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Banksters refuse to take haircut on Argentina debt, forcing default

vultures

Argentina will probably default shortly on its debt. Wall Street vultures bought Argentina debt cheap and refuse to negotiate or make concessions, even though the vast bulk of creditors have. The vultures want 100% payment. Argentina can’t afford that. Worse, if Argentina pays the holdouts at 100%, a clause in the contracts means that have to pay all other creditors at 100%. Plus, according to US law, it must pay all creditors, not just those who agreed to a haircut.

President Kirchner says that payment would amount to $15bn (£8.8bn), which is about half of the entire central bank foreign exchange reserves, so it’s not feasible for Argentina to do this. Not that the holdout jackals. They have no interest in Argentina beyond extracting money for it.

Argentina may default on July 30, with unpredictable and probably adverse ramifications for the world economy.

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More bubblicious tech: Amazon blows their earnings, warns on future

Amazon packages

Amazon lost $126 million last quarter, way worse than expected, and warns of a ginormous loss of $410-810 million next quarter, even as revenues were up 23%. Yes, Amazon continually pumps money into development and growth, and that’s great. However, it is a huge established company. At some point it needs to show a profit else people will start to think it’s just a carny shell game, with a levitating price based on hype not reality. In that it is not much different from too many other internet companies, which get fanciful valuations based of assumptions of future growth. However, at some point, profits really do need to be made. This time is not different. You can’t continually spend more than you have.

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Fed Chair Yellen says social media stocks overvalued

Funding potato salad on Kickstarter is as loony as buying social media stocks with no earnings and high valuations

Funding potato salad on Kickstarter is as loony as buying social media stocks with no earnings and high valuations

I’m guessing there was a surprise surge in shorting social media stocks right before Fed Chairman Yellen said the obvious, that social media stock valuations are ludicrously high and unsustainable. This of course is  a surge no one could have predicted (and which will barely be scrutinized by regulators, if at all.)

Nevertheless, valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.

Facebook has a P/E of 87. LinkedIn and Twitter are losing money. These are the healthier companies. There are hundreds of little start-ups with insane valuations. Then there are the idiots who pledge $50,000 to help someone make potato salad. Of wait, these are probably the same people who buy flaky social media stocks.

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Snowpiercer. An violent revolution allegory for our 1% times

snowpiercer

An experiment to end climate change fails, freezing the planet. A few escape onto a self-sustaining train. A vicious class system oppresses the proles, who revolt. Yes, the ruling class on the train needed their corrupt, pampered asses kicked hard. However, without being a spoiler, I will say, violent revolution can have unintended consequences. Be careful of who you are with and what you ask for.

Set in a future where a failed climate-change experiment kills all life on the planet except for a lucky few who boarded the Snowpiercer, a train that travels around the globe, where a class system emerges.

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Wall Street buy-to-rent racket getting wobbly. Who could have imagined?

Panic_of_1857

What happens when everyone tries to get out the same door at once? Wall Street never learns, does it?

The real estate market cratered in 2007, taking down the economy with it, primarily due to securitization of toxic slop mortgages and insane amounts of leverage. Wall Street parasites are doing exactly the same thing again, only this time with rental payments not mortgages. Private equity and hedge funds bought tens of thousands of foreclosed homes, rented them out, securitized the rental payments, then used the whole thing to pump up home prices so they could sell at a profit. (I’m guessing providing service to tenants is not at the top of their to-do list, if it ever actually occurs to them at all.)

So, now the hyena wants to cash out and take those tasty profits. However, when everyone tries to sell at once, prices drop. It’s called a bubble. Almost comically, some of these Very Smart People think the best way to combat this is by consolidating, buying other big rental companies, because surely taking on more risk and debt is the best way to lessen it. Right.

Wolf Street (formerly Testosterone Pit) has a detailed article on how this scammy bubble works.

Instead of trying to sell their tens of thousands of homes, Blackstone and American Homes are selling synthetic structured securities that are backed, not by mortgages like the toxic waste that contributed to the financial crisis, but by something even worse: rental payments, based on the flimsy hope that these homes will stay rented out. The already sold $3 billion of this stuff. Wall Street is jubilating. The fees are going to be huge: the market for this type of synthetic concoction is estimated to be $1.5 trillion.

And of course it will all come crashing down again.

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We either rebuild America or it’s pitchforks time

angry-mob-torches_and_pitchforks

The US economy and infrastructure are crumbling and need serious fixing. The answers are simple enough. All that is required is the will to do it. Instead we dither, pretend it’s complicated, while the 1% siphon off our money. We need massive investment in rebuilding America. This will create millions of jobs and the economic benefits will ripple through the economy. The 1% might want to start playing attention here, because even one of their own says the pitchforks are coming if they don’t change.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

5 dirty secrets about the U.S. economy. Umair Haque in the Harvard Business Review.

Number one. The biggest falsehood of all? That fixing it is something like teleporting to Jupiter: impossible! Beyond us! Science fiction!

