Today’s Water Cooler: QE ending (?), 2014, Ferguson PD’s budget, surveillance and secret law, Silicon Valley’s sense of entitlement.
Recent Items
Wednesday, October 29, 2014
2:00PM Water Cooler 10/28/14
Private Equity Consultants Flounder Over Question About Abusive “Evergreen Fees” at CalPERS Board Meeting
If you want to understand why private equity general partners have gotten away for so long with what the SEC has come perilously close to calling outright embezzlement, along with other serious compliance abuses, you need look no further than the last CalPERS board meeting to get a clue.
Topics: Private equity, Regulations and regulators, Ridiculously obvious scams
Posted by Yves Smith at 8:11 am | 14 Comments »
LInks 10/29/14
Topics: Links
Posted by Yves Smith at 6:55 am | 85 Comments »
J.D. Alt: Have We Passed the Tipping Point of Biological Collapse?
Yves here. Readers regularly debate issues of growth, groaf, and sustainability. This post makes an urgent case that we are farther along toward collapse, based on our consumption of biological resources, than most official sources acknowledge.
Topics: Doomsday scenarios, Environment, Guest Post, Species loss
Posted by Yves Smith at 6:31 am | 74 Comments »
SEC Commissioner Kara Stein Fighting for Tougher Bank Sanctions, Stymies Bank of America Settlement
One of the things that continue to be a source of anger in the American public is the way that banks were rescued en masse without the perps, the managers and producers in the businesses that produced toxic product facing much if anything in the way of consequences. Another is that the banks pay fines that are inadequate relative to the amount of damage that they did.
SEC commissioner Kara Stein has been using her post as a surprisingly effective bully pulpit to pressure the agency and other regulators into upping their game. It’s unusual for an SEC commissioner to play that role; the post is typically a runway for becoming either a lobbyist or a director on financial services company boards. Even more rare is that Stein is regularly crossing swords with SEC chairman Mary Jo White, who is taking a much more industry-friendly line than she promised at the time of her confirmation. It’s virtually never done to have a commissioner from the same party buck the chairman.
Topics: Banana republic, Hedge funds, Investment management, Legal, Private equity, Regulations and regulators
Posted by Yves Smith at 3:53 am | 6 Comments »
Matt Taibbi Leaving First Look
Matt Taibbi has been missed. He went into a writing black hole when he decamped from Rolling Stone to Pierre Omidyar’s wannabe media empire, First Look in February. But when the billionaire’s news venture was launched, the press was sloppy in reporting on Omidyar’s financial commitment. It was widely depicted as a $250 million venture, when the tech titan never committed anywhere near that amount of funding. Admittedly, it takes time to get a new publication going, but the lack of any apparent progress was becoming noteworthy. From the outside, it looked like the project might be going pear-shaped, and it appears it did.
Topics: Media watch
Posted by Yves Smith at 2:37 am | 43 Comments »
Chris Hedges and Sheldon Wolin on Inverted Totalitarianism as a Threat to Democracy
Yves here. We’ve been featuring what we consider to be standout segments in an important Real News Network series, an extended discussion between Chris Hedges and Sheldon Wolin on capitalism and democracy. This offering focuses on what Wolin calls “inverted totalirianism,” or how corporations and government are working together to keep the general public in thrall. Wolin discusses how propaganda and the suppression of critical thinking serve to a promote pro-growth, pro-business ideology which sees democracy as dispensable, and potentially an obstacle to what they consider to be progress. They also discuss how America is governed by two pro-corproate parties and how nay “popular” as in populist, candidate gets stomped on.
Topics: Banana republic, Free markets and their discontents, Politics, Social policy, Social values
Posted by Yves Smith at 1:38 am | 29 Comments »
2:00PM Water Cooler 10/28/14
Today’s Water Cooler: QE to end? Case-Shiller and durable goods, Hillary v. Jebbie in 2016, Ferguson, Hong Kong, and wild swine.
Topics: Guest Post, Water Cooler
Posted by Lambert Strether at 1:58 pm | 57 Comments »
Tech Underbelly: Indentured Servitude and Bonded Labor in the US
A labor collusion pact with the aim of suppressing pay levels among Apple, Google, Microsoft, Pixar, and others, demonstrated that the idea that Silicon Valley plays fairly is an illusion. But even more unsavory abuses occur further down the food chain. H1-B visa workers, who are generally held in low esteem in the US since they compete with Americans, take a risk when they sign up with labor brokers, even seemingly legitimate ones like Tata Consultancy, part of the giant Tata Group in India.
As the NBC video below, part of a joint investigation with the Center for Investigative Reporting, explains, the most abusive recruiters are body shops, who abuse the H1-B program by bringing in technology graduates when the firm in fact has no job lined up. The Indian immigrants are hostage, kept in guest houses where they are told not to go outside until they find work.
Topics: Legal, Regulations and regulators, Ridiculously obvious scams, Technology and innovation, The destruction of the middle class
Posted by Yves Smith at 9:55 am | 36 Comments »
Links 10/28/14
Topics: Links
Posted by Yves Smith at 6:55 am | 116 Comments »
Exploding Wealth Inequality in the United States
Yves here. This is a particularly important post on the state of inequality since Emanuel Saez, working with Thomas Piketty, was for over a decade tracking the rise in inequality in the US, particularly the way that the top 1% and 0.1% were pulling away from the rest of the population. Gabriel Zucman has made a recent important contribution to the analysis of wealth disparity by sizing the impact on global figures of the funds stashed in tax havens. A full 6% goes unrecorded, which by his estimates is enough to make the US less of a net debtor, Europe a net creditor, and of course, the rich in those regions even richer.
Saez and Zucman are particularly concerned that this level of wealth inequality is on its way to becoming entrenched.
Topics: Guest Post, Income disparity, The destruction of the middle class
Posted by Yves Smith at 5:42 am | 76 Comments »
Yanis Varoufakis: Why the European Bank Stress Tests Have to be Phony
Yves here. I have to admit I never focused on what turns out is a blindingly obviously reason why the European bank stress tests are an exercise in optics. Even though this website derided the US stress tests as a cheerleading exercise, and earlier criticized the Administration for failing nationalize Citigroup as FDIC chairman Sheila Bair sought to do, the US authorities were in a position to Do Something about sick banks. Consider the European case (note I consider Yanis to be too charitable toward US bank regulators, but keep in mind that he’s comparing them to his home-grown version). And then you have the additional problem, which was widely discussed in 2009 to 2011 or so, that the apparent insolvency of states was the result of and bound up with the overindebtedness of European nations. Perversely, tha is almost never put front and center these days when the topic of seriously unwell European banks comes up.
Topics: Banana republic, Banking industry, Doomsday scenarios, Dubious statistics, Europe, Guest Post, Regulations and regulators
Posted by Yves Smith at 3:52 am | 4 Comments »
Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers
Yves here. We’ve discussed the fracking bubble intermittently, particularly that many of the valuations ascribed to shale gas wells don’t reflect how short their production lives really are. This report by Steve Horn of DeSmogBlog focuses on a related result from the same set of unrealistically high production assumptions: that overall fracking output forecasts are likely to prove to be high.
Topics: Dubious statistics, Energy markets, Guest Post
Posted by Yves Smith at 2:10 am | 15 Comments »
Bob Goodwin: ‘Drug’ is a Teetering Social Concept
Yves here. Bob Goodwin discusses how the idea of legal versus illegal drugs has become a more obviously porous barrier than it was in his youth, even given the differences in how those differences are enforced across income/racial groups.
One thing that Bob may have deemed to be so obvious as to not be worth discussing is the casualness of prescribing what amount to performance-enhancing drugs to children, such as Ritalin and Adderall, along with troublingly frequent dispensing of antidepressants. Studies on safety are all short term; the idea of messing with the chemistry of developing brains, save in circumstances when the child is in acute distress, is heinous. Yet in parallel, kids have wised up and use various prescription stimulants, most notably Adderall, as study and test aids. I recall reading a New Yorker article on it at least a decade and maybe even more than a dozen years ago, on how utterly routine it was for kids in elite private schools to get these drugs prescribed, or filch their parents’ supplies, and trade them among their peers. My understanding is that the use of these drugs during exams, and for some students, on an ongoing basis, is routine.
Topics: Guest Post, Legal, Regulations and regulators, Social values
Posted by Yves Smith at 1:00 am | 47 Comments »
2:00PM Water Cooler 10/27/14
Today’s Water Cooler: 2014 mid-terms suspense builds, Oh, Canada…, Hong Kong, ObamaCare, a new essay from Isaac Asimov. Also evil clowns.
Topics: Water Cooler
Posted by Lambert Strether at 1:58 pm | 32 Comments »