Wealth Addiction

Excellent article describing the experience of being a money addict.


My ThoughtStorms page for it.

The Deeper Meaning of Cyprus

Worth a read

This is good too.

Max Keiser On LIBOR

Made In Chicago

The Barclays Scandal

Barclays and Libor

So let me get this straight. Banks self-report how trustworthy other banks find them. This information goes into a statistic that is used across the world to set interest rates and make other policy decisions. 

Now it turns out for the three years up to the financial crash of 2008 they were basically "making shit up" to scam more money. Then, when the crash hit, they continued lying to make themselves look more reliable than they were. (Barclays, remember, were the bank that famously didn't need a UK government bail-out because they found private sector loans to support them. Perhaps based on their faked credit-rating?) 

More : http://www.quora.com/London-Inter-Bank-Offered-Rate/Whats-so-significant-about-Barclays-Bank-lying-about-the-interest-rate-they-paid-on-loans , also my Quora Question )

Austerity Bites

The reality of Greek austerity

European Stability Mechanism

Not sure how much of a conspiracy theory this is but if it's even half true - and right now it seems horribly plausible - it's another extraordinary coup for disaster capitalism. 

Banksters' Lies

Surprised?

The Physics of Collapse

Excellent systems model of how complex societies collapse.

Hat-tip : Jean-Luc Delatre

Why The Violent Suppression Of OWS?

OK, dumb question. Why wouldn't there be a violent reaction to try to extinguish this movement?

Still, Naomi Wolf spells it out clearly :

But wait: why on earth would Congress advise violent militarised reactions against its own peaceful constituents? The answer is straightforward: in recent years, members of Congress have started entering the system as members of the middle class (or upper middle class) – but they are leaving DC privy to vast personal wealth, as we see from the "scandal" of presidential contender Newt Gingrich's having been paid $1.8m for a few hours' "consulting" to special interests. The inflated fees to lawmakers who turn lobbyists are common knowledge, but the notion that congressmen and women are legislating their own companies' profitsis less widely known – and if the books were to be opened, they would surely reveal corruption on a Wall Street spectrum. Indeed, we do already know that congress people are massively profiting from trading on non-public information they have on companies about which they are legislating – a form of insider trading that sent Martha Stewart to jail.

Update : The Silence of Obama 

Goldman Sachs Conquers Europe

I just don't know what to say any more.

Post Democracy

Aditya Chakrabortty :

Until this weekend, Monti served as an adviser to the world's number one investment bank, Goldman Sachs. As for Papademos, his biggest political intervention before becoming prime minister was to argue against the recent eurozone deal to write off half of Greece's debts – it should, he claimed, be a far smaller discount, so as not to hurt banks. One man was a banker, the other defended their interests, and yet the claim is that they have shed those prejudices in the past few hours.

What If Greece Exits?

The Guardian is pulling in opinions about what happens if Greece exits the Euro. Fascinating and disturbing.

Here are a couple of thoughts. What would happen if, instead of Greece, Germany unilaterally exited the Euro?

Presumably the value of the Euro would fall, Germany's reinstated Deutsche Mark might rise, it would pay a cost in exports. But, without Germany, perhaps the Eurozone could become more economically homogenous, with policies and devaluing currency more appropriate to its economic status.

A variation, what if the Eurozone was to split itself into two currency blocks? One of wealthier, industrial nations like Germany, France and the Netherlands. The other of the PIIGS and poorer Eastern European nations.  The zone would strive to retain much of its political and economic co-ordination, but the two currencies would be allowed to float against each other, giving a safety valve to tensions between the productivity of different blocks. 

Scandalous BBC Reporting

Here's a picture of this morning's BBC main page (click to enlarge) :

Notice the absence of any reference to last night's successful continual occupation of Saint Paul's while top billing is given to some princess in Wootton Bassett. (Bleah!)

I went down there to take food to the occupiers, but was kept outside by the police cordon. I hung around with the crowd outside for a few hours while the police

•  a) forced a line of helmeted riot police through the crowd, up to the back of the steps. Ostensibly to "protect St. Paul's" from damage. Actually to encircle those on the steps. 
•  b) brought in a number of vicious looking dogs to bark at the occupiers in a scary way. They didn't actually DO anything with the dogs. And clearly they weren't there for purposes of sniffing etc. Just to menace the occupiers. 
•  c) fairly skilfully (I have to say), started reducing the occupied space. Pushed those of us in the outer ring into the road. Then pushed us all out of the road. I left soon after, as it looked like the police were very much in control of the space. 

Seems, though, that that the occupiers survived the night and the vicar of St. Paul's has asked the police to back off. Now there's a call for donations from anyone who can get down there today.

Here's some video (someone else made) of earlier yesterday :


A Movement in Slow Motion from Studiocanoe on Vimeo.

The Only Useful Innovation

David Leonhardt :

In finance, trading volumes have boomed in recent decades, yet it is unclear how much all the activity has lifted living standards. Paul A. Volcker, the former Fed chairman, has mischievously said that the only useful recent financial innovation was the automated teller machine. Critics like Mr. Volcker argue that much of modern finance amounts to arbitrage, in which technology and globalization have allowed traders to profit from being the first to notice small price differences.


IN the process, Wall Street has captured a growing share of the world’s economic pie — thereby increasing inequality — without doing much to expand the pie. It may even have shrunk the pie, given that a new International Monetary Fund analysis found that higher inequality leads to slower economic growth.

The Great EU Debt Write Off

Read this :

This website presents the results of a simulation conducted by students at ESCP Europe Business School. The aim was to uncover the amount of interlinked debt between Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany; and then see what would happen if they attempted to cross cancel obligations.

The results were astounding:

• The countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
• Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt
• Three countries - Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries
• Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
• France can virtually eliminate its debt – reducing it to just 0.06% of GDP

There Aren’t Any More Rich Countries

Naomi Klein :

Ten years later, it seems as if there aren’t any more rich countries. Just a whole lot of rich people. People who got rich looting the public wealth and exhausting natural resources around the world.

Shooting Banksters In A Barrel

Daniel Davies (d-squared) tries to defend bankers against the accusation that they're responsible for the 2008 crash and continuing world economic crisis.

He doesn't do a particularly good job, but he elicits this great response from "Bloix" :

I’m sure I’m being naive in assuming that Daniel doesn’t already know this and is intentionally ignoring it, but here goes:

1) There was a bubble in housing prices. This means that people bought houses, not to live in, but because they believed that the house they bought would appreciate faster than any other asset they could invest in. The appeal of such appreciation was multiplied many-fold because houses are the easiest and most common investment for ordinary people that supplies large amounts of leverage. The ordinary buyer had no appreciation of the risks of leverage but well-understood its benefits. There was a lot of activity in buying up, flipping, and trading houses that had nothing to do with the need for shelter. This activity made a lot of money for a lot of people – real estate agents, mortgage brokers, inspectors, title insurers, and lenders.

2) Housing prices could not indefinitely go up faster than the rate of inflation because eventually there would not be enough buyers who had the income to qualify for the mortgages needed to on the higher home prices. Therefore, in the absence of “creative” financing, the run-up in housing prices would soon have stabilized and perhaps dropped a bit.

3) Mortgage brokers and lenders therefore created mortgage products that were designed to allow people to buy houses that they could not possibly pay for based on their income – balloon mortgages, teaser rates, interest only loans, even negative amortization.

4) If the mortgage lenders had had to hold the risk of these loans, they would never have made them. But they didn’t, because they could sell the loans to the banksters, who then packaged them in their creative products and sold them off as AAA-rated securities to insurers, pension funds, and the like. After the banksters took their large cut off the top, the money from these investors funded the loans to the ignorant buyers who were put into the creative mortgage products by the petty crooks who worked for the mortgage originators.

5) Without the market in mortgage-backed securities made by the banksters, there would have been no money to fund the creative mortgage products, and thus no possibility of a bubble anywhere near the size of the one that eventually burst. The whole point of the mortage-backed securities market was to keep the bubble inflated. Obviously it couldn’t go on for ever, but it was very, very profitable while it lasted.

6) The banksters either were world-class idiots or they were well-aware that the mortgage-backed securities they were selling to clueless institutional buyers were trash. As we know that they are not idiots, the only possible conclusion is that they were intentionally passing off trash.

People who peddle fake goods are usually considered to be crooks. But banksters who knowingly peddled enormously high-risk securities, while claiming that they were as safe as US treasuries, are walking around with billions of taxpayer dollars in their pockets. They own Congress and the administration. They write the tax code and dominate the Federal Reserve.

After smashing up our retirement accounts, destroying our pension funds, wiping out the savings of millions of people who bought into the rising market, and putting any number of us out of work, they sneer and pontificate and preen and strut their way across the major cities and TV screens and high-end resorts of all the world.

The only justification for the investment banking industry’s existence is that it does a better job of allocating investment capital for productive purposes than any other method of doing so. What we’ve just seen is that, far from allocating capital efficiently, the banksters allocated capital in a grotesquely wasteful manner for year and year, a manner that just happened to put huge amounts of that capital into their own individual pockets while leaving the institutions they worked for at risk of insolvency. And when that risk came to pass, the obscenely rich individuals suffered not at all, while the government bailed out the institutions.

So. Please. I don’t know anything about you personally, and I’m sure that you’re a wonderful fellow who loves dogs and is charming at parties. But the industry you are part of is a force for evil in the world. Everyone who is not dependent on that industry for a living knows it.

Naomi Klein is good on daylight looting.

Paul B Farrell :

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions.