhaps most of us are not ready to live like the "no money man"

One could correspondingly argue - Parliament or Congress is full of crooks -
ipso facto we need no Government!

Not sure if you have read - Lords of Finance, A term at the FED, Empire of Debt, etc.
We can agree to disagree, but I do not see much value in what Marx did in his entire life -
Ruthless Criticism with no tangible solution except to expect a revolution.

"I am referring to ruthless criticism of all that exists, ruthless both in the sense of not
being afraid of the results it arrives at and in the sense of being just as little afraid of
conflict with the powers that be."

Neshant · Post by **Neshant** » 01 Sep 2010 09:25

You have confused capitalism with croney capitalism.

Croney capitalism is where a useless middleman inserts himself into the equation and claims his presence is of critical importance to the functioning of the system. Really he's just living off the backs of everyone else and fooling a great majority with slick talk of high finance.

Such is the federal reserve and such is fractional reserve banking. Getting rid of both of those would pave the way for an alternate system where the money supply is based on competing currencies some govt and some private issued all of which would be legal tender. Of course no competing currency system would be complete without the only thing that keeps the accounting straight - gold.

Investment capital should come from savings and not thin air as decided by some money printing king at the top who has a monopoly on legal tender. As is becoming apparent, he is no wiser than a guy rolling dice. Of course he and the banks behind him have their own profit motives for claiming why their monopoly and secrecy (in spending people's money) are absolutely essential to society.

Most people accept the present system because they don't realise what's coming down the pike - which is a major fall in living standards which will destroy many who have been financially prudent. When that happens, a good number of people will wake up and realise they have been conned.

Hari Seldon · Post by **Hari Seldon** » 01 Sep 2010 10:05

Outlining the contours of a 'new' system to replace the current one after it melts down is a bridge too far since, as sri pulikesi has himself stated, those waiting for meltdown are wasting their time and all that. I happen to agree.

Much nicer trying to plug the holes in the current ship, IMO.

To start with, how about reinstating all the protections and regulations set up after the harsh lessons of the great depression and that were subsequently subverted and dismantled in the past 3 decades, eh? Not just glass-steagel but also reversing the dereg of derivatives and the fraudulent accounting standards (FASb FAS 157 anyone?) that are currently enabling misstatement of value on a scale unprecedented in human history.

How about prosecuting and actually jailing the perps in the mortgage and the banking industries responsible for systemic, widespread, brazen fraud in the housing bubble mania years? And the perps who knowingly, fraudulently sold BS in the form of AAA-rated MBS only to pension funds and such all over? How about reassuring mango public that the law still reigns supreme and white collar high crimes don't go unpunished??

Or, more importantly, see the bigger picture - how about returning control of currency to the people, to whom the constitutional founding father types had originally bestowed, eh? How about nationalizing the Fed Reserve - making it more of an RBI type institution - so that its principals are the people, not the 14 odd regional Feds whose boards are populated by reps from the private banking cartels?

How about breaking other freaky cartels in there - such as the healthcare one - both by the AMA and the pharma firms and the insurance industry sharks?

And so on and on.

But I am a pragmatist and no idealist. I realize these things are entrenched into status quo and won;t move anytime soon. Only concentrated crisis can perhaps kick them out. The current 'crisis' ain't nowhere near concentrated and threatening enough for that to happen.

Bottomlime: Things will likely get worse before they get better. Whether it is slow drift towards stagnation over a decade (the Red Dwarf model) or a more dramatic contraction that defies easy control (black whole types?). Let us hope things don't get much worse only. The US public will hopefully sooner rather than later wake up and do the right things.

Can't help but notice that those berating, mocking and mudflinging on this thread still manage to find time and bother to visit it though. Funny how that works, eh? Most welcome, btw. The critics help keep perspective, balance, introspection and all those nice things. No point having an echo chamber in here. Oh, no. Only.

Jai ho and have a nice day, all.

Pulikeshi · Post by **Pulikeshi** » 01 Sep 2010 10:25

Not sure I fully understand capitalism much less crony capitalism

However, as Hari has pointed above - there are many options that interested could pursue
even within the current system.

Keep in mind that the FED minds the NAIRU and is the bank of last resort.
By the way, the great depression occurred when there was a gold standard!

