Saturday, March 30, 2013

Giving Credit Where Credit Is Due

My previous post on the reopening of banks in Cyprus and the capital control rules depended a great deal on the reporting of Liz Alderman of the New York Times.

Thursday, March 28, 2013

Cyprus Lesson: Put Your Money In Your Mattress for the Good of the Country

The Troika (the European Commission, the ECB and the IMF) have made a sweeping power grab in Cyprus.  In exchange for a paltry bailout, Cyprus gave up its rights not only to negotiate its own affairs but to have free flow of capital.

Some of the capital controls imposed:

  • Electronic transfer of funds from Cyprus to other countries is prohibited
  • An individual cannot take more than 3000 euros in cash outside the country
  • Credit and debit withdrawals are limited to 5000 euros a month
  • Banks will not cash checks; they will only accept deposits
  • Bank clients will not be able to withdraw from fixed-term deposits before their maturity

The ECB did its part.  It sent an airplane filled with 1.5 billion euros in a cargo container made of gold (only kidding about the gold—can’t let the Cypriots get ahead of themselves).

It’s estimated despite these “controls” some 10% of Cyprus’s 64 billion euros on deposit will be withdrawn today when the banks reopen.

The question I have is: how does this power/money grab improve the Cyprus situation?  Oh, that’s right.  It doesn’t.  Isn’t the point simply to put Troika managers in charge of all the Eurozone nation-states?

Thousands of employees will lose their jobs at Laiki Bank, the country’s 2nd largest bank.  Businesses have not been able to pay their employees.  In a country dependent on imports, importers haven’t been able to pay their bills, raising the spectre of shortages and higher prices.

Under European Union treaties, restricting the free movement of capital is forbidden.  Critics say that what is happening in Cyprus shows that union rules will be flouted when the IMF (International Monetary Fund, the ECB (European Central Bank) and the EU (European Union)-THE TROIKA—leaders find it convenient to do so.

There is no need to fight bloody wars for treasure.  These are bloodless coups.  Where will it end?

Sunday, March 24, 2013

Mortgage Giants Gouge the Taxpayers With No End in Sight

In Gretchen Morgenson's article in today's New York Times she dissects how much the government owned mortgage insurers Fannie Mae and Freddie Mac drain the tax-payer with no hope of recouping the money.  Because the private mortgage market won't step in, Fannie and Freddie insure mortgages up to $417,000.  Any monies they make go directly to the Treasury, not to taxpayers.

And they're still in the red costing taxpayers hundreds of billions of dollars:

Last fall, the regulator charged with overseeing Fannie and Freddie estimated that the taxpayer bill for the companies could be $200 billion by the end of 2015.
 The chief executives who ran the companies into the ground made huge amounts of money.  For instance, Franklin Raines, former head of Fannie Mae, was paid $90 million from 1998-2004.  He still is on the taxpayer dole after replacement.  Not only does the taxpayer guarantee retiree pensions, he/she also pays their legal bills:

[F]rom September 2008 through 2012, taxpayers also spent $114 million for legal bills racked up by former executives and directors testifying in lawsuits relating to the accounting scandals or financial crisis inquiries.
If this money was taken out of these entities and returned to the taxpayer, that amount alone could stimulate the economy further.

Saturday, March 16, 2013

Cowardly New World: Nameless, Faceless II

To live desiring to be a robot or immortal through a machine is the sign of a death culture.  Witness The Singularity.  Or Ridley Scott’s Prometheus.  Why has the technology we so prize made us inhuman?

What kind of society is it when a human being is single-mindedly bent on becoming inhuman?  If you see the robot as perfect, then humanity in its organic messiness is the opposite.

If you stare at the abyss for too long, it stares right back at you (paraphrase).  You are a slave to the robot, don’t you see?  The robot is the master if that’s what you desire above all else.