Disconnected From the Internet, Egypt Goes 1994



I will never forget the first time I cranked up a 1200 bps modem and logged onto Prodigy: that skreeeeeeeeee-chik-chik-chik sound, the anxious anticipation, the unbelievable availability of a world I hadn't yet experienced. Sure there were books in libraries before there was a WWW but the Internet offered places and people previously out of my reach and though it took an excruciatingly long time to get to things sometimes, it was all there and somewhat reasonable at $2.99 an hour. I can't believe that was almost 20 years ago, my how time flies when you're streaming endless amounts of porn information via the precious tubes.

I couldn't imagine being in the middle of total societal breakdown without the Internets. Thankfully Egyptians are a clever lot and don't have to imagine such a thing either.

Bloomberg:

At least 30 different dial-up services are being offered to the Egyptian people to circumvent the shutdown, according to Paris-based French Data Network, a group founded in 1992 to make data accessible. The group opened up one such “small window” on the Internet network to help Egyptians access the Web.

“This is definitely an open attack from a state against the Internet,” the group said in a statement on its Web site. “FDN has decided to open a small window on the network.”

Internet traffic volumes in Egypt slumped in a “coordinated fashion” shortly after midnight on Jan. 28 after demonstrators took to the streets demanding the ouster of President Hosni Mubarak, according to Internet security firm Arbor Networks. More than 90 percent of Egypt’s Internet networks are currently down, the Geneva-based nonprofit Internet Society said today.

I remind dear reader that "They" have been trying to take over the Internet here at home for years. Each time the legislation seems to sputter and each time a new crop of Congressional asshats pops up with a new bill looking to install an Internet kill switch or otherwise regulate the wild world wide web. That's like trying to regulate stars in the sky but don't tell them that, they need something to do.

The latest is the Cyber Security and American Cyber Competitiveness Act (S. 21), sponsored by Senate Majority Leader Harry Reid (D-Nev.) and chairs of seven committees with jurisdiction over cybersecurity: Sens. Joe Lieberman (I-Conn.), Jay Rockefeller (D-W.V.), Carl Levin (D-Mich.), Patrick Leahy (D-Vt.), Dianne Feinstein (D-Calif.), John Kerry (D-Mass.), and Jeff Bingaman (D-N.M.). (via Infosecurity)

Our tubes, ourselves!

A Lesson in Maryland BBQ Food Safety



I drove by a BBQ truck with a turkey-shaped smoker trailer in a bank parking lot on Sunday selling, I assume, some of this same sort of Maryland BBQ:
The boss takes his long handled fork and spears the meat that the cook has placed on the front of the grill. He whacks it down on the cutting board that has been in use from early morning. He puts disposable gloves on, and chops the chicken into quarters, the ribs into halves and the brisket into slices. He places it all in a foil-lined Styrofoam take-out box. He slathers it with barbecue and hot sauce. He then takes the gloves off, takes your money, puts new gloves on and starts over with the next customer.

In this scenario there was no handwashing, not even a pretense of handwashing. There was no tub of water on the trailer. The nearest meat thermometer is 10 miles away. And that’s how it is when you have a barbecue addiction. You take risks.

As an out-of-towner still acclimating myself to my surroundings, I'm not sure if it's wise to eat this; mobile food in San Francisco is heavily-regulated in the Golden Nanny State and just as heavily-reviewed by actual patrons who haven't gotten gut-wrenching illness from eating the stuff.

I don't know if I could get into it.

Would I eat at "the kind of hole in the wall joint Guy Fieri would profile on Diners, Drive Ins and Dives...at the end of a strip mall..." that used to be a mobile smoking trailer? Now that I could get behind.

Looks like the trucks are taking over DC. As long as the odds are 0 that I'll bump into little Timmy Geithner at one some afternoon, I'm in. Now where's the guy with the smoking turkey trailer...?

TLP: If Glenn Beck Turns On Him, It's Over

boehner tears
You have to think that this is not quite how John Boehner expected he'd be treated by Fox News less than a month into his gig as House speaker.

You know The Huffington Post is loving this:
Bill O'Reilly expressed concern about Speaker of the House John Boehner's emotional stability on his Friday show, and said that international leaders were "laughing" at him and calling him a "sissy."

O'Reilly was speaking to Fox News colleague Chris Wallace, who will interview Boehner on Sunday. "He's got to get his emotions under control," O'Reilly said. He posited that President Obama may have been trying to make Boehner cry during the State of the Union address. He then compared him to two American icons.

"You've got your George Pattons, you've got your George Washingtons--stoic, tough," O'Reilly said. "A lot of Americans, you know, well if the guy's crying every two minutes, does that mean he's strong, does that impact on his credibility?"

He said Russian Prime Minister Vladimir Putin was "laughing" at Boehner because, while he was "wrestling polar bears without his shirt, and has never cried in his life, he's going, 'look at this sissy.' Perception is reality."
Hmm, if perception is reality, O'Reilly might want to keep his thoughts about a shirtless, bear-wrestling Putin to himself. Anyway, Wallace did ask Boehner about all the boohooing, and the speaker said it was no big thing.

More HuffPo:
"I wear my emotions on my sleeve," he said when asked to respond to critics who say his tendency to shed tears makes him look "weak" or "strange." "I'm not going to apologize for being emotionally attached to the things I feel most strongly about."
And then Wallace had to piss Boehner off and ask him about smoking. "Why do you bring this up again?" Boener responded. "It's a legal product. I choose to smoke it. Leave me alone."

It's almost enough to make a guy cry.

Sometimes It's Best to STFU (Ask Krugman)


When it comes to media silence, Scott Kurashige and I share an opinion. That being said, we also agree that some people are better off just keeping their mouths shut (via HuffPo):
Harsh realities and tough choices lie ahead. But readers of the NYT op-ed page would never suspect this. You can read pontifications about Michelle Bachmann and the First Lady's clothes. Yet, you won't find anything about one of the most game-changing events in our lifetimes and how it has thrown U.S. foreign policy into a state of disarray.

To be fair, the paper's reporting has been decent, though largely tailing the work of Al Jazeera. And a couple NYT editorials have criticized Mubarak, though these have largely echoed the tepid line of the U.S. administration by comparison with the Washington Post's call for the U.S. to break with his regime immediately.

Even the blog section of the NYT, where one would hope to find more timely dialogue, is less than buzzing. Paul Krugman sums it up well: "Egypt: I don't know anything, have no expertise, haven't even ever looked at the economic situation. Hence, no posting." Maybe Krugman could write about the consequences of his own ignorance and how badly that limits his analysis of global economics and politics.
That's not just what Krugman summed up, that's all he had to say in an entire column.

He didn't want to hear what you had to say about it, either, as comments were turned off.

(Later, you can see Krugman try to declare Bernanke and Co. innocent of the crime of destroying the world economy and thereby shredding the social contract)

TLP: Jerry Brown Takes Away the Keys. Curfew, More Veggies Expected for California Workers.

state cars
Since he became California's governor, Jerry Brown has turned into a grouchy Dad. Not that he doesn't have reason to be pissed off. What with there being no money and all. So, after deciding to cancel about half the cell phones state workers use, Brown started looking at state cars.

The NYT revs up the story:
In another salvo in his battle to tame California’s money problems, Gov. Jerry Brown announced Friday that he would stop any new cars from being purchased by government agencies and order the return of many already used by state employees.

The executive order came just weeks after Mr. Brown laid out a strict austerity budget for California, which is facing a $25.4 billion deficit over the next 18 months.

