The NY Federal Reserve is supposed to monitor big banks and prevent another financial crisis. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she bought a tiny recorder, and started secretly taping. This American Life
reports. [more inside]
Brave and afraid and heading down the longest road [Part 1/3]
The cars made a wet rushing sound as they swept past him, close enough that he could feel their motion in the air. He was certain if he tried, he could reach out and touch them. Mike Bourne stretched out both arms, fingertips extended. He was walking in the middle of the busy street. The yellow line on the pavement told him where to go. He thought of it as the yellow brick road. It would take him somewhere, he knew, somewhere beautiful. [more inside]
The Spanish housing boom goes bust.
"Some 65km from Madrid, in the quintessentially Spanish heart of a country riven by competing regional identities, Valdeluz – the notorious ciudad fantasma (ghost town) of the crisis – was conceived at the height of what is sometimes called Spain’s economic miracle. In a Catholic nation, whose faith has declined substantially during its three decades of democracy, there is an increasing reluctance to believe in miracles of any kind."
"When our donors met the actual people they were helping they often didn’t like them. During our Secret Santa drive, volunteers sometimes refused to drop gifts at houses with TVs inside. They got angry when clients had cell phones or in some other way didn’t match their expectations. Other times, the donations we got were too disgusting to pass along—soup cans that bulged with botulism and diapers so dry rotted they crumbled in our hands. One Thanksgiving, a board member called from the parking lot, requesting help carrying a frozen turkey from her trunk to our office. “Can you find a deserving family?” she asked. I lugged the bird up three flights of stairs. Somewhere near the top, I noticed the expiration date. It was seventeen years old." Anya Groner talks about working for Hudson Outreach in up-state New York and the sobering, chilling effect it had on her idealism.
magazine looks into Toronto police shootings of the mentally ill
and the Memphis Crisis Intervention Team model:
Memphis, one-quarter of Toronto’s size but with a homicide rate nine times higher, has developed a progressive approach to de-escalate high-tension confrontations, improve police attitudes toward those suffering from mental illness, and divert them from the criminal justice system. The Memphis Crisis Intervention Team model centres on dispatching specially trained beat cops to emergency calls as quickly as possible, and giving them the authority to take charge of the scene. That approach triggered a revolution in policing that has now been emulated in 2,700 jurisdictions across the US, including large urban centres such as Chicago and Los Angeles. A handful of Canadian cities, among them Hamilton and Vancouver, have also adopted the CIT model. While the TPS has not, senior officials claim that all of its 5,500 uniformed officers receive some training in how to handle mental illness, which makes the recent proliferation of shootings that much more perplexing.
"The only way to end Haiti’s cholera epidemic is to keep infected waste out of food and water. A subterranean network of pipes, pumping stations, and waste-treatment plants would be the ideal solution, but Haiti’s successive governments have had too little money, power, or will to build massive public works on their own.... International donors have been little help: in one case, the U.S. government, to protest the way an election was conducted, withheld funds to build water and sanitation infrastructure in northern Haiti for more than ten years
. From 1990 to 2008, the proportion of Haitians with access to basic sanitation decreased from 26% to 17%. Cholera broke out in 2010. Four years into the epidemic, a trip to the bathroom for most Haitians still means looking for an open field or wading into a public canal at dawn. Those who can afford to, dig cesspools under outhouses. When the cesspools get full, it’s time to call a man like Leon.
" [more inside]
U.S. District Court Judge Jed Rakoff on "Why Have No High Level Executives Been Prosecuted In Connection With The Financial Crisis?"
Judge Rakoff, a federal trial judge who sits in the Southern District of New York, writes: "[M]y point is that the Department of Justice has never taken the position that all the top executives involved in the events leading up to the financial crisis were innocent, but rather has offered one or another excuse for not criminally prosecuting them – excuses that, on inspection, appear unconvincing."
