The Big Picture

Tensions Between U.S., Israeli, British and Iranian Warships
Plutonomy
The Venn of Paul
George Mason University Green Machine Marching Band Rages Against the Machine
Does Lender Processing Services Deserve the Corporate Death Penalty?
Adaptive Markets and the New World Order
Cigar Aficionado: Best Cigars of 2011

Tensions Between U.S., Israeli, British and Iranian Warships

Posted: 08 Jan 2012 10:30 PM PST

American, British, Israeli and Iranian Warships Sailing Towards Confrontation

The U.S. and Israel are conducting their largest-ever joint warfare exercises near Iran. And see this.

England is sending its most advanced ship – the HMS Daring – to the region.

Only days after finishing its last wargames in the Strait of Hormuz, Iran has announced another set of wargames in February.

What Could Go Wrong?

Looking behind the headlines:

The people pushing for war against Iran are the same neocons who pushed for war against Iraq. See this and this.

China and Russia have warned that attacking Iran could lead to World War III.

War against Iran was planned at least 20 years ago.

The U.S. has been claiming for more than 30 years that Iran was on the verge of nuclear capability (and the U.S. apparently helped fund the Iranian nuclear program.)

The sinking of the USS Maine, the Gulf of Tonkin incident, and other justifications for past wars have turned out to be false. Similarly, a number of high-level intelligence officials and politicians have said that the U.S. would fake a provocation and blame it on Iran as a casus belli. For example, Ron Paul has warned of a "Gulf of Tonkin type incident" in Iran, and Pulitzer-prize winning investigative reporter Seymour Hersh says many ideas have been proposed for provoking a war, including building boats that look like Iranian boats, and then putting Navy Seals on them to "start a shoot-up".

The CIA admits that it hired Iranians in the 1950′s to pose as Communists and stage bombings in Iran in order to turn the country against its democratically-elected prime minister. Pulitzer-prize winning investigative reporter Seymour Hersh says that the Bush administration (and especially Dick Cheney) helped to fund terrorist groups within Iran (see confirming articles here and here). And the New York Times, Washington Post and others are reporting, former New York City Mayor Rudy Giuliani, former Homeland Security Secretary Tom Ridge, former national security adviser Fran Townsend and former Attorney General Michael Mukasey – who all said that the terrorists were going to get us if we didn't jettison the liberties granted under the Bill of Rights – are now supporting terrorists in Iran.

Endless war is bankrupting America and harming our national security.

The war against Iran has already begun. See this, this and this.

What could possibly go wrong?

Plutonomy

Posted: 08 Jan 2012 03:30 PM PST

Exactly 5 years ago today, the WSJ published this post (Plutonomics) about a rather fascinating study on wealth inequality.

It was written by of all folks, Citigroup global strategist Ajay Kapur. In 2005, Kapur’s research team “came up with the term ‘Plutonomy’ in 2005 to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.”

What are the basic characteristics of Plutonomies? According to Kapur:

1. They are all created by "disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time."

2. There is no "average" consumer in Plutonomies. There is only the rich "and everyone else." The rich account for a disproportionate chunk of the economy, while the non-rich account for "surprisingly small bites of the national pie." Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.

Kapur also noted the impact massive income and wealth inequality had on other aspects of the economy: Savings rates, national debt level, spending patterns, reaction to high commodity prices, and more. All of these, he claimed are substantially affected by the ultra wealthy.

Note that this was from 5 years ago today — circa January 2007 was, ten months before the market peaked, 11 months before the Great Recession began, and 15 months before Bear Stearns, 21 months before Wall Street (AIG BAC C FNM LEH, etc.) collapsed, and about 55 months before Occupy Wall Street began.

Quite fascinating . . .

