Chris Hayes, over on MSNBC, decided to be the first to seriously break the mainstream cable news' boycott over SOPA/PIPA with a big debate on the bill -- mainly between NBCUniversal's top lawyer, Rick Cotton, and Reddit co-founder Alexis Ohanian. Chris's opening discussion is quite good, and suggests he's certainly sympathetic to all of us who are vehemently opposed to the bill. You can watch it below: Source
S&P Says Greek Default Imminent
- KRAEMER: GREECE, CREDITORS `RUNNING OUT OF TIME' IN DEBT TALKS -BBG
- KRAEMER: EURO LEADERS HAVEN'T TACKLED CORE UNDERLYING PROBLEMS -BBG
- KRAEMER SAYS EUROPE MUST DEAL WITH IMBALANCES, COMPETITIVENESS -BBG
And the punchline:
- KRAEMER SAYS HE BELIEVES GREECE WILL DEFAULT SHORTLY - RTRS
The only thing he did not add is that the default will be Coercive. What happens next is anyone's guess, but whatever it is it is certainly priced in. Also, let's not forget that the inability of the market to react to any news ever again is most certainly priced in. Source
"It's Viral!" The Movement to Overturn Citizens United Swamps the Internet
Huntsman drops out of GOP race; Ron Paul surges in South Carolina
Former Utah Governor Jon Huntsman abandoned his attempt at the Republican Party’s nod on Monday, not just narrowing the number of candidates vying for the GOP nomination but potentially pushing the contest in favor of Texas Congressman Ron Paul. The announcement from the Huntsman camp came early Monday, only days after the candidate took third place in the New Hampshire primary. While Congresswoman Michelle Bachmann was prompted to pull out of the race following dismal polling in the granite state, Newt Gingrich, Rick Santorum and Rick Perry — who gathered substantially less votes that Huntsman — remain in the race. Now unless the pack of three bringing up the rear in the race can see a resurgence of success on the road to the South Carolina primary, the path to the Republican Party nomination seems certain to be a two-man race between Romney and Paul. Given his continuing surge in support coupled with a surprise second place win in New Hampshire, positive polling down south and the ability to reclaim votes from the Huntsman fan base, Congressman Paul stands to capitalize on having his contender call it quits.
"Why Marijuana Should Be Legalized" - M.O.C.
Let's be honest, marijuana IS a gateway drug. But maybe we shouldn't care. Source
Dr. Martin Luther King Jr. Day. "I Have A Dream"
"I Have Been To The Mountaintop"
An excerpt from the last speech given by Rev. Dr. Martian Luther King Jr. He was assassinated in Memphis, Tennessee the next day on April 4, 1968.
Guns on the Table: UK pushes Iran oil ban
As Iran and the West step up their war of words over the Islamic state's nuclear program, the UK is refusing to rule out taking military action. Foreign Secretary William Hague also spoke of his confidence that an EU embargo on Iranian oil will be in place by the end of the month. RT gets the latest from correspondent Ivor Bennett in London. Source
World War 3 Marc Faber
Dr. Marc Faber, an investor analyst and entrepreneur known as “Dr. Doom” for obvious reasons, predicted this week that World War III will occur in the next five years. His stated concern is China, he told Barron’sfinancial magazine in its annual roundtable discussion at the beginning of the year.
“On another optimistic note,” Dr. Faber said sarcastically, “World War III will occur in the next five years. That means the Middle East will blow up. New regimes there will be less Western-friendly. The West has also figured out it can't contain China, which is rising rapidly and will have more military and naval power in Southeast Asia. The only way for the West to contain China is to control the oil tap in the Middle East.”
The “good news” in Faber’s eye is that World War III will be good for the stock market. “It is very positive for stocks and negative for bonds, because debt will grow dramatically,” he explained.
Another participant in the discussion, Felix Zulauf, opined that a war will be good forstocks because “unused capacity in an economy can be directed to the defense and war industry. That will be paid for by new government debt, and that keeps the economy growing."
More optimistic was investment manager Scott Black who told Dr. Faber, "If Israel strikes Iran
In last year’s Barron’s roundtable discussion, Dr. Faber stated that investors should "want to be hedged for complete disaster – World War III…. Eventually, we will have a war, big time. Maybe you don't have divisions of tanks facing each other, but it should be clear that China is an active supporter of North Korea and the Taliban. And now with the US endorsing a seat for India on the UN Security Council, the Chinese are getting closer to Pakistan." Source
His doomsday scanario was also expresed on the following video.
