February 21st, 2011

dara

Why Wall Street isn't in jail

A brief introductory note: I used to post a lot more about economics than I do now. This is one of those posts. It lacks the depth of organisation I'd historically give them, but there are some things going on I thought people might want to know about.

Good morning, everyone. If you've missed Matt Taibbi's latest work in Rolling Stone, entitled "Why Isn't Wall Street in Jail?" I recommend skipping over and reading it. Fundamentally, despite hundreds of billions in fraud leading directly to trillions of wealth destruction, there are going to be no actual prosecutions, and it's purely and simply a matter of cronyism and corruption. Enjoy!

Garth Turner describes Vancouver's condo market as acting in ways I find awfully, awfully, awfully familiar. If you liked the US market in late 2006-early 2007? You'll love this market. My reaction? Run like hell. Some markets are already in collapse, you're very much into building-on-fire-last-one-out-dies territory.

Kyle Bass talks to CNBC about the zero-interest-rate trap, and what it means for the ability of the Fed to raise rates pretty much, well, ever. (Note: each percent raises the annual deficit by well over another hundred billion dollars.) This starts to matter when the effects of a de facto dollar devaluation start creeping over into prices, which they have. (The Eurozone is in an acknowledged debt crisis and the USD is the new carry currency and even with that the dollar index has given back all of last summer's rebound, and more. Energy is up 7.3% in the last 12 months, gasoline up 13.4% - notice that big price spike in gasoline lately? This is one of the two times of the year when prices normally drop, and it's the bigger one of two.)

Inquiring minds, to steal a phrase, may also want to look over Karl Denninger's analysis on margin collapse and the disturbing rise in crude goods costs over the last four months in particular.

And I've lost the link, but a nearly-unreported footnote in the Wikileaks reports over the last month or so indicate specifically that the Saudis are vastly overstating their reserves numbers, and that American interests on the ground on the Arabian peninsula believe there is no way whatsoever that Saudi Aramco can significantly exceed its pre-crash production limits. Fundamentally, they're saying that the general forward-looking presentation in Matt Simmons's Twilight in the Desert is substantially correct - not in the specifics, but in the general sense.

Which is not to say that they're geologists, and they seem to have a good bit less respect than I think are due the Aramco engineers, which hampers my impression of their notes. But I didn't want to let it slip by entirely unnoticed.

Oh, you might enjoy this note: WFAA Dallas is reporting that Bank of America, JP Morgan Chase, and Citigroup are threatening to limit debit transactions to $100 if new regulations limiting transaction fees aren't waived. The fact that all of these institutions have received hundreds of billions in bailout funds should not be ignored; they don't care and will fuck you if they can. See the first link above, to Matt Taibbi's article.

And contrast to Iceland once again telling the IMF to go fuck itself.

Also in Europe, Portugal is expected to need some sort of bailout by April, but is declining to ask. Japan is looking at a massive consumption tax hike to shore up finances.

And that's the first one of these for a while. Things may be getting interesting again, after a long several months of quiet. Be careful out there.
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Addena

Should've checked these:

The Baltic Dry Index has fallen to crash-of-08 levels. There's a little bit of a pick-back-up in the last couple of weeks, but that's a big decline. That's not hugely reliable because it's affected by ship supplies as well as cargo to be shipped - but even so, that's a pretty big decline. Either way, you want to see it matched by rail car loading declines, which lag a bit for obvious reasons...

...and in this case, the correlation is hazy at best. The numbers do not look awesome, but I can't honestly say it's out of cycle yet. Keep an eye on this.
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i hate mail

iOS's mail application doesn't try to authenticate smtp connections unless it's forced to. (apparently.) if it can attempt to send mail without AUTHing, it will, and nothing you can do seems to change that. failure to actually be able to send mail doesn't make it go, "huh, mebbe I should AUTH."

if your sendmail server behaviour changes based on authentication (specifically, to act like a smarthost and allow relays it otherwise wouldn't), this fucks you for sending mail from your iphone.

setting up a second host with exim4 to get around this means trying to get exim4 to acknowledge the concept of AUTH in response to an EHLO in ANY FUCKING WAY WHATSOEVER. which is supposed to be trivial but is instead INSANITY IN A SHELL. NOTHING I've done results in AUTH coming online. much less being required. fuuuuuuuuuuuuuuuck.

no reports or errors, of course. it's just insert coin, say hokaydo! and then change NOTHING WHATSOEVER.

hey, exim4 fans, you got anything here? i didn't think anything in the world could make me go, "y'know, sendmail docs are pretty clear," until I started poking around at exim4. at least, if you want to do anything that isn't handled by the six-screen eximconfig script. which this most definitely isn't.

(i want _some_ damn thing to pick up for smtp over ssh, _require_ auth, then relay whatever it gets to our actual mail server, all so we can fucking send mail from these phones, before I kill everyone. apparently that's hard. YES I WOULD INSTALL SENDMAIL except the fucking package manager won't let me change MTAs without uninstalling the webserver, which is a whole 'nother can of FUUUUUUUUUCK YOUUUUUUUUUU. AAAAAAAAAAAAAAAAAAAGH KJSHE FLKHWEFLIUH LEFIUFS)

i'm going to bed now. somebody be a dear and hand me the large animal tranquillisers. thanks.