Source:
Plutonomics
Robert Frank
WSJ, January 8, 2007
http://blogs.wsj.com/wealth/2007/01/08/plutonomics/

The Venn of Paul

Posted: 08 Jan 2012 11:30 AM PST

hat tip boingboing

If you have been following this election cycle, you know that the MSM has no idea of what to make of Anti-War Libertarian Republican congressman Ron Paul. They alternate ignoring and/or mocking him, despite being the only intellectually consistent person in the race.

Mother Jones attempts a taxonomy of libertarian thought in order to figure out where Ron Paul fits into the political firmament in The Venn of Ron Paul and Other Mysteries of Libertarianism Explained.

Previously:

Why is Fox News Trashing Ron Paul ? (February 17th, 2011)

Jon Stewart: Why is Media Ignoring Ron Paul ? (August 16th, 2011)

Ron Paul on Fed Transparency (September 24th, 2009)

Ron Paul: Audit the Fed, Then End It (May 19th, 2009)

Ron Paul's What If ? ReMixed (October 7th, 2010)

Ron Paul: Über Bear ? (August 20th, 2011)

The Daily Show: Ron Paul Extended Interview (September 27th, 2011)

Armed Chinese Troops in Texas! January 3rd, 2012

George Mason University Green Machine Marching Band Rages Against the Machine

Posted: 08 Jan 2012 08:00 AM PST

George Mason’s Green Machine plays Rage against the Machine.

Hat tip Washington Post
Vist http://music.gmu.edu

Does Lender Processing Services Deserve the Corporate Death Penalty?

Posted: 08 Jan 2012 07:14 AM PST

Before we begin our Sermon this Sunday, a bit of history:

Think back to the giant fraud that was Enron. It was enabled — indeed, it was only possible — by the criminal behavior of their “Big Five” accounting firm, Arthur Andersen. This massive fraud perpetrated on the investing public was only possible due to the cooperation and active participation of their accountant, who were found guilty of “obstructing justice when it destroyed Enron Corp. documents while on notice of a federal investigation” charges. For this sin relating to their handling of Enron’s audits, Arthur Anderson was forced to “decertify,” voluntarily surrendering their license to be Certified Public Accountants in the United States. By voluntary, we mean they had no other choice.

Hence, for their complicity in the Enron scandal, Arthur Anderson was taken out back like Old Yeller and put down. Their senior officers and accountants scattered to the other major firms with their clients in tow. Even their consulting firm, Accenture, luckily lost the name Arthur Andersen Consulting in 2000, removed all visible signs of affiliation.

Once Andersen was de-certified from Accountancy, AA was no more.

Today, we have what appears to be a parallel fraud: The processing of foreclosure documents by legal services giant Lender Processing Services. Thanks to the diligent worh of Attorneys General in states such as Nevada, New York, Delaware, California (but not Florida), we are starting to learn the extent of what took place under the auspices of LPS:

• former L.P.S. employee who worked in "attorney management," overseeing firms that performed legal work for foreclosures, told Nevada investigators that L.P.S. required him to resolve issues raised by the firms at a rate of 30 foreclosure files every hour (2 minutes per)

• Former workers described their work as "surrogate signers." Their job was to forge signatures on documents.

• Other employees were hired through temp agencies, paid $11 an hour and told that her job was "to sign somebody else's signature on documents," the lawsuit said. Investigators were informed she signed roughly 2,000 documents a day for months — well over 100,000 foreclosure docs.

• Notarization was similarly dishonest, with workers notarizing documents (as a Notary) that they had fraudulently signed as a surrogate.

• Borrowers were confronted with documents containing "false assertions about which entity was authorized to foreclose, and false assertions about whether the consumer was delinquent on a loan payment."

I have a question for Bank of America and Citi: Why haven’t you thrown these LPS weasels under the bus? What dirt they have on you preventing a simple j’accuse! ? What the hurry to settle before an investigation?

