Continued world financial crisis fallout

They shared their sad stories the other night at an informal gathering of Dating a Banker Anonymous, a support group founded in November to help women cope with the inevitable relationship fallout from, say, the collapse of Lehman Brothers or the Dow’s shedding 777 points in a single day, as it did on Sept. 29.

In addition to meeting once or twice weekly for brunch or drinks at a bar or restaurant, the group has a blog [4], billed as “free from the scrutiny of feminists,” that invites women to join “if your monthly Bergdorf’s allowance has been halved and bottle service has all but disappeared from your life.”

http://www.nytimes.com/2009/01/28/nyregion/28daba.html?ex=1390885200&en=843855e519bacaed&ei=5124 [5]

Oh the horror!

Taleb Says Nationalize Banks, You Can’t Trust Them  

Banks aren't the only thing getting nationalized:

The government will nationalise recession-hit private schools by turning them into state-funded academies, ministers have confirmed.

Headteachers predict that some struggling fee-charging schools will seek to join the scheme to stave off closure, as more parents desert the private sector.

There are warnings, too, that thousands of pupils may seek places at already-stretched state schools this September if private schools [11] fail.

http://www.guardian.co.uk/education/2009/jan/31/private-schools-nationalised-academies [12]

That's in the UK, of course, where the financial crisis has done nasty things to the private-school parent set.

So much for the usual bubbly sort of investment bank report -

ML chief economist David Rosenberg has broken the D(epression)-word seal. In his most recent report "Some Inconvenient Truths" he says we are currently in a depression

http://zerohedge.blogspot.com/2009/01/merrill-lynch-analyst-says-depress... [14]

Sadly, he gives a number of great reasons why it will be hard to get out as people make sustained changes to their economic behaviour in tough times.

The price of NFL Superbowl tickets has had to come down, there are unsold advertising spots - and won't somebody please think of the unemployed Playboy playmates, their party has been canceled.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRFJaZUKZrHw

more on DABA Girls

"Ain’t Messin’ With No Broke Banker"

January 27, 2009 in Uncategorized [17]

"This whole messy ordeal has advanced my Botox start date by at least two years.  Like every other DABA girl, the economy was wreaking havoc on my relationship and youthful good looks.  Phone calls went unanswered, Hamptons invitations un-extended, plans canceled (including, but not limited to, expensive opening night tickets to the ballet, which were scalped instead of being graciously offered to me and a galpal), and so forth and so on.  Until – the horror of all horrors – my FBF lost his job, which I guess technically downgrades him to just my BF.

Overnight, he went from unavailable to downright clingy.  He wants to have dinner every night.  By dinner I mean staying in and cooking as Megu is no longer in the budget.  AND, FYI DABA girls – chopping vegetables along side your man in a hot New York sized kitchen is NOTHING like the sexy kitchen scene between Mickey Rourke and Kim Basinger in Nine and a Half Weeks.  Seriously.  It sucks.  Anyhow, he suggested I meet his parents over the holidays and he keeps commenting that half Asian babies are by far the cutest.  My take on his 180: having no steady source of income for the foreseeable future, he realized that his chances of securing another fashion industry type girl are pretty much zilch and so he is cleaving to me as the last vestige of his former high rolling lifestyle.

Thanks to the recession, I now have a completely devoted BF, which is exactly what I wanted.  So I should be happy, right?  Wrong.  I’m bored and can’t stop thinking about my perpetually unattainable Euro ex-boyfriend who is recession proof courtesy of an offshore trust account.  To be honest, I’m only with my BF because I just don’t have the heart to change my facebook status from “in a relationship” to “I ain’t saying I’m a gold digger, but I ain’t messin’ with no broke banker.”

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

http://LASIK-Flap.com [18] ~ Health Warning about LASIK Eye Surgery

And we don't have to go outside of Canada to see major fuck-ups.

How Caisse's bet on quants went wrong 

http://www.theglobeandmail.com/servlet/story/RTGAM.20090130.wcover31/BNStory/National/home

Governments across Europe tremble as angry people take to the streets

"Public and private sector workers united in the protest to seek increases in salaries, greater protection for their jobs and more intensive government efforts to simulate the economy."

 Greater job protection and a more stimulated economy may be the wrong answers.  What is needed is a new, non-growth, economic model and new jobs not based on production of goods but on environmental rehabilitations for one, and on the replacement of mechanical use of energy by human energy on the other.

 A new economic model

Jerry West said: 

Exactly! Markets fail, and more economists are admitting this awful truth today. And I think there are more direct methods than taxation for  bringing the life blood of economies under democratic control, ie money creation and credit. That's another one which capitalists fought hard to bring under their exclusive control post cold war era, Jerry. As an unrepentant Marxist, I would prefer 100% control of money by democratically elected government. But I think even if we return to what existed in Canada from 1938 to 1974 with the feds creating about a quarter of the money supply as interest-free, debt-free money(government-created money as opposed to bank-created money) for special purposes, we could afford green infrastructure and vital program spending. Canadian William Krehm says there are municipalities across Canada that can not afford to repair aging infrastructure let alone build anew. And the experiment in privatization of vital infrastructure ie. water and sewers for example, has been a bust around the world where tried. 

But I also agree that if the feds simply taxed corporations and the wealthy at more progressive rates(OECD average to EU-15 average as a percentage of GDP) and actually enforced collection, then Ottawa and our various layers of sub government would have anywhere from $35B to $75 billion dollars(Mel Hurtig, The Vanishing Country: Is it too late to save Canada) more every year to finance public needs.

Denial isn't a river...in Davos:

Regret is cheap for some delegates at the World Economic Forum in Davos, Switzerland. Redemption for their role in the worst economic wreck since the Great Depression comes at a steeper cost.

“Nobody in Davos wants to get near a negative like redemption,” said Robert Dilenschneider, chief executive officer of the Dilenschneider Group, a public relations firm in New York. “But the truth is that everyone here is part of the problem, and the public will soon begin demanding a pound of flesh.”

“No banker or businessman wants to take responsibility,” said Dilenschneider, who counts 40 Davos delegates as clients, their identities shielded by confidentiality agreements. “It’s their view that everybody else did something wrong.”

 http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=abAA1ieh6wTk

Bankruptcies, unemployment and social unrest are spreading more widely in China than officially reported, according to independent research that paints an ominous picture for the world economy.

The research was conducted for The Sunday Times over the last two months in three provinces vital to Chinese trade – Guangdong, Zhejiang and Jiangsu. It found that the global economic crisis has scythed through exports and set off dozens of protests that are never mentioned by the state media.

http://business.timesonline.co.uk/tol/business/economics/article5627687....

What, human-powered rickshaws instead of automobiles? Humans shovelling snow off the roads instead of snow ploughs? Humans running on treadmills to recharge batteries to power their toasters?

What a horrible, reactionary dystopia. Just shoot me now.

What on earth makes you think that "human energy" comes at any lesser cost than the natural renewable sources of energy we already have? "Cheap" human labour is only cheap to the capitalist who exploits it - all he's doing is passing the cost off onto the worker and his/her family.

Get a grip, Jerry. 

 I think Jerry is pointing out the inequalities and inefficiencies in our current system. Why should robots make cars and subway trains if people can be paid to do it? What's the hurry and drive to do away with providing employment to real human beings?

What about parking all those gasoline powered streetsweepers, and paying unemployed people a living wage to do it with brooms?

How about cutting out capitalists and giving a pay raise to hospital cleaning staff? We could afford to do things like that, if we cut out the banksters for 25% of money creation and credit, or simply raise taxes on those bastards siphoning off our oil and gas for a song.

I think what we should be striving for is letting the robots and mechanical devices do their thing, but instead of replacing people's jobs we should be reducing working hours (with no reduction in pay!).  Why not increase leisure time for everyone instead of creating unnecessary work?

I agree with cutting out capitalists though.  What they do is unnecessary!

I believe robots have a purpose, like doing surgeries by remote control - bomb disposals - digging tunnels for mining - and generally any task that requires greater than human accuracy and precision.

But not for the sake of reducing labour costs and maximizing profit. And not aerial drones for murdering people villages in Pakistan with "smart bombs"

 I can see eliminating physical work by use of robots and technology at some future time when everyone is well educated and capable of doing advanced work. In the future, society may benefit from genetic engineering and things like speed learning through machine-human interfacing or some such. I think this period we're living in now will be looked back upon as the period of pre-genetic engineering and advanced medicine.

 Science and tech has had some bad press for a long time with not producing anything of real value for the human cause. I think that will change. I think the average life expectancy will be permanently altered for the better for the first time in about 50000 years. People will live longer in future, and all that they learn in time will become invaluable to economies of the future. But dont quote me.

Who ever said "employment" is something humans were designed for? Full, unemployement should be the goal! Thank goodness for recessions at least they give a few people a break.

I think the problem with idleness in general, not to mention sedentary jobs of today, is the fact that it's not healthy. I can appreciate the former Soviet approach to work. And that was for technical workers and agricultural workers to do job sharing in order to reduce boredom. Of course in their case it was a matter of manpower shortages after the war and the need to harvest crops. 

But think of Charlie Chaplin in that movie where he worked in the factory all day six days a week doing the same repetitive tasks. That's not good for either the mind or body. Soviet era exercise scientists like Tudor Bompa realized that our bodies were designed to be in motion. Everything works better with exercise, including our minds.

Um, weren't people paid to make the robots? Doesn't all productive capacity ultimately derive from human labour?

"Providing employment" is the euphemism of the capitalist for "exploiting human labour". You make it sound as if forcing people to sell their labour power so that a handful of owners of capital can get richer by appropriating surplus value is conferring a benefit on the workers!

People don't "need jobs", as the social-democratic politicians are so fond of saying. Who "needs" to produce commodities that will be taken from them and sold by their employer to a third party?

What people "need" is a fair share of the socially-produced wealth (whether produced directly by people or indirectly by robots that were built by people) to enable them to have the time and the wherewithal to enjoy fulfilling and satisfying lives.

Let the robots make commodities, and give human workers shorter working hours and more pay. Let the workers enjoy the fruits of increased productivity, instead of allowing the capitalists to appropriate them.

30 for 40!   

Yes, I'm not saying we need to stop making robots, just make them for appropriate purposes.

Why not give people a choice of what they can do to contribute to the greater good?

Less work sounds good to me. But the capitalist idea for excess workers and surplus human beings is a waste of humanity. And I think people do want to work and contribute to something greater than themselves. The capitalist idea for  sending someone a cheque in the mail to sit at home and do nothing tends to destroy our will to live at some point. Of course, with this economy and the way it wastes human labour and energy, some environmentalists are saying we should pay people to stay home and not contribute to global warming. I can see that, too.  

Good point Fidel

Every office, as well as providing a child care, needs to provide for all its employees, a workout room complete with showers and storage areas for a change of clothes. Isn't it interesting how executives can find the funds to make their personal offices look like mini Taj Mahals, but cannot find the money for the basic every-day needs of all the staff.

I agree, NorthReport. I think childcare should be available for anyone who does want to work while raising children. But I think, too, that if someone wants to stay at home and raise their own children, then that should be everyone's choice as well.

History will show that they went on hectoring each other with 'shoulds' right down to the bottom of the abyss.

The struggle for democracy continues?

Another beef I have with capitalism, and I think Marx pointed it out. A corner variety store in the small town near where I grew up used to sell shoes and clothing. Unsold shoes were cleared off the shelf as an example. And instead of donating the shoes to a good cause, the store owner would cut the shoes up and send them to the landfill site so as no one would find free shoes. Businesses have done similar things with food and other commodities sooner than allow a market in free goods 

Sheesh.  You mean you are opposed to using bicycles instead of motor vehicles where appropriate?  Switchboard operators instead of multi-level automated machines?  Agricultural workers instead of fruit picking machines?  etc., etc.?  Not all industrial development is socially or environmentally beneficial.  Some is, some is not.

For one, human energy is a natural, renewable source of energy, and although all of the other energy that we generate is natural, much of the source of the current energy is not renewable, at least in the time frame of human society.

Who said it had to be "cheap"?  And who said that there had to be capitalists?  Are you making an argument that humans should be able to live without lifting a finger?  That would be unnatural. :)

Using mechanical devices where appropriate is fine, the question is where are they appropriate.  And reduced working hours, why not?  In a society with more equitable distribution of resources working hours would probably be less.  Studies have stated that a least some hunter-gatherer societies worked a lot less than modern industrial ones.

And, my point  isn't about increasing unnecessary work, but about replacing non-renewable energy when appropriate with renewable energy, which human labour is.  It is about reducing the subsidization of (among other things) capitalism by the environment.

I agree.  But of course this does beg the question, what constitutes fulfilling and satisfying, and what responsibility does one have to acquire the necessities of life, and what responsibility does one have to contribute to the welfare of society.

More people are taking the final way out of their financial difficulties by committing suicide or turning in desperation to crime.

The body count is still rising. For months on end, marked by bankruptcies, foreclosures, evictions, and layoffs, the economic meltdown has taken a heavy toll on Americans. In response, a range of extreme acts including suicide, self-inflicted injury, murder, and arson have hit the local news. By October 2008, an analysis of press reports nationwide indicated that an epidemic of tragedies spurred by the financial crisis had already spread from Pasadena, California, to Taunton, Massachusetts, from Roseville, Minnesota, to Ocala, Florida.

Stimulating humans to work is one of those unfortunate sufferings many must endure from those with the whip.

My take is that, the benefit from these "economic stimulation packages" during this rest period (read recession) will not be for the masses.

  Rather, cash will flow to the unemployed capitalist leaders, in order to maintain their lifestyles. And then when the sunspots return and we all get up and resume our feverish quest, it will be primarily to pay the whipmeisters debt. 

The best revenge is living well. 

The 10 people most reponsible for the recession

http://timesbusiness.typepad.com/money_weblog/2009/01/the-ten-men-to-blame-for-the-credit-crunch.html

That's good to know so that things might be thrown at them.

I found a website with all the bad news in one place: http://www.layoffdaily.com/ [43]

These other people may have something to do with it, however:

The average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million, new IRS data show [44].

The 17.2 percent tax rate in 2006 was the lowest since the IRS began tracking the 400 largest taxpayers in 1992, although the richest 400 Americans paid more tax on an inflation-adjusted basis than any year since 2000.

http://www.bloomberg.com/apps/news?pid=20601103&sid=ar5uxG_wV87A&refer=u... [46]

Progressive taxation? I don't think so!

Maybe they will fall more than that. I think we may well be many years away from any kind of rebound in housing prices. There is still a huge amount of denial out there in the press about the state of the economy.  

http://www.independent.co.uk/money/mortgages/house-prices-could-fall-40-per-cent-without-loan-boost-1523110.html

Japanese manufacturers cut production an unprecedented 9.6 percent last month, deepening a recession that’s expected to be the worst in the postwar era.

The drop eclipsed the previous record of 8.5 percent decline set in November, the Trade Ministry said today in Tokyo. Economists predicted a month-on-month decrease of 8.9 percent.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=as9hl9mW7oGQ [49]

TSX down over 150 basis points in the first 5 minutes of trading today - another buying opportunity!

http://investdb.theglobeandmail.com/invest/investSQL/gx.index_today?pi_symbol=TSX-I&pi_action=

Thanks "Steve", but the answer is still no.

And today my bank informs me that the line of credit interest rate is going up 0.5 per cent despite their benefitting from a drop in the bank rate of that amount.  Ah, the problems with liquidity when you are trying to keep your investors from fleeing to safer climes.

