That Giant Sucking Sound…

wall-streetThe White House has released the text of the much-loathed and feared Trans Pacific Partnership trade deal.

You can read it for yourself, but fair warning you don’t want to print it at 2,000 pages and 30 chapters, it will make HP filthy rich in ink alone.

The way I understand it from the article, Congress (and the public) have 90 days to read this thing, and then there’s another 90 days for Congress to dis/approve it. So 180 days total starting now.

And this makes for an interesting sideshow for the 2016 Goat Rodeo as that 180 days will put the vote smack-dab in between the Iowa Caucuses and the New Hampshire primary.

So for our amusement, here is the 2016 Goat Rodeo state of play around the TPP as I understand it:

  • All three of the Dims’ candidates are opposed to the deal (yes, even Hillary Clinton, who probably participated in some of the negotiation as Secretary of state). The TPP should be a neutral issue since they all are in agreement, at least for now.
  • Short-fingered vulgarian Donald Trump (thanks Spy Magazine!) and Uncle Sugar hisself Mike Huckabee have stated opposition to it. Uncle Sugar, if he’s still in play, is running as a populist and sees the TPP as crony capitalism.
  • Cruz, Rubio, and Jindal have been negative on it because it was negotiated by The Kenyan Usurper, and so they will have to clarify where they stand if the press does its job (always doubtful).

I don’t think it’s a stretch of the imagination to say that the bidness interests of the Republican Party is going to be putting a lot of pressure on their candidates to support this thing, and so seeing who falls on which side should be really revealing for Cruz and Rubio. As for Jindal, he’s already out of the race, he just doesn’t know it yet.

Sudden-Death Overtime!

Wall St. Hard at work, so to speak.

Wall St. Hard at work, so to speak.

I am highly amused by the reaction of our much cosseted criminal class (Bankers and their Allies) to the new proposed overtime rules. When I read some of the reactions I recalled my high school US history class when we had the unit on the Great Depression and all the efforts to pull us out of our death spiral, not the least of which was the Fair Labor Standards Act of 1938, which established a minimum wage amongst many other reforms.

I’m going to give you some quotes and see if you can tell if they are from today or from 1938:

  1. ” [this] crackpot legislation…is utterly impractical…[and] would be much more destructive than constructive to the very purposes which it is designed to serve.”
  2. “Supporters of these regulations say they want to increase Americans’ take home pay, but these sweeping changes to the rules could mean anything but. If these regulations stand, that mobility and adaptability of employee schedules, which make our industry appealing, will be severely diminished.”
  3. “…[it] constitutes a step in the direction of communism…”
  4. “[Overtime] will not guarantee more income, but instead will negatively impact small businesses and drastically limit employment opportunities.”
  5. “It seems as if these proposed rules have the potential to radically change industry standards and negatively impact our workforce.”
  6. “…[it] will destroy small industry.”
  7. “[how could business] find any time left to provide jobs if we are to persist in loading upon it these everlastingly multiplying governmental mandates and delivering it to the mercies of multiplying and hampering federal bureaucracy?”

So if you too think that you hear an echo, you are not crazy. They’ve been pissing on our leg and telling us it is raining for 75 years.

I’d also like to call your attention to yesterday’s NYTimes editorial, which concludes with:

“No party and no politician that opposes the new overtime rules can credibly claim to care about the middle class.”

This really is the the Kobayashi Maru for Wingnuttia: they can’t support overtime because The Kenyan Usurper wants it and their nutty base will eat them with fava beans and a nice chianti, but they can’t oppose it because reveals their inequality rhetoric is as empty as their suits.

(Answer Key 1938: 1, 3, 6, 7 2015: 2, 4, 5)

Home Is Where Their Hearts Aren’t

It's a fixer-upper with potential.

It’s a fixer-upper with potential.

Hey guys, remember that time during the Miracle of Chimpy’s Economy when the mostly un-regulated banks decided to abscond with most of the world’s money by creating exotic derivatives based on mortgages, and no one went to jail for it?

They’re doing it again, but instead of packaging up mortgages, they are buying the houses themselves and are creating derivatives based upon rent checks.

No company has bought more houses than the Blackstone Group, one of the world’s largest private equity firms. (Its many investments include Hilton Hotels, the Weather Channel, and SeaWorld. Among its institutional investors are Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, Deutsche Bank, and JPMorgan Chase.) Through its subsidiary, Invitation Homes, Blackstone has picked up houses through local brokers, at foreclosure auctions, and in bulk purchases. Last April, it bought 1,400 houses in Atlanta in a single day. In Phoenix, some neighborhoods have a Blackstone-owned home on just about every block. As of November, Blackstone had acquired 40,000 houses, most of them foreclosures, worth $7.5 billion. Today, it is the largest owner of single-family rental homes in the nation.”

“…Invitation Homes has described its strategy as “a bet on America.” Rather than pricing buyers out of the market, [Andrew Gallina, Invitation Homes’ vice president for marketing] says, the company is helping families who can’t get mortgages.”

So let me get this right: after destroying the housing market in the early 2000s, the Hedge Funders have bought up the houses themselves and in the process of buying up all these low-priced houses, they are forcing people into renting their properties, of which rent checks are then bundled into exotic derivatives, i.e., making bets that everyone will pay their rent on time.

What could possibly go wrong?

“But what if the security blows up? Investors could demand their collateral back, forcing renters out of their homes, even if they never missed a payment. “We could well end up in that situation where you get a lot of people getting evicted—not because the tenants have fallen behind, but because the landlords have fallen behind,” says [Dean Baker, an economist and co-director of the Center for Economic and Policy Research].”