The end game for this is fairly obvious: Find the fuckers who authorized this, prosecute and convict them, and throw their sorry asses in jail. If the orders came from high enough up the food chain, why not pursue a similar Arthur Anderson penalty. Wat this broad corporate policy, or the work of a rogue banker? There is the answer to the death penalty question. After all, if a legal services firm is committing fraud, what bank or law firm can ever work with them? Depending upon the outcome of these AG investigations, a corporate death penalty could very well be the appropriate remedy.

This is going to get very interesting this year . . .

Source:
From East and West, Foreclosure Horror Stories
GRETCHEN MORGENSON
NYT, January 7, 2012
http://www.nytimes.com/2012/01/08/business/mortgage-servicing-horror-stories-fair-game.html

Previously:
Why Foreclosure Fraud Is So Dangerous to Property Rights (October 12th, 2010)

Foreclosure Fraud: "Systemic, Industrywide, Pervasive" (October 16th, 2010)

Legal ‘Impossibilities’ & Foreclosure Errors (October 14th, 2010) see also ‘Impossible’ Foreclosure: Never Late on a Payment (December 29th, 2010)

Banks Still Fabricating Docs, Commiting Foreclosure Fraud (September 1st, 2011)

Fraudclosure Errors Destroying Americans' Property Rights (October 19th, 2011)

Banks Pressing for Foreclosure Settlement Before Investigation (November 23rd, 2011) see also Florida AG Takes Orders, Money from Fraudclosure Firm (October 12th, 2011)

Foreclosure Fraud For Dummies (Part One, Part Two, Part Three, and Part Four)

Even more links here

Adaptive Markets and the New World Order

Posted: 08 Jan 2012 05:30 AM PST

Adaptive Markets and the New World Order
Andrew W. Lo
December 30, 2011
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1977721

Massachusetts Institute of Technology (MIT) – Sloan School of Management ; Massachusetts Institute of Technology (MIT) – Computer Science and Artificial Intelligence Laboratory (CSAIL) ; National Bureau of Economic Research (NBER)

Abstract: The traditional investment paradigm is based on several key assumptions including rational investors, stationary probability laws, and a positive linear relationship between risk and expected return with parameters that are constant over time and which can be accurately estimated. These assumptions were plausible during the "Great Modulation" — the seven decades spanning the mid-1930s to the mid-2000s in which equity markets exhibited relatively stable risk and expected returns — but have broken down during the past decade, implying temporary but significant violations of rational pricing relationships. This tension between rational and behavioral market conditions is captured by the Adaptive Markets Hypothesis (AMH), an evolutionary perspective on market dynamics in which intelligent but fallible investors learn from and adapt to changing environments. Under the AMH, markets are not always efficient, but they are highly competitive and adaptive, and can vary in their degree of efficiency as the economic environment and investor population change over time. The AMH has several new implications for financial analysis, including the possibility of negative risk premia, the transformation of alpha into beta, and the importance of macro factors and risk budgeting in asset-allocation policies.

Full PDF after the jump

Adaptive Markets and the New World Order

Cigar Aficionado: Best Cigars of 2011

Posted: 08 Jan 2012 04:45 AM PST

Cigar Aficionado picks the 25 best cigars of the year.

Rank . . .Cigar . . . . .Wrapper/Filler. . . .Rating
10. Casa Magna Colorado Diadema, Nicaragua (92)
9. Warlock Robusto, Nicaragua, Ecuador, Dom. Rep (92)
8. Punch Double Corona, Cuba (93)
7. Cabaiguan Guapo, Nicaragua/Ecuador (93)
6. Rocky Patel Fifteenth Anniversary Torpedo, Nicaragua/Ecuador (93)
5. Padrón 1964 Anniversary Series Exclusivo Maduro, Nicaragua (94)
4. Partagás Serie P No. 2, Cuba (94)
3. Illusione Epernay Le Taureau, Nicaragua (94)
2. La Aroma de Cuba Mi Amor Belicoso Nicaragua/Mexico (95)
1. Alec Bradley Prensado Churchill, Honduras, Nicaragua (95)

Click the ring for more info on each smoke: