Perhaps I don't point it out often enough but The Stars Hollow Gazette and DocuDharma are group blogs and without member contributions they wouldn't be much.
My activist brother thinks I'm intimidating and perhaps he's right, however my intention is to be nurturant and encouraging in my internet interactions.
A case in point- seakit posted some interesting links to pet food recall notifications for salmonella contamination in Monday'sOn This Day In History which I'll reproduce for you.
FOR IMMEDIATE RELEASE - May 5, 2012 - Diamond Pet Foods today announced that it is expanding a voluntary recall to include batches of nine brands of dry pet food formulas manufactured between December 9, 2011 and April 7, 2012 due to potential Salmonella contamination.
In April 2012, Diamond Pet Foods initiated three voluntary recalls of Diamond manufactured dry dog food. Although none of the additional products being recalled have tested positive for Salmonella, the company is pulling them from store shelves as a precaution. Diamond Pet Foods is coordinating efforts with federal and state health and regulatory agencies and decided to independently expand the recall to ensure the safety and well-being of customers and their pets.
The company stated: "We have taken corrective actions at our Gaston, S.C., facility and voluntarily expanded the recall out of concern for our customers and their pets."
Brands included in the recall include:
Chicken Soup for the Pet Lover's Soul
Country Value
Diamond
Diamond Naturals
Premium Edge
Professional
4Health
Taste of the Wild
Wellpet LLC Voluntarily Recalls One Recipe Of Dry Dog Food Due To Salmonella At Diamond Pet Foods' Facility
Contact:
Consumer
877-227-9587
Media
Megan McCutcheon, Hunter PR
212-679-6600
FOR IMMEDIATE RELEASE - May 4, 2012 - WellPet LLC announced a voluntary recall of one recipe of Wellness® dry dog food after being notified by Diamond Pet Foods regarding the presence of Salmonella in Diamond's Gaston, South Carolina facility.
All Wellness products are tested for Salmonella and all lots tested negative prior to shipping to customers. The company is voluntarily recalling the select products below. This voluntary recall is being done out of an abundance of caution as these products were produced at the facility that has been linked to recent recalls of Diamond brand foods due to the threat of Salmonella.
Pets with Salmonella infections may have decreased appetite, fever and abdominal pain. If left untreated, pets may be lethargic and have diarrhea or bloody diarrhea, fever and vomiting. Infected but otherwise healthy pets can be carriers and infect other animals or humans. If your pet has consumed the recalled product and has these symptoms, please contact your veterinarian.
Individuals handling dry pet food can become infected with Salmonella, especially if they have not thoroughly washed their hands after having contact with surfaces exposed to this product. People who believe they may have been exposed to Salmonella should monitor themselves for some or all of the following symptoms: nausea, vomiting, diarrhea or bloody diarrhea, abdominal cramping and fever. According to the Centers for Disease Control, people who are more likely to be affected by Salmonella include infants, children younger than 5 years old, organ transplant patients, people with HIV/AIDS and people receiving treatment for cancer.
Contact:
Consumer Contact: 800-398-1600
Media Contact: Michael Lopes 800-398-1600 ext. 516 mlopes@canidae.com
FOR IMMEDIATE RELEASE - May 5, 2012- Canidae Pet Foods announced today that it is issuing a voluntary recall of certain dry pet food formulas manufactured between December 9, 2011, and January 31, 2012 at the Diamond Pet Food Gaston, South Carolina plant.
Although there have been no animal or human illnesses related to Canidae Pet Food, and the product has not tested positive for Salmonella, the company has voluntarily initiated this recall out of caution to ensure the health and safety of consumers and their pets.
The below list of product with production codes that must have both a number "3" in the 9th position AND an "X" in the 10th or 11th position with best before dates of December 9, 2012, through January 31, 2013 which are being recalled.
Canidae Dog, All Life Stages
Canidae Dog, Chicken Meal & Rice
Canidae Dog, Lamb Meal & Rice
Canidae Dog, Platinum
Natural Balance Pet Foods Initiates Voluntary Recall of Certain Dry Pet Food Due to the Potential for Salmonella Contamination
Contact:
Consumer:
(800) 829-4493
Media:
Daniel Bernstein
(310) 902-2554
FOR IMMEDIATE RELEASE - May 4, 2012 - Natural Balance Pet Foods announced today that it is issuing a voluntary recall of certain dry pet food formulas manufactured by Diamond Pet Foods at their Gaston, South Carolina facility.
Although there have been no animal illnesses reported and none of the products included in the recall has tested positive for Salmonella, the company has voluntarily initiated this recall as a precautionary measure.
Pets with Salmonella infections may have decreased appetite, fever and abdominal pain. If left untreated, pets may be lethargic and have diarrhea or bloody diarrhea, fever and vomiting. Infected but otherwise healthy pets can be carriers and infect other animals or humans. If your pet has consumed the recalled product and has these symptoms, please contact your veterinarian. We do not have any confirmed reports of pet illnesses.
Individuals handling dry pet food can become infected with Salmonella, especially if they have not thoroughly washed their hands after having contact with surfaces exposed to a contaminated product. Healthy people who believe they may have been exposed to Salmonella should monitor themselves for some or all of the following symptoms: nausea, vomiting, diarrhea or bloody diarrhea, abdominal cramping and fever. According to the Centers for Disease Control, people who are more likely to be affected by Salmonella include infants, children younger than 5 years old, organ transplant patients, people with HIV/AIDS and people receiving treatment for cancer. The U.S. Centers for Disease Control (CDC) have received a limited number of reports of salmonellosis, the illness caused by Salmonella.
Now it's not my point to put seakit or anyone else on the spot, but we are fast approaching June and during that month both TheMomCat and I have other engagements that require a substantial time commitment.
I am hoping our loyal readers will respond by providing the content they've come to expect. It's not really that hard and while my family and friends are careful to pronounce every emission a 'gem' I know that 98% of it is crap. It's all part of the 'Poet's Pledge'-
"Punting the Pundits" is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past "Punting the Pundits".
Suddenly, it has become easy to see how the euro - that grand, flawed experiment in monetary union without political union - could come apart at the seams. We're not talking about a distant prospect, either. Things could fall apart with stunning speed, in a matter of months, not years. And the costs - both economic and, arguably even more important, political - could be huge.
This doesn't have to happen; the euro (or at least most of it) could still be saved. But this will require that European leaders, especially in Germany and at the European Central Bank, start acting very differently from the way they've acted these past few years. They need to stop moralizing and deal with reality; they need to stop temporizing and, for once, get ahead of the curve.
How did we end up with such smart scoundrels? Even after it was known that Jamie Dimon's bank blew more than $2 billion on the same suspect derivatives trading that has bankrupted the world's economy, Barack Obama still had praise for the intellect of his political backer and the integrity of the bank he heads: "JPMorgan is one of the best-managed banks there is," the president told the hosts of ABC's "The View" in an interview televised Tuesday, adding, "Jamie Dimon, the head of it, is one of the smartest bankers we got. And they still lost $2 billion and counting."
A lesser bank would have gone under and needed to be bailed out, Obama argued: "That's why Wall Street reform is so important." But even when fully implemented, Obama's tepid reforms would not have stopped this scam and will not stop the others that are sure to follow. Being one of the smartest bankers means you are among those who best know how to skirt the law or, if that cannot be done, how to successfully lobby to gut it.
President Obama doled out the most shocking stream of commencement cliches to the graduating class of Barnard College Monday. To offer just a taste:
"The question is not whether things will get better - they always do... The question is whether together, we can muster the will - in our own lives, in our common institutions, in our politics - to bring about the changes we need. I'm convinced your generation possesses that will."
Whatever else they possess, the class of 2012 possesses an enormous amount of debt. Heavy borrowing's not only for graduate students or drop outs from for-profit colleges any more. It's also for Barnard alums. Forty eight per cent of those graduating this year from Barnard (where the price tag of an education stands at $58,078 ) have taken out loans to pay for their bachelor's degree. As the New York Times recently pointed out, "Nationally, ninety-four percent of students who earn a bachelor's degree borrow to pay for higher education - up from 45 percent in 1993." For these students things aren't getting better, they're getting worse. Their will has nothing to do with it.
When the leaders of the Group of 8 gather at Camp David on Friday, President Obama and the others must press Chancellor Angela Merkel of Germany to commit to a euro-zone growth package. This is no time to mince words: Her one-size-fits-all austerity program has been a failure, pushing heavily indebted countries deeper into recession, making it even harder for them to pay off their debts. It is putting the already-weak recovery in the United States at risk and is fueling instability and extremism in Europe.
After months of obstinance, Ms. Merkel has softened her stance - saying that Germany is open to stimulus to spur growth, employment and development in Greece and pledging to work with the new French president, François Hollande, on a program to promote growth across recession-racked Europe. It is unclear, however, whether her comments reflect a true and lasting change of heart.
LOS ANGELES-Uh-oh! Some people are looking over the right shoulders of the Republicans who rode into the House of Representatives on the tea party wave of 2010. And they don't like what they're seeing.
The Club for Growth is fundamentally a conservative lobbying and research group pushing for lower taxes and reduced government spending, which positions itself well to the right of Republican elected officials and even to the right of tea party rhetoric. The club's basic goal is a flat tax to replace graduated income taxes or a national sales tax. The idea, pardon my liberalism, is to reduce taxation on business and on the rich.
It seems the club has decided that much of the tea party is reneging on its promises of reducing taxes and spending. Last Wednesday it issued a broadside targeting many of the 87 Republican freshmen who roared into the House of Representatives under the rhetorical umbrella of the tea party.
Not In My Backyard! As Local Government Attacks on Women's Health Increase, Citizens Are Fighting Back
The vicious attacks on women's health to which we've grown so accustomed on the national and state stages are trickling down to the local level, as municipal and county governments get in on the action. Thankfully, time and again, local citizens have mounted fast and furious responses, resulting in the type of swift and satisfying victories that sometimes feel unimaginable on the national stage.
Local officials around the country have been using the "no taxpayer-funding for abortion" mantra to quietly turn away money for family planning programs that provide vital services for their neediest constituents. These attacks tend to follow a pattern: a program that has been funded without debate for years is suddenly pegged by a politician as "controversial." Fellow politicians fall in line and vote to defund the program before residents and public health officials have time to react.
But in a few instances, community members are stepping in to stop them once word gets out.
In a 68-page ruling blocking this statute, U.S. District Judge Katherine Forrest agreed that the statute failed to "pass constitutional muster" because its broad language could be used to quash political dissent.
"There is a strong public interest in protecting rights guaranteed by the First Amendment," Forrest wrote. "There is also a strong public interest in ensuring that due process rights guaranteed by the Fifth Amendment are protected by ensuring that ordinary citizens are able to understand the scope of conduct that could subject them to indefinite military detention."
This puts a whole new spin on today's debate in the House floor Thursday of an amendment to the NDAA proposed by Representatives Adam Smith (D-Wash.) and Justin Amash (R-Mich.), that would undo the detention provisions and bar military detention for any terror suspects captured on U.S. soil. The ruling was made in response to a law suit brought by former New York Times war correspondent and Pulitzer Prize winner, Chris Hedges and others who argued that the law would have a "chilling effect" on their work:
Hedges was joined in the suit by linguist, author and dissident Noam Chomsky, Pentagon whistle-blower Daniel Ellsberg and other high-profile activists, scholars and politicians.
Hedges argued in his testimony that his work as a journalist would bring him into contact with terrorist organizations that would, given the scope of the law, qualify him for indefinite detention. The plaintiffs argued that the threat of detention alone would be an unconstitutional encroachment on their First Amendment rights to free expression and association, as well as a violation of the Fifth Amendment right to due process.
As Glen Greenwald points out in his Salon article, the court rejected the argument by the government that the NDAA did nothing more than the 2001 AUMF already did and thus did not really expand the Government's power of indefinite detention:
The court cited three reasons why the NDAA clearly expands the Government's detention power over the 2001 AUMF (all of which I previously cited when denouncing this bill).
First, "by its terms, the AUMF is tied directly and only to those involved in the events of 9/11," whereas the NDAA "has a non-specific definition of 'covered person' that reaches beyond those involved in the 9/11 attacks by its very terms."
Second, "the individuals or groups at issue in the AUMF are also more specific than those at issue in § 1021″ of the NDAA; that's because the AUMF covered those "directly involved in the 9/11 attacks while those in § 1021 [of the NDAA] are specific groups and 'associated forces'." Moreover, "the Government has not provided a concrete, cognizable set of organizations or individuals that constitute 'associated forces,' lending further indefiniteness to § 1021."
Third, the AUMF is much more specific about how one is guilty of "supporting" the covered Terrorist groups, while the NDAA is incredibly broad and un-specific in that regard, thus leading the court to believe that even legitimate activities could subject a person to indefinite detention.
The court also decisively rejected the argument that President Obama's signing statement - expressing limits on how he intends to exercise the NDAA's detention powers - solves any of these problems. That's because, said the court, the signing statement "does not state that § 1021 of the NDAA will not be applied to otherwise-protected First Amendment speech nor does it give concrete definitions to the vague terms used in the statute."
(emphasis mine)
A word of caution, we shouldn't celebrate victory just yet. This is a preliminary injunction issued by one judge and the government will surely appeal it the Circuit Court.
The debate in the House on the amendment to the NDAA introduced by House Armed Services ranking member Adam Smith (D-Wash.) and Rep. Justin Amash (R-Mich.) that would undo the detention provisions and bar military detention for any terror suspects captured on U.S. soil, will go on this afternoon. The amendment has strong bipartisan support in the House. We still need to take action and write our Representatives to vote for this amendment.
Some six weeks after the United States formally entered the First World War, the U.S Congress passes the Selective Service Act on May 18, 1917, giving the U.S. president the power to draft soldiers.
When he went before Congress on April 2, 1917, to deliver his war message, President Woodrow Wilson had pledged all of his nation's considerable material resources to help the Allies-France, Britain, Russia and Italy-defeat the Central Powers. What the Allies desperately needed, however, were fresh troops to relieve their exhausted men on the battlefields of the Western Front, and these the U.S. was not immediately able to provide. Despite Wilson's effort to improve military preparedness over the course of 1916, at the time of Congress's war declaration the U.S. had only a small army of volunteers-some 100,000 men-that was in no way trained or equipped for the kind of fighting that was going on in Europe.
To remedy this situation, Wilson pushed the government to adopt military conscription, which he argued was the most democratic form of enlistment. To that end, Congress passed the Selective Service Act, which Wilson signed into law on May 18, 1917. The act required all men in the U.S. between the ages of 21 and 30 to register for military service. Within a few months, some 10 million men across the country had registered in response to the military draft.
During World War I there were three registrations.
The first, on June 5, 1917, was for all men between the ages of 21 and 31.
The second, on June 5, 1918, registered those who attained age 21 after June 5, 1917. A supplemental registration, included in the second registration, was held on August 24, 1918, for those becoming 21 years old after June 5, 1918.
The third registration was held on September 12, 1918, for men age 18 through 45.
After the signing of the armistice of November 11, 1918, the activities of the Selective Service System were rapidly curtailed. On March 31, 1919, all local, district, and medical advisory boards were closed, and on May 21, 1919, the last state headquarters closed operations. The Provost Marshal General was relieved from duty on July 15, 1919, thereby finally terminating the activities of the Selective Service System of World War I.
If you want a classic example of the way Establishment Democrats are perfectly tone-deaf when it comes to the concerns of the working families they like to flatter themselves as representing, take a look at how the race in Washington's brand-spanking-new First District is shaping up, particularly on the Democratic side.
Because instead of backing Darcy Burner, the progressive candidate with far and away the greatest name recognition and a record of working for working-class families and their interests -- particularly when it comes to things like protecting Medicare and Social Security, and getting their children out of war zones -- the state's establishment Dems seem to be lining up behind Susan DelBene, a pro-business faux-progressive Dem with little popular support but very deep pockets.
Evidently, it's all about the money. In a year when Democrats should be listening to the anger of their constituents at the failure of Washington politicians to take care of the interests of ordinary people, these dimbulbs are going back to politics as usual and backing the candidate with the deepest pockets, not the deepest support among voters.
You know, some of us drink because we're not poets. I've been a writer all my life and it's as much a part of me as my sexual orientation and skin color ('tro, male, and white not that it should make a difference). I don't pretend to special expertise even in the matter of piloting river boats which is why I'm careful to maintain my anonymity. Feel free to disagree, you're probably right.