But now I'll really be nickel and diming it. Sorry, Keynes.

More BS from the cabbage, er I mean oil patch.

Obamania's great, but Canadian prudence trumps political charisma every time

http://www.theglobeandmail.com/servlet/story/RTGAM.20090202.wragendamorgan02/BNStory/crashandrecovery/home

Yes. Didn't hear any complaints about U.S.fiscal policy when old Gwyn was heading up EnCana , eh? Establishing U.S.markets for Canada's biggest.

But the Globe needed a Tar Patch voice. Unfortunately, it got rid of a correspondent who  apparently revealed too many internal doings in her weekly report - for jittery oilmen anyway.

Leading Experts: Let the Banks Fail

Islamic and Leftist Anti-imperialists unite [60]

Beirut International Forum

I enjoyed this response to Morgan's oil patch article in today Globe.

S Rankin from Chatham, Ontario, Canada writes: How tiresome. Another self-serving piece from Canada's clueless right-wing dragging Trudeau out of his grave yet again. How amusing that the writer failed to credit another liberal, Paul Martin for finally putting an end to 30 years of structural deficits - the single biggest factor in providing economic bragging rights to Canadians in the current debacle. Also how convenient to talk about Trudeau's contribution to the structural deficit when deficits run up under Mulroney were as great in dollar terms. What is it about the rightie mind anyway? They obviously take people for saps. A similar logic is in play in the USA: Bush and the Republican economic team that controls the SEC regulations have been in power for 8 years, the Republican Congress has either been in power or has had to power to block legislation for 13 years, the deregulation that has been traced as a cause of the crises took place on Bush's watch as well as his 3 previous predecessors ... so therefore the whole thing is Obama's fault. And here is how conservatives take responsibility for thier actions: (1) Point finger at nearest victim (2) Claim, in a loud voice, that the nearest victim is actually the culprit, and (3) Claim that you and other conservatives are simply hapless and pathetic victims of the MSM and "liberuls". Get a clue! In regard to deficit spending in the age of ZIRP (zero interest rate policy... Canada will soon be there): "There are no atheists in foxholes and there are no libertarians in financial crises." (Paul Krugman)

As with everything in China, the numbers involved in their portion of the global economic problem are staggering.

Around 20 million migrant workers have returned to the Chinese countryside after failing to find work in the cities because of the economic downturn, a senior official said today.

The figure - greater than the population of Australia - is double a previous official estimate and will heighten the concerns of the Chinese authorities about maintaining stability. It came a day after the government warned that 2009 would be "possibly the toughest year" for economic development in China since the turn of the century.

As Krugman (NYTimes) says, there are no "libertarians" in financial crises.

God it's nice to see someone who understands the meaning of libertarian.

-----------------------------

And you and Sheldon Wolin have found rapport since last spring, MS (see book lounge posting and revival of his theory).

 Some may find this bit on the economic impact of the Pentagon of interest:

Link to article [68]

This is great stuff, representative of the kind of discussions that need to take place - but will they ever occur in the corridors of power? It's a long article but worth reading in its entirety. It is the first time that I am able to at least partially grasp, if still not yet fully comprehend what has been  going on in with the movers and shakers in the major financial circles around the globe.   What Cooked the World's Economy?It wasn't your overdue mortgage.

http://www.villagevoice.com/2009-01-28/news/what-cooked-the-world-s-economy/

The basic story line so far is that we are all to blame, including homeowners who bit off more than they could chew, lenders who wrote absurd adjustable-rate mortgages, and greedy investment bankers.

Credit derivatives also figure heavily in the plot. Apologists say that these became so complicated that even Wall Street couldn't understand them and that they created "an unacceptable level of risk." Then these blowhards tell us that the bailout will pump hundreds of billions of dollars into the credit arteries and save the patient, which is the world's financial system. It will take time—maybe a year or so—but if everyone hangs in there, we'll be all right. No structural damage has been done, and all's well that ends well.

Sorry, but that's drivel. In fact, what we are living through is the worst financial scandal in history. It dwarfs 1929, Ponzi's scheme, Teapot Dome, the South Sea Bubble, tulip bulbs, you name it. Bernie Madoff? He's peanuts.

Credit derivatives—those securities that few have ever seen—are one reason why this crisis is so different from 1929.

Derivatives weren't initially evil. They began as insurance policies on large loans. A bank that wished to lend money to a big, but shaky, venture, like what Ford or GM have become, could hedge its bet by buying a credit derivative to cover losses if the debtor defaulted. Derivatives weren't cheap, but in the era of globalization and declining American competitiveness, they were prudent. Interestingly, the company that put the basic hardware and software together for pricing and clearing derivatives was Bloomberg. It was quite expensive for a financial institution—say, a bank—to get a Bloomberg machine and receive the specialized training required to certify analysts who would figure out the terms of the insurance. These Bloomberg terminals, originally called Market Masters, were first installed at Merrill Lynch in the late 1980s.

Subsequently, thousands of units have been placed in trading and financial institutions; they became the cornerstone of Michael Bloomberg's wealth, marrying his skills as a securities trader and an electrical engineer.

It's an open question when or if he or his company knew how they would be misused over time to devastate the world's economy.

Fast-forward to the early years of the Clinton administration. After an initial surge of regulatory behavior in favor of fair markets, especially in antitrust, that sort of behavior was abandoned, and free markets triumphed. The result was a morass of white-collar sociopathy at Archer Daniels Midland, Enron, and WorldCom, and in a host of markets ranging from oil to vitamins.

This was the beginning of the heyday of hedge funds. Unregulated investment houses were originally based on the questionable but legal practice of short-selling—selling a financial instrument you don't own in hopes of buying it back later at a lower price. That way, you hedge your bets: You cover your investment in a company in case a company's stock price falls.

But hedge funds later diversified their practices beyond that easy definition. These funds acquired a good deal of popular mystique. They made scads of money. Their notoriously high entry fees—up to 5 percent of the investment, plus as much as 36 percent of profits—served as barriers to all but the richest investors, who gave fortunes to the funds to play with. The funds boasted of having genius analysts and fabulous proprietary algorithms. Few could discern what they really did, but the returns, for those who could buy in, often seemed magical.

But it wasn't magic. It amounted to the return of the age-old scam called "bucket shops." Also sometimes known as "boiler rooms," bucket shops emerged after the Civil War. Usually, they were storefronts where people came to bet on stocks without owning them. Unlike their customers, the shops actually owned blocks of stock. If customers were betting that a stock would go up, the shops would sell it and the price would plunge; if bettors were bearish, the shops would buy. In this way, they cleaned out their customers. Frenetic bucket-shop activity caused the Panic of 1907. By 1909, New York had banned bucket shops, and every other state soon followed.

In the mid-'90s, though, the credit-derivatives industry was hitting its stride and argued vehemently for exclusion from all state and federal anti-bucket-shop regulations. On the side of the industry were Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, and his deputy, Lawrence Summers. Holding the fort for the regulators was Brooksley Born, who headed the Commodity Futures Trading Commission (CFTC). The three financial titans ridiculed the virtually unknown and cloutless, but brilliant and prophetic Born, who warned that unrestricted derivatives trading would "threaten our regulated markets, or indeed, our economy, without any federal agency knowing about it." Warren Buffett also weighed in against deregulation.

Putin at Davos

Talk about corruption.

And what's been discovered and exposed is obviously only the tip of the giant crooked iceberg that's floating around the globe.

Rats in the Grain

The Dirty Tricks and Trials of Archer Daniels Midland

http://www.nytimes.com/books/first/l/lieber-rats.html

Not only was Whitacre busy but he appreciated the nimble, decisive can-do atmosphere at ADM. He reported directly to Mick Andreas. The huge lysine plant, with an annual output capacity of 250 million pounds, went from blue prints to production within less than a year and a half, an astonishing feat. The facility, which looked like an indoor stadium, opened in February 1991.

    At the time, lysine was selling for about $1.30 per pound. ADM started a price war in order to win market share. When the price hit 60 cents, the operation was not even paying off the building costs. According to Whitacre, "we were losing money, a few million dollars a month. Production costs were high because we were just getting started."

    This sorry state was not regarded by ADM as permanent but only as stage one. As Whitacre put it, stage two started when Mick Andreas and James Randall, the ADM president, put him in touch with Terry Wilson the president of the corn processing division. Not especially popular among employees, Wilson, a gruff, bearish man with forearms like hams, silver hair, and metallic glasses, was the subject of office rumors about price-fixing. He put Whitacre at ease about losing money and said it was time to meet with the major competitors, which were two Japanese firms, Kyowa Hakko Kogyo and Ajinomoto.

    Whitacre told his FBI handlers that Wilson previously had set up a conspiracy to fix prices in citric acid. According to Whitacre, Wilson and Mick Andreas convinced the Japanese that it was time for everyone to climb out of the red in lysine. The way to do it was by raising prices collectively and carefully dividing up the market.

    Whitacre reported that ADM even had a price-fixing motto: "The competitor is our friend and the customer is our enemy." The phrase stood modern capitalism on its head. Whitacre promised that it "turned up lots of times on the tapes" he secretly made of the meetings. "Terry used to say it, and Mick would say it. It was our philosophy.... There are tapes of Mick Andreas quoting his father as always saying this."

    From the first, the government declined all requests to release the tapes under the Freedom of Information Act, because they were evidence in an ongoing criminal investigation. ADM also early developed a militant strategy to prevent any disclosures of the tapes, but portions leaked out.

    After his exposure, Whitacre publicly recounted how he became an informant wearing a wire and at times carrying a tiny recording device implanted in his briefcase. He claimed that in 1992, when price-fixing was being discussed with the Japanese but before it actually began, lysine batches in the ADM plant came out spoiled. There was a suspicion of sabotage by engineers from the Japanese competitors, who had visited the Decatur facility. Eventually sabotage was ruled out. Before it was, Dwayne Andreas became concerned, and ADM called a contact at the CIA who referred the case to the FBI. This resulted in the invitation of Brian Shepard to the plant. Among others, Shepard approached Whitacre who allowed the FBI to tap his home phone and agreed to spy. One of the ironies of the case is that the FBI initially contacted Whitacre about matters unrelated to price-fixing.

    In 1995, Whitacre insisted that he was not threatened by the government. "The FBI never forced me to do anything." He wanted to do the right thing because "from the beginning, I wasn't comfortable with the idea of price-fixing, not only because it's illegal but because I also believe it's the wrong way to do business."

    Brian Shepard also was a significant part of the equation for Whitacre. "I don't know. I just really trusted the guy. If it were another kind of guy, I might not have told him. He was really trustworthy and I found it a real relief to talk to him.... We really hit it off well."

    For the most part, Whitacre charmed the press, which did not probe the inconsistencies in his stories. For example, Whitacre always maintained that Dwayne Andreas was in on the price-fixing scheme. If so, why did he alert the CIA about alleged sabotage and later invite the FBI on site? If the competitor truly was the friend, why would such a friend even be suspected of sabotage? Above all, why really did Whitacre cooperate with the government? No similar tugs of conscience had disturbed him during school or in prior jobs. He was not known for making ethical stands or for doing anything to put his meteoric career at risk.

    Whitacre fast was becoming a folk hero of American business. A pariah at ADM, he found himself at the center of the largest antitrust probe in American history and in the pages of the New York Times, Wall Street Journal, Time, Newsweek, and Barrons. Fortune devoted a cover piece and extensive space to Whitacre's first-person account: "My Life as a Corporate Mole for the FBI." Residents of Moweaqua, from the barber to the police chief, told television that Whitacre and his wife Ginger were model citizens, parents, and philanthropists. The couple was especially concerned with the plight of poor children. They organized toy drives and invited local kids to play on their grounds. Time described Whitacre as practically a "second son" to Dwayne Andreas. Reporters, editors, and readers warmed to the story of a man who had everything and seemingly put it all at risk as a covert operative for the FBI in order to protect free enterprise.

Desperate Times and Desperate Measures

On Main Street and Wall Street, people are being driven to once unthinkable extremes.

http://www.motherjones.com/commentary/tomdispatch/2009/01/desperate-times-and-desperate-measures.html

Going to Extremes

Across the United States, people have been reacting to dire circumstances with extreme acts, including murder, suicide and suicide attempts, self-inflicted injury, bank robberies, flights from the law, and arson, as well as resistance to eviction and armed self-defense. And yet, while various bailout schemes have been introduced and implemented for banks and giant corporations, no significant plans have been outlined or introduced into public debate, let alone implemented by Washington, to take strong measures to combat the dire circumstances affecting ordinary Americans.

There has been next to no talk of debt or mortgage forgiveness, or of an enhanced and massively bulked-up version of the Nixonian guaranteed income plan (which would pay stipends to the neediest), or of buying up and handing over the glut of homes on the market, with adequate fix-up funds, to the homeless, or of any significant gesture toward even the most modest redistributions of wealth. Until then, for many, hope will be nothing but a slogan, the body count will rise, and Americans will undoubtedly continue going to extremes.

[Note: A special bow should be offered to undervalued small-town newspapers and local television stations across the country that have done the grunt work in covering the tragic results of the global economic crisis in their own communities. They continue to offer a real service to the public by documenting how individuals in cities and towns across America are suffering and just what that suffering drives them to do. By way of a Newsweek article on the "Killer Economy?" I recently became aware of an excellent resource on some of the human fallout of the financial crisis, "Greenspan's Body Count" an ongoing feature on the W.C. Varones Blog. Since early 2008, it has provided an invaluable record of "mortgage-related suicides" and other "victims of (former Chairman of the Federal Reserve) Alan Greenspan."]

Down, down it goes. How far down nobody knows!

Vancouver’s low pay out of whack with home prices: tech blogger 

http://thetyee.ca/Blogs/TheHook/Labour-Industry/2009/01/30/HomePrices/

"Affordable commercial real estate is hard to come by in the city - leading in some cases to a perverse reverse-commute where urbanites must schlep out to the suburbs to their workplaces - but more importantly this discourages companies from locating here.

"Most large cities with expensive downtown cores operate as financial centres ...Vancouver does not...

"B.C.'s resource industries, the bread and butter of Vancouver for more than 150 years, are weak thanks to everything from the U.S softwood lumber tariffs to Kyoto to a number of key mining company collapses. Our province has failed to diversify its economic base...

"The advanced industries like software and aerospace that keep California sizzlin' have failed to grow in scale in this city. Investment in this area is weak," with the exceptions of alternative energy and biotech.

"The film industry...is a fickle bride" and "the profits are retained in New York and LA...."

Bell goes on to note that B.C.'s largest industry is the marijuana trade, hardly a good foundation for your basic well-regulated urban economy.

And, when it comes to greasing the wheels of commerce, the Lower Mainland's transportation system is "pathetic."

 "Paul Samuelson: Financial Crisis Work of 'Fiendish Monsters'"

http://economistsview.typepad.com/economistsview/2009/02/paul-samuelson-financial-crisis-work-of-fiendish-monsters.html [75]

Another Nobel Prize winner - one who actually understands the difference [76] between the savings equals investment identity and behavioral relationships - for fiscal stimulus. This is slightly dated, it's from October 2008, but it's not stale yet:

Paul Samuelson: Financial crisis work of 'fiendish monsters', by Kiyoshi Okonogi, Asahi Shimbun [77]: With the financial crisis that started in the United States triggering a global recession, Asahi Shimbun Senior Staff Writer Kiyoshi Okonogi interviewed distinguished American economist Paul Samuelson for his insights on what the world can expect in the days and weeks ahead. ... Following are excerpts: 

Question: The current global financial crisis is said to be the worst since the Great Depression. What is your view?

Answer: I think it is definitely the worst crisis since the 1929-1939 Great Depression, both in America and globally, and I think it was an unnecessary breakdown as there was no need for America to have a meltdown.

When George W. Bush became president in 2001, he inherited a country with quite sound (fundamentals) from President Bill Clinton with an overbalanced budget.

Now this does not mean that there were not problems ahead ... (there had been problems) ever since 1981 when President Ronald Reagan took office.

He was not a bad movie star but he brought into power a swing to the right. This is what we call "extreme right, supply side economics." And, from 1981 we trace the acceleration of the huge yearly balance-of-payments deficit of the United States, which is still going on ... . If you come back 10 years from now we will still have a very serious problem. ... [S]ome time, whether it is eight years from now or 12 years from now, there will be probably a big run against the dollar and probably a disorderly run against the dollar. ...

Bush worst U.S. president in over 200 years

Q: How much of an impact will the global financial crisis have on the Nov. 4 elections in the United States?

A: ...George Bush will go down in the history books as the worst president that America has had in more than 200 years. And, that couldn't have happened if the voters had not moved to the right.

Now, aside from economics, which is my speciality ... President (Lyndon Baines) Johnson introduced Civil Rights ... equality in the law for black Americans. Immediately, all of the Democrats in the solid South moved to the Republican Party and that's part of the reason that for most of the last 28 years, since Ronald Reagan came to power, the Democrats have been the minority party.

I think after November that will change and it will change for two quite different reasons, both very important.

One is the Iraq war, which is a disaster. It's as bad as the Vietnam War and the Vietnam War entangled four or five presidents and there was no victory...

But the other reason is because people on Main Street in America are hurting. The reason they're hurting goes back to 1995 when Alan Greenspan, as the chairman of the Federal Reserve Board, made no efforts to curb the stock market bubble.

So the American electorate is very unhappy. Free trade and globalization add to world productivity. It also adds to the potential standard of living of many people, but unequally.

So, if Bush had been as wise as Clinton, you still would have from free trade a worsening of the situation of the lower middle-classes compared to the upper middle-classes and the very rich.

Adding to that, we had what Bush called "compassionate conservatism," which is generous to millionaires and helping to make them billionaires. The trouble is, it is ungenerous to people below the middle. ...

Fiendish Frankenstein monsters

Q: What is the major cause of the economic fiasco?

A: The whole history of capitalism has had up-bubbles in real estate and down-bubbles after something different. This time the new fiendish Frankenstein monsters of financial engineering blinded the eyes and the minds of everybody.

 Samuelson :

"So the American electorate is very unhappy. Free trade and globalization add to world productivity. It also adds to the potential standard of living of many people, but unequally."

----------------------------------------------------------------------------------

Right. We went around denouncing globalization and the NAFTA and now they wouuld appear to be coming apart as protectionism takes over. And that is bad because people are hurting.

But wasn't that to be the future? "Change" is needed in a healthy economy. It was a sign of mental health to invite and accept change - even as people were being laid off and production went "offshore".  People were hurting. But it was slow, insidious like a cancer. And, anyway, this was becoming a "knowledge based" economy, thanks to IT. Right? (That one was challenged by the local newspaper here, in the home of RIM, for the first time a week ago as unemployment locally went above the national average, defying holy writ).

And you just had to ignore the obvious limits to growth for generations to come. The ubiquitous "they" will come up with something. For everything. And a majority of people still buy that one.

Let's face it. "Authority" rules because we haven't the foggiest what is going on in focus groups and labs where the future is being fashioned. It's not just "Frankenstein monsters of financial engineering." And ignorance is bliss.

Everyone in Latvia is just plain pissed off, it would seem:

Those good years took Latvia to a great height, and now it has crashed to the ground with a sickening thud. Surveys suggest that it is suffering more than any other European economy. The IMF has given huge loans and the government is trying to make massive cuts to balance the books. Wages of civil servants are to be cut by a third, some schools and hospitals are closing, VAT has been put up to 21% and more cutbacks are certain. This in part led to the riots in the middle of last month. Some see it as a very worrying moment. Latvia is used to changes of government and lively street protests, but free Latvia is not used to political violence.

http://www.bbc.co.uk/blogs/thereporters/markmardell/2009/02/riga_latvia_... [80]

Coming to a town near you?

Maybe renting is the way to go for the next few years.

San Francisco’s Tallest Condo Cuts Prices 15% as Glut Increases

http://www.bloomberg.com/apps/news?pid=20601213&refer=home&sid=a.l_gBfpOQrs

“I wonder if a condo is even a good thing to buy,”

S&P 500 to Fall as Bank Bailout Stalls, Barclays Says

http://www.bloomberg.com/apps/news?pid=20601213&refer=home&sid=aq9GGgCeXDsw [83]

The Standard & Poor’s 500 Index [84] will fall, wiping out its 9.8 percent gain since November, as President Barack Obama [85]’s so-called bad bank plan takes months to carry out and the recession worsens, Barclays Plc said.

“We suggest putting down the champagne glass and drinking a cup of coffee,” Barry Knapp [86], chief U.S. equity strategist at Barclays said in a report dated Jan. 30. “The policy euphoria associated with the ‘bad bank’ plan will prove to be short lived.”

The S&P 500 [84] jumped 3.4 percent on Jan. 28, last week’s biggest daily gain, when government officials said the White House is moving closer to a plan to buy toxic assets from banks. The complexities of the program mean it will take months to implement, said Knapp, who reiterated his forecast that the U.S. stock benchmark will drop to 750 in the first quarter, the lowest level in 11 years.

Economic data that is still “unequivocally negative” will also prevent a rally in the stock market anytime soon, the strategist wrote. The S&P 500 dropped less than 0.1 percent to 825.44 today after the Commerce Department reported U.S. consumer spending fell in December for a record sixth consecutive month.

Barclays joins Goldman Sachs Group Inc. in predicting the S&P 500 will retreat back to the Nov. 20 low of 752.44 as approval of legislation to support the economy and financial system takes longer than investors anticipate.

‘Critical Milestones’

“Passage of a stimulus plan and resolution regarding the remaining TARP capital are critical milestones that must be passed for the S&P 500 to trade higher,” Goldman’s David Kostin [87] wrote in a note last week.

David Bianco [88] at UBS AG disagrees. Investors will gain confidence after the government releases more details on its program to buy bank assets and push the S&P 500 to 1,000, a level last reached on Nov. 4, the equity strategist said in a research report.

Bianco’s end-of-year estimate for the S&P 500 to reach 1,300 is the most bullish of the 10 Wall Street strategists surveyed by Bloomberg. The UBS forecast implies a 57 percent surge from the S&P 500’s Jan. 30 close.

Barclays is the most pessimistic with a projection of 874, a 5.8 percent advance. Goldman Sachs’s estimate for the U.S. stock benchmark is 1,100, a 33 percent gain. All three strategists are based in New York.

Sweden’s Fix for Banks: Nationalize Them

The Swedes have a simple message to the Americans: Bite the bullet and nationalize.

Oh those Swedes. Still playing hardball with capitalists after all these years.

Yep, that's how they should be dealt with.

Had a look at your new, lower line of credit interest rate lately (not)?

 Our banks won't ease up on credit, despite the wonderful new, lower bank rate, because they have to still compete for investor dollars on THE MARKET. And your own pension fund is sure to still have some finance sector equity kicking around in it somewhere.

Johathan Swift would have known how to deal with this. But our media would never employ such a writer, causing disquiet among the advertising community, their lifeblood. Just look at Walrus's advertising and stop wondering at its inane picture of our universe, the last few years.

