November 13, 2011 archive

  The financial crisis of the past week, that claimed the leaders of two European governments, came within a whisker of recreating the 2008 Finance Crisis, but was averted by timely action from European financial leaders.

  At least that is how it is being reported in the media.

 Prime ministers fell, markets shook and there were rumours that the eurozone would split up. But it survived – for now

 The stock market rallied on news of new austerity measures, a former central banker becoming leader of Greece’s new government, and agreements on a new bailout plan.

 The thing is, this was never a stock market problem. This is a credit market problem, and the credit markets don’t believe any of it. Most importantly, they don’t believe in the bailout.

 Sources said the EFSF had spent more than € 100m buying up its own bonds to help it achieve its funding target after the banks leading the deal were only able to find about €2.7bn of outside demand for the debt.

   The revelation will be seen as a major failure and a worrying sign of future buyers strike after EFSF officials and their bankers had spent recent weeks travelling the world attempting to persuade key investors, including China’s national wealth fund and Japanese government funds, to buy its bonds.

 To put this as plainly as possible: a central bank being forced to buy up the debt that it just issued, in order to hide the fact of the failure to find buyers for its debt, is the perfect example of a Ponzi scheme reaching its end game.

Cross posted from The Stars Hollow Gazette

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.

November 13 is the 317th day of the year (318th in leap years) in the Gregorian calendar. There are 48 days remaining until the end of the year.

On this day in 1982, The Vietnam Veterans Memorial is dedicated in Washington, D.C. after a week long national salute to Americans who served in the Vietnam War.

The Memorial Wall, designed by Maya Lin, is made up of two gabbro walls 246 feet 9 inches (75 m) long. The walls are sunk into the ground, with the earth behind them. At the highest tip (the apex where they meet), they are 10.1 feet (3 m) high, and they taper to a height of eight inches (20 cm) at their extremities. Stone for the wall came from Bangalore, Karnataka, India, and was deliberately chosen because of its reflective quality. Stone cutting and fabrication was done in Barre, Vermont. Stones were then shipped to Memphis, Tennessee where the names were etched. The etching was completed using a photoemulsion and sandblasting process. The negatives used in the process are in storage at the Smithsonian Institution. When a visitor looks upon the wall, his or her reflection can be seen simultaneously with the engraved names, which is meant to symbolically bring the past and present together. One wall points toward the Washington Monument, the other in the direction of the Lincoln Memorial, meeting at an angle. Each wall has 72 panels, 70 listing names (numbered 1E through 70E and 70W through 1W) and 2 very small blank panels at the extremities. There is a pathway along the base of the Wall, where visitors may walk, read the names, make a pencil rubbing of a particular name, or pray.

Inscribed on the walls with the Optima typeface are the names of servicemen who were either confirmed to be KIA (Killed in Action) or remained classified as MIA (Missing in Action) when the walls were constructed in 1982. They are listed in chronological order, starting at the apex on panel 1E in 1959 (although it was later discovered that the first casualties were military advisers who were killed by artillery fire in 1957), moving day by day to the end of the eastern wall at panel 70E, which ends on May 25, 1968, starting again at panel 70W at the end of the western wall which completes the list for May 25, 1968, and returning to the apex at panel 1W in 1975. Symbolically, this is described as a “wound that is closed and healing.” Information about rank, unit, and decorations are not given. The wall listed 58,159 names when it was completed in 1993; as of June 2010, there are 58,267 names, including 8 women. Approximately 1,200 of these are listed as missing (MIAs, POWs, and others), denoted with a cross; the confirmed dead are marked with a diamond. If the missing return alive, the cross is circumscribed by a circle (although this has never occurred as of March 2009); if their death is confirmed, a diamond is superimposed over the cross. According to the Vietnam Veterans Memorial Fund, “there is no definitive answer to exactly how many, but there could be as many as 38 names of personnel who survived, but through clerical errors, were added to the list of fatalities provided by the Department of Defense.” Directories are located on nearby podiums so that visitors may locate specific names.

In a comment posted in response to the Open Salon version of my previous entry, Barzin Pakandam posted the following:

Hi Michael, I completely agree with your assessment. My post goes one step further:

http://open.salon.com/blog/bar…

Mr. Pakandam, with all due respect, I think you glossed over what I wrote about Obama.  Yes, voters are fed up with far right, anti-labor, anti-woman, anti-civil-liberties, pro-war, anti-environment, pro-torture, pro-corporate Republican policies.  But they’re also fed up with far right, anti-labor, anti-woman, anti-civil-liberties, pro-war, anti-environment, pro-torture, pro-corporate Democrat policies.

On the issue of health care, for example, Obama cynically bet that by ramming through what amounts to a corporate boondoggle, he could remove health care as a wedge issue going into 2012.  And the best way he could do that was to pass something the Republicans had already passed at the state level.

Enter Romneycare, on which Obamacare was modeled and which bears many similarities to the Clinton plan Obama campaigned against in ’08.  (And they all appear to have swiped the idea from Richard Nixon.  Go figure.)

The thinking on this was painfully simple, and horrendously evil.  There’s an institutional crisis in how Americans are able to gain access to decent health care.  So Obama’s, Clinton’s, and Romney’s plan was to institutionalize the problem.  If it’s a built-in part of the system, no more crisis in the system because it’s now a feature instead of a supposed aberration.  Now we’re being forced to bail out the health insurance and pharmaceutical industries because they went too far in price gouging and were losing paying customers.

And, of course, Obamacare, as is Romneycare before it, is deliberately designed to fail.  As Jon Walker and Scarecrow at FDL reported last year, the Massachusetts plan failed spectacularly the same week Obamacare became law.  The state objected to proposed premium increases, which prompted insurers to back out of agreements to offer new coverage.

Why pass such a flawed plan if it’s very design guarantees failure?  As I wrote above, there’s a cynical political ploy at the heart of the matter.  But it runs much deeper than that.  By passing a health care law at the national level that’s designed to fail, the far right-wing lackeys of Wall Street (which include Obama in their ranks) can pretend to justify their long-disproven claims that government health care or insurance doesn’t work.  And also as I wrote above, they got to bail out two massive industries that had priced their goods so ridiculouly high that they were starting to worry that they’d not have enough customers.

It’s pretty insidious, but then what can be expected from a guy who, as a state senator in Illinois, and at the behest of his corporate bosses, actively and enthusiastically worked to gut a proposed bill that would have extended health insurance to impoverished children?

By the way, a year after the collapse of Romneycare in Massachusetts, it was still a miserable failure.

And that’s just on health care reform.  Look at each and every one of Obama’s policies and you will find a continuation or expansion of Bush’s far right policies.  He isn’t doing these things out of weakness or some misguided desire to be conciliatory.  He’s doing them because he is a right-wing extremist and his policies are the same as those of the Republicans.  THAT is what voters rejected in Ohio on Tuesday.