Yet as a writer it's gratifying to come across affirmations of sanity, if not an audience, and in that spirit I offer this-
"Fuck the compliance area - procedures, schmecedures," chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.
...
A quick primer on what naked short selling is. First of all, short selling, which is a completely legal and often beneficial activity, is when an investor bets that the value of a stock will decline. You do this by first borrowing and then selling the stock at its current price, then returning the stock to your original lender after the price has gone down. You then earn a profit on the difference between the original price and the new, lower price.
What matters here is the technical issue of how you borrow the stock. Typically, if you're a hedge fund and you want to short a company, you go to some big-shot investment bank like Goldman or Morgan Stanley and place the order. They then go out into the world, find the shares of the stock you want to short, borrow them for you, then physically settle the trade later.
But sometimes it's not easy to find those shares to borrow. Sometimes the shares are controlled by investors who might have no interest in lending them out. Sometimes there's such scarcity of borrowable shares that banks/brokers like Goldman have to pay a fee just to borrow the stock.
These hard-to-borrow stocks, stocks that cost money to borrow, are called negative rebate stocks. In some cases, these negative rebate stocks cost so much just to borrow that a short-seller would need to see a real price drop of 35 percent in the stock just to break even. So how do you short a stock when you can't find shares to borrow? Well, one solution is, you don't even bother to borrow them. And then, when the trade is done, you don't bother to deliver them. You just do the trade anyway without physically locating the stock.
Thus in this document we have another former Merrill Pro president, Thomas Tranfaglia, saying in a 2005 email: "We are NOT borrowing negatives... I have made that clear from the beginning. Why would we want to borrow them? We want to fail them."
Trafaglia, in other words, didn't want to bother paying the high cost of borrowing "negative rebate" stocks. Instead, he preferred to just sell stock he didn't actually possess. That is what is meant by, "We want to fail them." Trafaglia was talking about creating "fails" or "failed trades," which is what happens when you don't actually locate and borrow the stock within the time the law allows for trades to be settled.
If this sounds complicated, just focus on this: naked short selling, in essence, is selling stock you do not have. If you don't have to actually locate and borrow stock before you short it, you're creating an artificial supply of stock shares.
"Punting the Pundits" is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past "Punting the Pundits".
The dog that didn't bark this week, let alone bite, was the president's response to JPMorgan Chase's bombshell admission of losing more than $2 billion in risky derivative trades that should never have been made.
"JPMorgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion," the president said on the television show The View, which aired Tuesday, suggesting that a weaker bank might not have survived.
That was it.
Not a word about Jamie Dimon's tireless campaign to eviscerate the Dodd-Frank financial reform bill; his loud and repeated charge that the Street's near meltdown in 2008 didn't warrant more financial regulation; his leadership of Wall Street's brazen lobbying campaign to delay the Volcker Rule under Dodd-Frank, which is still delayed; and his efforts to make that rule meaningless by widening a loophole allowing banks to use commercial deposits to "hedge" (that is, make offsetting bets) their derivative trades.
Treating Greece like an incorrigible child won't improve its economy or the future of the eurozone.
"German Patience with Greece Wears Thin," says the New York Times headline. My patience with the mainstream media also wears thin. Like a bad parent, Germany scolds Greece for something its constant beatings basically forced it to do. The media buys into Germany's logic. Were high-pressure tactics to adopt punishing austerity cutbacks ever going to encourage Greek solidarity and social peace? Is the parent who beats the child ever going to encourage obedience and healthy behavior? Psychology has taken us a long way past the value of spankings to instill constructive attitudes. It seems not so for the Germans, although it should be said that not all of them agree with their prime minister, Angela Merkel, and government officials.
Are the Germans actually trying to get Greece to leave the euro? If so, they are probably underestimating the turmoil that would cause. On the other hand, it may be getting to the point where it is a better option for the Greeks to incur the possible closing of financial markets should they adopt a new drachma, which will quickly fall in value. They will not pay their debts to German banks and others in full-fledged euros. But they can start to determine their own fate and work with what industries they have. Their export sector is not as weak as people seem to think.
This is the week of the third annual Deficit Fest, the event sponsored by Wall Street billionaire Peter G. Peterson. At this event, many of the people most responsible for the current downturn come together to tell us why we should be worried about the deficit at a time when 25 million people are unemployed, underemployed or have given up looking for work altogether and millions face the prospect of losing their homes.
Past deficit fests included exchanges where Peter Peterson and former Treasury Secretary and Citigroup honcho Robert Rubin mused about their comparative net worth. We also got to witness President Clinton bemoan the fact that the Democratic and Republican leadership in Congress teamed up to prevent him from cutting Social Security. Had Clinton gotten his way, millions of seniors would be getting by on Social Security checks that are more than 10 percent smaller than what they now receive.
Peterson is also known for his sponsorship of the "Economic Sleepwalk" tour, which was officially billed as the "Fiscal Wakeup" tour. This involved sending a group of policy wonks around the country to complain about the budget deficit at a time when the housing bubble was growing to ever more dangerous levels. While some of us were doing our best to warn of the imminent disaster, Peterson was using his money and political connections to dominate media space at a time when the country's debt-to-GDP ratio was actually falling.
When he disclosed a stunning $2 billion trading loss at JPMorgan Chase last week, Jamie Dimon, the bank's chief executive, insisted that the trades had not violated the Volcker Rule, a crucial part of the Dodd-Frank reform law that is supposed to bar banks from doing risky trading for their own account.
This week, however, the story changed. On Monday, a JPMorgan official told The Times that the trades - which have since ballooned to at least $3 billion - started out as allowable, but had "morphed into something" that crossed the line. On Tuesday, at the bank's annual shareholder meeting, Mr. Dimon echoed that statement, calling for rules to ensure that permitted trades don't "morph into something different."
John Boehner wants to restart the debt-limit debate. This is big news. Remember all the fun we had last time: threats, brinkmanship, wobbling financial markets, torpedoed Grand Bargain? You can certainly understand why he misses it.
The weather's getting nice. Maybe this time we could do it outdoors.
"Let's start now!" the House speaker said during a "fiscal summit" in Washington on Tuesday. This is an annual event in which honchos from all political persuasions get together and agree that the national debt is too big.
We are getting into election season, people. We are going to be hearing a lot about the national debt. (Which is very big. Really, at that fiscal summit meeting they were totally in agreement on the bigness.)
Mitt Romney was against Bill Clinton before he was for him.
There was Romney, campaigning Tuesday in Iowa, praising the nation's last Democratic president and casting him as far superior to the current incumbent.
"Almost a generation ago, Bill Clinton announced that the era of big government was over," Romney declared. "Clinton was signaling to his own party that Democrats should no longer try to govern by proposing a new program for every problem." President Obama, he said, "tucked away the Clinton doctrine in his large drawer of discarded ideas."
So you might assume that Romney likes Clinton. But that would be wrong. Scrambling during the GOP primaries this year to explain why he had voted in the 1992 Massachusetts Democratic presidential primary for the late Sen. Paul Tsongas, Romney invoked that old GOP standby: Clinton hatred.
Make Banking Boring By JOE NOCERA, The New York Times
Published: May 14, 2012
Let's begin by stipulating the obvious: nobody outside of JPMorgan Chase knows for sure what really happened with those trades that have cost it so much money and done such severe damage to its once stellar reputation.
You know Joe, it's really not very hard to understand at all.
JP Morgan invested a ton of money, and by a ton I mean Trillions of exposure, in an obscure and lightly traded piece of paper labeled CDX NA IG 9 that represents a notional basket of 125 European stocks.
What do I mean by "notional"? Well, there's not actually a pile of stock certificates lying around that you can use to wrap fish or wipe your ass or wallpaper your living room, these stocks are "synthetic" meaning that if anyone ever needs to see one you have to go down to the store and buy it at whatever the market price is.
But there is always a price and a market- or is there?
As the Hunt brothers found out in the early '80s with a far more tangible and useful (you can use it to make photographic film and it has excellent electrical conductivity) asset, you can assemble a position that so dominates a market that you can't sell without lowering the price which is high because of your artificially created scarcity.
Supply increases in the face of fixed Demand and the price goes down. Real Economics 101 stuff, not hard to understand at all.
Now the problem with CDX NA IG 9 is you can't use it to make spoons or candlesticks. Heck, as I pointed out before you can't even use it to wipe your ass because it doesn't exist.
So its value is entirely dependent on finding another sucker investor who's willing to give you something for nothing.
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past "On This Day in History"here.
Click on image to enlarge
May 17 is the 137th day of the year (138th in leap years) in the Gregorian calendar. There are 228 days remaining until the end of the year.
On this day in 1954, in a major civil rights victory, the U.S. Supreme Court hands down an unanimous decision in Brown v. Board of Education of Topeka, ruling that racial segregation in public educational facilities is unconstitutional. The historic decision, which brought an end to federal tolerance of racial segregation, specifically dealt with Linda Brown, a young African American girl who had been denied admission to her local elementary school in Topeka, Kansas, because of the color of her skin.
Brown v. Board of Education of Topeka, 347 U.S. 483 (1954), was a landmark decision of the United States Supreme Court that declared state laws establishing separate public schools for black and white students unconstitutional. The decision overturned the Plessy v. Ferguson decision of 1896 which allowed state-sponsored segregation. Handed down on May 17, 1954, the Warren Court's unanimous (9-0) decision stated that "separate educational facilities are inherently unequal." As a result, de jure racial segregation was ruled a violation of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. This ruling paved the way for integration and the civil rights movement.
All were NAACP-sponsored cases. The Davis case, the only case of the five originating from a student protest, began when sixteen-year-old Barbara Rose Johns organized and led a 450-student walkout of Moton High School.
The Kansas case was unique among the group in that there was no contention of gross inferiority of the segregated schools' physical plant, curriculum, or staff. The district court found substantial equality as to all such factors. The Delaware case was unique in that the District Court judge in Gebhart ordered that the black students be admitted to the white high school due to the substantial harm of segregation and the differences that made the schools separate but not equal. The NAACP's chief counsel, Thurgood Marshall, who was later appointed to the U.S. Supreme Court in 1967, argued the case before the Supreme Court for the plaintiffs. Assistant attorney general Paul Wilson, later distinguished emeritus professor of law at the University of Kansas, conducted the state's ambivalent defense in his first appellate trial.
In spring 1953 the Court heard the case but was unable to decide the issue and asked to rehear the case in fall 1953, with special attention to whether the Fourteenth Amendment's Equal Protection Clause prohibited the operation of separate public schools for whites and blacks.
The case was being reargued at the behest of Associate Justice Felix Frankfurter, who used re-argument as a stalling tactic, to allow the Court to gather a unanimous consensus around a Brown opinion that would outlaw segregation. Chief Justice Vinson had been a key stumbling block. The justices in support of desegregation spent much effort convincing those who initially dissented to join a unanimous opinion. Even though the legal effect would be same for a majority versus unanimous decision, it was felt that it was vital to not have a dissent which could be relied upon by opponents of desegregation as a legitimizing counterargument.
Conference notes and draft decisions illustrate the division of opinions before the decision was issued. Justices Douglas, Black, Burton, and Minton were predisposed to overturn Plessy. Fred M. Vinson noted that Congress had not issued desegregation legislation; Stanley F. Reed discussed incomplete cultural assimilation and states' rights and was inclined to the view that segregation worked to the benefit of the African-American community; Tom C. Clark wrote that "we had led the states on to think segregation is OK and we should let them work it out." Felix Frankfurter and Robert H. Jackson disapproved of segregation, but were also opposed to judicial activism and expressed concerns about the proposed decision's enforceability. After Vinson died in September 1953, President Dwight D. Eisenhower appointed Earl Warren as Chief Justice. Warren had supported the integration of Mexican-American students in California school systems following Mendez v. Westminster.
While all but one justice personally rejected segregation, the self-restraint faction questioned whether the Constitution gave the Court the power to order its end. The activist faction believed the Fourteenth Amendment did give the necessary authority and were pushing to go ahead. Warren, who held only a recess appointment, held his tongue until the Senate, dominated by southerners, confirmed his appointment.
Warren convened a meeting of the justices, and presented to them the simple argument that the only reason to sustain segregation was an honest belief in the inferiority of Negroes. Warren further submitted that the Court must overrule Plessy to maintain its legitimacy as an institution of liberty, and it must do so unanimously to avoid massive Southern resistance. He began to build a unanimous opinion.
Although most justices were immediately convinced, Warren spent some time after this famous speech convincing everyone to sign onto the opinion. Justices Robert Jackson and Stanley Reed finally decided to drop their dissent to what was by then an opinion backed by all the others. The final decision was unanimous. Warren drafted the basic opinion and kept circulating and revising it until he had an opinion endorsed by all the members of the Court.
The key holding of the Court was that, even if segregated black and white schools were of equal quality in facilities and teachers, segregation by itself was harmful to black students and unconstitutional. They found that a significant psychological and social disadvantage was given to black children from the nature of segregation itself, drawing on research conducted by Kenneth Clark assisted by June Shagaloff. This aspect was vital because the question was not whether the schools were "equal", which under Plessy they nominally should have been, but whether the doctrine of separate was constitutional. The justices answered with a strong "no":
Does segregation of children in public schools solely on the basis of race, even though the physical facilities and other "tangible" factors may be equal, deprive the children of the minority group of equal educational opportunities? We believe that it does... Segregation of white and colored children in public schools has a detrimental effect upon the colored children. The impact is greater when it has the sanction of the law, for the policy of separating the races is usually interpreted as denoting the inferiority of the negro group. A sense of inferiority affects the motivation of a child to learn. Segregation with the sanction of law, therefore, has a tendency to [retard] the educational and mental development of negro children and to deprive them of some of the benefits they would receive in a racial[ly] integrated school system... We conclude that, in the field of public education, the doctrine of "separate but equal" has no place. Separate educational facilities are inherently unequal. Therefore, we hold that the plaintiffs and others similarly situated for whom the actions have been brought are, by reason of the segregation complained of, deprived of the equal protection of the laws guaranteed by the Fourteenth Amendment.
Well, what I like to do on formal occasions like this is to take some of the various types of songs that we all know and presumably love, and, as it were, to kick them when they're down.
I find if you take the various popular song forms to their logical extremes, you can arrive at almost anything from the ridiculous to the obscene, or -- as they say in New York -- sophisticated.
I'd like to illustrate with several hundred examples for you this evening, first of all, the southern type song about the wonders of the American South. but it's always seemed to me that most of these songs don't go far enough. the following song, on the other hand, goes too far. It's called I Wanna Go Back To Dixie.
I wanna go back to Dixie,
Take me back to dear ol' Dixie,
That's the only li'l ol' place for li'l ol' me.
Ol' times there are not forgotten,
Whuppin' slaves and sellin' cotton,
And waitin' for the Robert E. Lee.
(It was never there on time.)
I'll go back to the Swanee,
Where Pellagra makes you scrawny,
And the Jasmine and the tear gas smell just fine.
I really am a-fixin'
To go back where there's no mixin'
Down below that Mason-Dixon line.
Oh, poll tax, how I love ya, how I love ya,
My dear old poll tax.
Won'tcha come with me to alabammy,
Back to the arms of my dear ol' mammy,
Her cookin's lousy and her hands are clammy,
But what the hell, it's home.
Yes, for paradise the southland is my nominee.
Jes' give me a ham hock and a grit of hominy.
I want to start relaxin'
Down in Birmingham or Jackson
When we're having fun why no one interferes
I wanna talk with southern gentlemen
And put my white sheet on again,
I ain't seen one good lynchin' in years.
The land of the boll weevil,
Where the laws are medieval,
Is callin' me to come and nevermore roam.
I wanna go back to the southland,
That "y'all" and "shet-ma-mouth" land,
Be it ever so decadent,
There's no place like home.
After some controversy, the Democratic National Committee has agreed to help efforts with the Wisconsin recall. However, this will not include any of the DNC's war chest of funds, which they are husbanding for the general election.
Debbie Wasserman Schultz, the DNC chair, committed to come to Wisconsin to attend a fundraiser and to recruit volunteers for Tom Barrett's campaign to recall Scott Walker. In addition, DNC members have been encouraged to contribute to the recall effort. However, the DNC did not pledge funds that they plan to use to support the general election campaign of President Obama and other Democrats in the fall. They certainly have plenty; the President and the DNC just announced that they raised $44 million just in April.
...
