If you are the CEO of a major global bank and you have to announce a $2.0 billion trading loss, you will no doubt feel that the shareholders, regulators, and reporters are all against you. But if you announce that the loss occurred in a portfolio that just six weeks earlier was the subject of criticism in the press, and which you described as nothing more than “a tempest in a teapot”, you are entitled to feel that the gods are against you.

The gods definitely have it in for Jaime Dimon, CEO of JP Morgan Chase, the legendary “fortress balance sheet” bank that prides itself on having avoided problems during the housing bust and credit crisis of 2007-2008. Someone inside the bank blew a large cannonball through the bank’s fortress walls, and it seems likely to have been “the Whale” of the credit derivatives market, JP Morgan’s Bruno Michel Iksil.

Ethan Zuckerman throws a cold bucket of reality onto some of the more idealistic notions re: information, interconnectivity, and ye olde series of tubes (aka, the panacea that wasn't):

A central paradox of this connected age is that while it’s easier than ever to share information and perspectives from different parts of the world, we may be encountering a narrower picture of the world than we did in less connected days. During the Vietnam War, television reporting from the frontlines involved transporting exposed film from Southeast Asia by air, then developing and editing it in the United States before broadcasting it days later. Now, an unfolding crisis such as the Japanese tsunami or Haitian earthquake can be reported in real time via satellite. Despite these lowered barriers, today’s American television news features less than half as many international stories as were broadcast in the 1970s.

The pace of print media reporting has accelerated sharply, with newspapers moving to a “digital first” strategy, publishing fresh information online as news breaks. While papers publish many more stories than they did 40 years ago (online and offline), Britain’s four major dailies publish on average 45 percent fewer international stories than they did in 1979.

Why worry about what’s covered in newspapers and television when it’s possible to read firsthand accounts from Syria or Sierra Leone? Research suggests that we rarely read such accounts. My studies of online news consumption show that 95 percent of the news consumed by American Internet users is published in the United States. By this metric, the United States is less parochial than many other nations, which consume even less news published in other countries. This locality effect crosses into social media as well. A recent study of Twitter, a tool used by 400 million people around the world, showed that we’re far more likely to follow people who are physically close to us than to follow someone outside our home country’s borders, or even a few states or provinces away. Thirty-nine percent of the relationships on Twitter involve someone following the tweets of a person in the same metropolitan area. In the Twitter hotbed of São Paulo, Brazil, more than 78 percent of the relationships are local. So much for the death of distance.

Alex Newman | March 30

New American - The statist rulers of the so-called “BRICS” countries — Brazil, Russia, India, China, and South Africa — have been subtly calling for an end to the U.S. dollar’s status as the world reserve currency for years. Now, they are making more moves to turn that rhetoric into reality, proposing a jointly controlled “development” bank and working to sideline America’s already-troubled Federal Reserve Notes in trade by relying more heavily on their own fiat currencies.

William Engdahl punished an excellent analysis of the Greek debt crisis, oil and gas reserves emerging near the battered nation, and the leverage that the US and EU used to buy Greek government owned energy companies on the cheap, just before they strike it rich. The United States government is u to the hips in this. Hillary Clinton's ambassador for Eurasian energy, Richard Morningstar, is all for the privatization deal and husband Bill has even schmoozed for Noble Energy for Mediterranean oil deals (in Israel).

Call me cynical (or realistic) but it sounds like a Money Party mega swindle: Goldman sells Greece paper it knows will tank; the crisis emerges; normal IMF garbage, er, doctrine is offered - privatize. Clinton and the Germans weigh in and Greece puts up its gas company for nothing when it's looking at at a $300 bil take for oil and gas revenues over time from the government owned companies.

There's just one problem if this or a variation of this scenario is true. Everything involving Greece has been fraudulent. The risk factor for the firms acquiring Greek government assets is an unraveling of the plot. But, hey, who cares. It's quarterly bonus time and if someone challenges them, they'll just bring those making the charges some democracy Libyan style.

"ATHENS – Greece Wednesday invited bids for state-owned gas company DEPA and natural gas grid operator DESFA, moving ahead with a long-awaited privatization program aimed at raising EUR19 billion by 2015 to aid in addressing its huge debt crisis." February 29

From the Engdahl article: "In December 2010, as it seemed the Greek crisis might still be resolved without the by-now huge bailouts or privatizations, Greece’s Energy Ministry formed a special group of experts to research the prospects for oil and gas in Greek waters. Greece’s Energean Oil & Gas began increased investment into drilling in the offshore waters after a successful smaller oil discovery in 2009. Major geological surveys were made. Preliminary estimates now are that total offshore oil in Greek waters exceeds 22 billion barrels in the Ionian Sea off western Greece and some 4 billion barrels in the northern Aegean Sea. [1] Link

On the face of it, this seems like a particularly silly story, unless you're the parent or friend of one of the dead girls:

Time travel TV series have come under fire since two schoolgirls in East China's Fujian province killed themselves on Thursday after leaving notes saying the suicides could help them travel back to ancient times.

The two girls, Xiao Mei and Xiao Hua (not their real names), were fifth-grade classmates at a primary school in Zhangpu county, Zhangzhou.

On Thursday afternoon, Xiao Hua realized she lost the remote control for a rolling door at her house. She was worried and told her friend Xiao Mei.

The time-honored advice brokers have always given their investment clients is to “diversify, diversify, diversify!” It’s the basic law of investment – Investment 101 you might say – never put all your eggs in one basket. Which is why it is so odd to see the CEO of one of the largest investment funds in the world –BlackRock – insist that his customers ignore this basic rule and invest everything they have in equities.

CEO Laurence D. Fink says that we are living in a “New World” where it is impossible to earn a decent return on traditional bonds or other conservative investments. He’s right about that; Fed Chairman Ben Bernanke has made it clear he intends to keep interest rates at zero percent through at least the end of 2014. Maybe this New World is a welcome relief for borrowers, many of whom are desperate to reduce their debts, or at least the interest cost on their debts if they can refinance at lower rates.

The Wall Street Journal suggests that big banks should be broken up. Citing the inadequacy of the Volcker Rule in the Dodd-Frank bill now wending its way through Congress, the Journal states any real reform should include "a Congressional plan either for allowing large banks to fail or for breaking them up."

Horrors! Nationalizing banks? The Murdoch-owned Wall Street Journal?

More astounding: Jamie Dimon, the head of JP Morgan Chase Bank and an proud 1%er (he once claimed to feel safer in Lebanon than amongst the Occupy Wall Street members) is for raising his own taxes:

I came across this highly informative interview with Dr. Lacy Hunt of Hoisington Investment Management on Mish's blog: Global Economic Trend Analysis. He found it on another blog: johnmauldin.com, and the interviewer is financial journalist Kate Welling. A sample quote:

Kate Welling: I suppose all this means you expect a recession this year?

Dr. Lacy Hunt Well, consumer spending will slow this year very dramatically from a very weak
base. We had a decline in real disposable income in 2011. GDP rose, but GDP
measures spending, not prosperity. In 2011, as is often the case, when inflation rises,
households initially try to maintain their standard of living. So in the face of rising
inflation and trailing wages, which was the story in 2011, families resorted to
increased credit card usage or to drawing down their saving. But in addition to a
decline in real disposable income in 2011, we also saw a net decline in net worth
[lower chart below]. And a year-over-year decline in net worth has been associated
with the start of all the recessions since 1969.

We touch on many of the topics discussed in this interview, including in our recent conversations about Greece. It is well worth the time to go through all 29 pages of the interview.

http://www.johnmauldin.com/images/uploads/pdf/mwo021312.pdf

Traders in New York this morning were greeted with this happy headline from The Wall Street Journal:

US stock futures higher; buoyed by Greece

Yes indeed, the Dow Jones index is set to open at least 70 points higher because the Greek parliament approved the additional austerity measures demanded by the European Union, the European Central Bank, and the International Monetary Fund. In exchange for €130 billion in a second bailout by the “Troika”, as the three lending institutions are called, Greece will have to cut its minimum wage by 22% and the government will have to lay off an additional 150,000 workers. This is in a country that is in its fifth year of recession, with an official unemployment rate of 21%. Business has virtually collapsed, with many private sector companies on the verge of bankruptcy. The health system is so starved for funds that a bacteria resistant to all medicines is raging through hospitals, forcing the chronically ill to decide whether to even risk seeking professional care. Poverty is reaching extreme levels and is well-entrenched among what used to be the middle class. Children are sent to school so hungry that they are fainting in the classrooms. As of last night, the crowds that were storming through Athens and other large cities no longer were content to throw rocks at the police; Molotov cocktails were used to set at least forty buildings in Athens on fire. The police in Athens, facing crowds estimated from 80,000 to 100,000 people, were forced off Syntagma Square, and appeared to have run out of tear gas. Journalists described the business center of Athens as a war zone. The country is slipping into social disorder, if not anarchy. But stock markets in Europe were up today on the happy news that the Greek parliament approved the additional austerity measures.

The headline number from the Unemployment Report this morning showed 243,000 jobs were created, more than the highest estimated increase by any of the economists surveyed before the report was released (the average expected increase from the economist survey was 120,00 jobs). The unemployment rate fell to 8.3%, again lower than predicted, and certainly good news for President Obama. Job growth was nearly across the board – in retail, construction, manufacturing, business services, and the hotel and restaurant industry. You can believe all this if you want, or you can go into the details in the report for some interesting context.

As the years-long drought in Texas subsides, I feel this would be a good time to remind everyone that water is not only precious, but scarce.

Indeed, Africa is seeing some of the worst droughts in recorded history. Drought doesn't only affect humanity, afflicting us with thirst, famine, and war, but wildlife too. And while the famine in Somalia (not directly water-related, but...) has been declared "over", countries like Burkina Faso and Sierra Leone face dismal prospects for the near future.

. . . hippies have been proved right, but we will still get more austerity.

A long dense post, looking at the legacy of Edward Bernays, and the current state of the 'oppressed', using the crushing of the 'occupy' movement as a reference point.

An interesting read.

re-upping this, originally posted January 13. ~eds

I was telling someone earlier this week about my good friend Newt Gingrich. You didn’t know he was one of my friends? Neither did I, until I saw his television commercial attacking Mitt Romney for being a vulture capitalist. For at least five years, a lot of us in Leftist Blogoland have been decrying the equity extraction and asset stripping practices of people like Mitt Romney, the former CEO of Bain Capital. We’ve been joined in this crusade by writers with libertarian beliefs, and some of them, like Karl Denninger, are far more direct than we have ever been in calling a crime a crime, and demanding prison terms for the people who helped destroy America’s productive manufacturing base.

. . . so that 13 year-old Chinese pesants would only work half-day shifts manufacturing our gadgets. And yes, I have an iPhone. And yes, my conscience stings. An no, I probably won't do a fucking thing about it.

The world is running out of money. If money is credit, and credit relies on confidence, there is not enough confidence in the financial system to supply the world with the money it needs. Since the initial credit crisis struck in 2008, credit and money have been withdrawn from the system in such staggering amounts that international trade can no longer grow. The world’s central banks are playing a rear guard action by acting as lender of last resort to banks that no longer trust each other and have stopped lending in the interbank market. As liquidity flows out from the system, the rottenness that has corrupted the foundations of global finance is now exposed for all to see.

I was nine years old at the time. We were in school one morning when our teacher was called away. This was a very unusual occurrence. We sat quietly waiting, and when teacher returned, she was crying and shaking uncontrollably. All of us were worried and confused – teacher had never acted this way before. In fact we had never seen any emotion from her at all. “What has happened, teacher?”, someone called out. Sobbing, she replied – “Children, Great Teacher has died!”

It was as if you pushed a button in the room. Instantaneously all of us burst into tears, with many of us wailing “What is going to happen to us? Who is going to take care of us? How will we live?” It never occurred to any of us that our parents or some responsible adult would take care of us. From the moment we were aware of the outer world, we understood that all that was good, beautiful and intelligent in the world came from Great Teacher.

. . . inspired confidence fairy is working her miracles on Greece! What's next, Green Shoots?

. . . where the global markets are going look at copper.

Several years ago economist Brad DeLong noted that at some point in the future a transfer of wealth between rich and poor nations would commence, which would, among other things, increase incomes in the global "south" and flatten or reduce them in the "north." It made sense to me. And as this story from NPR's Morning Edition implies it's beginning in earnest now. Formerly plundered nations like Brazil and China among others, are going to loan the IMF money for Europe. Call it Montezuma's new revenge.

New Delhi | November 27

PTI - Under attack from the opposition and United Progressive Alliance (UPA) ally Trinamool Congress on allowing global retail chains in the Indian market, the government today launched a campaign to sell advantages of Foreign Direct Investment (FDI) in multi-brand retail.

In a full page advertisement in newspapers, the Commerce and Industry Ministry said FDI in multi-brand retail will help farmers, create more jobs and benefit consumers.

Financial markets rise and fall based on the perceived value of the products being sold. But there are occasions when market value is affected by the condition of the marketplace itself, and whether the infrastructure that supports the market is structurally sound. This is the situation investors are now facing. There is rottenness apparent in even the largest and most trusted markets, like the US Treasury market, and investors are beginning to question how safe their funds are, or whether the protection being bought is worth anything. Private money is nervous, or it is fleeing the markets altogether. When so many different markets are afflicted by the same creeping structural weakness, it is no surprise that the average investor begins to ask whether Financial Armageddon may be upon us.

New York | Nov 15

ABC News - Police wearing helmets and carrying shields have begun clearing Zuccotti Park in New York City's financial district, where protesters from the Occupy Wall Street movement have been camped since September.

"Liberty Square (Zuccotti Park), home of Occupy Wall Street for the past two months and birthplace of the 99 per cent movement that has spread across the country and around the world, is presently being evicted by a large police force," the demonstrators said in a statement.

The office of mayor Michael Bloomberg said the protesters should "temporarily leave" the park and remove their tents and tarps.financial system they argue mostly benefits corporations and the wealthy.

The New York Times reported that police told people in the park the city had determined that their continued occupation of the site posed an increasing health and fire safety hazard.

By Michael Collins

"The problems we are facing were not created by us, but we deign to shed light on them and so we are blamed for them. The truth is, every person at our protest is there because the system is broken." Samuel Rutledge, Open Newswire, Portland Indymedia

The fascist financiers of the Money Party are growing restless. Occupy Wall Street began with a call to action from the activist online group Anonymous in August. It was barely featured in the mainstream or alternate media. Instead of a small crowd that could easily be ignored then disbursed, fifty thousand citizens showed up at the headquarters for the world financial system, Wall Street. Despite the best efforts of Mayor Bloomberg and NYPD, the Occupy Wall Street continues. The message went out to the country and the world. Now, there are over 100 occupy events in Oakland, Kansas City, Washington, DC, and elsewhere. (Image: K. Kendall)

Occupy Portland began on October 6, 2011. It has maintained a steady presence in downtown Portland, a major West Coast center of commerce. The participants refuse to leave until the government addresses their grievances. Police scare tactics, planted provocateurs, and the elements are no barrier.

Stock markets around the world reacted with horror this week to the news that Greek Prime Minister George Papandreou has ordered that the terms of a proposed EU rescue package worth €130 billion should be voted on by the Greek people in a national referendum. The Nikkei, the German DAX index, the French CAC-40, and the Dow Jones Industrial index all ended the day down 2% or more. The euro took a pummeling on the foreign exchange markets.

Global leaders involved in the Greek rescue talks expressed shock and disappointment that the Greek government would throw into jeopardy the carefully-constructed rescue plans that required approval from all 17 EU governments. The White House press secretary, speaking on behalf of the President, urged Greece to accept the bailout terms as soon as possible. It was US Treasury Secretary Timothy Geithner who first recommended to the EU leadership that it significantly expand its bailout fund from €440 billion to as much as €2 trillion in order to calm global financial markets.

Now let’s step back a minute and consider how ludicrous this all is. The Greek Prime Minister proposes that the Greek people, who have borne the burden of one austerity package after another each time Greece has approached the EU for help, at long last get to have a say in these discussions. Politicians everywhere express dismay and surprise that any politician, especially one on the receiving end of the bailout talks, would even consider allowing the people to at long last have a vote in these decisions. Financial markets plummet on the news. Since when did democracy become the enemy of good governance in democratic countries?