Banker accepting souls as collateral

He might be out of luck trying to find a soul on Wall Street but fortunately he's doing micro-loans in Latvia. (Wall Street gladly takes handouts from average Americans to maintain their posh lifestyle, so clearly they are as soulless as they are selfish.) I'd love to hear the rate of faults later this year though micro-loans tend to have very high success rates. High interest rates tend to sound more like loan sharking than micro-loans but even a loan shark would probably ask for some other collateral. A new market is born.

Clients have to sign a contract, with the words "Agreement" in bold letters at the top. The client agrees to the collateral, "that is, my immortal soul".

Mirosiichenko said his company would not employ debt collectors to get its money back if people refused to repay, and promised no physical violence.

Signatories only have to give their first name and do not show any documents.

"If they don't give it back, what can you do? They won't have a soul, that's all," he told Reuters in a basement office, with one desk, a computer and three chairs.

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More hot dogs, fewer steaks this 4th

With fat bonuses and pay increases, it may still be steaks for Wall Street but elsewhere in America it's all about the budget cuts.

Americans will be throwing more hot dogs and hamburgers on their backyard grills rather than higher-priced meat like steaks this July 4 U.S. Independence Day holiday as the recession and high unemployment crimp celebrations.

"It will be the cheaper cuts that will take the majority of the business," said John Kleist, analyst with the McHenry, Ill-based advisory firm Allendale Inc.

"We would do well to say that meat movement over the holiday was decent. That is the best we can hope for," said Kleist.

High unemployment and the recession are controlling people's spending decisions, and as a result the cost and size of holiday meals will be down from years past.

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"She has told her supporters she is out of politics, period."

Jed caught this clip on MSNBC:

I don't care what Andrea Mitchel has been told, I'm still waiting for the other shoe to drop. Read the rest of this post...

Breaking: Palin to quit as governor of Alaska

What better way to celebrate the 4th of July than to announce that you are quitting. Strange story and there has to be much more to it.

Gov. Sarah Palin announced today that she will resign in a few weeks. Lt. Gov. Sean Parnell will take over at the Governor's Picnic in Fairbanks on July 25.

She made the announcement at a news conference at her home in Wasilla.

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Who do you believe?

I'll go out on a limb and say this former executive is on to something but who knows? Maybe the insurance industry really is like a big cuddly bear that only wants to pass along hugs and would never dream of purging customers. It's a big mistake and we need to hear their side of the story because they're always been so kind and flexible with everyone. CNN:

In his testimony and during an interview with CNN, Potter described how underwriters at his former company would drive small businesses with expensive insurance claims to dump their Cigna policies. Industry executives refer to the practice as "purging," Potter said.

"When that business comes up for renewal, the underwriters jack the rates up so much, the employer has no choice but to drop insurance," Potter said.

CNN obtained a transcript of a 2008 Cigna conference call with investors in which company executives use the term "purge."

But in an e-mail to CNN, Cigna spokesman Chris Curran denied the company engages in purging.

"We do not practice that. We will offer rates that are reflective of the competitive group health insurance market. We always encourage our clients to compare our proposed rates to those available from other carriers," Curran wrote.

Cigna had revenue of $19.1 billion in 2008, according to the company Web site.

Nice profits for an industry that never knows when to stop raising costs on consumers while delivering less by the day. At least the executive team is living the good life because that's all that matters. Read the rest of this post...

The Michael Jackson conundrum

Is it just me, or does anyone else feel oddly conflicted about why we continue to praise Michael Jackson as a great entertainer, and mourn his death, when many of us (most of us?) suspect that he was in fact guilty of molesting children? Shouldn't the latter outweigh the former? Read the rest of this post...

Public option: $1 trillion. Bush tax cut: $1.8 trillion.

Krugman makes a good point re: the relative cost of fixing our health care system versus George Bush's tax cuts. Read the rest of this post...

Interview with the leader of the Pirate Party in Sweden

Jane Hamsher and I got a chance to meet and interview Rickard Falkvinge, the head of the Swedish Pirate Party. The party is devoted to patent and copyright reform (they're not big fans of either), and they also focus on eavesdropping laws (that they don't like either). The party is loosely affiliated with the file-sharing Web site "The Pirate Bay," and just recently won a seat in the European parliament.



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Friday Morning Open Thread

Good morning.

Happy 3rd of July. Today is the federal and state holiday. (But, banks are open today, even though many are practically federal agencies.)

It should be a slowish news day and weekend. Obama is at Camp David. Biden is in Iraq. Congress is in recess. The stock market is closed. But, North Korea does like to act up over long holiday weekends. And, there is the ongoing Michael Jackson drama.

And, there's still no sun in Maine. Tourism is this state's biggest industry, so bad weather can have long-term effects. UPDATE @ 9:53 AM: The sun is out. I can see blue sky.

Let's get it started... Read the rest of this post...

UK Chancellor of the Exchequer slams bankers repeating bonus culture

Glad to see someone in power has both a spine and a will to force change. Business as usual is not going to cut it though the bankers also know that without more games - gambles and leverage being among their favorites - they will not see the fat bonuses that they've come to expect. Look at at this graph and see if you can spot the outrageous distortion brought on during the Reagan (and Thatcher) years.

Amid signs that the bonus culture blamed for excessive risk-taking is creeping back in the City of London, the Chancellor declared in an interview with The Independent: "There are people who are too complacent in my view. They need to be brought back to earth."

Mr Darling disclosed that he will try to end a damaging turf war between the Bank of England and the Financial Services Authority (FSA) by giving them both more powers in a White Paper on banking unveiled next week.

He assured the Bank it will play a central role in preventing future booms turning into bubbles and in assessing risks to the entire system as well as individual banks. The White Paper will endorse the Bank's call for financial institutions to have to provide "richer and more frequent" public disclosures of information. And it will back the FSA's demand to be able to extend its regulatory remit – a move which in future could draw hedge funds into its net.

The FSA will be ordered to take a more proactive approach to prevent a return to pay hikes and bonuses to reward short-term profits. If remuneration packages encourage risky behaviour, the FSA will force banks to hold more capital reserves to provide a safety net.

Geither never seems willing to upset his tennis partners and the rest of his team from Citi are afraid to create problems for old friends on Wall Street.

All of this comes back again to the many problems created back in the 1980s. The bulk of Americans rely on Wall Street for their 401K retirement plans. Americans view that money as a critical piece of their safe retirement yet Wall Street still thinks it's a game. For Wall Street, they like having those billions to play with because it enabled them to get more credit for more gambles. They still found a way to get paid but the American public has been caught billions in the hole.

If Obama and Geithner had any clue - and the jury is out on both - they would start to think more about how they could help the American public who continues to be battered from this recession. Firming up the Wall Street system is a priority and yes, they are making some moves there but it's too slow and not enough. What about those retirement losses? What about creating an easier 401K system that was clearer about charges and what about forcing more responsibility instead of allowing the casino culture to continue? Obama and Geithner, like every politician in the US, are financially set for life but that's not the case for the rest. It would be nice if both started to think more about that instead of what is good for Wall Street. Read the rest of this post...

US bank failures up to 52

The Wall Street gang all feel bullish thanks for billions from taxpayers including plenty of free money (well, maybe not Citi because they remain a basket case) but across the country it's a different story. Fewer banks is about the last thing the market needs in the Soviet-esque American business model that the GOP introduced. CNNMoney:

Seven banks were shut down by authorities Thursday, pushing the tally of failed banks for 2009 to 52, more than doubling the failures in 2008.

Six regional banks in Illinois and one in Texas closed their doors, according to the Federal Deposit Insurance Corporation.

The rash of Illinois failures are interlinked: All six banks were controlled by one family and followed a similar business model that "created concentrated exposure in each institution," according to the FDIC.

The agency said that the six failures stemmed from the banks' investments in collateralized debt obligations and other loan losses.

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Scottish sheep shrinking due to global warming

Mother nature always knows.

The case involves a rare herd of wild sheep on the remote Scottish island - known in Scottish Gaelic as Hirta - that are refusing to bow to conventional evolutionary pressure, which says big is best. Instead, they have steadily decreased in size since the 1980s.

Scientists have now stepped in to solve the conundrum, and fingered the culprit as the new Moriarty of mankind: global warming.

The experts say shorter and milder winters mean that lambs do not need to put as much weight on during their first few months of life. Smaller animals that would have perished in harsh winters a few decades ago can now survive to their first birthday. As a result, the average weight of the sheep has dropped by 81g each year.

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Deflation?

Krugman says "we're heading into Japanese-style deflation territory." And, he's got the chart of "wage change" to prove it.

Earlier this year, Krugman told us "getting out of a deflationary trap is very, very hard."

I don't like the sound of this. All I know is that if Krugman thinks it's bad, it is. Read the rest of this post...