War Games

And Only One Winning Move



At a guess, late one night within in the next three weeks, we'll be ready to shut off Conan O'Brien when it's possible that normal broadcasting of Teevee networks may be interrupted with news that Israel (and, possibly, the good old Eusa) has hit Iran with nearly everything but the kitchen sink. Initial targets would be the Iranian air force on the ground, Revolutionary Guard command, control and communication (The Three Cees) facilities, Antiaircraft and antiship missile positions; and (aber natürlich), the four known major centers of their nuclear development effort.

(It's also possible that you could first hear the news of an Iranian attack on an oil tanker or American aircraft carrier in the Persian Gulf, or some incident near the straits of Hormuz that results in casualties aboard a U.S. Navy vessel. No matter; the end result would be Iran, lit up like an Exmass Tree.)

By the time you heard reports of an all-out attack, the initial strikes would have been completed and the Iranians moving to execute counterstrikes against U.S. and Israeli targets. No one really knows what the reaction of other, regional and global players -- Russia, China; India, Pakistan; and the rest of the Middle East -- would be.

And by then, all bets will be off; we will truly enter Alice-Through-The-Looking-Glass, unknown territory: Beyond Here There Be Tygers.

Why I feel this is a likely possibility has been the steady drumbeat of evants -- sanctions, and more bellicose statements by the Iranian government; the assassination of another Iranian scientist in Teheran in mid-January; the attack on Israeli defense ministry officials and family members in India and Georgia, and the Israeli statement that it blames Iran (followed by the expected denials); the report of 'Iranians' and explosions at a rented house in Bangkok; claims of Hezbollah planning to attack Western targets (followed by the expected denials).

(I've already chronicled a previous timeline of events here, if you're curious -- or, you know, not.)

I've also noticed an increase in articles on web versions of newspapers or cable news organizations about Iran: Short, even 'filler', never front-page material but consistently playing on themes of Iran's leaders as aggressive, deluded and nonsensical; never know what they'll do next; and they want The Bomb ... and I feel that I haven't ever seen so many of these articles, so consistently -- even last summer, when many observers were convinced, then, that it was likely Israel would hit Iran any minute.

Today, as a result of economic and trade sanctions against the Iranian government, it announced that it was preparing to cut oil shipments to some European countries -- at the same time claiming it wishes to 'negotiate' about the status of its nuclear program.

It's been argued that the attacks on IDF members outside Israel were false-flag operations -- I doubt that; the evidence against the Iranian government and the creature they created, Hezbollah, is damning. However, my gut sense is that the fact the attacks have occurred may reduce or remove opposition to Benjamin Netanyahu and hard-liners in the Israeli cabinet who want to kill the snake in its nest, right now. It's just something indefinable, in the air, that I'm sensing. But I feel the Israeli government has consensus and has made its decision.

And it may be that the only thing preventing them from executing that decision (as it has been for some time, I think) is American reluctance to go 'all in' with our Middle Eastern ally. The recent long article ("Will Israel Attack Iran?") by Ronen Bergman in The New York Times' Sunday magazine section noted that whether or not the Israeli government had U.S. support -- intelligence, logistics; military and political -- will be a critical factor in Israel's decision to attack.

There may come a time that, with or without America's blessing and support, the Israeli government feels it has no choice. When you're surrounded by countries full of people determined to wipe you from the face of the earth, there's no incentive to wait for one of them to go nuclear. Bennie and his hard-liners might call President Obama as attacks are under way, saying You have to go all in with us now. Think how it will look in November if you abandon Israel in her hour of greatest need. You want that on your conscience?

And, realistically; who would?

Well, we'll see. I truly hope I'm wrong about this, but remember -- if it does occur, all bets about the future will be off, for real.

The GBU-28/BLU-113 Hard Target Penetrator is now a standard weapon in USAF service. In the months following the Gulf War, the USAF completed the testing process, TI developed and certified proper software for the seeker, and a substantial stock of warheads was built up. Carried initially by the F-111F prior to its premature retirement, and now by the F-15E, the Bunker Buster can be called upon to do its task at any time. It is indeed an excellent conventional deterrent weapon, as it can crack targets which otherwise would require a surface burst nuclear warhead to take out.

