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June 13, 2009
Links June 13 09

For Iran coverage please see the post below.

Please add your links, views and news in the comments.

Posted by b on June 13, 2009 at 08:03 UTC | Permalink
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Now the photos of the seized paper is looking a little more like fakes (e.g. fake no. 4) than like Zero Hedge’s bearer bond example – shaped like currency rather than a certificate, with denominations in upper corners only rather than all four corners. And the so-called trustee doesn’t show up as an official anywhere.

Posted by: …—… | Jun 13 2009 11:39 utc | 1

America! the blessing is next to the wound…
Freud is not your friend…
Ever wonder if he pulled the wings of of butterfly’s? But, we do know he was a chain smoking cocaine addict Jew.
From the frying pan to the fire, from Pavlov to the Skinner Box…
Where is your pathos?
Welcome to American Enantiodromia, America heal thyself or remain a Hospital of incurables.

Posted by: Uncle $cam | Jun 13 2009 12:22 utc | 2

re: Soros Says CDS are Destructive, Should be Outlawed
To me, Soros is a very interesting guy. I see him as having and articulating a moral core as it relates to functioning of markets. Yet, many of his big bets are to win big, to the exclusion of what he espouses.
Whatever the case, his CDS summary you link to is, in IMO, right on target, lacking only in detailed timelines which bring severity (crime AFAIC) into stark focus. From your link, Soros summarizes:

“In both cases, some bondholders owned CDS and they stood to gain more by bankruptcy than by reorganization. “It’s like buying life insurance on someone else’s life and owning a license to kill,” he concluded.

As brief discussion in comments we had for June 11, this is what I meant in saying:

The transformation in all this realigning world economies which IMO needs to happen is a recognition of doing work that matters with currency value following those achievements (or lack thereof), respectively. Rather now, as has happened leading up to current mess, it is the currency wagging the production with said currencies being manipulated in all kinds of ways to create illusions of wealth they represent. It’s bass-ackwards, leaving Wall street again poised to determine winners/losers for same reasons they sold CDS fraud, etc etc.

That to most citizens of western world (US in particular) the means by which so much savings was (literally) stolen by these shenanigans is still a mystery… I don’t know, doesn’t portend much (cough) confidence for what’s going on now, given next to nothing has been done to clean this up. Looks to me, in fact, that BO’s advisors are rolling the dice (deliberate choice of those words) that current gambles will bring us back to prosperity.
That their efforts entirely abandon regulatory restructuring (not to mention severe legal re-definitions of fraud) in order to create an environment where meaningful productivity has a rats-ass of a chance to systematically be rewarded by financial systems, the function of which is supposed to do just that, but instead does as SOROS describes in above quote.
Your EconBrowser link says as much, in more precise language:

The fun and games begin when multiple contracts get written on a single credit event and the notional value of outstanding contracts on that event– the total amount of money that is promised to be paid to the buyers of those CDS in the event of a default on the underlying asset– becomes larger than the par value of the underlying asset itself. Then it would clearly pay the party who sold those contracts to buy the underlying asset itself at par, relieve the original debtors of their burdensome obligations, and be out only $X (the underlyinevent) rather than some multiple of $X (all the contracts written on the event).

(continued in next post to avoid your 3 links per post = spam limit)

Posted by: jdmckay | Jun 13 2009 13:53 utc | 3

re: BO’s utter lack of meaningful reform/restructuring etc., latest consistently disappointing case in point highlighted by Yves today @ Naked Capitalism: Geithner’s Plan on Pay Falls Short…

Looking sternly into the cameras, Mr. Geithner read a statement in which he described executive compensation as a “contributing factor” to the crisis. Then he outlined a series of tough-sounding principles, including a “re-examination” of such egregious practices as golden parachutes, a need to align compensation practices with “sound risk management” and the importance of having compensation plans that “properly measure and reward performance.”
But then, as he so often does, he proceeded to follow these tough words with actual proposals that were less than inspiring. The only legislation his department planned to propose — indeed, the only legislation he deemed necessary — were bills that called for compensation committees to be made up of independent directors, along with “say-on-pay” legislation, which would give shareholders the right to vote on a company’s pay plan. That vote, however, would not be binding….

