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[Pacobird]

All-around decent article on a marquee short-seller.

Bit of a puff piece, but there's plenty of meat under there too. For those of you who don't know, short-sellers make money off of stocks going down in price. They do so by borrowing stock, selling it immediately (at what they perceive to be an inflated value), but with an agreement to return the same stock to the lender at a later date. If their prediction is correct, they can repurchase the stock later at a much lower price, netting a nice profit.

I've been more interested in short-sellers lately. The Sino-Forest story has been pretty interesting (tl;dr version: a Chinese-Canadian lumber firm turned out to be a giant Enron-like fraud, only the fraud was laughably crude and transparent, making the fact that it went undetected that much more embarassing), to say nothing of the 2008 debacle.

The two most interesting things I noted in the article were: 1) the fact that the SEC actually outright banned short selling of 799 American financial companies (!) at the height of the 2008-2009 disaster. That's actually a huge deal and not something I'd heard before, and 2) this rather chilling quote:

I can’t think of one major financial fraud in the United States in the last 10 years that was uncovered by a major brokerage house analyst or an outside accounting firm. Almost every such fraud ultimately was unmasked by short sellers and/or financial journalists.

Have you read The Big Short by Michael Lewis?

[Mongrel]

Newp.

[Thad]

And you guys still think a primary challenge would be a bad thing, right?

I don't.

Well, it depends.  I still don't like Clinton but I have to admit her supporters are probably right that she'd have done a better job at the negotiating table.  Couldn't have done much worse, anyway, short of invading Iran.

Problem is that it's not gonna happen.  I'm not putting much stock in Americans Elect, but it's more likely they'll get a candidate on the ballot than a Democratic challenger will step up.

[Brentai]

Well the main problem with the idea I that there IS nobody to step up.  Clinton is right out, she'd never win in a biting-the-hand scenario.  Reid is perfect on principle but he's an ancient lich kept alive by dark rituals and also probably a lot more useful where he is now.  Neither Boxer nor Feinstein could really win a national election and I'm just about out of candidates I can name off the top of my head.

So barring a hero, we've got about a year before we have to ask a very tough question: would the corporate wing (I don't want to say the right wing - conservatism isn't the actual enemy here) do better with Obama or Romney as president?

[Thad]

Tough call, and it mostly comes down to whether President Romney would be more like Governor Romney or Candidate Romney.  (And whether an Obama who wasn't worried about reelection would cut loose, but I'm much more confident in hazarding a guess on THAT subject.)

When Boehner says he got 99% of what he wanted in the debt ceiling showdown, it's pretty tough to picture things going much worse with Romney in charge than Obama.  And even the positive stuff Obama's accomplished -- healthcare and the repeal of DADT, for example -- I can't say with confidence that things would have gone differently under Romney.

On the whole, I want a Republican Party that's willing to compromise and a Democratic Party that knows giving the other guys 99% of what they want is not a goddamn compromise.  At the very least, I want the Democrats to be seriously sweating right now, and at the most, I can't honestly say I think we'd be much worse off with Romney than Obama.

[Brentai]

(And whether an Obama who wasn't worried about reelection would cut loose, but I'm much more confident in hazarding a guess on THAT subject.)

Well, and again, what that actually means can go either way.

Of course you can hazard a guess about that too.  At the end of the day, Barack Obama is the 1%, and his facade of being above it has been fading since he took oath.

giving the other guys 99% of what they want is not a goddamn compromise.

Yes it is, for Christ's sakes.  It's just that you have to get 100% of what you want too.

...which Reid's plan would have done at both ends, at least on paper.  Maybe we can just sacrifice a goddam chicken or something and get him out there.

[Thad]

Well, and again, what that actually means can go either way.

Of course you can hazard a guess about that too.  At the end of the day, Barack Obama is the 1%, and his facade of being above it has been fading since he took oath.

Every President is, though.  And every Supreme Court Justice and most of Congress.  Some of them fight for the 99% anyway.

giving the other guys 99% of what they want is not a goddamn compromise.

Yes it is, for Christ's sakes.  It's just that you have to get 100% of what you want too.

Both sides can't get 99-100% in a zero-sum game.  The budget is a zero-sum game.

You're right in that it's possible to back down on one issue in exchange for a victory on another -- you could argue, for example, that Obama's immediate caving on the tax cuts last year paved the way for the social victories that the lame duck Congress then pushed through.  I think that was an unintended consequence at best and not at all a sign of brilliant negotiation on anyone's part, but leaving aside the specific circumstances it's not a bad example -- give something up on the economic side in return for a victory on the social side.  Yeah, that's a compromise.

Trouble is that if you combine both things into a single bill you wind up piling unrelated shit on top of, say, budget items, which I'm not crazy about, whereas if you push them as separate bills, the only thing guaranteeing your compromise will pass is the word of the opposition leadership.

...which Reid's plan would have done at both ends, at least on paper.  Maybe we can just sacrifice a goddam chicken or something and get him out there.

Again, I don't really consider Reid's plan to be a 99% of one/100% for the other prospect, for the reasons outlined above.  But that doesn't mean it would be a bad compromise!

[Disposable Ninja]

So I was watching one of those Sunday morning news programs, I forget which one, and Mitch McConnel was on. He was shown statistical fucking proof that the largest problem with the economy is lack of demand, that people don't have enough money to buy things, and he was still espousing the application of Supply-Side Economics.

So let's break this down: the biggest problem with our economy is that people don't have enough money to buy things. The Republican Minority Leader believes we should give more money to the people who make things to sell.

Why are we letting these people anywhere near our Government, again?

[Mongrel]

Meanwhile, in Euroland...

[Büge]

"Job Creators: A Poem" By Rep. Gwen Moore

[Mongrel]

So, as per usual, I've been following the Euro events pretty closely and I just want to ask: Does anyone else think that Papandreou's stones require two midget Atlases to follow him around to carry them? 

I mean that guy just turned himself into probably the most hated man in Europe right now and the consequences for his decision are probably catastrophic for just about everyone, but in spite of it all, I am dead certain he's doing the right thing.

[Caithness]

Can you explain what exactly he is doing by calling a referendum and why it's the right thing, for the benefit of those of us who haven't been paying as close attention?

[Mongrel]

Okay, lets go back about a week and a half. After an incredible amount of prevarication, arguing, delay, and arm twisting, the Euro Zone leaders had FINALLY hammered out some kind of agreement for a partial default and increase in bailout funds for Greece. Close observers argued it was not quite enough and that there'd be more crises in perhaps a year's time, but overall the response was positive. It was a more solid plan than anyone had managed to put together in some time and markets were very happy with the news.

Then Papandreou came out of nowhere with a massive bombshell: The choice of accepting the bailout money would be put to the Greek people in a national referendum. Additionally, the referendum carries the inherent implication that a rejection of the bailout money is also a rejection of the Euro common currency (i.e. a Greek return to the Drachma) as well as Euro-zone membership.

If the bailout is rejected, it is expected Greece will immediately fall into a hard, disorderly bankruptcy possibly taking down all of Europe with it and dragging the world back to recession. Even if a total collapse is averted, Merkel and Sarko will both probably lose their re-election bids.

As bad as all that is, Greece has spent two years now being berated, abused, insulted, scorned and generally shit on by Europe. Any help was grudging, mostly out of sheer self-preservation. Better-off players like France or Germany frequently spoke sneeringly about humiliating Greece in the most ridiculous possible ways as some form of punishment.

The thing is, as much the Greeks are to blame for their own troubles (they basically perpetuated a gigantic and incredibly flimsy fraud to join the Euro zone and abused the hell out of it while times were good), I don't think anyone deserves the treatment they've had. It's as if a wealthy man became homeless due to his own profligacy. His former gambling partners now throw a few dollars in his hat as they pass him on the street, but never without spitting on him or cursing his name.