Iraq, Iran, Libya and North Korea have been reported in recent years to be expending much effort in digging themselves even deeper underground, producing a boom in world sales of tunnelling equipment. Given the proven performance of the GBU-28, they should probably keep digging !

More recently, Northrop have commenced flight testing of the GBU-37 GAM-113 (formerly BLU-113/GAM), a GPS guided weapon which uses the GBU-28’s BLU-113 warhead and a modified Northrop GAM tailkit to produce a wholly autonomous all weather bunker busting weapon for use by the B-2A....

Virtually undetectable, a Northrop B-2A dropping these weapons could paralyse an opponent’s hardened C3 system with total surprise. A single B-2A can carry up to eight rounds on its internal rotary weapons launcher. The almost undetectable APQ-181 Attack Radar and GPS aided GAM/GATS targeting system provide a true all weather around the clock precision capability.

-- From Australia Air Power, "The GBU-28 Bunker Buster"

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MEHR:... and the top article in this morning's online Paper Of Record is, "Aggressive Acts by Iran Signal Pressure on Its Leadership... A flurry of actions and statements by Iran this week suggest its leaders are responding frantically, and more unpredictably, to the tightening of sanctions."

My take on the story is that the Iranians are fragmented but far from stupid, and while they're willing to lash out at Israel in copycat-style attacks on IDF personnel in Georgia and India, using tactics ascribed to Israeli intelligence in the assassination of Iranian physicists (a message in itself), it doesn't mean they're insane -- at least, not enough to provoke a full-scale assault of their country.

Iran's government excells at escalating situations, and then suddenly appearing conciliatory, reasonable. That style of brinksmanship has worked well for Kim Jong Ill's North Korea, but the Iranians have used it so often as an apparent stalling tactic with the UN and IAEA investigators that it's damaged their credibility: No one wants to trust an angry drunk when they suddenly become genial and ask for the car keys.

As investigators unearthed new evidence implicating Iran in the attacks this week in Thailand, India and Georgia, President Mahmoud Ahmadinejad of Iran announced Wednesday what he said was his country’s latest nuclear advance, and Iran’s Oil Ministry threatened to pre-empt a European oil embargo by cutting off sales to six countries there.

“These are all facets of the same message,” said Muhammad Sahimi, an analyst and professor at the University of Southern California. “Iran is saying, ‘If you hit us, we will hit back, and we are not going to sacrifice our nuclear program.’ ”...

Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace, said the belligerent moves by Iran actually underscored weakness.

“If there’s a meta-narrative here, it’s that Iran tends to speak loudly but carries a small stick,” Mr. Sadjadpour said. “Their alleged terror attacks projected incompetence more than fear, their announced nuclear progress is likely exaggerated, and their threat to pre-emptively cease oil exports to Europe turned out to be another bluff.” ...

The latest developments suggested to some analysts that Iran’s supreme leader, Ayatollah Ali Khamenei, was deliberately lashing out at the West, though it was not clear whether his intention was simply to retaliate or to provoke a limited war with Israel. Some Iranian hard-liners are said to believe that such a war would benefit them, allowing them to close ranks and assert greater authority for the elite Revolutionary Guards.

“I think this is Iran’s way of saying, ‘Look out, we can reach out and touch you,’ ” said Mehrzad Boroujerdi, a professor of Middle East Studies at Syracuse University. “But I doubt that Khamenei wants to go all the way to a serious armed confrontation.”

So, perhaps not all the way to War Games. At least, not yet.

---

Greece -- The Tragedy; Season 5

Meanwhile, In Downtown Europe


Happy Greeks Enthusiastically Embrace Austerity To Assist
Their European Allies By Vowing To Live On Dog Food For
The Next Ten Years (Photo: Guardian UK / Milos Bicanski)

The Guardian UK:

Greece enacted billions of euros in spending cuts and fresh austerity measures last night in a volatile parliamentary vote aimed at avoiding default on its national debt and keeping the eurozone intact, despite some of the worst rioting and political violence witnessed in the country in years.