So, in summary, given subject of your original post/link (CDS shenanigans), all evidence I see is that that:
a) those things were monstrosity, they were fraudulent, they distort market reality, and they were vehicles for massive fraud… destroying legitimate enterprise in their wake while diverting legitimate savings into an unrecoverable black hole.
b) nothing has been done to acknowledge/explain/persuade (mostly) unknowing publics of the reality of this, in fact TARP (Bernacke/FED) has largely hidden accurate accounting of said foibles while re-financing the perpetrators.
c) BO policy pretty clear that full force of US gov is behind empowering same perpetrators for another go around, in name of “fixing our financial system.”
Change you can believe in.
NOT.

Posted by: jdmckay | Jun 13 2009 14:00 utc | 4

Ok, on same topic, after reading/posting and moving on to rest of my morning reading, another layer to insidious infectiousness of these monstrosities…
I live in New Mexico, but process I describe below has occurred in NY, Cal, Pennsylvania, Colorado (and who knows where else), the details of which only gradually percolate up to MSM level of locals most affected.
In our state, as financial crisis began to unfold (belatedly around 11/08 here), we saw repeated headlines in our Paper of Record that NM was faring better than average, that “Mortgage Bond Meltdown was Overblown”… and on point for this post, that State managed retirement funds were safe, carefully insulated from CDS vagaries, etc. etc.
Over the course of months, it has trickled out that:
a) State fund losses have been massive, to point where reallocation of benefits to current retirees and deductions from current workers are inevitable.
b) Lobbyists were persuasively influencing investments of these funds.
c) said lobbyists were middle men, representing Morgan Stanley/Merrill Lynch/Lehman (etc.) and, almost exclusively, pitching various funds, setup by groups they were also paid to represent, which sold various forms of derivatives which, when traced back through opaqueness of their various proxy disclosures, all traced back through many many layers to various packaging of mortgage bonds (CDO/CDS) marketed through usual suspects on WS.
In NM alone, I’ve now see loss estimates in +15b range… all steeped in uncertainty because underlying assets still too obscure (at least according to public disclosure) to value. Yet, from what I’ve seen to date, everything they did (at least here) seems to be “within the scope of the law”… eg: not prosecutable.
I don’t know how else to read this, other than to conclude: Fraud is completely legal.

Posted by: jdmckay | Jun 13 2009 14:38 utc | 5

“Tough sanctions may provoke NKorea: US envoy”
Of course that’s what the chicken-hawks want — mo’ war. The US has not pushed for peace with North Korea for 55 years — why start now? The US and NK are still in a state of war, and the US would love to have an excuse to put troops back into North Korea and ‘finish the job’ a la Iraq.

Posted by: Don Bacon | Jun 13 2009 15:34 utc | 6

I don’t know beans about the economy, but those of you that do might be interested in this — “M-1 Money Multiplier: Over a Cliff — This chart indicates the degree of bankers’ panic. They will not lend money except to the Federal Reserve System, where it is kept as excess reserves. This money does not enter the fractional reserve process.”
http://www.garynorth.com/public/5070.cfm

Posted by: Don Bacon | Jun 13 2009 16:11 utc | 7

@ Don Bacon #6 “the US would love to have an excuse to put troops back into North Korea and ‘finish the job’ a la Iraq.”
I don’t think so. The presence of NoKo provides a plausible excuse for the US to maintain de facto permanent bases on the northeast Asian continent (Japan is an island; not logistically the same), while simultaneously providing a meager buffer between those bases and China. It’s a fairly ideal situation from the perspective of the defense industry.
NoKo is a small, poor country which can not represent much of a physical threat (particularly after the economic and agricultural free fall it experienced after having lost its chief benefactor in the 1990’s), but it represents a perfect psychological bogeyman from a political standpoint. The defense industry no more wants to “finish the job” with North Korea than it wants to put any nails in the coffin of Usama bin Laden. It’s simply too convenient a situation to throw away lightly.
The only question now is whether or not NoKo continues to agree to be conveniently exploited in perpetuity now that the old cold war is over and they are not so far receiving the same material benefits from the new cold war.

Posted by: Monolycus | Jun 13 2009 16:18 utc | 8

@Don Bacon
I might have misread your #6 if the emphasis was not on “finishing the job“, but rather on “a la Iraq“. If the US were not already mired down in at least two other money pits and if the domestic economy were more robust, I could understand your conclusion. I still don’t think the US at heart wants to rock the boat by escalating things into a quagmire there.
The logistic convenience of NoKo is obviated by putting ground troops into it, and mutual fear of the Kim dynasty is one of the only factors that keeps SoKo and Japan on such good economic terms with the US. Eliminating the threat or exposing the US further as a “paper tiger” which can not decisively win a war runs counter to its interests.
A good Emmanuel Goldstein is hard to find; an Emmanuel Goldstein that is as geographically ideal as North Korea is next to impossible. I expect that the US wants nothing more than to rattle a saber for the remainder of this news cycle. It is NoKo who might decide not to relinquish the limelight, and that has the potential to be economically disastrous to the US.

Posted by: Monolycus | Jun 13 2009 16:32 utc | 9

Monolycus,
Putting US troops into NK doesn’t mean that they subsequently have to be removed from any part of Korea, does it. As I say, a la Iraq. Or, say, Germany, Italy or UK. US troops, unless defeated (Vietnam), generally have one-way tickets overseas. They go, and they stay. And stay. The current project in SoKo is to build high-rise apartment buildings, schools and recreation facilities as SoKo becomes an ‘accompanied tour’ (with families).
Nobody can predict the future, but anybody can recognize innate belligerence. Look for a sure-fire ‘Gulf of Tonkin’ incident.
Think strategically. In the final analysis, eleven US carrier fleets and a vast nuclear submarine fleet can’t be justified by any picayune NK threat. There is currently a China/Taiwan thaw, so that rationale has subsided. A larger ‘threat’ than either NK or a Taiwan attack is needed. China has to be transformed into a genuine US threat, and having US forces on the border of China would not please China and create such a threat. It would pull the tiger’s tail, so to speak.
Again I’m not predicting anything, just saying it’s possible.
ANNUAL REPORT TO CONGRESS
Military Power of the People’s Republic of China
2009
The People’s Liberation Army (PLA) is pursuing comprehensive transformation from a mass army designed for protracted wars of attrition on its territory to one capable of fighting and winning short-duration, high-intensity conflicts along its periphery against high-tech adversaries – an approach that China refers to as preparing for “local wars under conditions of informatization.” The pace and scope of China’s military transformation have increased in recent years, fueled by acquisition of advanced foreign weapons, continued high rates of investment in its domestic defense and science and technology industries, and far-reaching organizational and doctrinal reforms of the armed forces. China’s ability to sustain military power at a distance remains limited, but its armed forces continue to develop and field disruptive military technologies, including those for anti-access/area-denial, as well as for nuclear, space, and cyber warfare, that are changing regional military balances and that have implications beyond the Asia-Pacific region. . . .Some of these capabilities, as well as other, more disruptive ones, could allow China to project power to ensure access to resources or enforce claims to disputed territories.
http://www.defenselink.mil/pubs/pdfs/China_Military_Power_Report_2009.pdf

Posted by: Don Bacon | Jun 13 2009 17:13 utc | 10

Soros is a tricky guy. He has the skill to make self-serving actions sound like moral or tactical imperatives. Perhaps, in the CDS situation, he owns something on which a great many CDS were written, and he fears they might take him down for the payoff. It’s worth reading Soros’ biography on Wikipedia. He’s a founder and big supporter of Human Rights Watch, which pretends to be a neutral observer while actually serving as ideological front for western interventions.
Richard Sales’ article on the “two state solution” makes BO’s stance on the settlements sound stronger than I thought it was. I thought he was weasling on that issue, as on others, and as others have mentioned here, settlements are a lesser sign of seriousness than the wall. Sales has some good quotes from Hillary, however, to back up his claim.

Posted by: senecal | Jun 13 2009 17:20 utc | 11

jd 4) “Yes We Can” was the same popular media meme that swept an elite kleptocracy into power in Argentina, and brought on the Great Argentinian Economic Meltdown:
http://www.prisonplanet.com/argentinas-economic-collapse.html
Watch a few minutes in, how popular this guy was, how voters screamed their approval, then follow through all 12 episodes, how he quietly liquidated and hyperinflated the Argentinian economy, exactly as Obama is liquidating and deflating ours right now.
http://ferfal.blogspot.com/search/label/Argentine%20Collapse

Posted by: The Logic is Perfect™ | Jun 13 2009 17:50 utc | 12

http://theautomaticearth.blogspot.com/
Todo la Dia!

Posted by: Todo la Dia | Jun 13 2009 18:04 utc | 13

M 8) Let me posit a more international financialist coda behind ‘Little Dictator’.
The $8B base redeployment from Okinawa to Guam has stalled out over the past years as the resources endgame in Iraq fizzles and resource war heats up in Afghanistan.
Then Little Il does his fake nuke, fake ICBM telethon for global media, right on cue.
‘Suddenly’ (bugle sound playing ‘ta-dah’!) $10B base redeployment is back on the table, and Def.con mercs are greedily rubbing their hands together at the Hogfest.
For those who yawn, shrug and oh well!, there’s a darker side, as there always is.
Beneath the radar, an open immigration plan allowing East Asians into Guam to ‘work
on redeployment’, allows them to obtain US green cards after a period of 5 years.
100,000’s per year will be pipelined into US mil.gov channels, including high-tech
Chinese, Koreans and Indians searching for the soft underbelly of USA Easy Street.
500,000 ChinKorIndians will arrive in the US just as Obama is run out of office. Legally!
With those 500,000 high-tech ChinKorIndians will inevitably be 5,000 ChinKorIndian spies who have already achieved Guam military security clearance.
Green carded, security cleared, industrial espionage spies ready to ‘redeploy’ our US intellectual property right out of the country!
Legally!
Have a nice Kim Jung Il Redeployment Day!

Posted by: The Logic is Perfect™ | Jun 13 2009 18:57 utc | 14

outsider posted:
me, personally, I do not believe in middle class revolutions, not in this century.
absolutely, never happen. What may happen though is that the middle class becomes so impoverished that it will either through calculation or obligation join the ‘lower’ (meaning by then very low) classes, not in the close future obviously.
Iran is a semi-theocracy / democracy, which in itself is perhaps not the worst mix. More important, it is ‘socialist’ in Amerika speech, that is, very highly re-distributive. Its spending as % of GDP is dead last, in the negative range, in the traditional numbers, along with Afghanistan. link from the mad scientist but can be found in many places.
That, of course, was what the last revolution was about, and what it achieved. Why should that change? It won’t, and though Ahmadinejad may offend Westerners, that would be a plus point in Iran, no? The Iranians got what they wanted (footnotes skipped) in the last revolution, they are not about to contemplate another. The reformist branch, embodied in one or another actor, may have influence and be able to effect change on some domestic issues (e.g. moral codes, rights of women, etc.) and present a smoother international appearance, but that’s all. It surely is worth going for, but is very limited, and I’m sure most know this.
The poor live off the redistribution, and the middle class cannot, will not, change this. Adopt western ‘liberalism’ now? – a bad joke.
Ahmadinejad represents the opposition to western models in a populist way – coupled with the usual conservative moves (A: lock up women protestors, Bush: against stem cell research, etc., also elected twice.)

Posted by: Tangerine | Jun 13 2009 19:06 utc | 15

sorry above posted in the wrong thread…anyway….

Posted by: Tangerine | Jun 13 2009 19:09 utc | 16

I am in favor of bulldozing Gary, Indiana entirely and turning it into a nature preserve.

Posted by: ralphieboy | Jun 13 2009 21:45 utc | 17

Why not Washington, DC?

Posted by: Don Bacon | Jun 13 2009 22:43 utc | 18

U. S. gives half of the Lackawanna Six a fresh start

When three of the Lackawanna Six complete their prison terms, they will have the chance to start new lives under new identities — courtesy of the U. S. government.
That’s because they struck a bargain with the government: their testimony against Osama bin Laden’s media secretary in exchange for a fresh start.
Yahya A. Goba, Sahim Alwan and Yasein A. Taher are, in fact, already living under aliases while finishing out their time behind bars. ……
Many there expressed frustration over the lack of judgment the young men exercised in going to Afghanistan and one of the men’s fathers told his son’s attorney that he would personally behead the young man if he had any intentions of harming America, a lawyer in the case said.
But times have changed and now the government, barring the unforeseen, will end up launching Alwan, Goba and Taher into new lives when they re-enter society either later this year or next year.
Unlike Alwan and Taher, Goba, who was identified as the organizer of the Lackawanna Six, disappeared soon after the highly publicized detention hearings were conducted at the federal courthouse in downtown Buffalo seven years ago.
Goba periodically emerged as a government witness to testify at trials involving terror suspects around the country.
“He has provided a significant amount of assistance to the government,” said Marianne Mariano, his attorney.
As a reward for his cooperation, Goba’s 10-year prison sentence was cut by one year. With accrued good time, he could be free by next year. Taher, sentenced to eight years, could be free later this year. Alwan, sentenced to 9z years, is expected to be free in 2010.

Witnesses, coming to a trial near you.

Posted by: plushtown | Jun 13 2009 23:28 utc | 19

Uk Independent:
Japan’s Generation XX
They are known as the grass-eaters: effeminate young Japanese men more interested in perfecting their looks than finding a job or starting a family.

Men are now leading purchasers of hair products, make-up, fashion accessories and manicures. A Tokyo-based company called WishRoom is even selling men’s bras, some to middle-aged salary-men.
“They were the generation we had been told were ‘manly’ – they led Japan in the post-war period,” WishRoom president Masayuki Tsuchiya told the Japan Times this month. He said the company had sold more than 5,000 of the bras to men who are probably reacting against the classic stereotype of stoic, silently enduring male. “They said wearing a bra just made them feel more calm, relaxed and revived.”

Posted by: plushtown | Jun 14 2009 0:12 utc | 20

Wait! you guys, there’s more…
The ruling class are seizing the means of production for themselves
Snip:

CEOs aren’t abandoning their bonuses for worker committees and the power of the people. But Prof. Panitch and others point out that Marx predicted this collapse – right down to credit default swaps and other kinky tricks of finance. Marxism, they say, is a powerful tool with which to understand the mess we’re in – so powerful it will make us question the system that produced the crisis in the first place.

Snip:

What it indicates is that these huge corporations, while they may be legally private, are incapable of operating as private institutions. And if they can’t function without being public, then the state has to maintain order.”

How and by what means do the do that? See, my #2 Among other MANY tools…
sNIP:

. “A lot of people think the country’s being run by a left-wing radical.” But in fact Mr. Obama is “a kind of centre-slightly-left politician” overseeing the resale of America’s financial assets at fire-sale prices to the same private interests that screwed them up in the first place.

The 18th Brumaire of Barack Obama
HE’S BEING THEIR HOUSE NIGGER… yeah, I said it…

Posted by: Uncle $cam | Jun 14 2009 1:00 utc | 21

Enantiodromia, what a great word Uncl$. American Enantiodromia, exactly. Thanks for the new term for an old concept I’ve not before been able to articulate.
I wonder if faux is still around these days?
With regard to ‘America! I assume that they can monitor any physical act I initiate and behave as Leary suggested, I paraphrase, ‘nothing is secrete, there is nothing to hide, behave accordingly’.

Posted by: Juannie | Jun 14 2009 2:23 utc | 22

All we need to do now is spend our tax dollars on microsoft and google and we’ll be nearing the worker’s paradise.
Yeah, U$, U said it & I agree.

Posted by: Juannie | Jun 14 2009 2:34 utc | 23

Malooga was right! White House Browbeats Dem Freshmen On War Money: “You’ll Never Hear From Us Again” The White House is playing hardball with Democrats who intend to vote against the supplemental war spending bill, threatening freshmen who oppose it that they won’t get help with reelection and will be cut off from the White House, Rep. Lynn Woolsey (D-Calif.) said Friday.
“We’re not going to help you. You’ll never hear from us again,” Woolsey said the White House is telling freshmen. She wouldn’t say who is issuing the threats, and the White House didn’t immediately return a call.
Woolsey and Rep. Dennis Kucinich (D-Ohio) are both ardent opponents of the war and no friends of the IMF, which is in line for a $100 billion extension of credit in the same bill. Both pointed out that the Democratic leadership didn’t bring the bill up for a vote on Friday, indicating they weren’t confident they had the votes.
“It says something that this hasn’t been brought up yet,” Kucinich said. “I will tell you there’s a good number of members holding solid. That’s why this thing hasn’t passed yet.”
Kucinich said he’s whipping the 51 Democrats who previously voted against the war funding and also whipping Democrats who have voted against the IMF in the past. He said that tremendous pressure was being exerted on the folks leaning against it.

Posted by: Po’ Boy | Jun 14 2009 5:08 utc | 24

p 20) That’s nothing…
http://boksmati.blogspot.com/2008/03/arabic-graffiti-urban-arabic.html

Posted by: Boks Mati | Jun 14 2009 5:28 utc | 25

Isn’t the title inconsistent with the article? Nobody’s saying the paper is genuine. What’s Die Welt’s political slant? Japan and now Russia have expressed official support for the dollar. My new test hypothesis is that this is a slick Rovian ratfuck to keep enemy Democrats off balance with a bit of financial instability. There’s a GOP Congressman, Kirk, an expendable Republican, who went to China and pissed on the faith and credit of the US Government. If this were to get some results I would expect BBH, Poppy’s dad’s bank, to weigh in as dollar bears.

Posted by: …—… | Jun 14 2009 20:21 utc | 26

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