The question becomes whether a recall failure would have consequences for the fall election. The DNC is clearly making the choice to sit out the recall financially, wait for everything to blow over, and come back in the fall. But there could be a ripple effect here, in a key swing state as well as a state with an open Senate seat and a hot contest there. The failure to keep up the recall energy and dispose of Walker could definitely have repercussions. And there are only three weeks to turn it around.
Electoral victory my ass. What "Democrats" are really interested in-
(I)t's interesting to me to see who has been seduced by this power. Republicans are basically saying the same things in the era of Peterson that they have been saying for the past thirty years: they want low taxes and less wealth-redistributing programs to the lower classes. Sometimes they say they want "less spending" and a "smaller deficit," but only when a Democrat is in office, and only in relation to those redistributive policies. The tax cuts blow holes in the deficit, so that's not a preoccupation for them.
...
The only tax cuts they would entertain repealing are the ones that distribute funds to the lower classes. For example, in their budget bill, they replaced defense cuts with, among other things, a rollback of the child tax credit, which goes mostly to lower-class and middle-class families.
By contrast, Democrats have moved over the last several decades, under duress from Peterson on having to "be serious" about deficits. One after another at last night's event, Democratic politicians took aim at so-called entitlements, which I prefer to describe as the social safety net.
...
I'd like to find the Democrats who are "reluctant to commit to longer-term health-care savings" and who "don't want to touch Social Security." Contrary to President Clinton's remarks, they no longer exist. Even Nancy Pelosi is playing footsie with benefit cuts.
If this doesn't happen in the near future, it's because Peterson and his ilk failed to get Republicans to provide cover with any tax increases. But the idea that Democrats are somehow reluctant to get out the budget axe is just wrong. They are far more serious about so-called "fiscal responsibility" than Republicans. In fact, the President on that stage, Clinton, was the one who ended welfare as we know it. We now know, after the Great Recession, the terrible costs to that policy for millions of families. But Democrats haven't learned from that experience.
So while Republicans are clearly insane about the fiscal future - and impervious to logic, as Tom Coburn showed - the country has drifted to the right because one party has become caught up in pleasing the likes of Pete Peterson rather than their own constituents.
"We have a lot of people in our party who will not be drummed out if they depart from the conventional wisdom," Clinton said last night. That's not true. For the conventional wisdom in the Democratic Party is now that "balanced" cuts are needed to the entire budget to move America forward. And if you depart from that... you hear the drums playing, right?
One party. And it's not the Republicans, they've always been about pleasing the likes of Pete Peterson.
Their groundbreaking contribution was the concept that markets (individuals) could more efficiently allocate resources (capital) than corrupt cronyism. You know, free market capitalism.
Compare and contrast-
End of the Affair? The Editors of The New York Times
Published: May 14, 2012
There has been less buying and selling of stock, and there have been huge outflows of investor dollars from domestic stock mutual funds, as detailed recently by The Times's Nathaniel Popper. If the trend continues, the result could be a less robust market, with fewer companies opting to raise money by issuing shares and fewer investors willing to put their retirement savings into stocks.
...
Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.
American stocks have doubled in price since the market hit bottom three years ago. But trading in the United States stock market has not only failed to recover since the 2008 financial crash, it has continued to fall. In April, average daily trades stood at 6.5 billion, about half their peak four years ago. By comparison, after the market busts of 1987 and 2001, trading recovered within two years. In fact, going back to 1960, trading had never declined for three consecutive years, let alone four and counting.
Investors haven't just hunkered down, they have headed for the exits. Since the start of 2008, domestic stock mutual funds, a common way for individuals to invest, were drained of more than $400 billion, compared with an inflow of $52 billion in the four years before that.
...
There is also the feeling that the market has become increasingly unfair to investors. For example, Mr. Popper also reported recently on rebates to brokers from stock exchanges. In general, brokers are required to find the best prices for clients who pay them to buy and sell shares. But with the nation's 13 exchanges now paying brokers for sending them business, brokers may have an incentive to search for the biggest rebate rather than the best price. A new study has estimated that rebates could be costing mutual funds, pension funds and individual investors as much as $5 billion a year.
Also known as "maker-taker" pricing, the rebates have caught the attention of market researchers and investor advocates, including two former economists for the Securities and Exchange Commission who issued a report in 2010 saying that "in other contexts, these payments would be recognized as illegal kickbacks."
I realize citation of major media outlets is considered but a quaint remnant of irrelevant reality by sycophants and 'bots, but I thought I'd draw this to your attention.
"Punting the Pundits" is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past "Punting the Pundits".
Consider $2 billion lost on a bad bet, plus billions more as investors dumped the stock, a providential warning. When Jamie Dimon, the imperious head of JPMorgan Chase, revealed that the bank had lost so much on a derivatives trade gone bad, it was clear warning that, four years after blowing up the economy, the big banks are still playing with bombs. [..]
When Dimon testified before the Financial Crisis Inquiry Commission in 2010, he said that when his daughter asked him what a financial crisis was, he told her "it's something that happens every five to seven years." He seems intent on validating his prediction.
But the United States went for decades without a financial crisis after the New Deal regulations shackled the banks. It was only with deregulation under Reagan and Clinton that financial crises have been inflicted on us regularly. Now Dimon's bank's bad bets have given us one last warning: It is time to break up the big banks
The U.S. content industry will try anything to preserve its profit margin and power over the creative content market at the expense of the Internet. They will use any tactic that circumvents democratic processes to make new rules for the Internet that favor their interests and not the interests of Internet users or the technical community that actually builds the Internet as we know it. The Trans-Pacific Partnership (TPP) is yet another example of these tactics.
The TPP is a secretive plurilateral1 agreement that includes provisions dealing with intellectual property, including online copyright enforcement, anti-circumvention measures, and Internet intermediary liability. Due to the secrecy of the negotiations, we do not know what is in the current version of the TPP's IP chapter; the general public has only seen a leaked February 2011 version of the U.S. IP chapter proposal pdf. Based on the one-sided nature of the groups directly involved, and the content of what has already leaked, we should all be concerned about the prospect of the TPP including provisions that will harm online expression, privacy and innovation on the Internet.
J.P. Morgan's CEO Jamie Dimon once sarcastically complained that all his traders would need to talk to a psychiatrist in order to comply with regulations. Now, in the absence of strict regulations, every trader on the street is psychoanalyzing Dimon's every word in order to try to make money off J.P. Morgan's very large mistake.
Back in February, Dimon famously told Fox Business that because of the Volcker Rule for "every trader, we are going to have to have a lawyer, a compliance officer, a doctor to see what their testosterone levels are, and a shrink, 'what is your intent?' " But now it is J.P. Morgan's intent in a $100 billion bet that has sent the financial media abuzz with questions. The $2 billion loss that J.P. Morgan has incurred related to this position has only further fueled the speculations about what, exactly, J.P. Morgan was trying to do with this trade.
Greece's euro membership was as much the German elite's fault as anyone's. Can it find the leadership to resolve the crisis?
Sunday's regional German elections offer a small ray of hope. Merkel's party received a thrashing in North Rhine-Westphalia, home to nearly one in five Germans. Rejecting the conservatives' hard-line platform of more austerity and finger-pointing, German voters instead voted for the Social Democrats, for a platform of more spending and, shockingly, for more debt. This caps a series of defeats in state elections for Merkel and makes it increasingly clear that her government is in serious jeopardy.
Perhaps, just perhaps, German voters are waking up. And therein lies the possibility that the euro can be saved.
But it's a race against time at this point. Precious time, credibility and resources have been lost. Lives have been up-ended and shattered, voters are angry and restive, markets are in a hostile and unforgiving mood. It is said that leaders are born of great crises. It is now or never for Germany.
Komen. Sandra Fluke. Transvaginal. The reason these words are instantly recognizable-the reason the "war on women" is now part of the national conversation-is largely thanks to younger women and online organizing. Behind every recent battle against the onslaught of sexism has been the energy and activism of young people-on blogs, Twitter, Tumblr and Faebook. And in a long-overdue but welcome change of message, the mainstream feminist movement that once claimed young women didn't care about feminism is finally catching on. Some are even walking the walk.
Last week, NARAL Pro-Choice America President Nancy Keenan announced that she would be stepping down from her role to make way for younger activists. She told Sarah Kliff at the Washington Post, "There's an opportunity for a new and younger leader."
"People give a lot of lip service to how we're going to engage the next generation, but we can't just assume it will happen on its own."
Of all the street actions leading up to the NATO summit, the one that might seem most perplexing is a nurses' rally for a tax on securities trades. Financial markets are pretty remote from hospital bedsides, you might think.
Why would nurses get mixed up in an issue like that?
RoseAnn DeMoro, executive director of National Nurses United, says there's a simple explanation: "The big banks, investment firms and other financial institutions, which ruined the economy with trillion-dollar trades on people's homes and pensions and similar reckless gambling, should pay for the recovery."
Nurses have been on the front lines of the crisis, seeing firsthand the health impacts of skyrocketing poverty and record high rates of uninsured Americans.
Taibbi and Salmon agree JPMorgan's risk-taking has broad implications. "JPMorgan Chase takes deposits in from every single mom and pop, and small business and large business, in the world, and the President of the United States," Salmon says. "They're a utility bank and it is their job and their duty ... to take those deposits and lend them out into the economy. And what do they do instead? They take $360 billion and put it in a hedge fund in London."
Drew's Chief Investment Office quadrupled in size between 2006 and 2011, reaching $356 billion in total, and it's easy to see how that happened. On the one hand, it was incredibly profitable, with the London team alone, which oversaw some $200 billion, making $5 billion of profit in 2010, more than 25% of JP Morgan's net income for the year. At the same time JP Morgan accumulated enormous new deposits in the wake of the financial crisis, both by acquiring banks and by attracting big new clients wanting the safety of a too-big-to-fail bank. Historically, JP Morgan has served big corporations by lending them money, but nowadays, as the cash balances on corporate balance sheets get ever more enormous, the main thing these companies want from JP Morgan is a simple checking account - one where they can be sure that their money is safe.
With lots of deposits coming in, and little corporate demand for loans, it was easy for all that money to find its way to the Chief Investment Office, which could take any amount of liabilities (deposits are liabilities, for a bank) and turn them into assets generating billions of dollars in profits.
Never mind the weak tea Volker rule, what is needed is a new, revised Glass-Steagal, the break up the TBTF and protection for investors and the economy.
In February 1868, the House of Representatives charged Johnson with 11 articles of impeachment for vague "high crimes and misdemeanors." (For comparison, in 1998, President Bill Clinton was charged with two articles of impeachment for obstruction of justice during an investigation into his inappropriate sexual behavior in the White House Oval Office. In 1974, Nixon faced three charges for his involvement in the Watergate scandal.) The main issue in Johnson's trial was his staunch resistance to implementing Congress' Civil War Reconstruction policies. The War Department was the federal agency responsible for carrying out Reconstruction programs in the war-ravaged southern states and when Johnson fired the agency's head, Edwin Stanton, Congress retaliated with calls for his impeachment.
Of the 11 counts, several went to the core of the conflict between Johnson and Congress. The House charged Johnson with illegally removing the secretary of war from office and for violating several Reconstruction Acts. The House also accused the president of hurling slanderous "inflammatory and scandalous harangues" against Congressional members. On February 24, the House passed all 11 articles of impeachment and the process moved into a Senate trial.
Strategy and tactics of guerrilla warfare tend to focus around the use of a small, mobile force competing against a large, unwieldy one. The guerrilla focuses on organising in small units, dependent on the support of the local population. Tactically, the guerrilla army attacks its enemy in small, repetitive attacks from the opponent's center of gravity with a view to reducing casualties and becoming an intensive, repetitive strain on the enemy's resources, forcing an over-eager response which will both anger their own supporters and increase support for the guerrilla, thus forcing the enemy to withdraw.
This seemed unlike the ritual of war of which Foch had been priest, and so it seemed that there was a difference of kind. Foch called his modern war "absolute." In it two nations professing incompatible philosophies set out to try them in the light of force. A struggle of two immaterial principles could only end when the supporters of one had no more means of resistance. An opinion can be argued with: a conviction is best shot. The logical end of a war of creeds is the final destruction of one, and Salammbo the classical textbook-instance. These were the lines of the struggle between France and Germany, but not, perhaps, between Germany and England, for all efforts to make the British soldier hate the enemy simply made him hate war. Thus the "absolute war" seemed only a variety of war; and beside it other sorts could be discerned, as Clausewitz had numbered them, personal wars for dynastic reasons, expulsive wars for party reasons, commercial wars for trading reasons.
Now the Arab aim was unmistakably geographical, to occupy all Arabic-speaking lands in Asia. In the doing of it Turks might be killed, yet "killing Turks" would never be an excuse or aim. If they would go quietly, the war would end. If not, they must be driven out: but at the cheapest possible price, since the Arabs were fighting for freedom, a pleasure only to be tasted by a man alive.
...
In the Arab case the algebraic factor would take first account of the area to be conquered. A casual calculation indicated perhaps 140,000 square miles. How would the Turks defend all that-no doubt by a trench line across the bottom, if the Arabs were an army attacking with banners displayed . . . but suppose they were an influence, a thing invulnerable, intangible, without front or back, drifting about like a gas? Armies were like plants, immobile as a whole, firm-rooted, and nourished through long stems to the head. The Arabs might be a vapour, blowing where they listed. ... It seemed that the assets in this sphere were with the Arabs, and climate, railways, deserts, technical weapons could also be attached to their interests. The Turk was stupid and would believe that rebellion was absolute, like war, and deal with it on the analogy of absolute warfare.
...
The Arab army just then was equally chary of men and materials: of men because they being irregulars were not units, but individuals, and an individual casualty is like a pebble dropped in water: each may make only a brief hole, but rings of sorrow widen out from them. The Arab army could not afford casualties.
...
The Arab war should be a war of detachment: to contain the enemy by the silent threat of a vast unknown desert, not disclosing themselves till the moment of attack. This attack need be only nominal, directed not against his men, but against his materials: so it should not seek for his main strength or his weaknesses, but for his most accessible material.
...
The printing press is the greatest weapon in the armoury of the modern commander, and the commanders of the Arab army being amateurs in the art, began their war in the atmosphere of the 20th century, and thought of their weapons without prejudice, not distinguishing one from another socially. The regular officer has the tradition of 40 generations of serving soldiers behind him, and to him the old weapons are the most honoured. The Arab command had seldom to concern itself with what its men did, but much with what they thought, and to it the diathetic was more than half command. In Europe it was set a little aside and entrusted to men outside the General Staff. But the Arab army was so weak physically that it could not let the metaphysical weapon rust unused. It had won a province when the civilians in it had been taught to die for the ideal of freedom: the presence or absence of the enemy was a secondary matter.
...
The Turkish army was an accident, not a target. Our true strategic aim was to seek its weakest link, and bear only on that till time made the mass of it fall. The Arab army must impose the longest possible passive defence on the Turks (this being the most materially expensive form of war) by extending its own front to the maximum.
...
The contest was not physical, but moral, and so battles were a mistake. All that could be won in a battle was the ammunition the enemy fired off. ... Battles are impositions on the side which believes itself weaker, made unavoidable either by lack of land-room, or by the need to defend a material property dearer than the lives of soldiers. The Arabs had nothing material to lose, so they were to defend nothing and to shoot nothing. Their cards were speed and time, not hitting power, and these gave them strategical rather than tactical strength.
...
The Desert and the Sea. In character these operations were like naval warfare, in their mobility, their ubiquity, their independence of bases and communications, in their ignoring of ground features, of strategic areas, of fixed directions, of fixed points. "He who commands the sea is at great liberty, and may take as much or as little of the war as he will" ... The Arab army never tried to maintain or improve an advantage, but to move off and strike again somewhere else. It used the smallest force in the quickest time at the farthest place. To continue the action till the enemy had changed his dispositions to resist it would have been to break the spirit of the fundamental rule of denying him targets.
...
An Undisciplined Army. The internal economy of the raiding parties was equally curious. Maximum irregularity and articulation were the aims. Diversity threw the enemy intelligence off the track. By the regular organization in identical battalions and divisions information builds itself up, until the presence of a corps can be inferred on corpses from three companies. The Arabs, again, were serving a common ideal, without tribal emulation, and so could not hope for any esprit de corps. Soldiers are made a caste either by being given great pay and rewards in money, uniform or political privileges; or, as in England, by being made outcasts, cut off from the mass of their fellow-citizens. There have been many armies enlisted voluntarily: there have been few armies serving voluntarily under such trying conditions, for so long a war as the Arab revolt. Any of the Arabs could go home whenever the conviction failed him. Their only contract was honour.