This may be of interest to some here for those who are aware of "The Lords of Finance"

Liaquat Ahamed: Learning From the Great Depression

Notice the explanation he provides on 'shadow bank's' versus brick and mortar banks....
Also, see the response on India and lack of 'shadow bank's'

ShivaS · Post by **ShivaS** » 01 Sep 2010 12:12

In the name economies of scale the Ati trust Laws have been sabotaged since late 1989. With more and more conservative judges who have been converts to bogus free markets, anti regulation and in the pockets of energy executives cheer lead by Dick Cheny have struck at the rrots of one of the best and near free markets in the world.

Case in point the Enron episode in which energy executive very skillfully sabotaged the environmental regulation by switching to Natural Gas from coal instead of improving coal technology so as to pay less for carbon emissions and to aviod capital expenditure (which is infrastructure development and job generating). Till the natural gas was going abegging with TV adds exhorting it use and price.

SO enron goes to california the natural gas generation picksup dryng up cheap NG, the investment in refineries is stopped because of environmental regulations, petrol(gas) prices go up aka manipulated at the pump in addition the number of brands, Shell BP Amaco, Exxon, and number of them consolidate reducing monopolistic compettion to monopoly...

you see the result.

One president had intern in bed romm one vp slept with oil executives in the presidential mansion.
One lowered the thershold of the meaning of cex one lowered the meaning of Honesty and integrity, the other lied to get us into war....

Neshant · Post by **Neshant** » 01 Sep 2010 12:14

Pulikeshi wrote:By the way, the great depression occurred when there was a gold standard!

The great depression had nothing to do with the gold standard any more than the boom of the 20s was a result of the gold standard.

The federal reserve fiddling around with the money supply in the 1920s created an unsustainable credit-driven boom. Not too different than what has happened in recent times.

If you trace these disasters, they all have one thing in common. Some bernanke type joker at the top has a monopoly on things and deludes himself into thinking he knows more than the market. Either he starts a printing spree or lending spree or spending spree or debt spree or some spree to the benefit of the shareholder banks and things end up running amuck. The federal reserve however exists to transfer those losses to the productive people of the real economy full knowing that their fiddling around will eventually screw things up.

Unlike the 20s however, there is no gold standard against which the US dollar can be devalued as a quick fix. This presents a serious problem that will unfold in the next 3 to 5 years.

Pulikeshi · Post by **Pulikeshi** » 01 Sep 2010 18:56

^ That may very well be that doom and gloom awaits us... It is hard to converse with dogma.
That the FED overstepped its mandate, that it could be more open in its voting, etc are all valid.
One could even argue an alternate world that did not require the FED, but what is the theology
of the structure that replaces it? Would be interested to know the exact mechanics
of how Gold Standard would prevent danger of contagion in the 'shadow bank's'?
Someone can correct me, but it may be approximately 10 trillion in regular another 10 in shadows now.
Also, without FED who maintains the NAIRU? Does the Gold standard solve that as well?

If the great depression was the imbalance between Europe and the US,
this current one is the imbalance between Asia and US.
However, notice China is still not in a position to take up the mantle of world finance
and monetary policy. The perturbations will continue for a while.
Meaning, it would be prudent to expect couple more bubbles. The outlook remains frothy!

If you paid attention to the Ahamed Q&A session, there are folks saying something similar
in terms of outlook over the next couple of years. Malthus and Marx may yet have a second life.
As long as money and fools exist, we all have a fighting chance.
Please elect leaders and governments who give us a fair chance!

Pulikeshi · Post by **Pulikeshi** » 01 Sep 2010 22:25

Something more to chew on -:
(Mises and Hayek are prehaps the wisest of wise men the west has produced)
Most libertarians should have no ideological fear listening to them. However, the problem of
setting up competing currencies is in its implementation. How does one work with or without
nation-states to bend them into this supposed new way?

The question that I have not seen answered yet, is even if such a scheme were accepted
have we found the panacea for market failure? If dis coordination problems occur even in the
free market, would that not occur despite currency competition. If so, then what?