This is the majuscule axiom — the maxiom, let us say — for revolution. Revolution is a total thought, a thought of the totality; they are necessarily entangled. Reform, repair, regime change, recuperation: all of these are the politics of the partial, of isolating specific problems as if they admitted of independent solution. Ezra Pound said that the epic is a poem that contains history. What matter that we might amend the last word, a minor amendment at that, a swapping out of inseparable concepts? The epic is the poem that contains totality. [more inside]
A history of CLiNT
, Mark Millar’s
attempt at launching a newsstand anthology comic, which ended this month
despite its Lad Mag sensibility, celebrity creators such as Jonathan Ross
and Frankie Boyle, and a recent reboot
. The comic magazine joins the likes of Revolver
in the great newsagents in the sky, though like many of those other short lived UK magazines it has spawned many spin off successes, not least the controversial Kick Ass II, which is now a movie minus its rape scene
After Forbes magazine declared Dayton, OH
, one of America's " fastest dying cities,
" a group of local media makers
created Reinvention Stories
. The interactive film/multimedia experience rolls out this month in three acts.
The Real Cuban Missile Crisis
: Everything you think you know about those 13 days is wrong.
"We decided to go on an adventure through the financial statements of one bank
[Wells Fargo], to explore exactly what they do and do not show, and to gauge whether it is possible to make informed judgments about the risks the bank may be carrying. We chose a bank that is thought to be a conservative financial institution, and an exemplar of what a large modern bank should be."
The Absurd Quest for Euro Crisis Images: The Greeks aren't the only ones sick of the euro crisis. Photographers are reaching the end of their tether too, struggling to shoot images of euro coins in various states of distress to illustrate the story. Though some of the photos are absurd, they still get published -- because news outlets are equally desperate. Gallery
The complete guide to America's jobs crisis and the failure of monetary policy using animated gifs
"Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks." [Five years on, the Great Recession is turning into a life sentence
Financial Markets, Politics and the New Reality
: "Louis M. Bacon is the head of Moore Capital Management, one of the largest and most influential hedge funds in the world. Last week, he announced that he was returning one quarter of his largest fund, about $2 billion, to his investors, [saying] it is impossible to make money when there is heavy political involvement, because political involvement introduces unpredictability in the market… Adam Smith and David Ricardo, who modern investors so admire, [never] used the term "economics" by itself, but only in conjunction with politics; they called it political economy… The investors' problem is that they mistake the period between 1991 and 2008 as the norm and keep waiting for it to return."
The Las Vegas Sands Corporation
, headed by multibillionaire and notorious supporter
of right-wing causes Sheldon Adelson
, is considering building an enormous gambling resort in crisis-stricken Spain: Euro Vegas [more inside]
The Costs of Capitalism's Crisis: Who Will Pay?
Economics professor Richard Wolff gives some context to the latest economic crisis and suggests a solution to prevent this from happening again.
Harvard’s annual cost for journals from these providers now approaches $3.75M. In 2010, the comparable amount accounted for more than 20% of all periodical subscription costs and just under 10% of all collection costs for everything the Library acquires. Some journals cost as much as $40,000 per year, others in the tens of thousands. Prices for online content from two providers have increased by about 145% over the past six years, which far exceeds not only the consumer price index, but also the higher education and the library price indices. These journals therefore claim an ever-increasing share of our overall collection budget. Even though scholarly output continues to grow and publishing can be expensive, profit margins of 35% and more suggest that the prices we must pay do not solely result from an increasing supply of new articles.
Harvard's Faculty Advisory Council asks Harvard's faculty to change how they publish
. [more inside]
Writing in the New York Review of Books
, Nobel laureate Steven Weinberg
discusses his reason for suspecting that advances in particle physics and astronomy will not just slow down in the coming years, but cease entirely.
"I call it the destruction of shared prosperity hypothesis. ... [A]round 1980 the U.S. adopted a fundamentally flawed economic paradigm ... that abandoned full employment and severed the link between wages and productivity growth. ... Financial deregulation, regulatory forbearance, financial innovation, financial mania, and plain vanilla financial fraud kept the economy going by making ever more credit available, However, as the economy cannibalized itself by undercutting income distribution and accumulating debt, it needed ever larger speculative bubbles to grow. The house price bubble was simply the last and biggest bubble and was effectively the only way around the stagnation that would otherwise have developed in 2001." - an interview
with Thomas Palley
on the origins and prognosis for the crisis
Emotions ran high
(video) as city and state leaders met to work out a deal
to address Detroit's looming budget crisis
. The threat of state imposition of an emergency financial manager
has some residents
fearful of the ulterior motives
of state officials: [more inside]
Mired in debt, the small town of Rasquera, in Spain, is considering an unorthodox source of funding: growing marijuana
. [more inside]
Andrew Lo reviews 21 books on the financial crisis.
