Feb 152012
 

 

* MFGLOBAL REVEALS YOU ARE A BANK COUNTER-PARTY

By Barry Ritholtz, The Big Picture

The esteemed former Fed Chairman, Paul Volcker, introduced a very simple regulatory concept that bears his name: The Volcker Rule. It was part of the Dodd-Frank regulatory reforms passed after the financial crisis of 2008-09.

There has been enormous pushback against what should be a simple piece of prophylactic rules on proprietary trading by depository banks (see this Jamie Dimon commentary as an example). Why? The profits of speculation goes to banks, driving bonuses and compensation; but the ultimate risk of loss lay with the FDIC and taxpayer. If the banks blow up, someone else besides the banker pays.

Privatized gains, socialized losses.

I want to take a few moments to briefly explain why this rule is so important to taxpayers, especially following the collapse of MF Global and the loss of billions of client assets. […]

READ @ http://www.ritholtz.com/blog/2012/02/volcker-rule-mfglobal-bankcounterparty/

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* WHAT EXPANDED SAFETY NET?

By James Kwak, The Baseline Scenario

In general, I think Binyamin Appelbaum and Robert Gebeloff’s article on how the same people oppose government handouts and take government handouts is very good. But I think their framing buys into a piece of conventional wisdom that just isn’t true.

Here it is, without any shortening (but emphasis is mine):

“The problem by now is familiar to most. Politicians have expanded the safety net without a commensurate increase in revenues, a primary reason for the government’s annual deficits and mushrooming debt. In 2000, federal and state governments spent about 37 cents on the safety net from every dollar they collected in revenue, according to a New York Times analysis. A decade later, after one Medicare expansion, two recessions and three rounds of tax cuts, spending on the safety net consumed nearly 66 cents of every dollar of revenue.

“The recent recession increased dependence on government, and stronger economic growth would reduce demand for programs like unemployment benefits. But the long-term trend is clear. Over the next 25 years, as the population ages and medical costs climb, the budget office projects that benefits programs will grow faster than any other part of government, driving the federal debt to dangerous heights.”

The idea that politicians have expanded the safety net is just not true, with the exception of the Medicare prescription drug benefit and an expansion in Medicaid that hasn’t taken effect yet. Spending on social programs has increased for a few obvious reasons: the baby boomers have started taking Social Security benefits, increasing that program’s expenditures; the recession boosted unemployment benefits, disability claims, and eligibility for poverty programs; and most importantly, health care has gotten much more expensive. […]

READ @ http://baselinescenario.com/2012/02/13/what-expanded-safety-net/

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* GREECE FACES DEATH BY A THOUSAND CUTS UNLES IT LEAVES THE EURO

Lucas Papademos was suitably apocalyptic. If the terms of the second Greek bailout were not approved, the Greek prime minister warned over the weekend, there would be a “disorderly bankruptcy that would create conditions of economic chaos and social explosion.

By Jeremy Warner, Telegraph UK

“The savings of the citizens would be at risk. The state would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, and … the country – public and private sector alike – would lose all access to borrowing and liquidity would shrink.

“The living standards of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to exit from the euro.”

Up to a point, these warnings are of course all true. Much less clear is whether the enforced penury of continued euro membership which Greek MPs eventually voted for on Sunday night amounts to a better alternative. Any analysis of the economics suggests powerfully that it does not. […]

READ @ http://www.telegraph.co.uk/finance/comment/jeremy-warner/9080159/Greece-faces-death-by-a-thousand-cuts-unless-it-leaves-the-euro.html

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* THE DAY OF RECKONING FOR GLOBAL TOTAL DEBT — TOTAL CREDIT MARKET UP FROM $28 TRILLION IN 2001 TO $53 TRILLION IN 2012. US CONSUMER DEBT WENT UP IN THE LAST FEW MONTHS BUT LARGELY BECAUSE OF GIANT AMOUNTS OF STUDENT LOAN DEBT TAKEN ON.

Source: MyBudget360

You have to really question what passes for financial analysis these days.  One financial show was discussing the recent increase in consumer debt as something positive.  In the same breath this person also said that households increased savings.  Now think about this statement.  If you financed a $2,000 vacation on your credit card but increased savings by $500 did your balance sheet improve?  Of course not.  Let us not even dive into the fact that most of the recent consumer debt increase has come at the hands of student debt which is already in a massive bubble.  We are simply repeating the same mistakes with a different soundtrack.  We are trying to get out of a debt led crisis with more debt.  The facts even show this and we have compiled some of the more troubling data by putting the entire debt market into perspective here.  Is it really possible to solve a problem based on too much debt with more debt?

The total market of debt shows our addiction to borrowed money

We flat out have an addiction to borrowing.  Total market debt is now up to an astonishing $53 trillion and continues to grow.  Take a look at this frightening data: […]

READ and CHARTS @ http://www.mybudget360.com/day-of-reckoning-for-global-total-debt-total-credit-market-debt-consumer-debt-large-charge-of-household-debt-trillions/

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* TRANSFORMATION: EFFECTUATING DEMOCRACY BY VOTERS’ RIGHTS AMENDMENT

By William John Cox, OpEdNews

If they are to ever achieve true representative democracy and the freedom and opportunity inherent in its promise, the People of the United States must transform their government, rather than to reform or restore it back to something which will not serve or protect their best interests.

::::::::

Reversing the Supreme Court’s gift of constitutional rights to corporations in Citizens United will not cure the political ills weakening the sinews of democracy that bind the United States. The nation was infected at birth and it will continue to be diseased until its government is transformed into one that is responsive to the needs and ambitions of ordinary people, irrespective of wealth or influence.

Although Citizens United unleashed the overwhelming power of the wealthy elite, corporations, and other special interest groups to purchase the major benefits of government while avoiding the burden of taxation, the danger presented by the power of money has been a risk to democracy throughout American history. […]

READ @ http://www.opednews.com/populum/printer_friendly.php?content=a&id=145435

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* MEET THE SHAMELESS PLUTOCRATS CHOKING WHAT’S LEFT OF OUR DEMOCRACY

By Bill Moyers, AlterNet

[…] Here’s what we’re up against. Read it and weep: “America’s Plutocrats Play the Political Ponies.” That’s a headline in “Too Much,” an Internet publication from the Institute for Policy Studies that describes itself as “an online weekly on excess and inequality.”

Yes, the results are in and our elections have replaced horse racing as the sport of kings. Only these kings aren’t your everyday poobahs and potentates. These kings are multi-billionaire, corporate moguls who by the divine right, not of God, but the United States Supreme Court and its Citizens United decision, are now buying politicians like so much pricey horseflesh. All that money pouring into super PACs, much of it from secret sources: merely an investment, should their horse pay off in November, in the best government money can buy.

They’re shelling out fortunes’ worth of contributions. Look at just a few of them: Mitt Romney’s hedge fund pals Robert Mercer, John Paulson, Julian Robertson and Paul Singer – each of whom has ponied up a million or more for the super PAC called “Restore Our Future” — as in, “Give us back the go-go days, when predators ruled Wall Street like it was Jurassic Park.” […]

READ @ http://www.alternet.org/economy/154137/moyers%3A_meet_the_shameless_plutocrats_choking_what%27s_left_of_our_democracy/?page=entire

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* HALLIBURTON CHARGED WITH SELLING NUCLEAR TECHNOLOGY TO IRAN – VIDEO

Source: C-Span

VIDEO @ http://www.youtube.com/watch?v=-ukekE_s7OQ

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* THE U.S. V. IRAN

By Michael S. Rozeff, LewRockwell.com

No matter what anyone says, Iran is not a threat to the U.S. and not even close to being a threat to the U.S. The forces of the U.S. are so extensive and so overwhelming on so many dimensions that for Iran to attack the U.S. would be sheer madness. The Iranians know this. The U.S. knows this. Israel knows this.

We know for a fact that Iran was unable to defeat Iraq in the Iran-Iraq War (1980-1988).

Anyone with access to the internet can easily determine that Iran doesn’t stand a chance in a war with the U.S. Anyone who says or thinks that Iran is a threat to the U.S. that should be taken seriously is talking nonsense.

The Iranians cannot want war and do not want war with the U.S. There are absolutely no signs that the Iranians want or intend a war against the U.S. In fact, they have already absorbed a number of aggressive acts from Israel and the U.S. without any kind of retaliation. […]

READ @ http://lewrockwell.com/rozeff/rozeff378.html

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* MAJORITY OF DEMOCRATS NOW SUPPORT DRONE STRIKES, GUANTANAMO BAY

Source: Sam Seder, The Majority Report

VIDEO @ http://www.youtube.com/watch?feature=player_embedded&v=63jQfeqnVmc

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* SEEDS OF CONFLICT: SECTARIAN SPLIT CREEPS INTO SYRIA – VIDEO

Source: RT

VIDEO @ http://www.youtube.com/watch?feature=player_embedded&v=LL0hc0W5ouI#!

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* 33 CONSPIRACY THEORIES THAT TURNED OUT TO BE TRUE, WHAT EVERY PERSON SHOULD KNOW …

By Jonathan Elinoff, New World Order Report

[...] January 20, 1987 Report on CIA Drug Smuggling:

[...]

READ and DOZENS OF VIDEOS @ http://newworldorderreport.com/News/tabid/266/ID/980/33-Conspiracy-Theories-That-Turned-Out-To-Be-True-What-Every-Person-Should-Know-Updated-Revised-and-Extended.aspx

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