Friedrich August von Hayek

IX. Denationalization of Money
Hayek as a monetary reformer is interested in minimizing the potential for discoordination that is inherent in monetary mechanisms and precluding the manipulation of money for political advantage. He has long doubted that the government has either the will or the ability to manipulate the money supply in the public interest.
In his early writings Hayek took for granted the existence of a central bank and focused his analysis on the consequences of different policy goals, e.g. the goal of stimulating economic growth or the goal of stabilizing the general price level. In his later writings, he began to see the monopolization of the money supply as the ultimate cause of monetary disturbances. As early as 1960, though still "convinced that modern credit banking as it has developed requires some public institutions such as central banks, [he was] doubtful whether it is necessary or desirable that they (or the government) should have the monopoly of the issue of all kinds of money" (1960, p. 520, n2).
In the mid 1970s Hayek's interest in the denationalization of money (1976) was renewed. Having lost all hope of achieving monetary stability through the instruments of highly politicized monetary institutions, Hayek suggested—by his own account, almost as a "bitter joke"—that the business of issuing money be turned over to private enterprise. Soon taking this suggestion seriously, he began to explore the feasibility and the consequences of competing currencies.
Hayek's proposal for competition in the issue of money is not subject to the standard objection based on the so-called common-pool problem. The proposal is not that private issuers should compete by issuing some generic currency. Clearly, competition on this basis would produce an explosive inflation. The proposal, rather, is that each competitor issue his own trade-marked currency. Under this arrangement, each issuer would have an incentive to maintain a stable value of his own currency and to minimize the difficulties of using this currency in an environment where other currencies are used as well.
In spelling out just how such a system of competing currencies would or could work, Hayek has had to walk the fine line between constructivism on the one hand and blind faith the the market process on the other. His discussions of possible outcomes of the market process should not be taken as prescriptions for the provision of competing currencies, but rather as a basis for believing that competition between private issuers is feasible. Individuals may choose one currency over another on the basis of the issuer's demonstrated ability to achieve purchasing-power stability for that currency. Their choice may be influenced, Hayek has suggested, by what particular price level serves as the issuer's guide for managing the currency. Or it may be that public confidence can be maintained only by a currency that is convertible at a fixed rate into some stipulated commodity or basket of commodities. Hayek does doubt that a gold standard would re-emerge as result of the competitive process, largely because the confidence and stability of gold was based upon beliefs and attitudes on the part of the public that no longer exist and cannot easily be recreated. But if gold did prevail in a competitive environment, there would be no basis for objection.
More importantly, Hayek's proposal for monetary reform should be seen not as an aberation from but as thoroughly consistent with his view of economics as a spontaneous order. Markets serve to coordinate the activities of individual market participants. The use of money, while greatly facilitating economic coordination, contains an inherent potential for discoordination. Competition in the market for money holds that potential in check and allows market participants to take the fullest advantage of the remaining elements of the spontaneous order.

ramana · Post by **ramana** » 02 Sep 2010 02:02

Ex-Lehman CEO says regulators refused to save firm

Case of ex-GS employees in govt taking care of competetion?

enqyoob · Post by **enqyoob** » 02 Sep 2010 02:20

The Ron Paul / Austrian School seems to have really converted at least one person:

Lee has been linked to a manifesto that was posted on the internet... The angry manifesto repeatedly refers to humans as "filth" and demands that the Discovery Channel "stop encouraging the birth of any more parasitic human infants." "Civilization must be exposed for the filth it is," the 1,149-word statement says.
...
"Humans are the most destructive, filthy, pollutive creatures around and are wrecking what's left of the planet with their false morals and breeding culture." The writer blasts immigration, farming, weapons of mass destruction, automotive pollution, "and the whole blasted human economy." He demands that the Discovery Channel broadcast daily prime-time shows devoted to "solutions to save the planet," perhaps in a game-show format, insisting, "Make it interesting so people watch and apply solutions!!!!"

Many of the writer's comments are directed at "the media," saying, "You can reach enough people. It's your responsibility because you reach so many minds!!!" "The world needs TV shows that DEVELOP solutions to the problems that humans are causing, not stupify the people into destroying the world. Not encouraging them to breed more environmentally harmful humans," the manifesto says.

"These are the demands and sayings of Lee," the manifesto concludes.
A month or so later, Lee was arrested near the building on littering and disorderly conduct charges, Morrissey said. The littering charge stemmed from Lee's throwing money in to the air,

This is the danger: shrill propaganda eventually brings out the yahoos from under their stones, carrying machine guns and targeting anyone who looks different. Like u or me.

enqyoob · Post by **enqyoob** » 02 Sep 2010 06:11

The Goldman Roaches are everywhere:

AP IMPACT: Feds fail to use land for solar power
By JASON DEAREN, Associated Press Writer Jason Dearen, Associated Press Writer Wed Sep 1, 10:51 am ET

ROACH DRY LAKE, Nev. – Not a light bulb's worth of solar electricity has been produced on the millions of acres of public desert set aside for it. Not one project to build glimmering solar farms has even broken ground.