Consequently the Arab army had no discipline, in the sense in which it is restrictive, submergent of individuality, the Lowest Common Denominator of men. In regular armies in peace it means the limit of energy attainable by everybody present: it is the hunt not of an average, but of an absolute, a 100-per-cent standard, in which the 99 stronger men are played down to the level of the worst. The aim is to render the unit a unit, and the man a type, in order that their effort shall be calculable, their collective output even in grain and in bulk. The deeper the discipline, the lower the individual efficiency, and the more sure the performance. It is a deliberate sacrifice of capacity in order to reduce the uncertain element. ... In irregular war if two men are together one is being wasted. The moral strain of isolated action makes this simple form of war very hard on the individual soldier, and exacts from him special initiative, endurance and enthusiasm. Here the ideal was to make action a series of single combats to make the ranks a happy alliance of commanders-in-chief. The value of the Arab army depended entirely on quality, not on quantity. The members had to keep always cool, for the excitement of a blood-lust would impair their science, and their victory depended on a just use of speed, concealment, accuracy of fire. Guerrilla war is far more intellectual than a bayonet charge.
Here is the thesis:
Rebellion must have an unassailable base, something guarded not merely from attack, but from the fear of it: such a base as the Arab revolt had in the Red Sea ports, the desert, or in the minds of men converted to its creed. It must have a sophisticated alien enemy, in the form of a disciplined army of occupation too small to fulfill the doctrine of acreage: too few to adjust number to space, in order to dominate the whole area effectively from fortified posts.
It must have a friendly population, not actively friendly, but sympathetic to the point of not betraying rebel movements to the enemy.
Rebellions can be made by 2% active in a striking force, and 98% passively sympathetic. The few active rebels must have the qualities of speed and endurance, ubiquity and independence of arteries of supply. They must have the technical equipment to destroy or paralyze the enemy's organized communications, for irregular war is fairly Willisen's definition of strategy, "the study of communication," in its extreme degree, of attack where the enemy is not.
In 50 words: Granted mobility, security (in the form of denying targets to the enemy), time, and doctrine (the idea to convert every subject to friendliness), victory will rest with the insurgents, for the algebraical factors are in the end decisive, and against them perfections of means and spirit struggle quite in vain.
Their groundbreaking contribution was the concept that markets (individuals) could more efficiently allocate resources (capital) than corrupt cronyism. You know, free market capitalism.
Compare and contrast-
End of the Affair? The Editors of The New York Times
Published: May 14, 2012
There has been less buying and selling of stock, and there have been huge outflows of investor dollars from domestic stock mutual funds, as detailed recently by The Times's Nathaniel Popper. If the trend continues, the result could be a less robust market, with fewer companies opting to raise money by issuing shares and fewer investors willing to put their retirement savings into stocks.
...
Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.
American stocks have doubled in price since the market hit bottom three years ago. But trading in the United States stock market has not only failed to recover since the 2008 financial crash, it has continued to fall. In April, average daily trades stood at 6.5 billion, about half their peak four years ago. By comparison, after the market busts of 1987 and 2001, trading recovered within two years. In fact, going back to 1960, trading had never declined for three consecutive years, let alone four and counting.
Investors haven't just hunkered down, they have headed for the exits. Since the start of 2008, domestic stock mutual funds, a common way for individuals to invest, were drained of more than $400 billion, compared with an inflow of $52 billion in the four years before that.
...
There is also the feeling that the market has become increasingly unfair to investors. For example, Mr. Popper also reported recently on rebates to brokers from stock exchanges. In general, brokers are required to find the best prices for clients who pay them to buy and sell shares. But with the nation's 13 exchanges now paying brokers for sending them business, brokers may have an incentive to search for the biggest rebate rather than the best price. A new study has estimated that rebates could be costing mutual funds, pension funds and individual investors as much as $5 billion a year.
Also known as "maker-taker" pricing, the rebates have caught the attention of market researchers and investor advocates, including two former economists for the Securities and Exchange Commission who issued a report in 2010 saying that "in other contexts, these payments would be recognized as illegal kickbacks."
I realize citation of major media outlets is considered but a quaint remnant of irrelevant reality by sycophants and 'bots, but I thought I'd draw this to your attention.
Why is the CEO of JP Morgan Chase, or for that matter any bank CEO, sitting on the board of the body that is supposed to regulate their banks? This is a serious conflict of interest in the face of the 2008 bank crisis and, now, the $2 billion loss by Chase. $2 billion, a pittance you say. Well consider that loss triggered a drop in Chase's market value by another $20 billion
[..] J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it's everyone's problem. [..]
{T}he incident underscored the basic problem. If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn't get to do it with cheap cash from the Fed's discount window, and they shouldn't get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It's a simple concept: you either get to be a bank, or you get to be a casino. But you can't be both. If we don't have rules to enforce that concept, we ought to get some.
The chief executive of JP Morgan Chase -- the largest bank in the land, and the exemplar of a 'too big to fail' institution -- is allowed to sit at the table with the people tasked with deciding when and how much of other people's money gets earmarked for his rescue. This is not the fox guarding the hen house; this is the fox guarding the hen house while selling synthetic derivatives whose value increases with every hen he gobbles up, and who burns down the hen house so he can collect on his fire insurance policy, and then gets the government to build him a new hen house at taxpayer expense. And then, after that, he still gets to guard the new hen house.
JP Morgan Chase CEO Jamie Dimon should resign from the NY Federal Reserve Bank Board
Last week, JP Morgan Chase announced a $2 billion trading loss in two months.
Sunday on Meet the Press, JP Morgan CEO Jamie Dimon said, "We know we were sloppy, we know we were stupid, we know there was bad judgment."
After the biggest financial crisis in generations, Americans are frustrated that Wall Street has still not been held accountable and does not appear to consider itself responsible. Wall Street banks continue to have fundamental problems, and tough oversight and accountability are urgently needed.
Dimon is not only the CEO of JP Morgan, he is also a member of the Board of Directors of the New York Federal Reserve Bank, where he advises the Federal Reserve on the oversight of the financial industry.
Dimon should resign from his post at the New York Fed to send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.
"Punting the Pundits" is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past "Punting the Pundits".
They're missing the point. When CEO Jamie Dimon announced that JPMorgan Chase had incurred at least $2 billion in losses from risky, unsecured, derivatives-types trading, it uncovered the scandal of our time once and for all.
The Chase disaster gives us a much-needed a glimpse into our corrupt political system, its Wall Street paymasters, and the media voices that allow people like Dimon to escape scrutiny.
The JPMorgan Chase story is the story behind the financial crisis that has thrown millions of people out of work. It's the story behind our ever-growing wealth inequity. It's the story behind Washington's inability to prosecute criminal bankers, regulate reckless ones, and propose the economic solutions the rest of us urgently need.
Investors are shunning the stock market, and who can blame them? As serial bubbles have burst, faith in the market has been rewarded with shattered retirements. At the same time, trust has been destroyed by scandals and - as demonstrated by the reckless trading at JPMorgan Chase - the slow, uncertain pace of financial reform.
There has been less buying and selling of stock, and there have been huge outflows of investor dollars from domestic stock mutual funds, as detailed recently by The Times's Nathaniel Popper. If the trend continues, the result could be a less robust market, with fewer companies opting to raise money by issuing shares and fewer investors willing to put their retirement savings into stocks.
Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.
This is the week of the third annual Deficit Fest, the event sponsored by Wall Street billionaire Peter G. Peterson. At this event, many of the people most responsible for the current downturn come together to tell us why we should be worried about the deficit at a time when 25 million people are unemployed, underemployed or have given up looking for work altogether and millions face the prospect of losing their homes.
Past deficit fests included exchanges where Peter Peterson and former Treasury Secretary and Citigroup honcho Robert Rubin mused about their comparative net worth. We also got to witness President Clinton bemoan the fact that the Democratic and Republican leadership in Congress teamed up to prevent him from cutting Social Security. Had Clinton gotten his way, millions of seniors would be getting by on Social Security checks that are more than 10 percent smaller than what they now receive.
The Trans-Pacific Partnership is a proposed free trade agreement under secret negotiation between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.
Branded as a "trade deal" by its corporate proponents, the TPP would actually establish new corporate rights to undermine environmental and health laws, offshore millions of American jobs, flood the US with untested food products, and extend the duration of medical patents. Its expansive non-trade provisions would impose constraints on government regulation of financial firms and food safety. As the Huffington Post's Zach Carter reported, the TPP would even ban the widely popular "Buy America" procurement policy.
The US Chamber of Commerce has promised to mount "the most significant political effort in its 100-year history" to influence this fall's Congressional races-and, not surprisingly, it's looking to be a daring exercise in dishonesty as well.
The Chamber rolled out a national television ad last week hitting Democrats who voted for healthcare reform, and now Senator Bill Nelson, who is facing a tough re-election campaign in Florida, is marshaling his lawyers to have the ad pulled from the air waves because of dishonest claims.
The spot contains a particularly explosive charge, particularly in Florida-and one that Republicans have often repeated: "Seniors will see $500 billion in Medicare cuts to fund Obamacare." See the ad here, as tailored for Nelson . . .
Last week, I wrote about President Obama's announcement that he had signed an agreement to extend the US military occupation of Afghanistan for twelve more years. I said that, at this point, the war in Afghanistan very much resembles what, in October 2002, State Sen. Barack Obama called a "dumb war."
Which begs this question: what is not a "dumb war"? Well, we just saw a good example of a not-dumb war, at least if you happen to be French.
Negotiations with party leaders to form a government in Greece fell apart again, as Greece inches closer to new elections in June that could usher in the left wing Socialist government opposed to the draconian austerity agreement with the European Central Bank, the International Monetary Fund and the Eurozone. Talks will resume on Tuesday but the moderate Democratic Left party in Greece says it will not join pro-bailout parties in a coalition without the more radical far-left Syriza. It doesn't sound promising but technically President Karolos Papoulias has until Thursday when Parliament reconvenes:
Without the support of Democrat Left, a decidedly "pro-European" force which won 19 seats in parliament, the New Democracy party and centre-left Pasok party fall two seats short of being able to achieve a workable majority.
Syriza, an alliance of leftists and ecologists that emerged as the poll's surprise runner-up - and has since seen its popularity surge on the back of anti-austerity sentiment - rejected the idea of participating in a government that it claimed was bent on "destroying Greece". Alexis Tsipras, Syriza's young firebrand leader, refused to even attend the negotiations. [..]
Syriza, whose popularity has risen on a platform of rejecting such measures, is projected to win the election with as much as 27%, according to polls conducted over the past week. Tsipras, an unabashed populist who counts Hugo Chávez among his heroes, has promised to renegotiate the painstakingly acquired bailout agreement Athens has signed with foreign lenders.
With the radical left fast dominating a political landscape whose traditional parties have been decimated for backing policies now blamed for record levels of poverty and unemployment, analysts believe it is only a matter of time before Greece is cut loose from Europe. The result, they say, will be a dramatic decline in living standards as the debt-stricken country, bereft of international rescue funds, slips ever deeper into poverty.
Financial and energy shares fell the most among 10 groups in the Standard & Poor's 500 Index. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) sank at least 2.6 percent as European lenders slumped. Alcoa Inc. (AA) and Schlumberger Ltd. (SLB) slid more than 1.5 percent to pace declines in commodity producers. Symantec Corp. (SYMC), the biggest seller of security software, retreated 1.4 percent after Goldman Sachs Group Inc. cut its recommendation.
The S&P 500 slid 1.1 percent to 1,338.35 at 4 p.m. New York time, the lowest since Feb. 2. The Dow fell 125.25 points, or 1 percent, to 12,695.35. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against S&P 500 losses, rose 10 percent to an almost four-month high of 21.87. About 6.6 billion shares changed hands on U.S. exchanges, in line with the three-month average.
Meanwhile, German Chancellor Andrea Merkel's Christian Democratic Union was handed a defeat in Sunday's election in Germany's most populous state, North Rhine-Westphalia, receiving only 26% of the vote:
The outcome will be seen as a rejection by voters of the strict austerity policy promoted by Ms Merkel's party at both local and national level, and a boost for the opposition. It will encourage the SPD and Greens to campaign all out for a "red-green" coalition at national level when Ms Merkel stands for re-election in autumn 2013. [..]
Opinion polls suggested that voters did not regard Ms Merkel's national and European policies as relevant, and opted instead for the popular "red-green" coalition in the state, headed by Hannelore Kraft of the SPD, which had governed without an absolute majority for the past two years. The surprise election was caused by the defeat of Ms Kraft's annual budget by the CDU, FDP and the far-left Linke party.
The defeat is the worst suffered by Ms Merkel's CDU since the party lost control last year of the state of Baden-Württemberg in the wake of the Fukushima nuclear disaster.
Merkel tells Greece to back cuts or face euro exit
Greece may be forced to leave the euro if the country refuses to implement spending cuts agreed with the European Union, Angela Merkel warned. [..]
Yesterday, Mrs Merkel raised the spectre of Greece leaving the euro. She is under increasing pressure in Germany to force the country out of the single currency to avert several more years of uncertainty. "I believe it's better for the Greeks to stay in the euro area, but that also requires that we set out a path on which Greece gets back on its feet step by step," said the chancellor.
"The solidarity for the euro will end only if Greece just says, 'We're not keeping to the [austerity] agreement.' But I don't expect that to happen. I do think they are making an effort. There are many, many people in Greece who actually want it."
The worries over will happen to the Greek economy should they exit from the euro are really unknown. From Paul Krugman:
In particular, I keep reading that Argentina's example is irrelevant, because Greece has hardly any exports. [..]
What is true is that Greece doesn't export a lot of goods. But it exports a lot of services - shipping and tourism (pdf). How might these respond to the devaluation of the new drachma? [..]
This isn't a prediction that everything will be fine, but it is a caution that the pessimism about Greek prospects once the turmoil is past may be overdone.
If the left wing holds out and wins enough of a majority in June to form a new government, we'll find out sooner than later who's right about Greek prospects without the euro.
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past "On This Day in History"here.
Click on image to enlarge
May 15 is the 135th day of the year (136th in leap years) in the Gregorian calendar. There are 230 days remaining until the end of the year.
On this day in 1776, the Virginia Convention instructs its Continental Congress delegation to propose a resolution of independence from Great Britain, paving the way for the United States Declaration of Independence.
The Virginia Conventions were a series of five political meetings in the Colony of Virginiaduring the American Revolution. Because the House of Burgesses had been dissolved in 1774 by Royal Governor Lord Dunmore, the conventions served as a revolutionary provisional government until the establishment of the independent Commonwealth of Virginia in 1776.
The fifth convention began May 6, 1776 and met in Williamsburg. On May 15, the convention declared independence from Britain and adopted a set of three momentous resolutions: one calling for a declaration of rights for Virginia, one calling for establishment of a republican constitution, and a third calling for federal relations with whichever other colonies would have them and alliance with whichever foreign countries would have them. It also instructed its delegates to the Continental Congress in Philadelphia to declare independence. Virginia's congressional delegation was thus the only one under unconditional positive instructions to declare independence; Virginia was already independent, and so its convention did not want their state, in the words of Benjamin Franklin, to "hang separately." According to James Madison's correspondence for that day, Williamsburg residents marked the occasion by taking down the Union Jack from over the colonial capitol and running up a continental union flag.
On June 7, Richard Henry Lee, one of Virginia's delegates to Congress, carried out these instructions and proposed independence in the language the convention had commanded him to use: that "these colonies are, and of right ought to be, free and independent states." This paved the way for the American Declaration of Independence, which also reflected the idea that not one nation, but thirteen free and independent states were aborning on the east coast of North America.
The convention amended, and on June 12 adopted, George Mason's Declaration of Rights, a precursor to the United States Bill of Rights. On June 29, the convention approved the first Constitution of Virginia, which was also the first written constitution adopted by the people's representatives in the history of the world. The convention chose Patrick Henry as the first governor of the new Commonwealth of Virginia, and he was inaugurated on June 29, 1776. Thus, Virginia had a functioning, permanent, republican constitution before July 4, 1776 -- uniquely among the thirteen American colonies.
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In New York City, U.S. District Judge Katherine Forrest ruled that the 
Negotiations with party leaders to form a government in Greece fell apart again, as Greece inches closer to new elections in June that could usher in the left wing Socialist government opposed to the draconian austerity agreement with the European Central Bank, the International Monetary Fund and the Eurozone. Talks will resume on Tuesday but the 
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