“There is a lot of wasteful spending on cars that aren’t even driven,” Mr. Brown said. “And we can’t afford to spend taxpayer money on new cars while California faces such a massive deficit.”
Cutting out the new cars and selling another 5,000 or so could save the state $16.5 million, Brown's office tells the Times. Trimming the number of cell phones may amount to another $20 million annually. It all makes for a good story, but there's a long way to go to get to $25 billion.

The Great (?) DC Snowstorm



If you're wondering why JDA has been somewhat silent for the last few days it's not because the black helicopters finally showed up and silenced me (Bernanke wishes) but due to the few inches of wet snow that snarled DC traffic and left a big chunk of the area completely black for days. And no, I don't mean that kind of black, we already have that going in my county in a big way (yay wealthy black people sticking it to the man... who they happen to work for...).

As of this writing, we still have no power. Big ole gangsta that I am, I tried to tough it out. Most of the city had power so there was warm "food" to be had and, best of all, we got the generator going so I had Fallout 3 and cold beers stashed outside in the snow to go with my scented candles and BlackBerry car charger. Pepco (our utility, who we will discuss momentarily) updated us saying crews were working "round the clock" to restore power, which was lovely and all but seeing as how we went black at 8:30pm on Wednesday night, I just couldn't imagine why it took them so long to stop by and fix it and it wasn't getting any warmer in the house. I mean, doesn't this snow thing happen a lot in this part of the country? I stuck around thinking it couldn't take more than a few hours. Those hours turned into days and by then my stubbornness told me I couldn't leave now, I'd come too far.

At around 5 this evening, I sat huddled in my La-Z-Boy (no, not that lazy boy) with my elderly, half-frozen cat picking away at Capital Wasteland mutants and wondered what roasted elderly cat would taste like. I realized it just wasn't reasonable to wait around for these Pepco assholes to get their shit together, especially considering the note they left up on their website that they couldn't even keep their outage map from going out. I was almost too cold to appreciate the irony then but now that kitty and I are safely hidden away in a warm Virginia hotel room for the night, we can laugh. So can you, peep:

Hilarious, isn't it?

Good little citizen that I am, I called them this evening to report that we still didn't have power and was quickly shut down by Pepco Operator #25673, who seemed annoyed that I was bothering her. I was tempted to launch into "Listen, asshole, you aren't the one that's dirty, starving and freezing to death in your fucking hou....." but by that point I was clean, fed and toasty in my hotel room so fuck it, let some other sucker sitting in their cold dark house bitch.

Upside? I caught up on a week's worth of Washington Posts and, surprise, found quite a bit of coverage about our little storm. Like this little gem:

Pepco did not call for major reinforcements to help restore power to its customers until late Wednesday night, well into the storm and several hours after Baltimore Gas and Electric had begun assembling outside contractors for help.

Similarly, Dominion Virginia Power began moving its own crews from southeastern Virginia and North Carolina closer to Northern Virginia as early as Tuesday, anticipating weather problems. As a result, it has called in only about 200 outside workers for additional help, a spokeswoman said.

BGE had arranged for about 400 extra workers by about 5 p.m. Wednesday, according to its spokesman. Pepco didn't ask for mutual aid until an 8:30 p.m. conference call among mid-Atlantic region utilities - a call arranged by BGE, both companies said.

Oh, you mean like 8:30pm when the fucking lights went out?

Fail, Pepco, fail. And guess what? This isn't the first time.

Guess who is writing an angry, expletive-free letter to the governor and the Maryland Public Service Commission and whomever else cares to listen? Don't think I can't find a few plugs and some WiFi next time, fuckheads.

Note to self: get a universal laptop charger for the car.

Surprise, It Was Greenspan and Bernanke's Fault

 What, Bernanke worry?

The Financial Crisis Inquiry Commission is about to tell us, in 576 pages, what many of us already know:

The majority report finds fault with two Fed chairmen: Alan Greenspan, who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but played a crucial role in the response. It criticizes Mr. Greenspan for advocating deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as a “prime example” of negligence.

Anyone else running out tomorrow to get a copy?

Like the 9/11 Commission, we could have saved a whole lot of money and time by simply verifying alternative media claims instead of starting from scratch as if no one knew anything all along.

Oh well.

Michele Bachmann Says F^%* History


Embarrassing.

Listen, we know no one pays attention in school. We know history is ignored by everyone except history buffs who are into that whole thing (JDA is guilty of skipping history class in high school, by that point TLP was likely working on his 3rd history PhD) and we know that we can, as a society assaulted with a constant stream of tweets, status updates and 24 hour news, barely remember what happened last week let alone in the last few centuries. Surely Bachmann isn't the only one to make a mistake like this but really, Michele? Really?


Her entire team needs to be fired for sending her out there looking like that.

Then again, in her defense, if you ask an American elementary school kid about Abraham Lincoln's position on slavery, you might be told that he fought bravely to free the slaves. The Great Emancipator, the textbooks call him.

That's what I was taught, you too?

The truth, however, is that Lincoln, like Bachmann, was a politician just doing what he had to do. The Emancipation Proclamation was a political move, you're a sucker if you believe anything else. Worse? Honest Abe offered good government money to pay off slave-owners to get their slaves out of town as part of his 1860 presidential campaign:

In 1860, the 3,185 slaves in the District of Columbia were owned by just two percent of the District's residents. In April 1862, Lincoln arranged to have a bill introduced in Congress that would compensate District slave-holders an average of $300 for each slave. An additional $100,000 was appropriated

to be expended under the direction of the President of the United States, to aid in the colonization and settlement of such free persons of African descent now residing in said District, including those to be liberated by this act, as may desire to emigrate to the Republic of Haiti or Liberia, or such other country beyond the limits of the United States as the President may determine.

When he signed the bill into law on April 16, Lincoln stated: "I am gratified that the two principles of compensation, and colonization, are both recognized, and practically applied in the act."

And there's this quote, which you should know if you are not a high schooler skipping history class: "My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave, I would do it; and if I could save it by freeing all the slaves, I would do it; and if I could do it by freeing some and leaving others alone, I would also do that.."

I bet Bachmann (or her dumbass speechwriters and/or shitty teleprompter technician) just read the same books everyone else has. I could see where it might be easy to have absolutely no idea what you are talking about when the foundation of public school is a pablum version of what could have possibly happened, packaged in the simplest, most watered-down way possible. God forbid any children be left behind when we're manufacturing the past, right? No wonder no one wants to take history, by the time you get to college you'd have to start all over just to figure out what maybe might have happened.

Her failure last night goes way beyond one idiot saying dumb things in public.

TLP: It Must Feel Better in Tights

ventura TSA
You'd have to think he's been groped much worse. Oh well, go get 'em, Jesse.

AP via Huffington Post:
Former Minnesota Gov. Jesse Ventura sued the Department of Homeland Security and the Transportation Security Administration on Monday, alleging full-body scans and pat-downs at airport checkpoints violate his right to be free from unreasonable searches and seizures.

Ventura is asking a federal judge in Minnesota to issue an injunction ordering officials to stop subjecting him to "warrantless and suspicionless" scans and body searches.

The lawsuit, which also names Homeland Security Secretary Janet Napolitano and TSA Administrator John Pistole as defendants, argues the searches are "unwarranted and unreasonable intrusions on Governor Ventura's personal privacy and dignity and are a justifiable cause for him to be concerned for his personal health and well-being."

According to the lawsuit, Ventura received a hip replacement in 2008, and since then, his titanium implant has set off metal detectors at airport security checkpoints. The lawsuit said that prior to last November officials had used a non-invasive hand-held wand to scan his body as a secondary security measure.

