Friday, February 15, 2013

Weekend links

1---Student loans; The pain continues, The Burning Platform

2---Amazon 'used neo-Nazi guards to keep immigrant workforce under control' in Germany, Independent

Amazon is at the centre of a deepening scandal in Germany as the online shopping giant faced claims that it employed security guards with neo-Nazi connections to intimidate its foreign workers.
Germany’s ARD television channel made the allegations in a documentary about Amazon’s treatment of more than 5,000 temporary staff from across Europe to work at its German packing and distribution centres.

The film showed omnipresent guards from a company named HESS Security wearing black uniforms, boots and with military haircuts. They were employed to keep order at hostels and budget hotels where foreign workers stayed. “Many of the workers are afraid,” the programme-makers said.

The documentary provided photographic evidence showing that guards regularly searched the bedrooms and kitchens of foreign staff. “They tell us they are the police here,” a Spanish woman complained. Workers were allegedly frisked to check they had not walked away with breakfast rolls.

3---Foreclosures Fall Due to New Laws, CNBC

A lot of today's housing demand is fueled not by spectacular job growth and soaring consumer confidence, but by super-low mortgage rates and unusually high levels of investor and cash purchases. Take away any one of those elements and it will matter," said John Walsh, DataQuick president....
While the numbers can be parsed in many ways, the bottom line is that while fewer borrowers are getting into trouble, an enormous backlog of distress is still moving through the foreclosure system, in some places quite quickly, and in others ever more slowly. Until the overall numbers come down to a more normal level, any speculation on overall price stability is risky at best.

4---Shiller: Has the US housing market bottomed?, zero hedge 

Maybe, but I still worry about further price declines. There’s no really concrete reason for an upturn now; a recent survey of home buyers didn’t find any sudden change in optimism and there seems to be a souring on the idea of home ownership. That might reverse again as the crisis ends. But I suspect that it’s not easily reversed because the whole idea of proudly owning a home has been tarnished. And now Congress is talking about eliminating the whole mortgage deduction or government support for Fannie and Freddie. These are all clouds on the horizon. That’s why I think home prices may still go down.
5---Rubio and the Zombies, Paul Krugman, NY Times

The State of the Union address was not, I’m sorry to say, very interesting. ... On the other hand, the G.O.P. reply, delivered by Senator Marco Rubio of Florida, was both interesting and revelatory. ... Mr. Rubio is a rising star... What we learned Tuesday, however, was that zombie economic ideas have eaten his brain. ...
Start with the big question: How did we get into the mess we’re in?
The financial crisis of 2008 and its painful aftermath ... were a huge slap in the face for free-market fundamentalists. ... Instead of learning from this experience, however, many on the right have chosen to rewrite history. ... Every piece of this revisionist history has been refuted in detail. No, the government didn’t force banks to lend to Those People...; no, government-sponsored lenders weren’t responsible for the surge in risky mortgages...
But the zombie keeps shambling on — and here’s Mr. Rubio Tuesday night: “...In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.” Yep, it’s the full zombie.
What about responding to the crisis? Four years ago, right-wing economic analysts insisted that deficit spending would destroy jobs ...and ... send interest rates soaring. The right thing, they claimed, was to balance the budget, even in a depressed economy.
Now, this argument was obviously fallacious... Sure enough, interest rates, far from soaring, are at historic lows — and countries that slashed spending have also seen sharp job losses. You rarely get this clear a test of competing economic ideas, and the right’s ideas failed.
But the zombie still shambles on. And here’s Mr. Rubio: “Every dollar our government borrows is money that isn’t being invested to create jobs. And the uncertainty created by the debt is one reason why many businesses aren’t hiring.” Zombies 2, Reality 0.
In fairness to Mr. Rubio, what he’s saying isn’t any different from what everyone else in his party is saying. But that, of course, is what’s so scary.
For ... one of our two great political parties has seen its economic doctrine crash and burn twice: first in the run-up to crisis, then again in the aftermath. Yet that party has learned nothing; it apparently believes that all will be well if it just keeps repeating the old slogans, but louder. 

6---Memories of Bubble Denial Past, NYT

A further thought on the “Barney Frank did it” view of the housing crisis that has become GOP orthodoxy, and was regurgitated by Marco Rubio: at the time when evil liberals were supposedly forcing helpless bankers to lend into a housing bubble, leading to crisis, pretty much the very same people now claiming that it was all the government’s fault were vehemently denying that there was a bubble — and asserting that the only reason anyone even imagined that there might be a housing crisis looming was the malign impact of the biased liberal media.
It’s really pretty awesome.

7---Obama and the Illusory State of the Empire, Pepe Escobar, global research

China has surpassed the US and is now the biggest trading nation in the world – and counting. [3] This is just the first step towards the establishment of the yuan as a globally traded currency; then will come the yuan as the new global reserve currency, connected to the end of the primacy of the petrodollar… Well, we all know the drill.

So that would lead us to reflect on the real political role of the US in the Obama era. Defeated (by Iraqi nationalism) – and in retreat – in Iraq. Defeated (by Pashtun nationalism) – and in retreat – in Afghanistan. Forever cozy with the medieval House of Saud – “secret” drone bases included (something that was widely known as early as July 2011). [4] “Pivoting” to the Indian Ocean and the South China Sea, and pivoting to a whole bunch of African latitudes; all that to try to “contain” China.
Thus the question Obama would never dare to ask in a SOTU address (much less in a SOTE – State of the Empire – address). Does the US remain a global imperial power? Or are the Pentagon’s – and the shadow CIA’s – armies nothing more than mercenaries of a global neoliberal system the US still entertains the illusion of controlling?
There’s plenty of money in the world. That’s the good news.
The not-so-good news: The flood of dollars, euros, yen and pounds pumped into the global economy by major central banks in recent years has yet to pay off in the form of job creation, investment and stronger economic growth.

10---Proposal Gives Banks More Freedom to Value Assets, NYT

The board that sets American accounting rules moved on Wednesday to substantially reduce the use of market values in financial statements. The move, if adopted, would give banks more freedom to value financial assets as they deem appropriate.
The proposal by the Financial Accounting Standards Board, contained in what is called an exposure draft, would also end the counterintuitive practice of a bank’s profits rising simply because its credit has worsened, and then falling when the credit recovers.
Under Robert H. Herz, the former chairman of the FASB, the board moved to increase the use of “fair values” of financial assets, on the ground that such values were all that really mattered.
11---NYSE Margin Debt Stalks All-Time Highs, Pragmatic capitalism 

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