More than 40 buildings were set ablaze in an orgy of looting that left scores injured as protesters vented their anger at the caretaker government and parliament's ordering of a further €3.3bn of savings by slashing wages and pensions and laying off public sector workers.

In return, Greece is to receive a second eurozone bailout in two years worth €130bn in addition to a €100bn writedown of debt by the bankrupt country's private creditors.

There was turmoil inside the parliament, too. MPs voted 199-74 in favour of the cutbacks, despite strong dissent among the two main coalition members.

A total of 37 politicians from the majority Socialists and conservative New Democracy party either voted against the party line or abstained. A further six voted against sections of the legislation. After the vote, the government announced that those 43 MPs had been expelled.

In case you haven't been paying attention (or believe that what happens elsewhere doesn't affect you), the European Central Bank / International Monetary Fund bailout of the current Greek government is important, and you may want to keep these points in mind:

• The "assistance" gives the Greeks money to prevent default on the redemption of bonds, due on March 20th; not being able to do so would cause the Greek economy to implode (sooner than it will, that is);
• The loan package and debt restructuring makes sure the creditors (primarily major European banks) holding those bonds are paid enough -- some of these banks are Zombies, only kept alive and solvent by the constant motion of money, as in a check-kiting scheme. Without timely payment on these Greek bonds of enough Euros to keep everything in balance, the cash flow would be interrupted, the Zombie banks could suddenly assume full-on Walking Dead Status and default on counterparty obligations, which would Be Bad;
• The "assistance" to Greece came with a price -- including cutting over 100,000 public sector jobs in the next four years; selling state-owned electric, natural gas and other monopoly businesses to the highest bidders (Look Out! Here Come The Oligarchs!); and slashing government pensions by up to 40%.

And all of this demand for Austerity is just so that Greece will receive a bridge loan to ensure it will not default and affect European banks.

It does not solve Greece's overall deficit and debt problems. More loans and ECB/IMF financing will be needed for that -- and in order for Greece to receive that future assistance, Little Angela and the Austerians are saying that Greece will need to cut public financing and expenditures even more.


Greece's Finance Minister Evangelos Venizelos, One Of The
Largest Humans On Earth, Spots Christine Lagarde Of The IMF
At EU Headquarters In Brussels On Thursday. He Seems Hungry.
(Photo: National Post, Canada; Yves Herman / Reuters)

In this latest round of Voting To Impoverish Your People, I particularly liked the part where members of Greece's parliament who voted against accepting the ECB/IMF's financing terms were thrown out of their political parties. And in Brussels on Thursday, IMF Director Christina Legarde stepped from a BMW limousine to speak briefly to the press in her new red coat and black, two-inch-heel Pradas; so comfortable and fashionable. I'm sure the sight of her quiet luxury inspires Greece's children to want to grow up and be just like her.

But, the EU leaders who believe in Austerity don't see the previous weeks of turmoil around Greece as being about a band-aid for Europe's banks. This is about the survival of the Eurozone and the political entity of the European Union -- to people like Angela Merkel, Finance is the force behind the ideals, but it all seems to come down to money in the end. And unfortunately, at this point the world's financiers are not at all trustworthy.

And, please note that the Zombie banks are still at risk of failing from any event that could interrupt the necessary flow of money; they're balanced that precariously. Any default, any failure on the part of another bank to pay might cause one of them to fail. All this is widely understood if not acknowledged; one reason the results of 'Stress Tests' of European banks last year were greeted with skepticism.

But, this isn't over, just in case you were wondering. "Greek Crisis", Season 6, will start again in the near future -- and expect the Greeks to greet it in the same spirit of cooperation and sacrifice which we've seen on Teevee this weekend.

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So Good

Banksters Win Again

So, a "settlement" has been reached between major banks and Attorneys Generals of 49 states over charges of outright fraud in illegal foreclosures.

For having fabricated millions of purportedly legal documents to support foreclosing on millions of mortgage loans in America (a criminal act; something you or I would be indicted for and arrested in a heartbeat), and no one responsible goes to jail. The banks will collectively pay $25 Billion dollars. The total of all mortgages in the United States either in forclosure, delinquent, or whose owners are 'underwater', is estimated to be $700 Billion.