Pentagon Under the Knife - Will Obama's cuts produce any results?
Gene Kerrigan: Is your toilet half-empty, or half-full? explore the toilet arrangements of Mr Brendan Howlin TD
Let's explore the toilet arrangements of Mr Brendan Howlin TD. Mr Howlin is the Minister for Frowning Sternly at Waste of Public Money. The minister wakes up thinking of costs he must chop, he nods off to sleep muttering about spending he might slash. It's a dirty job, but someone's got to do it. A bit like this column -- who else will take on the job of peering closely at Mr Howlin's toilet arrangements? It's been a momentous week, with workers fighting back against despicable treatment and the euro inching closer to the edge. There's been a sudden lurch away from the economic fashion for austerity. But Mr Howlin's toilet arrangements must take priority with us. In fact, Mr Howlin's toilet arrangements are pertinent to these matters. Some time ago, word went around that Mr Howlin had spent €47 on a toilet seat for his ministerial office. The usual suspects sneered at this supposed extravagance by Mr Austerity. In fact, the toilet seat story was a lie. The evidence is that Mr Howlin spent €47 of our money on getting a key cut for his personal toilet. I know these things because I occasionally click into an indispensable website, thestory.ie, run by journalist and researcher Gavin Sheridan. Mr Sheridan has an admirable devotion to digging out and archiving raw data on the running of the Government. He acquired a detailed list of the costs of Mr Howlin's offices. Why did Brendan need a key for his toilet? To keep unauthorised personnel from using The Official Ministerial Lavatory, of course. One can't expect a minister to pee and poo in the same facility used by all and sundry. Besides, one needs a toilet nearby when one has installed a "Tea Station" at a cost of €7,638 (plus plumbing and electrics costing €4,368). However, this raises another question. Why did Brendan spend another €47 installing what the records call a "sign for Minister's toilet"? Presumably this sign said something like, "Brendan's Toilet -- Piss Off". But the Sherlock Holmes in me wonders why Brendan needs to tell others they can't use his toilet, if he has the only key? Perhaps the sign isn't on the door. Perhaps it's inside the facility, above the actual toilet. And it reminds the minister, "Poo Here". All this came to mind with last week's revelations that Brendan Austerity authorised a €133,000 salary for his "special adviser", Ronan O'Brien. He did this back in April, at the time he was vigorously resisting Richard Bruton's demand that his "special adviser" should get a salary of €127,000. Officially, there was a salary cap of €92,000 for these positions. "Ah, here," said Mr Howlin's officials, or words to that effect. So, the King of Austerity shrugged and arranged for his adviser to get only €114,000 -- i.e. a mere €22,000 above the salary cap. (You'll be glad to know that Richard Bruton's adviser, Ciaran Conlon, got his full €127,000, on the instructions of Taoiseach Enda.) Now, you might conclude that there's something wrong with the fact that we're paying for lavish lifestyles for the people who close hospital beds and destroy crucial education programmes. But the argument has been that such costs don't matter in the greater scheme of things. And that the brutal austerity must be bravely borne, as it will save us all. From the beginning, some of us pointed to an inescapable lesson of history. You can't cut your way out of a deep recession -- austerity makes things worse. On average, five companies per day were declared insolvent in 2011. It looks like it's about to get worse. We were set against each other -- private sector set against public sector. The silly Ibec people demanded that nurses and guards and clerks "share the pain", when their wages had already been cut. Ibec represents many retail businesses. Essentially, Ibec demanded that the purchasing power of their clients' customers should be reduced. Hey, we loony lefties warned -- you're killing your own jobs. Share the pain, share the pain, share the pain, said the bright folks at Ibec, with unflinching mindlessness. Today, even Ibec mutters sullenly about austerity. On Friday, when the chancers at Standard & Poor's rating agency were downgrading whole countries, they had to make a grudging swipe at austerity. As Forbes reported on the Standard & Poor's story: "German Austerity To Blame For Eurozone Crisis." Why the lurch against austerity? It's not real. Austerity "alone", we're now told, won't end the crisis. But -- austerity and what? And here, Standard & Poor's, Forbes and the academic economists start crunching selected numbers. To no effect. Because this is a very special recession. Massive banks, and the extremely wealthy people behind them, gambled billions on stupid speculation -- sub-prime housing in the USA, property here and in Spain. German and UK banks and other gamblers joined the game. Hedge funds, investment banks, gamblers of all sorts, raked in billions. Right down to the builders throwing up housing estates where nobody wanted to live. When the credit bubble burst they found themselves on losing bets, but they were damned if they were going to take the losses. That's what the "re-capitalisation" of the banks and Nama and the