But when Ventura set off the metal detector in November, he was instead subjected to a body pat-down and was not given the option of a scan with a hand-held wand or an exemption for being a frequent traveler, the lawsuit said.

The lawsuit said the pat-down "exposed him to humiliation and degradation through unwanted touching, gripping and rubbing of the intimate areas of his body."
Um, isn't that the gig he had before he got into politics? Unless he didn't consider all that sweaty "touching, gripping and rubbing" to be "unwanted." And wasn't humiliated by wearing a boa.

Video: Fed Rent-a-Cops Chase Reporter Off the Lawn

pic credit: JDA the tourist who was just snapping a shot of the Fed, naturally

Is that lawn public property? Is the sidewalk? Is the park across the street? Is that rent-a-cop a real cop? Questions abound.


For the record, I'll have to say that I've had only pleasant experiences with Fed cops and would like to keep it that way, tyvm. We're all just working stiffs out for a buck, right?

Know your rights, kiddies. It is NOT illegal to film federal buildings. If the Fed would like to masquerade as federal, the rules apply to them too.

Via the New York Civil Liberties Union:

In the settlement approved today by a federal judge in Manhattan, , the federal government acknowledges that there are no federal laws or regulations that prohibit photography outside federal courthouses. It agreed to provide federal officers written instructions emphasizing the public’s right to photograph and record outside federal courthouses. The settlement has even broader implications, though.

“Not only will this settlement end harassment of photographers outside federal courthouses, it will free people to photograph and film outside of all federal buildings,” said NYCLU Associate Legal Director Christopher Dunn, lead counsel in the case. “The regulation at issue in this case applies to all federal buildings, not only courthouses, so this settlement should extend to photography near all federal buildings nationwide.

Those of you looking to film regional Fed banks, however, are on your own. They aren't pretending to be federal.

Kansas City Fed's Hoenig Hopes He's Wrong (But We Know He's Not)



Kansas City Fed President Tom Hoenig and JDA have a lot in common believe it or not: we're both known shit-disturbers, dedicated to a sense of "right" that forces us to go against the grain even when that means isolating ourselves from the status quo. A lot. We're both polite Midwesterners, which makes us stubborn but kind and reasonable most of the time unless you mess with us. And people tend to pronounce our names wrong but that's where we're different because I'll correct someone in a second and hold it against them for the remainder of our association for being too lazy to come out and ask instead of bumbling it from the gate.

Oh and we both hope we're wrong when it comes to the doomsaying but, sadly, we're probably both right. Too right.

Also, I don't regulate any Too Big to Fail banks either.

Check out Mark Davis' profile of the soon-to-be-retired lone dissenter via the Kansas City Star for more teary-eyed nostalgia on his way out.

Psst, TH, it's not too late to repent.

OMG! I Guess No One Told Obama About the 500+ Dodd-Frank Regs Alone...




I'm sorry but both sides need to take responsibility for the ridiculous regulatory environment we have created, regardless of who Obama decides to hat tip in his little WSJ op-eds. Worse, it will take a lot more than some stupid executive order to unravel. Even worse than that, all the executive orders in the world won't bring the jobs back.


The Hill:

President Obama said Tuesday he will sign an executive order to trim outdated and ineffective regulations that impede economic growth.

In an op-ed in The Wall Street Journal, Obama said the country's complex regulatory structures have sometimes had a "chilling effect" on job growth and, giving a nod to the priorities of the new House Republican majority, observed that small businesses often feel that burden.

"We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation," he said. "And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way."

OH surely you don't mean burdens like 1099s for every purchase/sale over $600 that was carelessly stuffed into Obamacare, right?

Face it, people, we're screwed if this is the best we can get out of our leadership.

I'm sure more paperwork can solve it somehow.

Bernanke Accidentally Points Out that the Dollar is Dying



Obviously they're stretching here in the hopes that we're too stupid to realize a strong stock market is actually BAD for any of us who use, spend and/or are paid for in dollars. Doesn't everyone who matters already know that strong stocks equal a weak dollar in this post-9/11, hypermanipulated economy of ours? I guarantee you most of the suckers holding dollars know that - except, of course, for the morons (psst, that's you guys, America) getting paid in them.

WSJ's Real Time Economics
:

In recent weeks, the Federal Reserve has been turning to an unusual metric to prove the potency of its bond-buying program: the stock market.

Comments from Fed Chairman Ben Bernanke and other officials, as well as research by the central bank, cite rising stock prices as a sign that the central bank’s $600 billion bond-buying program is working to bolster the economy.

The focus on stocks puts the Fed in an unusual position, given that equity moves haven’t usually been a focus of the monetary-policy process. The shift could be benign, or a sign of trouble.

In other words: "Our policies have contributed to a stronger stock market just as they did in March 2009 when we did the first iteration of this program," Bernanke said at a Federal Deposit Insurance Corp. forum on small businesses. "A stronger economy helps small businesses more than larger businesses. Interest rates are higher but that's mostly because the news is better. It has responded to a stronger economy and better expectations."

Fuck! Did he just admit that? He did. Watch it backfire before his very eyes.

Bring on the chart porn (via A Dash of Insight). Someone make sure Bernanke gets a copy of this, it may be news to him.


So I ask the Fed, is this really the relationship you want to point out?

Time to open that Ebay store selling rare collector $10 and $100 US dollar bills for $1 trillion each. And yes, that's one trillion US dollars, I'm not crazy, I'm just a capitalist pig looking to profit off of others' misery.

Lesson Learned: Don't Ask Yahoo! Answers About the Assets and Liabilities of the Fed

 pic credit: Skull-A-Day

Lindsay asks on Yahoo! Answers, an authority for a perfect snapshot of how misinformed and useless humanity has become:

What are the major assets and liabilities of the federal reserve system?

This is what she gets back:

Eliminations from Wednesday Change since
consolidation May 12, 2010 Wednesday Wednesday
Assets, liabilities, and capital May 5, 2010 May 13, 2009

Assets
Gold certificate account 11,037 0 0
Special drawing rights certificate account 5,200 0 + 3,000
Coin 2,065 - 16 + 205
Securities, repurchase agreements, term auction
credit, and other loans 2,119,894 - 131 + 477,418
Securities held outright (1) 2,043,258 + 982 + 961,667
U.S. Treasury securities 776,792 + 43 + 199,701
Bills (2) 18,423 0 0
Notes and bonds, nominal (2) 712,023 0 + 199,253
Notes and bonds, inflation-indexed (2) 41,125 0 - 128
Inflation compensation (3) 5,220 + 43 + 575
Federal agency debt securities (2) 168,112 0 + 95,157
Mortgage-backed securities (4) 1,098,355 + 940 + 666,810
Repurchase agreements (5) 0 0 0
Term auction credit 0 0 - 428,835
Other loans 76,636 - 1,113 - 55,413
Net portfolio holdings of Commercial Paper
Funding Facility LLC (6) 2 0 - 163,207
Net portfolio holdings of Maiden Lane LLC (7) 28,262 + 1 + 2,569
Net portfolio holdings of Maiden Lane II LLC (8) 15,841 - 222 - 309
Net portfolio holdings of Maiden Lane III LLC (9) 23,361 - 304 + 3,056
Net portfolio holdings of TALF LLC (10) 439 0 + 439
Preferred interests in AIA Aurora LLC and ALICO
Holdings LLC (11) 25,416 0 + 25,416
Items in process of collection (41) 160 - 65 - 200
Bank premises 2,237 + 3 + 43
Central bank liquidity swaps (12) 9,205 + 9,205 - 237,633
Other assets (13) 96,428 + 1,463 + 30,914