In a 41-page paper, Andrew Lo, from the MIT Sloan School of Management, does a comparative review of 21 books about the financial crisis - some from academics and some from journalists and Secretary Paulson, looking for common threads. Tyler Cowen comments
As the former head of Deutsche Bank, Hilmar Kopper
was once the most powerful banker in Germany. In an interview with SPIEGEL
, the 76-year-old takes stock of his career and the current crisis shaking Europe. The three main constants he has seen in the world, he says, are "money, avarice and greed."
Nobody was surprised when Italy Prime Minister Mario Monti presented a draconian "save Italy" emergency Budget decree
on Sunday - that's what he had been nominated to do. But the full impact of the measures, especially hitting pensioners, became stunningly clear when Welfare Minister Elsa Fornero, invited by Monti to present her ministry's section of the decree to the press and TV, broke down
(SLYT) and was unable to bring out the word "sacrifice".
"The political elite have actually no interest in explaining to the people that important decisions are made in Strasbourg; they are only afraid of losing their own power." Jürgen Habermas on the crisis of the European project and how it could be overcome
A Planetary Crisis Is A Terrible Thing to Waste There are striking similarities between the current economic and ecological crises — both involve indulgent over-consumption and a failure to consider the impacts on future generations. But it’s not too late to look to new economic and environmental models and to dramatically change course.
opines Der Spiegel environmental journalist, Christian Schwägerl
"24 Hours of Reality
will focus the world’s attention on the full truth, scope, scale and impact of the climate crisis. To remove the doubt. Reveal the deniers. And catalyze urgency around an issue that affects every one of us.” — Al Gore on the worldwide event to broadcast the reality of the climate crisis. The Climate Reality Project will live stream starting at 7pm CT on September 14. [more inside]
Why Africa is leaving Europe behind: Africans are relishing something of a reversal in roles. The former colonial powers in Europe are wrestling with debt crises, austerity budgets, rising unemployment and social turmoil. By contrast much of sub-Saharan Africa can point to robust growth, better balanced books and rising capital inflows. There is an opportunity in this novel scenario: for Africa to assert itself on the global stage, and for European countries to take advantage of their historic footprint in Africa by stimulating commercial expansion to their south. But it is far from clear either side will grasp it. Recently.
On July 9, the Japanese public broadcaster NHK aired a documentary on the earliest days of the Fukushima Daiichi nuclear crisis. There appears to be precisely one place on the internet where it can currently be viewed: here
The World Development Movement (WDM)
published a report six months ago on How Banking Speculation Causes Food Crises
. It describes why the deregulation of commodity derivatives, specifically food commodity derivatives, has led to a state of global instability in the price of food
. Political instability in the Middle East is not helping
either. The European Commission is considering methods to introduce regulation
in commodity derivative markets [Strategy Outline PDF]
. In the meantime, speculators gonna speculate
. [more inside]
Interview with Gary Gorton
) - Fascinating look at private institutional bank money
creation (really) and subsequent run on the shadow banking system that hearkens back to the late-19th century banking crises
with securitization playing the role of checking before the advent of deposit insurance. "Gorton is a lucid narrator of a complex tale
." (via via
Right Wing Radio Duck "Donald's life is turned upside-down by the current economic crisis and he finds himself unemployed and falling behind on his house payments. As his frustration turns into despair Donald discovers a seemingly sympathetic voice coming from his radio named Glenn Beck. "
Wajahat Ali, a solo practitioner from California, takes on Wells Fargo in an attempt to get his clients' home loan modified. Lots of ball dropping and passing of the buck ensues. He describes
the Kafka-esque nature of the experience.
"It's the ultimate Gordian knot ... There is no other system in the world as complex as the Delta.
" [more inside]
Betting Against the American Dream
. In 2005, just as Wall Street started to get cold feet about the housing market, the Magnetar
hedge fund helped create a new wave of billion-dollar mortgage-backed securities, pushed bankers to include riskier sub-prime mortgages, and then shorted the securities, making millions when the bubble finally burst. Traders on both sides of the deals pocketed enormous fees even if their banks went under when the securities failed. Pulitzer Prize-winning ProPublica
, This American Life
, and NPR's Planet Money
track down some of the big winners in the housing/financial crisis. No time to read or listen? It seemed so much like a scheme from The Producers
, they even recorded a show tune to explain it all