rest of the game-playing has been about. The austerity programmes are designed to siphon money from the real economy, from the taxes and levies the rest of us pay, from the services we earned and built up over generations -- and borrowing money our children will have to pay, to shore up the insolvent financial system. The hope is that the money people will somehow make it right. And this despite the fact that there simply isn't enough money on the planet to pay all the debts these idiots have run up. In Europe, the euro has become a victim of the row over who pays. Here, the real economy has suffered. In the row between retail outlets and the landlords (the banks), the Government has stood loyally by the bankers. Brutality is the order of the day, which leads to workers at La Senza, Vita Cortex and other places being discarded like used tissues. Last week saw a fightback, the injustice of what was done to those workers being so cruelly obvious. And, now, in the fourth year of this lunacy, the penny is dropping. Austerity kills jobs. Without jobs, no growth. Without growth, we slide into a generation of stagnancy -- and over on the right, the dark forces are stirring. Look at what's happening in Hungary (where democracy is being suppressed by Fidesz, a party that shares membership of the European People's Party with Fine Gael). A problem for the austerity hawks has been that they love their comforts. They love their big salaries and their personal toilets. So, ministers still expect hundreds of thousands and conditions to match. When the bank workers who accept our deposits and cash our cheques are thrown on the dole, the lads upstairs in the sharp suits still complain that salaries of half a million aren't enough.
A fourth year of paring back social supports, killing hope, driving the young off the island, and the futile search continues for a solution that enables the privileged to maintain their structured inequalities. Either the rich accept their losses or we're all going down the toilet.Source
Quo Vadis, Britannia? Relative international Silence on UK finances
Ilargi: There is a relative silence in the international financial press when it comes to Britain. The economic situation of continental Europe gets almost all the attention. Every now and then someone in France or Germany states that Britain, too, should be downgraded, like when S&P cut the ratings of 9 European countries, but such statements attract hardly any interest at all. This might not be overly wise, though.At the end of last year, Tyler Durden at ZeroHedge published a graph from Haver Analytics/Morgan Stanley that should probably have sounded alarm bells quite a bit louder than it did.
Still, this graph would seem to indicate that the only core issue in the UK is its outsize financial sector with its outsize debt. From time to time, however, news articles pop up that seem to indicate there's more going on than trouble in the City of London.
I found this one alarmingly interesting, for instance, from James Hall in the Telegraph on January 4:
Ilargi: Payday loans to pay off your mortgage? Sounds like perhaps Britain has a substantial hidden real estate problem, a pre-shadow inventory one that could spiral out of control at a rapid clip.Almost one million Britons have taken out an emergency 'payday' loan to help pay their rent or mortgage in the last year, according to Shelter, the housing charity.
The high degree of borrowing highlights the 'spiral of debt' that people are falling into to keep a roof over their head, Shelter said. The charity also found that seven million Britons are relying on some form of credit to help pay their housing costs.
Campbell Robb, Shelter’s chief executive, said: 'These shocking findings show the extent to which millions of households across the country are desperately struggling to keep their home.'
First of all, austerity measures. Which will hit those people very hard who are in the bottom 25% or so who already have no savings, no nothing, to fall back on. And which will also lead to a rise in unemployment, which in turn will exacerbate the vicious problem circle.
Cameron also distances himself, and his country, from continental Europe, even though that is Britain's main export destination. How smart is that?
Britain is a country of relatively large regional disparities as well as wealth disparities. The already rich center increasingly sucks up the remaining wealth of the periphery of society. There is then only one possible outcome of those one million people paying their rents and mortgages with payday loans: the British housing bubble will burst sooner rather than later.
Tax revenue has only one way to go as well. Down. So what will Cameron use to support the banks? How will he attempt to prevent a large scale repeat of last year's Tottenham riots?
Looking at all this, we also need to wonder how much longer, and why in the first place, Britain is perceived as a safe haven, with its sovereign bonds - gilts - much sought after. Sure, Britain has its own currency and central bank, it can "print", it can do QE 1001, but it's not as if it hasn't already tried that route. And still lost 20% of GDP.
Whatever it decides to do, it seems safe to presume that Britain might well steal some of the limelight away from Greece and Italy in the not too distant future.