Ultimately, Papandreou is the leader of the Greek people. Not Europe, not the world, but Greece. He is giving his country its one last chance to stand up and decide its own fate. If they decide that the next time they see one of their old partners that they're gong to deliver a roundhouse to the face, then no one will ever toss coins in their hat again and they will truly be destitute. But it will have been their decision and theirs alone.

He is putting the responsibility to accept the bailout money - and far more importantly the extreme austerity conditions that come with the money - directly on the Greek people. If they do choose to accept the money, they must accept the conditions - no longer will the bailout be something imposed on the Greek people by angry foreigners. If the Greeks do approve the bailout and choose to stay in the Euro zone, that acceptance of responsibility will greatly improve chances for eventual success. It's genius, really.

[Caithness]

Thank you, that sums things up nicely.

But won't the Greek people claim they're being offered a false dichotomy, and demand an option to receive the bailout money without the austerity measures?

[François]

Well, just as Europe isn't running Greece, Greece isn't running Europe. I'd suspect everyone's sufficiently fed up with them not to give them money without strings attached anymore, especially since the Greeks would basically be saying "give us more cash so we may waste it as we please again".

[Dooly]

That's worked pretty fantastically for the US financial sector so far.

[Büge]

The thing is, as much the Greeks are to blame for their own troubles (they basically perpetuated a gigantic and incredibly flimsy fraud to join the Euro zone and abused the hell out of it while times were good), I don't think anyone deserves the treatment they've had. It's as if a wealthy man became homeless due to his own profligacy. His former gambling partners now throw a few dollars in his hat as they pass him on the street, but never without spitting on him or cursing his name.

With this intent, Abou Hassan formed a society with youths of his
own age and condition, who thought of nothing but how to make
their time pass agreeably. Every day he gave them splendid
entertainments, at which the most delicate viands were served up,
and the most exquisite wines flowed in profusion, while concerts
of the best vocal and instrumental music by performers of both
sexes heightened their pleasures, and this young band of
debauchees with the glasses in their hands, joined their songs
with the music. These feasts were accompanied by ballets, for
which the best dancers of both sexes were engaged. These
entertainments, renewed every day, were so expensive to Abou
Hassan, that he could not support the extravagance above a year:
and the great sum which he had appropriated to this prodigality
and the year ended together. As soon as he discontinued keeping
this table, his friends forsook him; whenever they saw him they
avoided him, and if by chance he met any of them, and went to
stop them, they always excused themselves on some presence or
other.

[François]

That's worked pretty fantastically for the US financial sector so far.

Any comparison of the US financial sector to Greece is an insult to Greece.

...and possibly vice versa.

[Mongrel]

The thing is, as much the Greeks are to blame for their own troubles (they basically perpetuated a gigantic and incredibly flimsy fraud to join the Euro zone and abused the hell out of it while times were good), I don't think anyone deserves the treatment they've had. It's as if a wealthy man became homeless due to his own profligacy. His former gambling partners now throw a few dollars in his hat as they pass him on the street, but never without spitting on him or cursing his name.

With this intent, Abou Hassan formed a society with youths of his
own age and condition, who thought of nothing but how to make
their time pass agreeably. Every day he gave them splendid
entertainments, at which the most delicate viands were served up,
and the most exquisite wines flowed in profusion, while concerts
of the best vocal and instrumental music by performers of both
sexes heightened their pleasures, and this young band of
debauchees with the glasses in their hands, joined their songs
with the music. These feasts were accompanied by ballets, for
which the best dancers of both sexes were engaged. These
entertainments, renewed every day, were so expensive to Abou
Hassan, that he could not support the extravagance above a year:
and the great sum which he had appropriated to this prodigality
and the year ended together. As soon as he discontinued keeping
this table, his friends forsook him; whenever they saw him they
avoided him, and if by chance he met any of them, and went to
stop them, they always excused themselves on some presence or
other.

It's even more apt when you realize that the gambling money my prototypical Greek lost was all loaned to him by the people he lost it to.

[François]

Welp, the referendum is off. The opposition calls for elections, but Papandreou doesn't want to step down. Heh, like they can even afford to set that up.