Total assets (41) 2,339,547 + 9,933 + 141,712


Eliminations from Wednesday Change since
consolidation May 12, 2010 Wednesday Wednesday
Assets, liabilities, and capital May 5, 2010 May 13, 2009

Liabilities
Federal Reserve notes, net of F.R. Bank holdings 898,681 + 1,166 + 33,170
Reverse repurchase agreements (14) 56,647 + 3,164 - 14,247
Deposits (0) 1,310,842 + 4,734 + 102,137
Depository institutions 1,092,845 + 60,106 + 161,108
U.S. Treasury, general account 16,293 - 53,647 - 40,874
U.S. Treasury, supplementary financing account 199,958 0 + 25
Foreign official 1,413 - 1,638 - 1,134
Other (0) 333 - 88 - 16,989
Deferred availability cash items (41) 2,372 - 341 - 979
Other liabilities and accrued dividends (15) 16,210 + 755 + 9,929

Total liabilities (41) 2,284,753 + 9,478 + 130,010

Huh? No wonder no one has any fucking idea what is going on because it's not bad enough that is a jumble of numbers, the 10s of thousands have to be converted into millions. Ugh.

Her response?

OMG!!! can someone please give me a straight clear answer i need this to help me with my final!!!

Though poor Lindsay doesn't realize the Fed is serving as money-shuffling bitch so the government can pile on all kinds of garbage debt (see WC Varones' recent explanation of the sort of or maybe totally ballooning deficit versus the actually ballooning amount of debt our government is "hoarding"), including the student loans she took out so she could be on Yahoo! Answers asking about the Fed's assets and liabilities. Oh dear.

I hope she didn't end up at one of those scam schools like these guys, who will be coming for some of that free debt tyvm:

Enrollments at DeVry University, Keller Graduate School of Management and Chamberlain College of Nursing were in-line with previously announced expectations. However, new student enrollment at the Carrington Colleges declined more than anticipated in October and November as the result of fewer adult students entering into programs driven by lower inquiry volume and conversion. To address this issue, Carrington is in the process of shifting its focus from brand awareness associated with the recent name change to more direct response communications. Carrington is also making additional investments in its website interface and admissions processes to better serve prospective students.

"In the coming years, the strong demand for quality education will continue to grow in the United States and around the world. DeVry provides a key part of the solution by providing capacity and access so our students can achieve their educational and career goals,” said Daniel Hamburger, president and chief executive officer of DeVry Inc. “While we experienced lower demand at some of our colleges during this enrollment period, we remain well-positioned through our diverse family of schools and programs should these trends continue. We have strategies in place to address areas where we can improve and remain confident in our ability to meet our long term performance goals.”

I'm sure that strategy involves getting ads into the lucrative 10 a.m. spot between Maury baby daddy announcements.

Mish goes on to hammer the education scam as a very appropriate follow up to WCV's revelation that . You either go to Harvard to learn to write up uncritical love letters in exchange for office supplies or get your how-to-be-a-debt-slave education from these mills. Or if you're lucky, you get a discount on your education and then return to your country to actually use it.

The DoJ Gets TMI With Iceland

 pic credit: Popular Science, March 1963 (via Modern Mechanix)

This, my friends, is why it's a bad idea to act like an ass on the Internet. They know where you are, it's just a matter of whether or not your government is reasonable about who can request access to that information.

The Guardian
:

The American ambassador to Iceland has been summoned to explain why US officials are trying to access the Twitter account of an Icelandic MP and former WikiLeaks collaborator.

Birgitta Jónsdóttir, an MP for the Movement in Iceland, revealed last week that the US justice department had asked Twitter to hand over her information. The US authorities are trying to build a criminal case against the website after its huge leaks of classified US information.

"[It is] very serious that a foreign state, the United States, demands such personal information of an Icelandic person, an elected official," the interior minister, Ogmundur Jonasson, told Icelandic broadcaster RUV. "This is even more serious when put [in] perspective and concerns freedom of speech and people's freedom in general," he added.

Maybe they can dispatch Frederic Mishkin to Iceland, he can swap a glowing review of Iceland's new finances (like he did the last ones that imploded) in exchange for forgiveness of our completely out-of-line intrusion. Sorry, Iceland, here we think that's an OK way to treat our own people as well so we just figured you'd be complacent enough not to care.

I may have to find a new line of work if this keeps up, we know they will not allow the revolution to be televised.

TLP: Slow Down, Jr Deputy Accountant is Still Waiting for a Stimulus Sign

stimulus signs
Back in the Depression, FDR established programs that paid people to build roads and schools, do conservation projects and — I fucking love this one — write. It put people to work and got things done. Now, it seems that it's enough to make a sign that says other people are building a road. Well, unless a Republican congressman has something to say about it.

The Huffington Post:
Rep. Aaron Schock (R-Ill.), who once blasted the signs as "propaganda," recently proposed H.R. 389, a measure that would forbid federal dollars from going to fund the markers, which often read "Project Funded by the American Recovery and Reinvestment Act" (ARRA) or "Putting America to Work."

The Hill reports on the history of the placards:

Originally, the use of signs calling attention to ARRA projects was required, but later signs were just encouraged by the Obama administration. Guidance from the Office of Management and Budget from last year says signage promotes "openness and transparency," but also says it is "important that costs associated with signage are reasonable and limited." Thus, it says, ARRA-funded projects "should display signage," but "exclusions may apply."

Schock's first iteration of this proposal, introduced last year, claimed, "reports indicate that potentially tens of millions of dollars have been spent" on the signs.

Jill Zuckman of the Department of Transportation, however, told ABC News that $5 million, or .02 percent of overall project spending, was a better estimate.

Eddie Vale, spokesman for the labor union federation AFL-CIO, also declared at the time that the markers contributed to job creation.

"Where do they think the signs come from?" said according to CBS News. "There isn't a magical road sign unicorn that brings them ... they're manufactured — i.e., building and placing the signs ALSO create jobs."
Obviously. And, duh. If there were a magical unicorn making stimulus signs, I can tell you that Jr Deputy Accountant would already have hers. After all, the federal government has provided her with an endless supply of work.

The Dirty Fed Quietly Rewrites Accounting Rules to Disallow Their Own Insolvency



Hey, any accountants out there to explain what the fuck a "negative liability" is? A normal person might assume a negative liability to be an asset (since a negative asset would, obviously, be a liability) but not in this case, this is magical Fed accounting we're talking about.

If you weren't paying attention (I know I wasn't, they snuck this one by me too), you probably didn't notice this January 6 announcement from our friends at the Board. The best part is they used "transparency" as an excuse. Oh it's transparent alright, just not in the way they hoped we'd think it was.
The Board's H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks," has been modified to reflect an accounting policy change that will result in a more transparent presentation of each Federal Reserve Bank's capital accounts and distribution of residual earnings to the U.S. Treasury. Although the accounting policy change does not affect the amount of residual earnings that the Federal Reserve Banks distribute to the U.S. Treasury, it may affect the timing of the distributions. Consistent with long-standing policy of the Board of Governors, the residual earnings of each Federal Reserve Bank, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in, are distributed weekly to the U.S. Treasury. The distribution of residual earnings to the U.S. Treasury is made in accordance with the Board of Governor's authority to levy an interest charge on the Federal Reserve Banks based on the amount of each Federal Reserve Bank's outstanding Federal Reserve notes.