Jim Rogers: Lazy bank & ratings clique must take a hit
Boycott Expansion: 'First steps to fascism are quiet' - Israel
Germany: Time For European Ratings Agencies
Westerwelle spoke on January 15 on a visit to debt-crippled Greece. His comments came two days after the Standard & Poor's ratings agency on January 13 downgraded the credit rating of nine European countries -- raising fresh concerns on markets about the European debt crisis and the euro currency. Westerwelle said the decisions of the ratings agencies can help create uncertainty in markets.
"It is high time that Europe asserts itself and that we ensure competition between the ratings agencies," he said. "A lot of politics plays into this, many political value judgments. And therefore it is necessary that in Europe, we found independent, European ratings agencies."
Westerwelle said agreements between European Union member states aimed at handling the debt crisis must be given a realistic chance to work, suggesting that the announcements of ratings agencies can prematurely raise doubts. Source
Europe anti-austerity rallies turn ugly - Molotov cocktails
During the latest such protests in Spain, police scuffled with demonstrators in the capital Madrid on Sunday, detaining three people and wounding several others. Scuffles broke out when 'indignant' Spaniards gathered at a Madrid subway station to protest against rises in the cost of public transportation. Dozens of protesters entered the station and refused to pay, shouting slogans such as “I don't pay for your crisis.”
In the Greek capital Athens, riot police attacked around 2,000 demonstrators protesting against job cuts outside parliament, before detaining three and injuring one. The demonstrators say Athens has failed to decrease its debt, despite massive lay-offs. Last year, the Greek government cut 10,000 jobs and announced plans for further lay-offs in 2012.
Clashes between riot police and demonstrators have also erupted in the Romanian capital Bucharest for a third day in a row. At least seven people, including a number of police officers, were injured in the confrontations. The demonstrators chanted slogans against President Traian Basescu, whom they blame for the country's falling living standards, and called on him to step down. The demonstrations originally started on Thursday in a show of support for Deputy Health Minister Raed Arafat, who resigned earlier in the week, and as a protest against a pension freeze and a 25 percent cut in public sector wages approved by Romania's center-right government in July 2010. Arafat, a doctor born in Palestine, had harshly criticized a draft healthcare reform bill and entered a dispute with the president, who is a main supporter of the potential law. Source
The Accelerating Disintegration of America
Ex-Goldmanite Nomi Prins Fears Return of 1930s Great Depression
Onaran: Why did you go for fiction this time?
Prins: In nonfiction, you don’t have the ability to dig into the emotional impact on people of financial disasters. You can talk about statistics, but that doesn’t do it justice. I wanted to explore the emotional side of the story.
Onaran: Why did you use the 1930s as the backdrop to the story rather than the current crisis?
Prins: There are so many parallels between the 1930s and now, they’re staggering. Just like the asset bubble that caused the Great Depression, our subprime bubble has led to the 2008 crash from which we’re still suffering. So I wanted to say: “We’ve been here before. Why are we doing this again?”
Prins: In nonfiction, you don’t have the ability to dig into the emotional impact on people of financial disasters. You can talk about statistics, but that doesn’t do it justice. I wanted to explore the emotional side of the story.
Onaran: Why did you use the 1930s as the backdrop to the story rather than the current crisis?
Prins: There are so many parallels between the 1930s and now, they’re staggering. Just like the asset bubble that caused the Great Depression, our subprime bubble has led to the 2008 crash from which we’re still suffering. So I wanted to say: “We’ve been here before. Why are we doing this again?”
Rich Versus Poor
Today we have this 1 percent versus 99 percent, the dislocation between the rich and the poor, between the bankers and everybody else. That was very prevalent back then, leading up to the Depression. So the contrast between the poor Lower East Side residents and the Wall Street bankers in the 1930s was very intriguing to me.
Onaran: Are we repeating the same mistakes of the Great Depression?
Prins: The Glass-Steagall Act was created in 1933 to make sure banks couldn’t take advantage of their deposit and loan customers to get involved in the creation of new securities. So the risk of investment banking was separated, and the biggest banks were split up. But this time around, we didn’t do that -- we didn’t break up the banks, we actually consolidated more of their risk. We made them bigger. We lost the opportunity to make the banks less complex and not have the government subsidize zombie banks. We’ve done so many things wrong, I’m afraid this will be a prolonged depression on the economy.
Prins: The Glass-Steagall Act was created in 1933 to make sure banks couldn’t take advantage of their deposit and loan customers to get involved in the creation of new securities. So the risk of investment banking was separated, and the biggest banks were split up. But this time around, we didn’t do that -- we didn’t break up the banks, we actually consolidated more of their risk. We made them bigger. We lost the opportunity to make the banks less complex and not have the government subsidize zombie banks. We’ve done so many things wrong, I’m afraid this will be a prolonged depression on the economy.
Roosevelt’s Reforms
Onaran: How could Franklin Delano Roosevelt carry out fundamental reforms -- banks had just as much political clout then, no?
Prins: Banks didn’t see that they were losing their power when they were forced to split. The same people stayed on the boards of the new entities formed, so they thought they continued to wield power in the financial system.
Onaran: Are the banks cooking the books now as they were at the time?
Prins: Yes. By not marking to market the complex securities in their books, they’re hiding losses. Second, if you have loan properties and if you haven’t finished foreclosure, the related assets aren’t marked down. So there’s massive overvaluing going on across the board.
Prins: Banks didn’t see that they were losing their power when they were forced to split. The same people stayed on the boards of the new entities formed, so they thought they continued to wield power in the financial system.
Onaran: Are the banks cooking the books now as they were at the time?
Prins: Yes. By not marking to market the complex securities in their books, they’re hiding losses. Second, if you have loan properties and if you haven’t finished foreclosure, the related assets aren’t marked down. So there’s massive overvaluing going on across the board.
(Yalman Onaran writes for Bloomberg News. The opinions expressed are his own. This interview was condensed from a longer conversation.) Source
Is German Anger Finally Coming To A Boil? Even Local CEOs Say Time To Exit Euro May Have Arrived
- *SCHAUEBLE SAYS ECB AS LENDER OF LAST RESORT WOULDN'T CALM MKTS
- *SCHAEUBLE SAYS JOINT EURO REGION BOND SALES NOT A SOLUTION
Hardly reassuring given the dreams of every GGB owner and BTP-exposed insurance company are banking on the ECB cranking the presses to 'secure' nominal returns in the real world. The EURUSD has opened down 40 pips or so on a slow Sunday afternoon as we remind hopeful investors (and the German public) of our comments from last July (which seem even more prescient now with the AAA downgrades and increasing reliance on EFSF and ESM mechanisms placing more burden explicitly on German taxpayers and "in doing so may have jeopardized anywhere between 32% and 56% of its entire annual economic output".
Germany should consider leaving the euro if efforts to impose fiscal discipline upon indebted euro zone countries fail, the head of industrial gases firm Linde (LING.DE) told German weekly paper Der Spiegel."I fear the willingness of crisis countries to reform themselves is abating if, in the end, the European Central Bank steps in," Linde's chief executive Wolfgang Reitzle was quoted as saying."If we do not succeed in disciplining crisis countries, Germany needs to exit," said Reitzle who was previously a board member at carmaker BMW (BMWG.DE) and head of Jaguar and Land Rover.Asking Germans to pay more than 50 percent taxes to help fund other euro zone countries will erode the will of the German electorate to support rescue measures, Reitzle said.Although this scenario is not desirable, he felt that German industry would survive working in a new currency."Of course it would lead the new currency - Deutschmark, North-euro or whatever it is called - to appreciate in value. But it would be by a lesser amount than feared," Reitzle said."Although this would lead to higher unemployment in Germany because exports would take a hit, pressure would increase to become more competitive."Reitzle said the euro zone is unlikely to break up completely but Greece is not in a position to service its debt."The country is not in a position to restructure itself in such a way that it can remain in the currency union," Reitzle said."In the medium term Greece needs to exit. And the writedowns on Greek debt will not be between 50 to 70 percent, but in the end will be written down by 100 percent," Reitzle said.So long as Greece remains in the euro it needs to be supported. "All in all this is a 500 billion-euro problem," Reitzle said.Structural reforms need to continue elsewhere in places like Italy too, Reitzle said.The year of destiny for the euro is not 2012, but three to four years down the line, Reitzle said.Upon being asked whether Linde has a plan B to cope with a complete break-up of the euro zone, Reitzle said 'no'."Even if we had a recession for years in Europe, it would only impact 30 percent of our revenues," he added.
As the ESM is accelerated and deposits/investor-cash flood into German banks and bunds, the risks of subordination of existing sovereign bond holders and devaluation from non-German-euro-holding deposits is perhaps too much to bear for investors/savers and leaves the German politik, CEOs, and public at a critical decision point in terms of extending the socialist empire experiment (at their expense) or going it alone facing pain now for a brighter future - the Linde CEO seems convinced (and Schaeuble seems less than inspired by the euro-bond-based fiscal compact solution). Source