How *not* to do "Movember"

Movember is a charity for raising awareness of men's health issues. My mustache - beard actually, because I haven't trimmed it yet - is driving me nuts with its scratchiness, but hey, I'm closing in on raising $1000. It's easy to participate (even women) so if you can, join or donate to someone you know.

Meanwhile, maybe these two need to find a charity for anger management as well. Read the rest of this post...

Law firm, that held Halloween party mocking people who lost their homes, to close

The NYT reports that Steven J. Baum P.C., the firm of foreclosure lawyers who held the 'homeless' themed party last year (photos of their costumes mocking people who lost their homes here) is to shut down as a result of the NYT story:

But despite its settlement with the federal government, the firm’s fortunes worsened this month after The New York Times published photos of a Halloween party at the Baum firm showing employees wearing costumes mocking people who had lost their homes.

After those photos surfaced, the mortgage giants Freddie Mac and Fannie Mae cut off the Baum firm, forbidding servicers of their mortgages from using Mr. Baum and his colleagues. That effectively served as the firm’s death knell.

Here's background on this story from our previous post:

On Friday, the law firm of Steven J. Baum threw a Halloween party. The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

The party is the firm’s big annual bash. Employees wear Halloween costumes to the office, where they party until around noon, and then return to work, still in costume. I can’t tell you how people dressed for this year’s party, but I can tell you about last year’s.

That’s because a former employee of Steven J. Baum recently sent me snapshots of last year’s party. In an e-mail, she said that she wanted me to see them because they showed an appalling lack of compassion toward the homeowners — invariably poor and down on their luck — that the Baum firm had brought foreclosure proceedings against.

Here's a Washington Post story on the firm closure, for those who don't subscribe to the NYT. Read the rest of this post...

Limbaugh says Michelle Obama was booed at NASCAR because she’s uppity

Which is a word first used in slave states to describe black slaves who didn't understand that they were inferior to their white masters.  Today the word, when applied to someone who is black, has the exact same connotation, and Limbaugh knew it when he said it.  He basically compared the First Lady to a black slave, and by implication suggesting that the NASCAR audience is a bunch of racists (because they recognized her "uppityness," per Limbaugh.

He never pays a price for his racism, and the Republicans, including the leader of their party, still genuflect before the altar that is Limbaugh.  Partially because they fear Limbaugh's reach, and partially because the Republican party is a little racist, and homophobic, and sexist. Read the rest of this post...

Video: Adorable cat bothers young guy while really bad music plays

Why do people always put music to what would otherwise be great videos standing alone?   Anyway, it's adorable, take a one minute break and go smile.

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What links bank bailouts to pepper spray? It’s the lack of accountability.

If only the transfer of wealth from the 99% to the 1% could be captured so clearly on a camera-phone as a policeman using pepper spray on an unarmed, peaceful protester there would have been no need for the demonstrations.

Josh Marshall asks if the violence at the demonstrations threatens to overwhelm the message:

I’ve wondered about this for a week or two. And I haven’t known quite what to make of it or how to express it. It didn’t start with this pepper spray incident at UC Davis. But that sort of crystallized it further in my mind: the core message about economic inequality is being overwhelmed by a distinct story about (depending on your perspective) street violence and police brutality or excessive militarization of crowd control.

There is however a very important link between the banker bailouts and the images of police brutality: The lack of accountability.

What was so galling about the banker bailouts was the fact that the people who created the problem have got off without any consequences at all. For over a decade they got rich through what the establishment assured us was 'wealth creation' but events have since proven to be purely parasitic speculation. When their bets paid off they pocketed the profits and when they went sour they gave the rest of us a choice between covering their losses and seeing the economy crash taking our pensions with it.

The root cause of the financial crisis was a lack of accountability. Banks were not accountable for the quality of the loans they originated. Insurers were not accountable for the fact that they could not possibly meet the obligations they had underwritten as Credit Default Swaps. Credit Rating Agencies were not accountable for the accuracy of the ratings they published. Fraud and larceny were perpetrated on an epic scale but nobody has been held accountable.

The accountability gap is much clearer when a cop pepper sprays an unarmed protester but no charges have been brought (against the police that is) in any of the cases of what are very clearly an aggravated assault. A regular citizen who attacked a police officer with pepper spray would be facing a likely prison sentence. So why have none of the officers been charged with assault?
(Link to TPM.) Read the rest of this post...

Sargent: No, ’both sides’ aren’t equally to blame for supercommittee failure

Greg Sargent at the Washington Post:

Here’s why the supercommittee is failing, in one sentence: Democrats wanted the rich to pay more in taxes towards deficit reduction, and Republicans wanted the rich to pay less in taxes towards deficit reduction.

Any news outlet that doesn’t convey this basic fact to readers and viewers with total clarity is obscuring, rather than illuminating, what actually happened here.

The Dem offer involved both sides making roughly equivalent concessions; the GOP offer didn’t. The main GOP concession — the additional revenues — would have come in exchange for Dems giving ground on two major fronts: On cuts to entitlements, and on making the Bush tax cuts permanent.

Putting aside whether the supercommittee failure matters at all, it’s plainly true that one side was willing to concede far more than the other to make a deal possible. And anyone who pretends otherwise is just part of the problem.

Greg goes on to note that the NYT didn't bother mentioning this fact until the 25th paragraph of their story. Read the rest of this post...

Protests continue in Cairo, at least 11 reported dead

This didn't have to happen, but the Egyptian military couldn't live up to its agreements to transfer power. It should give everyone a pretty good idea just how corrupt they are and how much they stand to lose when their position is exposed. If the military is this eager to destroy anyone who questions them after the bloody uprisings this spring, they really must be nervous. (Probably for good reason.) The situation today is not unlike the spring protests, including many dead or seriously injured on the street as this photo shows. Al Jazeera:

Protesters calling for Egypt's military to hand over power have beaten back a new raid by security forces to evict them from Cairo's Tahrir Square after more than 48 hours of violence in the heart of the Egyptian capital.

Security forces fired tear gas and attacked a makeshift field hospital on Monday morning, while protesters broke up pavements to hurl chunks of concrete at police.

Al Jazeera's Mike Hanna reporting from Tahrir Square, said: "Throughout the morning plumes of tear gas are rising over houses. There are sporadic clashes happening around the outskirts of the square."

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Occupy Davos?

If ever there was a group that deserved to be Occupied, it would be the ruling class types who meet at Davos every year. Most of them remain clueless about the world around them and are immune from the problems they've created thanks to owning the political class. With very few exceptions, it's an entitled and arrogant group that serves no purpose in this day and age other than providing a forum for the elite to have their egos stroked by other elite. Reuters:

A Swiss youth party called on activists on Sunday to stage an "Occupy" World Economic Forum protest from igloos when the global elite descend on the ski resort of Davos for their annual meeting in January.

Inspired by the Occupy Wall Street protests, the youth wing of the Socialist Party (JUSO) invited occupy activists from around the world to set up a "Camp Igloo" in the Swiss mountain town from January 21 next year.

Occupy camps have sprung up in a number of cities across the world this year, protesting against corporate greed and economic inequality.

Read the rest of this post...

Edward Harrison: Here's what happens if Italy defaults—an "Armageddon scenario"

I alluded earlier to this piece by Edward Harrison in the great Naked Capitalism. In my earlier post, I wanted to bottom-line it and tack on Krugman's agreement. (See here for that bottom line.)

Now I'd like to dig into some of its details. Harrison starts with a couple of background premises:

■ The world is in a "cyclical uptick within a larger depression." (Ugh.)

■ For countries with a "lender of last resort" (countries that can borrow from their own central bank), the depression will be "soft" — we can talk about what that means later.

■ Italy has no lender of last resort. Unless Italy's bonds are backstopped by the European Central Bank (ECB), it can't afford to finance its debt — current market rates on Italian bonds are just too high for Italy to issue them at competitive prices.

This creates an "Armageddon scenario" for Italy, and a need for investors to learn how to protect themselves. The rest of this post outlines Harrison's Armageddon scenario — what happens if — or when — Italy defaults.

(Note: There is much more detail in the article; these are just the short strokes.)

1. A "credit event":

[A]n Italian default would be uncontrolled and immediately crystallise losses that must run through the balance sheets of everyone holding their bonds.

This is why no one in the market wants to buy Italian bonds right now, why the interest rate is so high relative to German bonds. That 2% higher rate is the "risk premium" and it's going through the roof.

2. A bank run:

Once Italy defaults, Italian banks would be insolvent as a result of these losses since they are the largest holders of Italian sovereign debt.

3. Increased pressure on weaker economies with similar bond pricing problems. Named countries include Slovenia, Spain, Austria and Belgium (yes, Belgium). Also Ireland, Portugal and Greece. The contagion could then spread to Eastern Europe — the Ukraine, Kazakhstan and the like. That's a huge and important list, a real house of cards.

Harrison offers a fascinating and careful analysis. Remember, it's all based on willingness of investors to buy the bonds of these countries. As 10-year rates rise to 6%, 7% and higher, self-financing becomes more and more impossible.

For comparison, the coupon on U.S. 10-year bonds is 2%. The U.S. borrows for free.

4. Threat of bank insolvency in the Euro core. Here's a chart showing core bank holdings of European peripheral sovereign debt. Click to big, then look at the Italy stack. The Y-axis shows millions.

Subtract out the Italian banks, and look at the rest. If I read the chart right, it looks, for example, like Société Général is holding just under €10 billion in Italian debt alone. (That euros, not dollars.) Many other banks are exposed.

Total Italian debt held by all core EU banks is €100 billion. Add about €40 billion for the debt of the other four countries listed. That total is the exposure of core Euro banks to the sovereign debt of just five vulnerable economies.

France, Germany et al, could make their own banks whole again, but will they? And if so, how? (Remember, in Europe at least, the voters get to choose their candidates. What will those candidates do?)

5. Credit default swaps — bets on the default of the peripheral nations — get triggered worldwide. This could actually be the big enchilada (in my opinion). A bond can default only once. But the number of bets on that default can be limitless (in the absence of ... ahem ... regulation). Harrison:

As an Italian default would be a credit event, it would trigger credit default swaps, many of which were sold by American financial institutions. Would these institutions pay out? Could they?

CDSs have already taken down MF Global and Jon Corzine (who needs to be reminded there are jail cells). Just recently there is news that U.S. banks may be on the "AIG side" of those CDS bets.

From Bloomberg (my emphasis, h/t Matt Stoller):

JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.

Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.

When you "sell" protection, you promise to make the counterparty whole in the case of a default. JPM and GS won't say whether they were on the sell side, kind of a clue they were.

If they are exposed, can you say "second bank bailout"? Good. Now form the words: "President Mitt Romney" and "Hello to the New 1930s."

That just touches the surface of Harrison's analysis. Again, please read to learn more.

This is so off the radar of most Americans, and shouldn't be. Offered as my small (if not short) contribution to your understanding.

(Roman ruins photo via Shutterstock)

GP Read the rest of this post...

Perry insists he will fight for Banana Republic-style military

For a guy who calls the center-right Obama a "socialist" this one is not too surprising. Maybe I'm just old fashioned, but I prefer the military to answer to elected officials and not the Banana Republic model (or Egyptian model) where the military is calling the shots. Think Progress:

PERRY: There is a time and a place for us to intervene, and intervene militarily. But when we intervene militarily, we best make the decision on how we are going to win and how we are going to win convincingly and quickly, send those young men and women with the equipment to win. Don’t let some congressman sitting in an air-conditioned office in Washington DC deciding what the rules of engagement are. … And for us to micromanage them, in a civilian way, without their commanders truly in charge, is absolutely irresponsible and as commander-in-chief of this country I will not let it happen.

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Key Senate and House Republicans moving to undo Super Commitee’s defense cuts

So when Republicans agreed to the Super Committee, and agreed that if the committee couldn't reach an accord there would be automatic cuts to domestic programs and defense programs, they didn't mean it. The GOP agreed to the Super Committee as a kind of bluff. They never intended to let the committee cut defense spending or raise taxes (either by design or by default).  They simply wanted to see if they could get the Democrats to cave during the negotiations, and since the didn't cave, the GOP is pulling out of both deals (both the committee negotiations and the automatic-cuts). From CBS News:

[T]he same legislators who concocted that budgetary booby trap just four months ago could end up spending the 2012 election year and beyond battling over defusing it.

Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., say they are writing legislation to prevent what they say would be devastating cuts to the military. House Republicans are exploring a similar move. Democrats maintain they won't let domestic programs be the sole source of savings.

Read the rest of this post...

Top 0.1% earned nearly 50% of all capital gains

And to think the GOP and quite a few Democrats buy into the baloney that we need to keep cutting capital gains taxes. How about seeing a majority in Washington give a damn about everyone else? It hasn't been part of the mainstream policy for decades, but it needs to be. Until someone dedicates themselves to bringing back the middle class and helping Americans other than the richest of the rich, neither party deserves any financial support of votes. Both parties are complete jokes and yes, anti-American.

This disgraceful statistic unfortunately has the fingerprints of both Democrats and Republicans and it has to change.

Capital gains are the key ingredient of income disparity in the US-- and the force behind the winner takes all mantra of our economic system. If you want even out earning power in the U.S, you have to raise the 15% capital gains tax.

Income and wealth disparities become even more absurd if we look at the top 0.1% of the nation's earners-- rather than the more common 1%. The top 0.1%-- about 315,000 individuals out of 315 million-- are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.

It's crystal clear that the Bush tax reduction on capital gains and dividend income in 2003 was the cutting edge policy that has created the immense increase in net worth of corporate executives, Wall St. professionals and other entrepreneurs.

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Latest poll shows Obama doing well with base for re-elect

I suspect the last few months, with the President fighting back harder against the Republicans, and his increased willingness to blame them when they deserve it, has helped him with a large cross section of the base.  It also hasn't hurt that the Republicans continue to be insane.  I still think that enthusiasm is not what it was in 2008, and that enthusiasm matters - for fundraising, for messaging, and for get out the vote.  The President has begun to turn things around with the base - and more generally show some backbone, which will help him with independents as well. Read the rest of this post...

Conservatives rout Socialists in Spanish elections

Someone was going to have to pay the price for being in power during this disastrous economic time and the Socialists were in power. The unemployment rate remains painfully high, with the youth unemployment near 50%. It won't be a surprise to see the elections swing back and forth in the coming years as there is so much blame to go around and things are not about to improve for years. Spain, like many countries, is also looking at the high likelihood of a lost generation who will never have acceptable levels of employment. The Guardian:

The conservative People's party (PP) of Mariano Rajoy has swept to a landslide victory in Spain's general election, inheriting sky-high unemployment and one of the shakiest economies in Europe.

Rajoy's PP gained an absolute parliamentary majority with a crushing 16 percentage point win over the Socialists of outgoing prime minister José Luis Rodríguez Zapatero.

The Socialists lost a third of their seats as voters dumped a government that presided over a dramatic economic slump which has left 23% of Spaniards out of work.

Read the rest of this post...

Church of England bishops criticize welfare cuts

What a crazy concept here to see senior religious leaders standing up for the poor and suffering during a severe economic crisis. It's good to see some religious people concerned about the issues they ought to be concerned about other than maintaining tax cuts for the rich or promoting bigoted policies that discriminate. The Guardian:

Bishops across the country, backed by Rowan Williams, the archbishop of Canterbury, have condemned the coalition government's controversial welfare reforms, which they say risk pushing thousands of children into poverty and homelessness.

Eighteen Church of England bishops, backed by Williams and the archbishop of York, John Sentamu, are demanding that ministers rewrite their flagship plan to impose a £500-a-week benefit cap on families.

In an open letter in Observer, they say the Church of England has a "moral obligation to speak up for those who have no voice". Their message is that the cap could be "profoundly unjust" to the poorest children in society, especially those in larger families and those living in expensive major cities.

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Florida Democrat introduces OCCUPIED amendment

OK, that's the type of politician that people want to vote for. The idea that corporations are people is so bizarre yet so few in Congress have bothered to do anything about it. More from Think Progress:

In one of the greatest signs yet that the 99 Percenters are having an impact, Rep. Ted Deutch (D-FL), a member of the House Judiciary Committee, today introduced an amendment that would ban corporate money in politics and end corporate personhood once and for all.

Deutch’s amendment, called the Outlawing Corporate Cash Undermining the Public Interest in our Elections and Democracy (OCCUPIED) Amendment, would overturn the Citizens United decision, re-establishing the right of Congress and the states to regulate campaign finance laws, and to effectively outlaw the ability of for-profit corporations to contribute to campaign spending.

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