A very appropriate Word of the Day:

The BMO's explanation for raising interest rates:

"While the BMO Prime Rate has been decreasing in recent months and the savings passed on to you, the cost of borrowing has risen dramatically for all banks around the world and BMO is no exception. To reflect the changing market realities and the increases in the cost of raising funds in the market, we're increasing our Base Rate from 2% above the BMO Prime Rate to 3% above the BMO Prime Rate."

No mention that it will happen to all - just like gas prices at the pump, and for the same reasons.

More mendacity...{Latin mendax  -dacis perhaps from mendum  fault}

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan.....“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm.

http://www.nytimes.com/2009/02/04/business/04pay.html?hp

or horses tethered to generators, while the bread bakes in solar-powered ovens.

what's the difference between farmers growing biofuels for consumption by wealthy users - to power their vehicles - and human-powered rickshaws ?

crude oil is a huge windfall, in terms of energy density.  as it becomes more expensive & unavailable - and considering the environmental costs of replacements like tar sands - human powered rickshaws don't sound so bad.

 although my limited experience with wealthy people is that some of them prefer the energy for their transportation come from a long ways away, so they don't have to deal with the riff-raff.  or the Rabble. 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - http://LASIK-Flap.com ~ Health Warning about LASIK Eye Surgery

And what are the caps in Canada?

These executives just sicken me with their greed and lack of a moral compass. How would any of them like to trade places with any one of the hundreds of thousands of the unemployed who lost their job this past month.

ADP Says U.S. Companies Reduced Payrolls by 522,000

http://www.bloomberg.com/apps/news?pid=20601087&sid=alV5yqCR0DTY&refer=home [103]

 Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was less than economists forecast and followed a revised cut of 659,000 for the prior month.

Employers are slashing workers as clogged credit markets and slumps from housing to manufacturing threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending [104], which represents about 70 percent of the economy.

“We’re in for several more months of bleeding on the jobs front,” Joel Prakken [105], chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.

ADP revised its methodology late last year to help limit differences between its calculations and the government’s payroll numbers. Last month, the new methodology overestimated the drop in December private payrolls by 162,000 after underestimating the count by about an average 116,000 a month in the first 10 months of 2008 before the revision.

The Labor Department may report in two days that the economy lost 535,000 jobs in January and the unemployment rate jumped to a 16-year high of 7.5 percent, according to median forecasts in a Bloomberg News survey. The U.S. lost almost 2.6 million jobs in 2008, the most since 1945.

Less Than Forecast

The ADP report was also forecast to show a decline of 535,000 jobs, according to the median estimate of 23 economists in a Bloomberg News survey. Projections ranged from decreases of 487,000 to 720,000.

Stock index futures rose following the report and Treasury securities were little changed. The Standard & Poor’s 500 futures contract was up 0.6 percent at 8:57 a.m. in New York. The yield on the benchmark 10-year note was 2.88 percent, the same as yesterday’s close.

ADP includes only private employment and does not take into account hiring by government agencies. Macroeconomic Advisers produces the report jointly with ADP.

Job cuts announced by U.S. employers more than tripled in January from a year earlier, led by planned cutbacks at retailers following the worst holiday-shopping season in four decades, the Chicago-based placement firm Challenger, Gray & Christmas Inc. said today. Firing announcements [106] rose 222 percent last month from January 2008, to 241,749. It was the largest total since January 2002, when job cuts reached a record of 248,475, Challenger said.

Breakdown

Today’s report showed a reduction of 243,000 workers in goods-producing industries including manufacturers and construction companies. Service providers cut 279,000 workers. Employment in construction dropped by 83,000.

Companies employing more than 499 workers shrank their workforces by 92,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 255,000 jobs and small companies decreased payrolls by 175,000.

Businesses continue to announce firings. Rockwell Collins Inc., an aircraft-parts producer, yesterday said it will eliminate 600 positions in coming weeks, and PNC Financial Services Group Inc. said it plans to cut 5,800 jobs by 2011.

The economy will probably “remain in a severe recession with unemployment well in excess of 8 percent” through 2009, PNC Chief Financial Officer Richard Johnson said on a conference call.

The ADP report is based on data from 400,000 businesses with about 24 million workers on payrolls.

ADP began keeping records in January 2001 and started publishing its numbers in 2006.

As the economy takes a spanking, many women are turning to freelance fetish work to supplement their incomes.

"I've seen it before," says Linda, “during the tech bust in 2002. Women who thought they would always make a decent living in the tech sector lost their jobs.” They came looking to Linda’s industry for freelance work, and now it’s happening again: professional women whose cubicle-bound careers have been downsized are entering Linda’s corner of the “gig economy”—a corner that involves whips, ropes, and occasionally, nipple clamps.

http://www.thedailybeast.com/blogs-and-stories/2009-02-03/kinkonomics/ [108] 

It makes sense. Good jobs are hard to find and there are an awful lot of businessmen who badly deserve a spanking now.

It makes bad sense Doug. They are bad jobs, and there is no humour in it.  Exploitive and dehumanizing. The product of desperation. A parent's nightmare.

I don't really want to derail this thread by spending a long time on this, but that's not the impression of it I get at all from the professional dominatrices I've known. (Yes, that's kind of weird. I spent a good bit of time as a younger lad in gothic culture and it goes with that territory.) It's not so wonderful a job as being a bank CEO, but it pays the bills quite nicely.

$200 an hour is bad? I wish my job were that kind of awful. They could strip (or telemarket, for that matter) instead and earn a lot less and have a lot less control. Doing any job in a capitalist society with inadequate social welfare is a product of desperation.

Bernard Madoff has a Japanese counterpart, it seems:

It is a bizarre tale of a bedding company, a megalomaniac businessman and a make-believe currency. And today it culminated in a series of arrests in what could be the biggest investment scam in Japanese history.

Kazutsugi Nami, the chairman of L&G, which stands for Ladies & Gentlemen, a bankrupt bedding supplier, and 21 other executives are suspected of defrauding hundreds of thousands of investors of at least $1.4bn (£1bn) over the past eight years.

http://www.guardian.co.uk/business/2009/feb/05/japan-kazutsugi-nami-ladi...

Unemployment up in the U.S. to 7.6%, 7.2% in Canada.  Worst job loss, nearly 600,000, in the U.S. since 1974.

http://www.nytimes.com/2009/02/07/business/economy/07jobs.html?_r=1&hp

UK banks are rushing to get the bonuses out to their greedy managers now before their government acts too to limit compensation in state-supported banks:

Banks dependent on taxpayer support are planning to rush out hundreds of millions of pounds in bonuses to senior bankers and traders before a threatened crackdown.

As ministers prepared to curb excessive remuneration, it emerged that Barclays and Lloyds Banking Group were poised to follow Royal Bank of Scotland (RBS) by paying bonuses within weeks.

Lloyds, which has taken £17 billion in rescue money from the Government, appears ready to give hundreds of millions of pounds to top executives and more junior staff.

Barclays, which has tapped the Bank of England for billions of pounds in loans and guarantees, is believed to be planning even larger payouts. According to the terms of its purchase of the North American division of the collapsed Lehman Brothers, Barclays is due to pay $2.5 billion (£1.7 billion) in bonuses to traders and dealmakers on Wall Street in the next few days.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_...

Obama Bank Bailout: There is an Alternative Open Letter to Dr. Joseph Stiglitz and Challenge to Debate

by Richard C. Cook

Stiglitz says things that needed to be said. But Cook's is a very good letter, imo. 

Here is one outcome of the financial crisis that isn't bad whatsoever:

The think-tanks with large endowments like Brookings, the Rand corporation and the Council on Foreign Relations have seen a lot of their cash-pile go up in smoke in the stock-market slump. Things are even more precarious for a lot of the smaller think-tanks - many of them in Europe - that do not have big endowments, but rely heavily on corporate donations and sponsorship. As company bosses and investment banks look for easy items of expenditure to take the axe to, donations to think-tanks for research are an obvious target.

http://blogs.ft.com/rachmanblog/2009/02/incredible-shrinking-think-tanks...

If you still have money by this point, you may want to consider heading to NYC for some deep-discount designer fashion shopping.

When Saks Fifth Avenue slashed prices by 70% on designer clothes before the holiday season even began, shoppers stampeded. "It was like the running of the bulls," says Kathryn Finney, who says she was knocked to the floor in New York's flagship store by someone lunging for a pair of $535 Manolo Blahnik shoes going for $160.

Saks's deep, mid-November markdowns were the first tug on a thread that's now unraveling long-established rules of the luxury-goods industry. The changes are bankrupting some firms, toppling longstanding agreements on pricing and distribution, and destroying the very air of exclusivity that designers are trying to sell.

http://online.wsj.com/article/SB123413532486761389.html?mod=testMod [118]

There were 11 fewer debutantes at the International Debutante Ball this year. Oh the tragedy!

But the experienced hands, including mothers like the duchesse who made their own debuts in society in this very ballroom, could see the subtle difference in the layout of the hall. And there were fewer debutantes, 47 this year rather than the 58 at the last biennial ball in 2006, and far fewer guests — 662 instead of 976.

http://www.nytimes.com/2008/12/31/nyregion/31debs.html

Paul Krugman in today's NYTimes: "What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

 A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished. Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years. Yet the centrists did their best to make the plan weaker and worse. "

This is a hoot!

I never know with Americans when they use the term socialist whether they mean commie.  

In many ways our economy already resembles a European one. As boomers age and spending grows, we will become even more French.

http://www.newsweek.com/id/183663

Americans must think Harper is gonna lead them to the promised land.

 http://www.newsweek.com/id/183670 [123]

Canadian banks are typically leveraged at 18 to 1--compared with U.S. banks

In the States, all political commentary is Orwellian doublespeak as a rule

I'm not sure why red Republican states would have declined money even in good times, because they've been have-nots for a long, long time. The USSR wasnt this broke in 1991.

That reeks more of Lassalle than Marx to me.

Arnold having a hard time with Rae days.  Perhaps he was visionary...for Rethuglicans...:

Read it all.

http://cnews.canoe.ca/CNEWS/World/2009/02/09/8330031-ap.html

How many Hummers does the governor own now?

------------

So we know now these apoligies aren't worth shit as they were drafted by pr firms!

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5697883.ece

The bankers who led Royal Bank of Scotland and HBOS to the brink of collapse will offer a public apology today.

But amid the furore over bankers’ bonuses, they will also seek to point out that they have personally been “punished for failure”, losing millions of pounds because of the meltdown in their banks’ share prices.

Sir Fred Goodwin and Sir Tom McKillop, respectively the former chief executive and chairman of RBS, will express their regrets at a meeting of the Treasury Select Committee. Their expressions of remorse will be echoed by Andy Hornby, the former chief executive of HBOS. and Lord Stevenson of Coddenham, its former chairman.

RBS is 68 per cent owned by the Government while the new Lloyds Banking Group, formed after the rescue of HBOS by Lloyds TSB, is now 43 per cent owned by taxpayers. All four of the bankers have received extensive coaching from public relations and communications experts before today’s meeting — in which MPs, led by John McFall, the committee chairman, are expected to question them aggressively about their role in the banking crisis.

Last September 18, the global economy was just hours from total collapse.

On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.

The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.

They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.

If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.

http://www.dailykos.com/storyonly/2009/2/9/234340/6189/142/695504

Yay free market!

It seems something similar happened in the UK on October 10:

City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

 http://www.dailymail.co.uk/news/article-1127278/Revealed-Day-banks-just-hours-collapse.html#

Geithner Says U.S. Financial System Badly Damaged, Needs Aid

http://www.bloomberg.com/apps/news?pid=20601087&sid=ar9DJY_76OuA&refer=home [131]

Feb. 10 (Bloomberg) -- Treasury Secretary Timothy Geithner [132] said the U.S. financial system is badly damaged and needs more government help to avoid a collapse that could devastate an already battered economy.

“The financial system is working against recovery, and that’s the dangerous dynamic we need to change,” Geithner said in remarks prepared for delivery today at a speech in Washington. “Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.”

In the speech, Geithner lays out the administration’s overhaul of the $700 billion bank rescue plan it inherited. He acknowledged that “the American people have lost faith in the leaders of our financial institutions” and are skeptical of the rescue spending so far.

The Obama administration’s strategy has three main components: more capital for banks, financing for as much as $1 trillion of consumer and business loans, and public financing for private investors willing to buy distressed assets, people familiar with the plan said.

I'm so glad we are tied into the US economy, after all the Dow Jones is only down over 300 basis points this morning in early trading - another buying opportunity!  

People have attacked Trudeau for his economic policies to try and diversify Canada's international trading partners. He knew what he was talking about.

Now thanks to Harper and Mulroney, etc. we can't even control our own destiny in Canada.

http://business.theglobeandmail.com/servlet/story/RTGAM.20090210.wboc0210/BNStory/Business/home

Perhaps. What's clear about marauding capital today is that it's managed to divorce itself from productive labour economies and achieve unprecedented concentration of wealth in offshore accounts and privatized assets. Capitalists have enslaved whole nations of people with compounding interest on debt that we will never pay down with credit-based consumption economies fueled by more borrowing of money and credit as interest-owing debt. We're being prodded down the path of obligatory growth and indebtedness. 

Bank of Canada says to Canadians: ~Our planned and enforced impotence is still the way, so carry on with your pathetic struggle for democracy

Ha!

Ya, back then they needed clean money to make a mandatory offering in the temple. And so poor people couldnt afford to worship.

It Shall Be a Jubilee Unto You

We need a new covenant. And we can be sure the Gracci bros would be pushed over a cliff by our senators today sooner than grant relief to debt slaves.

The markets have spoken - DJ down close to 400 points, TSX down over 200 points  Another buying opportunity - well eventually one of this situations will actually provide a buying opportunity, but just not sure what century that will be

 Markets plunge on Geithner plan

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.wUSbailout0210/BNStory/crashandrecovery/home

But analysts said they were disappointed by the lack of details in the plans, and investors appeared wary. The Dow Jones industrial average plunged about 330 points in afternoon trading as financial stocks led the market lower, reflecting Wall Street's concerns that the government's latest plans aren't enough to revive the banking industry.

The new efforts are part of the government's major overhaul of the widely criticized $700-billion (U.S.) financial rescue program.

The Federal Reserve said it would expand the size of a key lending program to as much as $1-trillion from $200-billion. The program, which has yet to begin operations, is designed to boost resources for consumer credit and small business loans.

When the right takes power they go for the jugular, but when others takes power they want bipartisanship. WTF!!! Doesn't seem like very good negortating strategy to me.

http://www.truthdig.com/report/item/20090209_eugene_robinson_bipartisanship_stimulus/

But in the Senate, the ad hoc “gang” of moderate Republicans (all three of them) and conservative Democrats cut those state funds to $39 billion. It’s wrong to see this as the normal give-and-take of legislative sausage-making, the usual trek down a well-worn path toward the golden compromise that everyone can live with. This is not, repeat not, a time for compromise. Meeting in the middle, which the Senate sees as its role in our democracy, renders the whole exercise potentially useless. If we don’t get enough money into the economy, and if we don’t do it soon, we risk wasting a king’s ransom on a stimulus that’s too puny to stimulate.

    This is not an issue where the answer is to be found in the “middle.” This isn’t a matter of left, right and center; it’s a matter of yes or no: Does the federal government try to get the economy moving again, or not? This will sound ridiculous, but the fact is that the details of Obama’s plan don’t matter that much. If anything, many economists believe, the government needs to spend even more than Obama proposes.

    Republicans are using this debate as a branding opportunity, positioning themselves as careful stewards of the public purse. This is absurd, given their record when they were in charge. It’s also cynical. They know that some kind of stimulus will get passed anyway. If it works, they’ll claim their principled intransigence made the plan better; if it doesn’t, they’ll say “I told you so.”

    Obama and the Democrats have public opinion on their side

Wait a minute-wait a minute! We were better off with Soviet Communism!

This is the type of scenario which stupidly spending on military expenditures as a prime example is costing us:

 Pimco Says World Economic Crisis Faces ‘Second Wave’ (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=anA4PQ48RFhI&refer=home

Asia: The Coming Fury 

Walden Bello

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Well if the market is going to jump up today should probably be the day, but it seems they are postponing the enevitable.

I wonder when the run on these banks is going to start, or maybe it already has.

http://www.google.com/hostednews/ap/article/ALeqM5hRdNEUn0EJdRzHIWuwdox6VWT7JAD96903800

In a report Monday, RBC Capital Markets predicted that up to 1,000 U.S. banks — or roughly one in eight — could fail over the next several years. That's more than three times RBC's earlier estimate.

 Is this what people think of Obama's stimulus package?

Gold hits seven-month high on safe-haven buying

http://www.marketwatch.com/news/story/gold-rises-near-930-safety/story.aspx?guid={604BA4C2-6E2A-4D9B-B021-8E9E996F7255}&dist=msr_2

there's an easy way to solve all this mess. The u.s. president simply has to announce a 100 percent tax on all profits and any personal income over 1000000 dollars . Then unveil a plan to lead the global community in establishing a lunar space station.

I like that idea posted above where they taser all the banksters and send them to Gitmo where they cant do more harm. Or was it just to bullwhip them senseless? I forget which now. 

China’s exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe and imports [149] plunged by a record, signaling a deepening slump in the world’s third-biggest economy.

Outbound shipments [150] declined 17.5 percent in January from a year earlier and imports fell 43.1 percent, the customs bureau said on its Web site today. Both numbers were worse than economists’ forecasts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axZwl6OyPaZY&refer=h... [151]

Ouch.

Well China is now selling more new cars than the USA.

I wonder what the stats are on total used car sales compared to new car sales.

Car sales are expected to drop by $5 billion in Canada this year by some analysts, so manufacturers need to start reeling in some of those excessive prices on their vehicles.  Hyundai came up with a good marketing strategy to offer to take back new cars purchases from people who lose their jobs. Combined this perk with zero interest rates (not really true, just a little con job here by accountants), and slashed prices should start pushing Hyundai up percentage wise in total sales in Canada.

Dow Jones down again close to 250 point drop so far today on Obama's stimuluas package. Certainly not a sign of confidence so far. 

http://business.theglobeandmail.com/

China may be recovering, which is one of the four countries apparently planet earth's econony depends on now. The other three being Russia, Brazil, and India.

In 2008's fourth quarter, consumer spending on food fell at an inflation-adjusted 3.7% from the third quarter, according to data from the Commerce Department's Bureau of Economic Analysis. That is the steepest decline in the 62 years the government has compiled the figure. The report is based on receipts from a sampling of food-oriented businesses across the country.

The big drop likely comes from two things, said Joseph Carson, an economist at AllianceBernstein who worked at the Commerce Department in the 1970s. First, consumers have been trading down to lower-priced items. Second, he thinks many households dug into their pantries for staples rather than going to the store, a trend that can't continue indefinitely. "You can't contract at this rate for long," he said. "It's just shocking."

http://online.wsj.com/article/SB123448606475780133.html

So this is how it works.

Paulson May Have Made $67 Million in Lloyds Plunge  

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDcOB7zgzB58&refer=home [157]

Paulson & Co., the hedge fund run by billionaire John Paulson [158], may have made as much as $67 million in 25 minutes today as Lloyds Banking Group Plc [159] lost about 5.9 billion pounds ($8.5 billion) in market value.

Lloyds fell the most in 20 years after saying HBOS Plc, the U.K. lender it took over last month, would report a 10 billion- pound pretax loss. The shares plunged as much as 43 percent in less than 25 minutes of London trading.

Paulson, who made billions from betting against the subprime mortgage market, held a Lloyds short position representing 0.79 percent of the bank [159], or 129.3 million shares, as of Jan. 20, according to a regulatory filing. DataExplorers.com [160], which tracks share borrowing from London, said 1.1 percent of the stock was on loan as of Feb. 11, the most recent data available. That’s down from as much as 8 percent six months ago and suggests Paulson held the bulk of the remaining short position.

“It wasn’t really shorted at all before this share drop,” Julian Pittam, a managing director at DataExplorers.com [160], said in an telephone interview from London. “There’s little upside and lots of downside in banks when there’s this much political rhetoric and volatility going on.”

Armel Leslie [161], a spokesman for the $30 billion New York-based hedge fund, declined to comment. There’s no indication that Paulson closed his short position, and there won’t be until a subsequent filing.

Paulson’s Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

Shares Tumble

Lloyds closed down 32 percent at 61.4 pence. Paulson’s short position would have netted a gain of $54 million, based on the closing prices of the past two days.

The Financial Services Authority, the U.K. market regulator, lifted a short-selling ban on financial companies on Jan. 16. The restrictions were imposed in September as politicians and investors blamed hedge funds for destabilizing markets.

So this is how it works.

Paulson May Have Made $67 Million in Lloyds Plunge  

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDcOB7zgzB58&refer=home [157]

Paulson & Co., the hedge fund run by billionaire John Paulson [158], may have made as much as $67 million in 25 minutes today as Lloyds Banking Group Plc [159] lost about 5.9 billion pounds ($8.5 billion) in market value.

Lloyds fell the most in 20 years after saying HBOS Plc, the U.K. lender it took over last month, would report a 10 billion- pound pretax loss. The shares plunged as much as 43 percent in less than 25 minutes of London trading.

Paulson, who made billions from betting against the subprime mortgage market, held a Lloyds short position representing 0.79 percent of the bank [159], or 129.3 million shares, as of Jan. 20, according to a regulatory filing. DataExplorers.com [160], which tracks share borrowing from London, said 1.1 percent of the stock was on loan as of Feb. 11, the most recent data available. That’s down from as much as 8 percent six months ago and suggests Paulson held the bulk of the remaining short position.

“It wasn’t really shorted at all before this share drop,” Julian Pittam, a managing director at DataExplorers.com [160], said in an telephone interview from London. “There’s little upside and lots of downside in banks when there’s this much political rhetoric and volatility going on.”

Armel Leslie [161], a spokesman for the $30 billion New York-based hedge fund, declined to comment. There’s no indication that Paulson closed his short position, and there won’t be until a subsequent filing.

Paulson’s Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet. Last year, his flagship fund returned 37 percent, compared with a loss of 19 percent for hedge funds on average.

Shares Tumble

Lloyds closed down 32 percent at 61.4 pence. Paulson’s short position would have netted a gain of $54 million, based on the closing prices of the past two days.

The Financial Services Authority, the U.K. market regulator, lifted a short-selling ban on financial companies on Jan. 16. The restrictions were imposed in September as politicians and investors blamed hedge funds for destabilizing markets.

The big money is often made on the short side of things.

Stocks drop a lot quicker than they go up.

And big time banksters being bailed-out with billions and billions have been betting against one another on the way down, too. It's blasphemous.

What's this tell you.

 The national average price for home sales via the MLS® in January 2009 is down 11.3 per cent compared to January 2008.

http://creastats.crea.ca/natl/mls_stats.htm

Closing for length.