Effective January 1, 2011, as a result of the accounting policy change, on a daily basis each Federal Reserve Bank will adjust the balance in its surplus account to equate surplus with capital paid-in and, in addition, will adjust its liability for the distribution of residual earnings to the U.S. Treasury. Previously these adjustments were made only at year-end. Adjusting the surplus account balance and the liability for the distribution of residual earnings to the U.S. Treasury is consistent with the existing requirement for daily accrual of many other items that appear in the Board's H.4.1 statistical release. The liability for the distribution of residual earnings to the U.S. Treasury will be reported as "Interest on Federal Reserve notes due to U.S. Treasury" on table 10. Previously, the amount necessary to equate surplus with capital paid-in and the amount of the liability for the distribution of residual earnings to the U.S. Treasury were included in "Other capital accounts" in table 9 and in "Other capital" in table 10.

What this means, for dumbass sheep like you and me, is that instead of a negative capital balance, it is instead a negative liability against the money they were going to turn over to the Treasury. So those last two huge announcements about record Fed "profits"? Just a fluff for the big assraping they gave us all via the Fed balance sheet. The worst kind of assraping too because they tried to do it silently and sneakily as if you wouldn't notice a giant ache in your taxpaying, higher-price-suffering ass after the fact.

Take note, accounting students, professors and professionals alike: the Fed called it a "change in presentation". Remember that when you are out in the field trying to figure out how to defraud investors and be sure to use it as a defense when the DoJ comes down on you for your criminal activity. What? Fraud? Me?! I merely changed that $900 billion liability into a debit to someone else's accounts receivable that we accrue for as if it is our own, it is merely a change in presentation!

Now I wonder what Bob McTeer has to say about that. Remember how he got all pissy the other day when a former Dirty Fed operative went spreading the truth about their scam?

First, there is no need for the Fed to mark to market since its assets are not held for trading and can easily be held to maturity or recovery if necessary. Second, the Fed’s liabilities are mainly the required reserves of the banking system not subjecting to withdrawal except as banking assets shrink. Fed liabilities are not hot money. Third, the Fed’s capital is required to be held by member banks and is subject to calls that would double its size if necessary. In other words, the Federal Reserve and other central banks are unique institutions and the usual rules and ratios don’t apply.

Regular banks, to some degree, still “borrow short and lend long.” They are vulnerable to losing deposits and faster than they can liquidate assets; so their capital is at risk. The deposit liabilities of Federal Reserve Banks, however, are the reserve deposits that banks are required to maintain at the Fed as a percentage of their own deposit liabilities. The excess reserve component has risen in the past two years, but mostly they are required reserves. The Fed’s ability now to pay interest on reserves, including excess reserves, gives it a tool, if needed, to incent even excess reserves to remain. In other words, those who hold the Fed’s liabilities are compelled to do so.

Aha! It's all clear now that Bob knew what idiots like us can't possibly figure out: this money laundering scheme is so genius that there's NO way it can go wrong. Look, he admitted right there what's happening and why it can't possibly fail. Well, assuming no one outside of the circle jerk who is pissed that these jackasses are inflating the currency to their heart's desire finds out and dumps their dollars. But that would never happen, surely.

Anyway, as of the latest Fed balance sheet release, they've come up with 2,895,000,000 as "Interest on Federal Reserve notes due to U.S. Treasury" for the 12 regional Fed banks. JDA finds that term to be hilarious since everyone knows we actually pay THEM for the privilege of using said Federal Reserve Notes so perhaps they could have come up with a better term like "Treasury Slush Fund to Make the Fed Look Solvent" or "Big Fat Lie Account".

We all saw what you did there.

Which Came First, the Foreclosure or the Snakes?



This is quite possibly the funniest thing I've read so far this entire housing crisis. Better than the one where Bank of America foreclosed on a house paid for in cash and definitely better than the guy in Minnesota getting foreclosed on by the New York Fed.

Any takers?

An Idaho home that has been infested with thousands of snakes for at least five years has been put up for sale for $66,000 less than its estimated market value after the recent owners gave up and walked away.

The five-bedroom home in Rexburg, Idaho was taken over last year by the lender, Chase Bank, after the owners left and let it lapse into foreclosure because of the serpents slithering around in the ceilings and walls.

The residents are believed to be common garter snakes, a type found throughout the United States. They are not poisonous and are harmless to humans.

"It's not a problem; it's an infestation," said Todd Davis, associate broker with Realty Quest in Rexburg, who is trying to sell the home. "It's been a horrible experience."

You know the housing market is fucked up when the bank drops the price to $109,000 from $175,000 because of the snakes. $109,000!


Wasn't this in Revelation?

For their power is in their mouth, and in their tails: for their tails [were] like unto serpents, and had heads, and with them they do hurt.

News Flash: "Printing Money is no Substitute for Sound Fiscal Policy"




I hate to break this to Mike Pence or any of my fellow Fedbashers who might feel the same but, uh, the Fed is aware of this and knows that it's too late. The crackhead is hooked and there's no pulling away the pipe now. Isn't that right, Zimbabwe Ben?

The Hill on one Congressman's Don Quixote mission to keep the Fed busy (or is it un-busy?):

The Federal Reserve would focus its efforts exclusively on controlling inflation and stop attempting to simultaneously maximize employment under a bill introduced Friday by Rep. Mike Pence (R-Ind.).

Pence, who introduced a similar bill late in the last Congress, said that it is the government's job, not the Fed's, to boost economic growth and drive up employment.

"It is the job of Congress and the President to put forth pro-growth policies on taxes, to rein in government spending and to reduce the regulatory burden in order to create an environment that is friendly to our nation's job creators," he said in a statement. "Printing money is no substitute for sound fiscal policy."

That's really cute and all but here's the reality: pouring billions into McDonald's and Verizon wasn't necessarily in their mandate either but they did that, didn't they?

They aren't buying $600 billion more in Treasurys because they believe it will create jobs (don't listen to what the Fed's Co-Idiot-in-Chief Janet Yellen says about magically creating 3 million jobs by printing money, she's got her head shoved so far up her ass she wouldn't know deflation from taco farts at this point), they're doing it because deflation is their worst nightmare. True deflation (not asset deflation like we're seeing now, which is really just a desperate attempt on the part of over-manipulated markets to adjust to more realistic prices) means the perpetual debt machine that keeps them alive comes to a grinding halt and suddenly everyone realizes that those worthless pieces of paper we call money are just worthless pieces of paper. They don't give a fuck if you have a job and certainly are smart enough to know that all the worthless pieces of paper in the world aren't going to bring industry back to the United States. The jobs are gone. You know it, I know it and the Fed knows it.

So good luck with that, Mr Pence, and I mean that. It's too late to stop them now.

Birds Falling From the Sky? It's the Government, Of Course! (Or Not)



Relax, kids, it isn't the end of the world, it's just the government!

Via the Christian Science Monitor:
The United States Department of Agriculture (USDA) took responsibility for hundreds of dead starlings that were found on the ground and frozen in trees in a Yankton, S.D., park on Monday.

The USDA's Wildlife Services Program, which contracts with farmers for bird control, said it used an avicide poison called DRC-1339 to cull a roost of 5,000 birds that were defecating on a farmer's cattle feed across the state line in Nebraska. But officials said the agency had nothing to do with large and dense recent bird kills in Arkansas and Louisiana.
So they're admitting to euthanizing a couple hundred birdies (there is actually a government program called Bye Bye Blackbird which began in the 1960s) but won't cop to the rest. Fair enough.

Here's where the story doesn't quite work, though. This DRC 1339 stuff is supposedly low toxicity to humans (considering the crap the FDA lets them pump into us, I'd almost rather lick dead birds off the pavement) but in birds, it rots their kidneys within 5 to 40 hours:
DRC 1339 is absorbed into the bloodstream and impairs the liver and kidney functions.