Dirty secret number two: This is a bogus recovery—and it’s going to poison society, unless we are wise enough to recover from the recovery

Where will the money come from? Dirty secret number three: It doesn’t matter. Print it. Borrow it. Tax it from the super-rich, in whose coffers it’s merely sitting idly. It does not matter one bit. It’s a second order question. If the U.S. doesn’t invest in public goods, it will not prosper

Here’s dirty secret number four. The pundits don’t want you to know any of the above. They want you to believe that fixing the economy is unfeasible. It’s not. It’s simple.

So here’s dirty secret number five. We don’t live the lives we were meant to by merrily shoving Artificially Fried Chicken Flavored Dorito Slurpees down our gullets while watching our societies crumble.

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Barclays and BNP Paribas being faux spanked by regulators

slap-on-the-wrist

This is what passes for justice in America now. More fines for banksters but no criminal indictments of the people responsible. Federal and state regulators are essentially running a protection racket. They pretend to enforce the law by imposing fines. Banks pretend they will change. However, criminality at big banks won’t end until there are painful personal consequences like prison and asset forfeiture imposed upon those those involved. For this to happen regulators would actually have to do their jobs.

The State of New York is suing Barclays for promising institutional investors best possible prices in their dark pool but then maximizing their own profits to the detriment of traders. Big banks are leaving the dark pool so it appears, once again that overwhelming greed and dishonesty has backfired into the face of yet another bankster.

BNP Paribas, parent of Bank of the West,will plead guilty to criminal charges, pay a $8.8 billion fine, and be banned from dollar-clearing operations for upwards of a year for transferring money for Sudan, Cuba, Iran, and other countries.

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Bothersome inflation news called “noise” by Federal Reserve

noise

Further proof we are governed by deceitful chimps: Fed Chair Janet Yellen says sharply rising inflation is  just noise and we shouldn’t bother our foolish little heads worrying about it. Inflation will subside because the Fed hath decreed it must. I trust this clears things up. The obvious solution to inflation is for the government to manipulate inflation numbers like it does to unemployment and ignore data that doesn’t fit their predetermined outcome. If people have been looking for a job for more than six months, they are dropped from unemployment numbers. With inflation, they can just tweak the numbers say that, say, rising food prices due to the California drought, are “smoothed out” or otherwise ignored.

Reality must never be allowed to intrude in Washington, DC. However, Yellen’s comments did spur the stock market, so that’s all the matter anyway. The primary job of the Fed is to make banksters and the 1% happy, the rest of us are just “noise.”

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Those with student loans are dangerously ignorant about them

Student Debt

A NY Fed study shows those with student loans generally are clueless about how onerous the terms are. Student loan debt is not dischargeable by bankruptcy. The government can and will hound delinquents endlessly. Banksters make risk-free loans which are guaranteed by the government. Those burdened with too much student loan debt are likely to be scared and passive, and will work 70 hr weeks without complaining because they need the money to pay the debt. And that’s precisely how the overlords want their vassals to be, meek and cowed.

Only 28 percent of respondents knew that if student loans aren’t repaid, the U.S. government can garnish wages, withhold Social Security payments and tax refunds, and report the debt to credit bureaus. Even more people—35 percent—incorrectly thought the government couldn’t do any of those things or said they didn’t know what the government could do. Only 37 percent of those surveyed knew that students loans are extremely hard to shed in bankruptcy, a reality that differentiates student loans from other debts, such as mortgages and credit cards.

Any similarity between the coming student loan debt bubble bursting and the housing bubble are of course not a coincidence at all. Every burst bubble means more money has been sucked out of the middle and working classes to the 1%.

All of the above, naturally, is a pivot to the moment just after the student debt bubble bursts: then, just like with the housing bubble, the excuse will be the Americans, hardly with a gun against their head, did not understand what the “implications” of burying yourself to the neck in debt are. Which is why they did it. Which is why the entire system had to be bailed out. Or something like that.

It is good to see that nobody has learned any lessons from the recent past, as usual.

Au contraire, the 1% has learned well how to siphon money from us to them, aided by the government.

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Detroit decay in Google Map photos. Who benefits from the decay?

detroit-decay Goobing Detroit uses past and present Google map photos to document Detroit decay. Large areas of Detroit are being left to rot while bankster vultures suck marrow from its bones and an apparatchik local government raises cost of services and refuses to innovate. At least some of this process of decay seems quite purposeful. Who benefits from it? certainly not those attempting to live there. Detroit cuts water to individuals owing owing, but not to businesses and corporations

This is beyond wrong. Detroit keeps raising water rates, billing residential customers for previous occupant’s bills, rolling unpaid balances into property taxes, and is now shutting off water to thousands of homes. Businesses and companies are not shut off if they owe money. Why is that?

“Detroit is a victim of decades of market driven neoliberal policy that put business and profit ahead of public good,” Barlow said. “Social security programs have been slashed and their delivery privatized. Investment in essential infrastructure has been slashed…”

Weed-eating goats in Detroit must leave due to city ordinance. Yup, stupid rules are definitely a way to continue the decline of a once-great city.

“Once the vegetation was cleaned up, then we would have the volunteers come in, take the trash out of the area, and using the goats and the volunteers we would be clearing this ground for future agricultural use,” said Kevin Pollara, a consultant for the project in Brightmoor, a neighborhood on the city’s west side. He said the project, called Idyll Farms Detroit, would have been a success, but the animals will be removed.

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