Financial topics

[aedens]

http://www.youtube.com/watch?feature=pl ... -ahRZGN9Fo Tarpleys jelly doughnut 1:45
http://www.youtube.com/watch?v=5DgQ7t5y ... re=related

[Trevor]

It might work to a certain point. The sanctions on Iran are causing them some major problems, with high inflation and unemployment. However, there are ways around it, at least to where they could mitigate the damage. And if they're determined enough, they'll do what they want in spite of it.

Also, it depends where they are on the generational timeline. In an awakening or unraveling, it might force them to back down. In a crisis era, it'll only piss them off and could motivate them to launch an attack. If we tried sanctions against China, there's a decent chance that they'd respond that way.

[aedens]

Collectives provide mirror images of minds in the default mode, capable of only reflecting the shared ignorance and prejudices upon which the institutionalized control of humans depends. Butler Shaffer

[aedens]

http://www.miamiherald.com/2012/07/06/2 ... ckens.html

[OLD1953]

I don't think you need worry about the middle class fleeing America, the smart ones with no family attachments left over the last twelve years, and the ones that remain either have to look after family or they are convinced they live in "the greatest country in the world with more freedom than anyone". It's funny, really, how many of the expats I work with are absolutely rigid on how the US needs less government and less controls on everything, but plan to retire in countries that are exactly the reverse. Why vote to create a country that you won't live in? It seems that philosophy rules the voting booth, but practical matters rule where they'll retire. The number of retired Americans living in Mexico and the Phillipines and Korea who are stridently active on the political boards about how the USA needs less of everything is simply shocking. Why retire in a place like that if you want more freedom? They've got much stricter laws on almost everything.

[thomasglee]

I don't think you need worry about the middle class fleeing America, the smart ones with no family attachments left over the last twelve years, and the ones that remain either have to look after family or they are convinced they live in "the greatest country in the world with more freedom than anyone". It's funny, really, how many of the expats I work with are absolutely rigid on how the US needs less government and less controls on everything, but plan to retire in countries that are exactly the reverse. Why vote to create a country that you won't live in? It seems that philosophy rules the voting booth, but practical matters rule where they'll retire. The number of retired Americans living in Mexico and the Phillipines and Korea who are stridently active on the political boards about how the USA needs less of everything is simply shocking. Why retire in a place like that if you want more freedom? They've got much stricter laws on almost everything.

OLD I agree I've a lot of expat friends living in Korea that are exactly as you describe. What I think you overlook is that they also tend to be detached from the politics of the country they live in. In other words, they feel "freer" there, but it is because they are really not involved (sure, they follow local politics, but feel it doesn't affect tem that much) in the politics of the country in which they live. Also, they expect things to be the way they are wherever yet live, but look at the USA and remember how it "used" to be.

[John]

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[Higgenbotham]

The multiyear investigation has ensnared more than 10 big banks in the United States and abroad. With the prospects of criminal action, several firms, including at least two European institutions, are scrambling to arrange deals, according to lawyers close to the case.

http://dealbook.nytimes.com/2012/07/14/ ... te-fixing/

[Higgenbotham]

Online foreclosure marketplace RealtyTrac recently found that just 15 percent of REOs in the Washington, D.C., area were for sale, a statistic that is representative of nationwide numbers, the company said.

Analytics firm CoreLogic provided an even lower estimate, suggesting that just 10 percent of all REOs in the country are listed by their owners, which include mortgage giants Fannie Mae and Freddie Mac as well as the Federal Housing Administration. As of April 2012, 390,000 repossessed homes sat in limbo, while about 39,000 were actually listed for sale, said Sam Khater, senior economist at CoreLogic.

Daren Blomquist, vice president of RealtyTrac, said that he was surprised by his company’s finding, especially since a similar analysis in 2009 found that banks were attempting to sell nearly twice as much of their REO inventory back then.

http://www.nakedcapitalism.com/2012/07/ ... bogus.html

Leaving property vacant costs a lot of money. Part of the "need" to run huge deficits is due to these costs of covering insolvent banks losses. Covering the costs in this manner (rather than by bankruptcy) increases inflation. As I noted in different words before, if inflation is 2% in an environment where it would normally be -8%, then the typical citizen is feeling 10% inflation. It is high inflation. The way it gets higher is for the Fed to continue to target 2% inflation when the average citizen is doing so poorly that they need -25% to stay even. Rather than calling it hyperinflation, I would call it collapse, but there's not a whole lot of difference. The market won't clear and the system won't reset to lay the foundation for recovery. Another effect I see is recent increases in permits for apartment construction. Unneeded housing units are being built because foreclosures (or what should be foreclosures) are being held off the market. I think once the economy turns down again, the effect of this will be for families to double up or triple up and for even more property to become vacant.

[Higgenbotham]

Barofsky zeroed in on Tim Geithner, who was President of the New York Fed from 2005-2008, pointing out that, based on the memos that Geithner sent to the Bank of England in June 2008, it was clear that he knew, in detail, what the Libor rigging was all about. If all he did was to send an email, Barofsky continued, then this is equally a scandal for the regulators. The regulators are complicit, as has already been alleged in England. Clearly referencing Geithner's lack of action, Barofsky emphasized that the regulators allowed criminal activities to continue. "It is a significant act of deception if the regulators were aware and did nothing." Barofsky ran down a string of serious crimes that have been committed in the Libor rigging, including cheating counterparties, and securities fraud. "I want to see indictments," he declared. He warned that banks like JPMorgan Chase and Citigroup, who were both on the Libor rate setting committee, committed outright criminal acts. But the government lacks leverage over these too big to fail institutions, because criminal prosecutions of these banks would bring down the whole system. He warned that this will happen over and over again, until we break up the big banks and put people in handcuffs. "This was a scheme to defraud. This is textbook securities fraud," he concluded.

http://larouchepac.com/node/23344

I thought about this for a bit after posting the story from the New York Times. I think Barofsky is right when he says, "the government lacks leverage over these too big to fail institutions, because criminal prosecutions of these banks would bring down the whole system." I suppose there are other opinions but this is how I see it shaping up. My guess again is that we are seeing evidence in many areas that the system can no longer function in a self correcting manner. The quote from the New York Times states that the LIBOR investigation has been ongoing for years, yet nothing has been done. This is typical of how government continues to function - it doesn't function - at a time when we should be deep into crisis mode with the market clearing, the system resetting and beginning to properly function again. Meanwhile, on the surface, things don't look so bad and the response of the populace is to cling more tightly to their perches for fear of falling off rather than to express outrage and call for real change.