Death apparently results from uremic poisoning. The damaged kidneys are unable to excrete the body’s waste products and these build up in the bloodstream
to a lethal level.

The first symptoms of poisoning are an increase in water consumption, followed by a sharp drop in the intake.

About 4 hours before death, the birds cease to eat or drink and become listless and inactive. They perch with feathers ruffled, as in cold weather, and appear to doze. As death nears, breathing increases slightly in rate and becomes more difficult. The birds finally become comatose and die. There are no convulsions or spasms; consequently there are no distress calls or 'spooking' to deter other birds from feeding. Poisoned birds are characterised by fluffed-out feathers and by tucking their feet inside the lower breast feathers.
It seems odd that thousands of birds would be out for a stroll in the air as the poison pumped through their little birdy bodies and then suddenly drop dead in the damn sky given the above information. Nor do I recall seeing any images of birds with fluffed out feathers and feet tucked in (maybe tucked backwards since they snapped when they hit the ground). You know, JDA is no scientist but something smells funny and it isn't all the bird shit on these farmers' fields.

Try again, dear government, try again.

TLP: You Had Me at "More?"

hollywood incentives
If this story were made into a movie, I'd have to guess that it would be rated NC-17 — or X, or MA, or whatever the filthiest classification is these days — just based on all the whoring around and ass-fucking involved.

Seems that state governments are strapped for cash these days and might not have much extra to throw at Hollywood to lure producers to come make movies. Roads and schools and police all cost money, apparently, along with the need to pay off all kinds of other shit that states committed themselves to financially in recent years.

NYT:
Preparing to deliver his first State of the State address last week, Gov. Chris Christie of New Jersey was looking at a $10.5 billion budget gap, a collapsing pension fund and a probable cut in Medicaid spending.

He was also being asked to put money aside for Hollywood.

Government subsidies for film and television productions proliferated in flush times as more than 40 states competed for entertainment work. Those subsidies face an uncertain future as new governors and lawmakers, many of them fiscal conservatives, join incumbents like Mr. Christie in trying to balance budgets without losing jobs.

Tax credits for Hollywood were recently expanded in Florida and North Carolina but are under fresh scrutiny in states like Pennsylvania, Michigan and New Mexico, all of which have new Republican governors reviewing film subsidy programs that were begun under Democratic predecessors.

No big spender has yet pulled out of the subsidy business, though Arizona, Iowa and Kansas have suspended or dropped their relatively small programs. In Missouri, meanwhile, a bipartisan review of all the state’s tax credits recommended that a film incentive be dropped, but no bill has been introduced to do so.

That has been enough to send a shudder through Hollywood, where producers have come to rely on taxpayer support for films like “How Do You Know,” “The Social Network,” “Love and Other Drugs,” “127 Hours” and many others.

“If you take that away, I think production will leave the U.S.,” a producer, Brian Oliver, said.
So the states are threatening to stop playing Sugar Daddy, which makes Hollywood talk about pulling up its panties and going home. Please.

Come to think of it, this movie is a remake, and a bad one. While not every governor has gotten turned on by Hollywood's CFM boots, there's probably not a state out there that hasn't played the economic incentive game with business. Same basic plot: show me the money (or tax credits or a highway interchange) and I'll build my factory (or rehab your vacant one, whatever.)

In the end, whether the product is movies or anything else, it usually becomes a bidding war between the states to see who will offer more. With that mindset, is it any wonder that the finances of all these states wound up getting fucked?

Obama's New FDA Wolf in Genetically-Engineered Sheep's Clothing



Once again I am left questioning the Obama administration's decision-making ability. I have nothing against the man himself but it is those he chooses to surround himself with that leaves me wondering what on Earth he could be thinking, and his latest appointment to the FDA is no exception.

Meet Mike Taylor (via NYT):

The Obama administration, moving to address the nation’s fractured food safety system, on Wednesday appointed Michael R. Taylor, a veteran food expert, as deputy commissioner for foods at the Food and Drug Administration. The newly created position is the first to oversee all the agency’s many food and nutrition programs.

The federal government’s oversight of the nation’s food supply has for decades been split among 13 disparate and sometimes feuding agencies. The result has been a growing menu of food recalls, including contaminated peanut butter, spinach and cookie dough, and the annual sickening of about 70 million people.

With new powers and extensive Washington experience, Mr. Taylor is supposed to fix this mess. But he is likely to be on a short leash.

He's got an exceptional resume, one that bounces him back and forth from law to Washington (surprise) on behalf of our friends at Monsanto. You know the ones, the guys who are only interested in profits using their patented frankenscience seeds.

Check out You're Appointing Who? Please Obama, Say It's Not So! via HuffPo to read all about the horrors of genetically-modified foods, the Monsanto lawyer who knew they are to blame for all sorts of human health issues from asthma to cancer and, worse of all, the Obama appointment as food safety czar that put that very lawyer in charge of (allegedly) guarding the sanctity of our health. If you had any doubts up until this point that the FDA doesn't actually care whether you live or die, let that be a compelling piece of evidence that opens your swollen, cataract-infested eyes.

The person who may be responsible for more food-related illness and death than anyone in history has just been made the US food safety czar. This is no joke.

Here's the back story.

When FDA scientists were asked to weigh in on what was to become the most radical and potentially dangerous change in our food supply -- the introduction of genetically modified (GM) foods -- secret documents now reveal that the experts were very concerned. Memo after memo described toxins, new diseases, nutritional deficiencies, and hard-to-detect allergens. They were adamant that the technology carried "serious health hazards," and required careful, long-term research, including human studies, before any genetically modified organisms (GMOs) could be safely released into the food supply.

But the biotech industry had rigged the game so that neither science nor scientists would stand in their way. They had placed their own man in charge of FDA policy and he wasn't going to be swayed by feeble arguments related to food safety. No, he was going to do what corporations had done for decades to get past these types of pesky concerns. He was going to lie.

That man? Why Mike Taylor of course.

Forgive me for being bold but Obama needs to look at the big picture instead of listening to these assholes he surrounds himself with. But let's look at his comments July 2, 2009 to AllAfrica.com about introducing the "green revolution" to Africa:

Now, I also think on the ground in many of these countries, how we think about not high-tech stuff but low-tech technologies to, for example, improve food production is vitally important. And I'm still frustrated over the fact that the green revolution that we introduced into India in the '60s, we haven't yet introduced into Africa in 2009. In some countries, you've got declining agricultural productivity. That makes absolutely no sense. And we don't need fancy computers to solve those problems; we need tried and true agricultural methods and technologies that are cheap and are efficient, but could have a huge impact in terms of people's day-to-day well-being.

Wait, that same "green revolution" introduced in India that has led Indian farmers to suicide as they buckle under the weight of debt and Monsanto-introduced GM seed fraud? I don't think so.

Is this who you want running the show, America? If so, I grieve for you.

Maryland Gets a Financial Blessing on Inauguration Day



Lucky me, I happened to be in Annapolis yesterday covering not Martin O'Malley's Inauguration but a much more important legislative event: CPA Day with the Maryland Association of CPAs.

The Baltimore Sun has an excellent take on the event I missed while I was chasing CPAs through legislators' offices:

Gov. Martin O'Malley's second inauguration was much warmer than his first, and not just because of the absence of an outgoing Republican administration in the crowd. January temperatures in the 40s brought out signs of something not much in evidence in the state capital recently: optimism. Sen. Barbara A. Mikulski, introducing the governor before his speech on the sunny steps of the State House, quipped, "Remember the weather forecast? Stormy weather. O'Malley changed that. Remember the economic forecast? Stormy weather. O'Malley's going to change that, too."

Still, there was no escaping the fact that not everything at the second inauguration went as Mr. O'Malley might have wished. He probably did not intend for the awkward, minute-long pause after Chief Judge Robert Bell administered the ceremonial oath of office when the governor stood on the dais by himself, silent and waiting for a 19-gun salute and military fly-over. Nor, as he stood on the spot four years ago, did he likely anticipate what a slog he would face during his first term, or the difficult situation he confronts today as he finalizes a plan to close the state's $1.6 billion budget shortfall.

True, it was warm. I'm sure the accountants apologize if there was any awkwardness in Annapolis yesterday, that happens sometimes when you get too many of them together in one small area.

Two days earlier, the gun lobby stormed Richmond. Are 150 CPAs in Annapolis more dangerous than 200 gun owners in Richmond? I would be pretty frightened to see 150 financial professionals coming at me asking about a gross receipts tax.

Gun-toting activists wearing black and orange stickers stating "Guns Save Lives" and red, white and blue stickers saying "Freedom is not a Loophole," roamed the halls of the General Assembly Building on Capitol Square in Richmond before assembly near the Capitol Bell Tower for a late-morning rally sponsored by the pro-gun Virginia Citizens Defense League.

"This is one of the safest places in Richmond right now," said VCDL president Phil Van Cleave, who estimated that more than 200 firearms were present.

For now, Bill Sheridan talks about why 150 CPAs are way more dangerous than 200 guns but I need a few days to recover before I can begin to describe that sort of power in front of me. Let Martin O'Malley consider it a blessing that 150 financial professionals appeared on the first day of his second term and brought the sun.

TLP: Maybe Baby Needs New Shoes

o'donnell pac
Some things aren't worth the trouble of figuring out.

WSJ:
Two of the most remarkable developments during the 2010 congressional elections were the sudden rise of Delaware Republican Christine O’Donnell and the millions of dollars spent on political advertisements by newly created independent campaign groups.

Now, those two forces are combining. Ms. O’Donnell is establishing an independent political group that will allow her to spend unlimited amounts of money on behalf of other Republican candidates.

Newly available documents from the Federal Election Commission show that one of Ms. O’Donnell’s close political advisers filed paperwork to set up a new political entity for Ms. O’Donnell called ChristinePAC.

Under new campaign-finance rules, Ms. O’Donnell can use the new political action committee to raise unlimited sums of money to run television ads or send political mailings to help Republican candidates win. But election rules bar the new organization from donating money to candidates.
What about rent, wardrobe, groceries, employing people who look like you? What do the rules say about all of that? Or better, what do her "close political advisers" tell her the rules say?

TLP: We Have No Idea What You Are Talking About

o novel
Don't even bother asking. We're not telling. Not even if we get the question from The New York Times:
The publisher of “O,” an anonymously written novel about a 2012 presidential campaign, made a brazen request of journalists and other writers in an e-mail on Tuesday: if anyone asks whether you are the author, please decline to comment.

Not everyone complied.

“I didn’t write it,” said Joe Klein, the author of “Primary Colors,” who was reached at his office in Washington as copies of the book, to be published by Simon & Schuster next week, began to trickle out. “But if I had written it, I would be saying I didn’t write it.”

The publisher has whipped up interest in the novel with a heavy-handed marketing campaign that plays up the book’s similarities to “Primary Colors,” a smash hit whose anonymous author (later revealed to be Mr. Klein) riveted Washington for months.

“O,” a 353-page novel whose author “has been in the room with Barack Obama and wishes to remain anonymous,” according to the publisher, has been the subject of a Washington guessing game for weeks over who wrote the book.
What does that mean anyway? " ... been in the room ..." Are we talking about the Oval Office? A Harvard classroom? The Senate chamber? A restaurant? United Center? And who does that rule in or out?

Speculate all you want. Just remember that Jr Deputy Accountant has a day job and another day job. Plus, Fedbashing is hard work. But she is very industrious. As for The Lazy Paperboy, well, doesn't the name sort of answer the question right there?

Or does it?

Philly Fed's Plosser Goes Off the Reservation, Admits Monetary Policy is Impotent



That's not omnipotent, that's impotent as in the fuckers are shooting blanks and don't even know it. Well Chuck Plosser knows it but if he keeps this up they're going to drag him off and sequester him in the bunker they reserve for bad central bankers who can't keep their mouths shut.

See The Scope and Responsibilities of Monetary Policy from Santiago, Chile yesterday:

Most economists now understand that in the long run, monetary policy determines only the level of prices and not the unemployment rate or other real variables.2 In this sense, it is monetary policy that has ultimate responsibility for the purchasing power of a nation's fiat currency. Employment depends on many other more important factors, such as demographics, productivity, tax policy, and labor laws. Nevertheless, monetary policy can sometimes temporarily stimulate real economic activity in the short run, albeit with considerable uncertainty as to the timing and magnitude, what economists call the “long and variable lag.” Any boost to the real economy from stimulative monetary policy will eventually fade away as prices rise and the purchasing power of money erodes in response to the policy. Even the temporary benefit can be mitigated, or completely negated, if inflation expectations rise in reaction to the monetary accommodation.

Nonetheless, the notion persists that activist monetary policy can help stabilize the macroeconomy against a wide array of shocks, such as a sharp rise in the price of oil or a sharp drop in the price of housing. In my view, monetary policy’s ability to neutralize the real economic consequences of such shocks is actually quite limited. Successfully implementing such an economic stabilization policy requires predicting the state of the economy more than a year in advance and anticipating the nature, timing, and likely impact of future shocks. The truth is that economists simply do not possess the knowledge to make such forecasts with the degree of precision that would be needed to offset the economic shocks. Attempts to stabilize the economy will, more likely than not, end up providing stimulus when none is needed, or vice versa. It also risks distorting price signals and thus resource allocations, adding to instability. So asking monetary policy to do what it cannot do with aggressive attempts at stabilization can actually increase economic instability rather than reduce it.

I know you're dying to know what footnote 2 is. It's easy: "There are some extreme cases. If the monetary authority engineers a hyperinflation, it is likely to have deleterious effects on output and employment."

Now what monetary authority would ever intentionally do such a thing?

TLP: Like Shooting Fish in a Pork Barrel

government waste
Anyone who pays even the slightest bit of attention to the governmental appropriations process can cite an example of wasteful spending or money that would have been spent better some other way. Too often, the reason the money went where it did is blatantly political.

Welcome to the Go Fish Georgia Education Center, a $14 million fishing museum in Perry, population 9,600 or so. Kids love it. As for others, well, let's hear this fish tale from the NYT:
But not all Georgia taxpayers are so thrilled. Even before the museum opened in October, “Go Fish” had become shorthand in state political circles for wasteful spending. Republicans and Democrats alike groaned over $1.6 million a year in bond payments and operating costs. And even supporters concede that the museum would never have gotten financed in 2007 if the legislature knew where the economy was headed.

“Hindsight is 20/20, but we should have seen this one coming,” said State Senator George Hooks, an Americus Democrat on the budget-writing Appropriations Committee.

With a large state deficit looming, Go Fish has become a cautionary tale about the long-term ramifications of prerecession decisions. The state must make bond payments for the museum for the next 16 years. Meanwhile, cuts are being proposed to the state’s college scholarship program, health care and the prison system.

“We simply can’t afford it — not in this economy,” said Debbie Dooley, the Georgia coordinator for the Tea Party Patriots, who likened the museum to Alaska’s infamous “Bridge to Nowhere.” “When you want to talk about wasteful spending in Georgia, the first thing everyone brings up is Go Fish.”

And then there is the controversy over the museum’s location — in the home county of its main supporter, former Gov. Sonny Perdue, a Republican who left office this month after two terms.
The big payoff was supposed to be tourism. Uh huh. A hundred miles from Atlanta and three hours from the coast. So far, though, it seems to be pretty much a destination for school field trips and popular with local folks like Michael Morris, who told the NYT he brings his 2-year-old son to the museum every weekend and can't wait til the stocked lake opens.
“I don’t like to fish, but I love to catch,” Mr. Morris said. “Who wants to go somewhere else for three hours and not catch anything? You come here, and you’re guaranteed to go home with a fish.”
And a $14 million hook in your ass.

TLP: That Must be Fake Italian for "Big Gulp" or "Giant Sucker"

starbucks trenta
Now that they've dropped "coffee" from the company name and the company name from the logo, there's no telling what's next at Starbucks. Well, we know one thing that's coming: bigger drinks.

Reuters foams this one up:
Starbucks Corp will roll out its biggest drink size yet — the 31-ounce "Trenta" — in all of its U.S. coffee shops by May 3, the company said on Sunday

The new size will be available only for iced coffee, iced tea and iced tea lemonade drinks in the United States. The Trenta is 7 ounces larger than Starbucks' "Venti" cup for iced drinks, which currently is its largest size on offer.

Drinks in the Trenta size will cost 50 cents more than similar Venti-sized iced drinks, the company said.

Seattle-based Starbucks tested the new size in several U.S. markets last year, saying it was responding to customer demand for larger cold beverages.

The Trenta size will debut in 14 states, including Virginia, Georgia, Florida, Texas, Hawaii and Arizona, on January 18 and in California on February 1.
Hey, it is January 18! Those of you demanding larger cold drinks in 14 lucky states, you can line up today. Starbucks is "responding" to you. Everyone else, except you California loners, will have to make do with smaller cold drinks until May.

You have to figure that the take on the Trenta drinks will far exceed whatever the extra cost is for the bigger size, whatever the fuck they say about "customer demand" for more. Now, I'm not one to say no to more, but at some point, the drinks at Starbucks will get so big and so caffeinated that no one will be able to finish one without taking a leak first.

Former Dallas Fed President Bob McTeer on Magic Fed Un-Insolvency


Two things. OK three. First, I am wont to point out that the correct word is "Fedbashers" and I should know because I'm the pied piper of Fed-hating, Fedbashing assholes and practically invented the word, at least in the single, 10 letter form you see today. Just like I coined "Zimbabwe Ben" with the help of my fellow Fedbasher and mentor Skeptical CPA (with a honorable mention to WC Varones for encouraging us). So let's get that straight.

Second, I commend Bob for his site redesign, welcome to the 21st Century in web design, buddy.

Third, what the fuck is this shit?

Bob McTeer via his NCPA Economic Policy Blog:

As usual, serial Fed bashers are stretching to find ways to criticize the Fed. This time, the criticism is directed at the fiscal windfall which is a by-product of its monetary policy. One such basher, a former Fed official who should know better, said on Cable TV that the Fed was broke or near broke because a rise in interest rates could easily wipe out the Fed’s capital if its assets were marked to market, which should be done in his opinion.

First, there is no need for the Fed to mark to market since its assets are not held for trading and can easily be held to maturity or recovery if necessary. Second, the Fed’s liabilities are mainly the required reserves of the banking system not subjecting to withdrawal except as banking assets shrink. Fed liabilities are not hot money. Third, the Fed’s capital is required to be held by member banks and is subject to calls that would double its size if necessary. In other words, the Federal Reserve and other central banks are unique institutions and the usual rules and ratios don’t apply.

Regular banks, to some degree, still “borrow short and lend long.” They are vulnerable to losing deposits and faster than they can liquidate assets; so their capital is at risk. The deposit liabilities of Federal Reserve Banks, however, are the reserve deposits that banks are required to maintain at the Fed as a percentage of their own deposit liabilities. The excess reserve component has risen in the past two years, but mostly they are required reserves. The Fed’s ability now to pay interest on reserves, including excess reserves, gives it a tool, if needed, to incent even excess reserves to remain. In other words, those who hold the Fed’s liabilities are compelled to do so.

Did a former Dirty Fed asshat just admit the Fed can't possibly be insolvent because they just make it all up anyway? I think he did.

But what do I know, I'm just a Fedbasher stretching to find ways to criticize the Fed. I hate to break this to Bob and anyone else who might wonder why we don't seem to have anything better to do but it really isn't much of a stretch, the Fed writes most of the criticism themselves.

Here's what I don't get. Bob explains Fed "profit" (a.k.a. "income returned to Treasury") like this:

The Board of Governors recently announced a record $78.4 billion of Reserve bank earnings paid to the Treasury (and taxpayers) in 2010, up from a record $47.4 billion in 2009. These record earnings come from the growth in assets related to recent Fed policy. To the extent that outstanding Treasury debt is purchased by the Fed, the burden of interest payments on the public debt is reduced almost proportionally.

But if Fed "profit" also consists of interest payments paid by the Treasury on existing debt the Fed owns, why not just call it a wash instead of pretending like it is profit? Not to mention the fact that this "profit" is unaudited and when it is audited, it's done so using the very Fed financial accounting manual that - you guessed it! - the Fed itself comes up with. What about this isn't masturbatory?

My left hand is getting sore just reading about this sideways jerking off, Christ.

The Fed is insolvent! Deal.

San Francisco Sends Her New Mayor to DC to Beg For Money the Government Doesn't Have

pic credit: Married to the Sea


If trying to plead their case to our broke federal government doesn't work, he'll also be hanging out with the Chinese, maybe they have some money San Francisco can borrow.

SF Gate:

San Francisco Mayor Ed Lee will make his first official trip as the head of city government when he flies to Washington, D.C., on Wednesday for the U.S. Conference of Mayors. Lee is also to attend a state dinner for Chinese President Hu Jintao and meetings with federal officials such as House Minority Leader Nancy Pelosi, D-San Francisco.

"This is a short but important trip to solidify personal relationships and represent San Francisco's interest in an era of declining federal resources," mayoral spokesman Tony Winnicker said. "We benefited from significant federal stimulus dollars in recent years, and those are gone; so directly advocating for the city and key federal support will pay dividends."

You knew this whole terrorizing citizens using the Parking Gestapo budget plan wasn't going to work forever...

The ECB Can Stop Buying Debt If the Eurozone's Bailout Slush Fund Is Allowed to Buy It Instead




Filed under: incredible things central bankers actually say.

Bloomberg:

European Central Bank council member Athanasios Orphanides said the bank may be able to stop buying government bonds if Europe’s rescue fund is empowered to purchase debt.

The ECB initiated its bond program “to address market dysfunction that hampered the monetary transmission mechanism,” Orphanides said in a Jan. 14 interview in Frankfurt, a day after ECB policy makers met. If the European Financial Stability Facility “were to buy government bonds, and that improved the functioning of the monetary policy transmission mechanism, that might render some of the ECB’s non-standard measures no longer necessary,” he said.

If the European Financial Stability Facility a.k.a. Massive European Bailout Slush Fund is already allowed to issue debt, why should it also be allowed to buy it? Fuck it, why don't we take this all the way and let it both issue AND buy its own debt? That's what we do here in America and it seems to be working just fine.

And you wonder why Germany is pissed, I'd be pissed too.