News That Will Drive You To Drink: Staples Edition

piles of cash


FRAMINGHAM, Mass. & BOCA RATON, Fla.–(BUSINESS WIRE)–Staples, Inc. (Nasdaq: SPLS) and Office Depot, Inc. (Nasdaq: ODP) today announced that the companies have entered into a definitive agreement under which Staples will acquire all of the outstanding shares of Office Depot. Under the terms of the agreement, Office Depot shareholders will receive, for each Office Depot share, $7.25 in cash and 0.2188 of a share in Staples stock at closing. Based on Staples closing share price on February 2, 2015, the last trading day prior to initial media speculation around a possible transaction, the transaction values Office Depot at $11.00 per share. This represents a premium of 44 percent over the closing price of Office Depot shares as of February 2, 2015, and a premium of 65 percent over the 90-day average closing price of Office Depot shares as of February 2, 2015. The transaction values Office Depot at an equity value of $6.3 billion.

…The transaction is subject to customary closing conditions, including antitrust regulatory approval and Office Depot shareholder approval, and is expected to close by the end of calendar year 2015. Staples will remain focused on its strategic reinvention plan, and Office Depot will remain focused on its integration of OfficeMax during this period.

Oh, please. The regulators would not raise an objection if the entire Fortune 500 merged into one company called “BiteMeBitches LLC.”

And for those of you who say, “so what, I’ll buy my ink cartridges online” – here’s the ugly twin sister to the word monopoly: monopsony: a market form in which only one buyer interfaces with would-be sellers of a particular product.

In other words, if Staples is the only retailer that 3M realistically can sell its post-it notes to, well, then Staples can dictate for how much. It is essentially what Walmart is and what Amazon wants to be. The implications for this are HUGE, and hugely bad for all of us.

Side note: Staples was controlled by Mitt’s Bain Capitol, and he bragged about how he turned it around while on the campaign trail. So each time you plunk down $50 for an ink cartridge (the Monopoly side of the equation), you can feel really comfortable knowing you didn’t vote for Willard, though now you have the pleasure of sending him your money.

He’s A Credit Risk


…but wouldn’t you think that the bankster sharks would show a little professional courtesy?

The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. — “just between the two of us” — that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

When the audience laughed, Bernanke said, “I’m not making that up.”

Well, It Would Be A Good Start

[Geithner] cheerfully relayed a story that also appears in his book about the time he sought advice from Bill Clinton on how to pursue a more populist strategy: “You could take Lloyd Blankfein into a dark alley,” Clinton said, “and slit his throat, and it would satisfy them for about two days. Then the blood lust would rise again.”

Metaphorically speaking.

Today in Banking…

choo-choo train

It’s a small consolation prize, but it looks as if the Feds are going to press charges against two of the blood-sucking leeches Too Big To Fail Banks, but not for their crimes against, well, the world. That said, there are still plenty of reasons for the banksters to be preparing to open their windows, so to speak.

As they said in NYC, Jump Motherf***ers. And we mean that will all insincerity.

The Midday Quote: Get Off The Cross Edition

“You know, it’s interesting, in America there’s only one group you can legally discriminate against in America anymore: rich people.”

–Steve Moore, former Wall St. Journal writer and current Heritage Foundation economist.

So, Who’s Destroying America Today?

The Koch Brothers Left a Confidential Document at Their Last Donor Conference—Read It Here

In the annals of comic-book supervillians, no evil genius is so inept that they leave behind their secret membership roster when they flee their caves, but apparently that lesson was never learned by the super-rich Koch Brothers.

Mother Jones has the list and has done the legwork to itemize who these people are. I would say it is fascinating reading, but it also is stomach turning.

(Mother Jones)

Good one! Target takes this crime seriously.

Target says…

We take this crime seriously. It was a crime against Target, our team members, and most importantly, our guests. We’re in this together, and in that spirit, we are extending a 10% discount – the same amount our team members receive – to guests who shop in U.S. stores on Dec. 21 and 22. Again, we recognize this issue has been confusing and disruptive during an already busy holiday season. We want to emphasize that the issue has been addressed and let guests know they can shop with confidence at their local Target stores.”

Gee, you mean we guests are invited to spend more money at the security sieve?

[One of the banks interviewed] has issued a grand total of more than 120,000 debit and credit cards to its customers, but my source told me the tiny bank had not yet heard anything from the card associations about specific cards that might have been compromised as a result of the Target breach. My source was anxious to determine how many of the bank’s cards were most at risk of being used for fraud, and how many should be proactively canceled and re-issued to customers.

Let’s see: 40M cards – 120,000 =39,880,000 more cards to go. That’s still more than 10% of the country affected by the security breach and no one is doing anything about it.

The bank wasn’t exactly chomping at the bit to re-issue the cards; that process costs around $3 to $5 per card, but more importantly it didn’t want to unnecessarily re-issue cards at a time when many of its customers would be racing around to buy last-minute Christmas gifts and traveling for the holidays.

But more importantly, note that your date security is worth about $3-$5 and the banks don’t want to spend it.

Do you really think that anyone is going to do anything about data security on their own? Not likely. I’d say Congress ought to pass a law, but they did: it protects every corporate entity, but not you. You still have to change all your accounts, PIN numbers, bill paying, etc., at your own cost. Have fun with that, Guests.

(Krebs on Security)