Instead, five years after federal land managers opened up stretches of the Southwest to developers, vast tracts still sit idle.

An Associated Press examination of U.S. Bureau of Land Management records and interviews with agency officials shows that the BLM operated a first-come, first-served leasing system that quickly overwhelmed its small staff and enabled companies, regardless of solar industry experience, to squat on land without any real plans to develop it.

At a time when the nation drills ever deeper for oil off its shores even as it tries to diversify its energy supply, the federal government has, so far, failed to use the land it already has — some of the world's best for solar — to produce renewable electricity.

Nowhere is this more evident than in Nevada, where a Goldman Sachs & Co. subsidiary with no solar background has claims with the BLM on nearly half the land for which applications have been filed, but no firm plan for any of the sites.

The Obama administration says it is expediting the most promising projects, with some approvals expected as soon as September. And yet, it will be years before the companies begin sending electricity to the Southwest's sprawling, energy-hungry cities.

....
Congress in 2005 gave the Interior Department a deadline: approve 10,000 megawatts, or about five million homes' worth during peak hours, of renewable energy on public lands by 2015. Reaching that goal was left to the BLM, which oversees federal land and knows oil, gas and mining leases but is new to solar.

The Bush administration, however, kept BLM's focus on oil. BLM's database of solar applications shows many languished for years while the agency approved more than 73,000 oil and gas leases in the last five years. BLM has yet to give final approval to one solar lease.

BLM's solar leasing system ended up allowing developers to lay claim to prime sites — many located in the deserts that span California, Nevada and Arizona. All developers had to do was fill out an application, pay a fee and file development plans.

But many were so vague that it was difficult for BLM to separate the serious projects from the speculative ones.

"People were making (solar) applications on federal lands not knowing what kind of technology to propose and ... how to develop the land," Brady said.

In the Southern California desert near Palm Springs, for example, San Diego-based LightSource Renewables filed an application in August 2008 for 2,500 acres, BLM records show. The small, two-person development firm knew enough to recognize the land's worth — it was close to transmission lines — but had no previous experience with such projects.

Co-founder Paul Whitworth said it is now focusing on getting private land, and is not pursuing plans for its BLM site. The agency, however, still considers the application active, meaning other interested firms cannot access it.

"We don't know what technology will win or lose, and certain sites cater to certain technologies, but a good site is a good site," Whitworth said when asked why they filed their application. The firm has never filed a development plan, records show.

While dozens of smaller firms like Lightsource joined in the rush, BLM records show two Goldman subsidiaries filed 52 of the 354 applications throughout the region, more than any other company.

....

For example, records show Goldman-owned Cogentrix Solar Services, LLC, the subsidiary with no previous solar experience, has a pending application for 13,440 acres in Nevada for a 1,400-megawatt solar plant. Another claim on land nearby asks for 22,400 acres for the exact, same-sized plant.

BLM records show other companies proposing the same type of solar plants were asking for 6,000-7,000 acres.

Over the years, BLM rejected applications or companies withdrew them, bringing the total active applications to 123.

Some of Goldman's California applications were withdrawn after U.S. Sen. Dianne Feinstein proposed last year that part of the Mojave Desert where some of the projects were proposed be declared a national monument. Now Goldman holds 10 of the 123, including eight that cover nearly half the land proposed for solar in Nevada.

An AP review of BLM's applications database found Cogentrix has staked more development claims in the Southwestern deserts than any other company. In Nevada alone, Cogentrix has applied for exclusive development rights on nearly as much federal land as all other companies combined. Its active lease applications cover about 120,000 acres — the equivalent of more than eight Manhattans.

"Goldman Sachs was one of the first applicants to dot the map with potential projects, and since then they haven't moved on any of them," said Gregory Helseth, the BLM's new renewable energy project manager in southern Nevada. "You can't hold the land forever. You can't be a prospector and hope somebody down the road wants to buy."

A Goldman representative defended the firm's solar investments, saying the Wall Street titan has since gained experience through its 2009 purchase of an aged solar facility in San Bernardino, Calif., that it was moving forward in good faith and was not blocking anyone. The company also announced this month it had reached a deal to build a small, 250-acre project in Colorado on private land.

"While we continue to pursue development of projects utilizing public lands in the Southwest, we have not held land reservations if they are determined not to be viable for future solar development," company spokesman Ed Canaday said in an e-mail.

The Obama Administration has identified 14 promising "fast-track" projects targeted for approval by year's end so they can qualify for stimulus funding. None of Goldman's claims are among them.

When completed, these facilities could generate 6,000 megawatts, enough electricity for several million homes during peak hours. There is a ready market for big plants, with California's strict climate change laws creating a huge demand among utilities for solar power.

Companies that hold BLM solar development applications are prohibited from selling them, but the companies themselves can be sold along with the potentially lucrative applications.

Tempe, Ariz.-based First Solar, an industry leader and a maker of solar panels, bought two smaller companies, including the companies' land rights and power agreements with utility companies. First Solar paid about $400 million for OptiSolar and $285 million for NextLight. Analysts say the sale value of both companies likely was increased because they held BLM solar development applications.

First Solar spokesman Alan Bernheimer said the acquisitions were valued on the companies' signed agreements with utilities not on their BLM land positions.

In September, at least two of the "fast-track" projects — by Oakland, Calif.-based Brightsource Energy and by First Solar-owned Nextlight — are expected to get the first solar permits issued by BLM. Bringing plants online however will likely take years.

These fast-tracked sites are located on either side of the dormant Goldman lease near Roach Dry Lake, located about 35 miles south of Las Vegas, and will utilize the same Southern California Edison transmission lines that pass over Goldman's site.

Goldman spokesman Canaday said the company is still trying to work out a deal with a utility.

And BLM's Helseth said he still is seeking final plans from Goldman and Cogentrix. He said the agency's main problem was that there were too few employees available to work on the applications.

Under Obama administration, more BLM staff like Helseth have been hired to help weed out dormant applications so developers better suited for the job can be found. Officials say the administration is trying to avoid future land rushes by identifying the best solar locations with the fewest environmental impacts, rather having a free-for-all.

Critics say BLM should have done this in the first place and help avoid years of delay.

"BLM let people file applications willy nilly wherever they wanted," said Johanna Wald, a land-use attorney with the Natural Resources Defense Council.

The point to note is that if the US gets serious, there's more than enough free land and free sunshine in the Southwest to light up the whole US.

Neshant · Post by **Neshant** » 02 Sep 2010 09:40

enqyoob wrote:This is the danger: shrill propaganda eventually brings out the yahoos from under their stones, carrying machine guns and targeting anyone who looks different. Like u or me.

He went to the wrong place. He should have racked up some good karma by dropping in on banking & financing BSers.

He'd need to upgrade his firepower however to provide maximum stimulus to the economy.

Neshant · Post by **Neshant** » 02 Sep 2010 09:45

Peter Schiff : Wall Street Unspun (Aug 18, 2010)

http://www.europac.net/sites/default/fi ... 8-2010.mp3

Housing prices need to fall to a point where people can afford to pay for them.

Artificially propping housing by ripping off Peter to keep Paul in an over priced mansion is just keynesian nonsense.

Neshant · Post by **Neshant** » 02 Sep 2010 09:58

Considering fort knox has resisted any audit of its gold reserves for 50 years and the federal reserve also resists an audit, I'm sure a few skeletons are just waiting to fall out of the closet. The recent accidental admission of an insider at a CFTC meeting (another useless organization) that the gold bullion market is leveraged 100 : 1 of paper gold to physical gold is itself a shocker. A whole lot of paper contracts like gold ETFs and option are changing hands with people thinking they are holding gold when all they are holding is a worthless receipt.

If there was a sudden draw down of physical inventory as people rushed to trade in their paper gold receipts for physical gold, all hell will break loose.

As usual, RP making too much sense.

Ron Paul: Audit the Gold

http://www.youtube.com/watch?v=SRwFa3_wv1Y

ShivaS · Post by **ShivaS** » 02 Sep 2010 10:10

Meanwhile Gold touched another record high...
In the land of devoted Lord Venkateswara in tirupathi is being stripped naked of his gold and diamonds.

I hope there will all india agitation to find out whats going on there.

Its not just AP that is contributing to Sri Vari hundi, every one from India and abroad do that....

No wonder Fornt Knox is empty...

The price of Gold is direct evidence of the intrensic worth of dollar.

In 1996 1 oz 33 gms of 99.99 pure Candain Maple, SA kruger, US golden eagle were US$ 285 inclusive of all taxes.

shyam · Post by **shyam** » 02 Sep 2010 10:18

Robert Prechter explains:
Explainer: Why the Fed's Hands are Tied When it Comes to Deflation

The Daily Crux: But, ultimately can’t the Fed simply “print” money if it appears deflation is starting to win? The “drop money from helicopters” analogy you mentioned earlier? Wouldn’t that prevent outright deflation and ultimately lead to inflation or even hyperinflation as the dollar is devalued?

Robert Prechter: To begin with, the printing analogy is flawed. The Fed does not operate a press, as the government of Zimbabwe did. It creates new money only when it buys IOUs. This may seem to be a distinction without a difference, but it’s actually very important. These IOUs are the Fed’s assets, and it doesn’t want worthless assets backing its notes.

Even if the Fed were to monetize every dime of currently outstanding, dollar-denominated debt, it would create no net inflation. The money-plus-credit supply would be the same. And price levels — especially for investments — are based on the total of monetary assets, not just base money.

Even so, there is no way that the Fed will buy up the entire world’s stock of lousy IOUs. It has always wanted pristine assets on its books. Remember, it didn’t buy Fannie and Freddie’s IOUs until it got the Treasury to guarantee them.

Then there is the so-called moral hazard — not that the Fed cares about morality — meaning that if the Fed were to begin buying everyone’s IOUs, people would immediately issue more IOUs as fast as they could and sell them to the Fed. It couldn’t keep up with the volume.

But these scenarios are fantasies. In reality, self-preservation will eventually motivate the Fed just as it motivates every other institution. Buying too many worthless assets would cause the Fed’s self-destruction, and I think it will balk at going that far.

The Daily Crux: OK, so you don’t think the Fed will go that far. But what if the government got involved and tried to inflate its way out by issuing massive amounts of Treasury bonds to the Fed? Wouldn’t that create inflation?

Robert Prechter: If the government tried to do that, bond holders would get spooked, and interest rates would go up and stay ahead of the printing. At the same time, other credit prices — municipal, corporate and consumer — would implode. When the supply of credit is far bigger than the supply of money — and it is by a huge margin — the value of old credit can contract faster than new bonds can be printed. The net result would still be deflation.

But this is not the most likely scenario. Have you noticed that even the Fed chairman has been telling Congress it needs to stop spending and borrowing? The Fed doesn’t want this to happen any more than other creditors do.

If the Treasury’s interest rates do soar, it will not likely be due to inflation fears but to fear of government default. If the government is forced to pay higher and higher rates, it will become a black hole for money. Spiraling Treasury rates would suck money from other sources, causing banks, municipalities and companies to fail, ruining all of their debts, which would be deflationary.

Hari Seldon · Post by **Hari Seldon** » 02 Sep 2010 10:24

The point to note is that if the US gets serious, there's more than enough free land and free sunshine in the Southwest to light up the whole US.

And won't that be sweet?
I hope it happens double quick fast whatever because it will spur the creation of a new (jobs-providing hopefully) industry that we in the sdre turd world can also (with a decade's lag only, hopefully) hope to gain from. Our Thar desert and other inland arid land and vast oceanfront could do with some solar power harnessing, am sure.

The cheenis are in a dedicated race to bring down the cost of solar power panels, am told. More power to the far thinking CCP in that case, I say. Heck, we can then buy from the cheenis instead of the yanks. Ki pharak painda?

Hari Seldon · Post by **Hari Seldon** » 02 Sep 2010 10:30

The automatic earth (TAE, in short) is among the better commentators on khanomic crisis perspectives out there, IMHO. And like a few good things in the world, it is free to access and avail of.

This particular TAE blogpost comparing the state of the melt-downturn in Ireland versus canada is an interesting enough read as it is. Worth reading in full whereas moi was thinking of excerpting and all.

Takes the long view - history, politics, economics, migrations, climate....

Bubble case studies

Here's one excerpt I can't help put in though.

This is a monumental transfer of public assets into private hands through a privatized-profits-but-socialized-losses model. The concentration of property ownership in Ireland is returning with a vengeance. With ordinary people having spent unpayable amounts to buy real estate, they are now likely to forfeit their property to the wealthy, who will buy it up from NAMA at a few eurocents on the euro.

This is the property ownership model that gave Ireland the great famine (an Gorta Mór - the Great Hunger of 1845-1852), when wealthy landowners continued to export food while half the tenant population either starved or emigrated. The population is still nowhere near what it was in 1850 as a result. Highly concentrated property ownership, with its concurrent gridlock on political power, risks an isolated elite acting purely in its own short-term interests, no matter what the consequences to the rest of the population.

It is quite possible, indeed likely, that Ireland (and other highly indebted states of the European periphery) may leave the eurozone, causing an enormous wave of economic dislocation, which would compound the impact of on-going credit crunch. While I don't see the periphery being forced to leave by other member states, I do see the austerity measures required to remain part of the club becoming so onerous that implementing them domestically would become a recipe for political suicide. Leaving the eurozone is no panacea though. Ireland is inevitably looking at a long period of extreme socioeconomic and political upheaval no matter what decisions its politicians make now.

The bolded sentence - is this really true?? boing boing only. I thought with the excessive church strictures of more kids-no condoms - so devastatingly satirized in Monty Python among other classics - populn figs in modern ireland would've jumped only. Wow.

Oh, and read it all plz.

ShivaS · Post by **ShivaS** » 02 Sep 2010 10:37

yes I read that on Flight from Chennai.

Ireland ways are not fool proof soon the people will vent their Ire in their land...

ramana · Post by **ramana** » 02 Sep 2010 20:47

You do have a way with words. Good high school education from Wren and Martin!

Hari Seldon · Post by **Hari Seldon** » 02 Sep 2010 21:08

Casualties of the Crisis: Stress, Sexism and Layoffs Thin the Ranks of Women on Wall Street

Yawn. cry me a bucket. Wall street jokers have no gender, where looting and fraud is concerned. This feminist grievance mongering gets no sympathies from moi sdre self.

Hari Seldon · Post by **Hari Seldon** » 02 Sep 2010 21:13

Wasn't this what sri n^3's was warning us about?

Having Hollowed Out IT in the US, Indian Outsourcers Complain Re Difficulty of Finding US Staff

The comments section is vicious.

Author also moonlights as agony aunt in the comments section and sishes out Itvity advice.

If you make career plans that depend on foreign demand, you are at risk of rule changes abroad that will have an adverse impact on your employment prospects.

Carl_T · Post by **Carl_T** » 02 Sep 2010 21:16

I think the Fed could avoid this trouble with treasury bills if they buy corporate debt.

ShivaS · Post by **ShivaS** » 02 Sep 2010 23:40

I think the Fed could avoid this trouble with treasury bills if they buy corporate debt.

This is not the first time you have suggested this, and Ihad replied it saying good money being thrown at bad debts.

There was once a Hollowed ranking member in this forum called texas saviour Jones.

When I said dollar bill is nothing but a promisory note he mocked me.

{Remember where ignorance is a bliss knowledge is curse

)

Robert Prechter: To begin with, the printing analogy is flawed. The Fed does not operate a press, as the government of Zimbabwe did. It creates new money only when it buys IOUs. This may seem to be a distinction without a difference, but it’s actually very important. These IOUs are the Fed’s assets, and it doesn’t want worthless assets backing its notes.
Even if the Fed were to monetize every dime of currently outstanding, dollar-denominated debt, it would create no net inflation. The money-plus-credit supply would be the same. And price levels — especially for investments — are based on the total of monetary assets, not just base money.

So buying corporate debt who are in trouble is accumulating junk.

Junk is junk is still a junk even if owned by Federal govt.

You have to just write off that means some one has to bite the bullet, who else but Mango man (common man in english parlance).

Wealth is neither created nor destroyed it only changes hands or transforms.
Debt is never paid off it is just passed on. (In India it can also be palmed off)

All valuations are relative, nothing is absolute {even Absolut is better compared to Smirnof which is less than Stolichnaya which is less than Kettle one}

Valuations are based on perception hence a department called Marketing to change the perception.

Bade · Post by **Bade** » 03 Sep 2010 01:16

Valuations are based on perception hence a department called Marketing to change the perception.

Hari Seldon · Post by **Hari Seldon** » 03 Sep 2010 07:38

Why for do we need any Absolut when we have shivas regal only saar?

ShivaS,

Kindly hold fort on your prognostications for what the future - the next 2 yrs until (gasp!) 2012 may hold. Would be hajaar interesting, something tells me. Only.

Hari Seldon · Post by **Hari Seldon** » 03 Sep 2010 09:26

aaj ke TAE tweets
http://twitter.com/AutomaticEarth

VIDEO: College Grad Blues http://bit.ly/byv5rw 60pc of University grads who applied for jobs got no job offers last year?! #CNN

Parents Using Retirement Savings for College Costs http://bit.ly/bOQgqH (Some 6pc of parents did so, about $8,554 on average)

Yup, the bursting of the US higher ed bubble is overdue, some say. I happen to agree. Ramifications will be felt far and wide, I suspect. Losta high-skill immigrant wannabees enter via the univ route, after all.

Can A Family Of Four Survive On A Middle Class Income In America Today? http://bit.ly/bkViCS The median income is used at apprx. $50,000

Employers shifting health-care costs to workers, survey shows. Employees pay 13.7pc more and employers paid 0.9pc less! http://bit.ly/doixkk

For family coverage,workers are paying an average of $3,997,up $482 from last year,while employers are paying an average of $9,773,down $87.

Since 2005, employees' premium payments have gone up 47 percent while overall premiums have risen 27 percent

It is getting tougher for aam joe n jane to maintain living stds circa 2006 in 2010. The squeeze is real. And yup, corrupt cartels are nose-deep in the great rip-off. The banking cartels by raising interest rates willy nilly on credit card debt even as their access to Fed and taxpayer backstopped funding has come down to historic lows, the healthcare and insurance cartels riping off basic coverage for even healthy families, about the higher edu cartel, less said the better perhaps. And so on.

Industrialised world's 'lost decade' risk: experts http://bit.ly/djWf5i "The risk... is higher than ever,"

Yawn.

IMF warns over UK debt in call for global fiscal reform http://bit.ly/byl01x UK gross debt expected to soar even with Cameron's cuts!

Aha, clever cameron psy-ops to push through deeper cuts perhaps. If he cuts welfare too deep, the packee pigs who are professional welfare moochers will start to squeal and maybe light up some cars nightly only, who knows?

California ‘Budget Kabuki’ Increases Schwarzenegger Debt Costs (Extra yield costs up 14pc in 1wk) http://bit.ly/cH3mc3 $19.1 Billion deficit

Yawn. Cal;if will be bailed out bigtime only. Who are the feds kidding acting high and prissy on state debt and the possibility of calamitous default, eh?

/Jai ho.

ramana · Post by **ramana** » 03 Sep 2010 10:05

Obama may seek permanent research credit in econ proposals

Back to encouraging innovation.

Hari Seldon · Post by **Hari Seldon** » 03 Sep 2010 15:50

Alrite, some good news at last. Seems one corner has been turned. "whew!"

The Nelson Rockefeller Institute reports State Tax Revenues Are Slowly Rebounding

Excerpts:

Preliminary tax collection data for the April-June quarter of 2010 show improvement in overall state tax collections as well as for personal income tax and sales tax revenue. However, revenue collections remain significantly below peak levels and are still weak in a number of states.

The Rockefeller Institute’s compilation of data from 47 early reporting states shows collections from major tax sources increased by 2.2 percent in nominal terms compared to the second quarter of 2009, but was 17.2 percent below the same period two years ago.

Gains were widespread, with 30 states showing an increase in revenues compared to a year earlier. After adjusting for inflation, tax revenues increased by 1.4 percent in the second quarter of 2010 compared to the same quarter of 2009.

Yay. What could go wrong now? Sales tax receipts are fact not opinion, after all.
Well, the devil is in the details and Mish explains the devil in this report very well...

The "improvement" in personal income taxes was a mirage caused by California speeding up collection of personal income taxes. California required payment of estimated taxes before money was even earned! Ignoring California, income tax collections actually declined from a year ago.

Much of the improvement in sales taxes is a result of tax hikes, not increased sales. Those effects will soon wear off in year-over-year comparisons (assuming of course there is not another round of sales tax hikes, by no means a good bet).

In simple terms that dramatic rebound shown in the first chart merely means things have stabilized but only vs. the rock bottom depressed level of second quarter of 2009.

But the good news remains - H2 2009 has sorta established the rock bottom at least in nominal terms. That is a good sign. It can't any worse, hopefully, and so, steadily if slowly, the possibility of recovery does exist. Chalo, jai ho to that.

Hari Seldon · Post by **Hari Seldon** » 03 Sep 2010 20:20

Fiscal Policy: The Fed, Romer, And A Path Forward

Denniger hits it outta the stadium with this one.

Thought of excerpting and all, but that would be pointless. A post that deserves to be read in full and all that.

Ensoi.

abhischekcc · Post by **abhischekcc** » 04 Sep 2010 00:25

Bade wrote:
Valuations are based on perception hence a department called Marketing to change the perception.

Yup. And the amount of market value over and above actual value is called Goodwill, which is what investment bankers said is the function of marketing.