The bulk of the settlement, about $20 billion, would go to one million American homeowners [wrote Nelson Schwartz and Julie Creswell in the NYT] who would have their mortgage debts reduced or their loans refinanced at a lower interest rate. It also includes $1.5 billion for roughly 750,000 people who lost their homes to foreclosure between 2008 and 2011, with each receiving between $1,500 and $2,000.

And, the media is putting a positive spin on developments: Homeowners benefit! Well, some of them do; yeah! People are helped! Justice is served, kinda!

• The New York Times headline was, "Homeowners Get Bulk of the Benefits From Mortgage Plan (...Under the settlement, nearly two million Americans could benefit from mortgage relief from the nation’s biggest banks").
• The Los Angeles Times headline was, "Foreclosure deal to help 2 million with loan trouble (... The nation's five largest lenders will pay $25 billion to partially compensate those who lost their homes)".
• The Guardian UK wrote that "Obama Praises $25b Mortgage Deal (... Millions of people could have mortgage debt cut as America's top lenders agree deal over alleged abuses in housing market)".

“The effect of this settlement will be catalytic,” Shaun Donovan, the secretary of Housing and Urban Development, said in an interview.

He predicted it would spur more loan modifications through existing government programs as well as principal reductions — when loan debt is written down for borrowers who owe more than their home is worth — as well as additional mortgage relief provided by banks.

So, let's recap -- approximately one million homeowners will receive some relief through restructuring in their mortgages. Approximately 11 million households need their loans modified in order to keep from being forced out of their homes.

Approximately 750,000 people who were evicted, lost their property and in some cases hundreds of thousands of dollars; marriages, and jobs, could receive monetary compensation in the amount of ... between $1,500 and $2,000.

Fortunately, they don't waive any rights to file future legal action against their former mortgage lenders if they demand that two grand -- but is the compensation more than a token? Is it just? Or, an insult? It reminds me of the "compensation" offered by Austrian courts to the families of Holocaust survivors attempting to reclaim their lost art.

The banks, which were facing the possibility of criminal investigations and civil actions in at least 25 states, including California and New York -- will effectively not be further prosecuted by the Attorneys General of 49 states (Oklahoma would not join in) for their actions. They could be investigated and prosecuted for violations of Federal law... but what is the chance of that happening?

And, as HUD Secretary Donovan said to the NYT, the "settlement" would move the major banks to 'act better', provide further loan modifications and reductions in principal for affected Americans (the 11 million other mortgageholders facing foreclosure not assisted by this "settlement"). And the banks would do this, because they're just nice guys.

Remember? The Bush and Obama administrations gave them hundreds of billions of dollars. The expectation was that the money would spur the Nice Guys to lend money to small businesses, prime the pump to get the economy moving. The banks took the money, kept it, and used it (among other things) to provide themselves huge bonuses for their executives and board members. Why would they behave differently, give the Rubes they steal from public any assistance, now?

The banks precipitated a gigantic, global financial crisis -- which is far from being over. They forced millions of Americans from their homes, illegally. They disrupted and even destroyed lives. And unless the States' Attorneys General or the Department Of Justice go after them in force, the banks are effectively getting a Mulligan.

They walk, by ponying up a relatively small amount of cash -- which will simply become a tax write-off as a business expense. I understand that the "settlement"'s cheerleaders tout this as a first step, a move in the direction toward reforming the financial industry. But as one critic noted, the total is a "drop in the bucket". It smells like a band-aid for a dysfunctional system that still rules.

The amounts from individual banks were linked to their share of the servicing market. The biggest, Bank of America, would provide $11.8 billion, followed by $5.4 billion from Wells Fargo, $5.3 billion from JPMorgan Chase, $2.2 billion from Citigroup and $310 million from Ally. Bank of America would contribute an additional $1 billion for Federal Housing Administration loans.

And if nine other major mortgage servicers join the pact, a possibility that is now under discussion with the government, the total package could rise to $30 billion.

Banks stocks were mixed in trading Thursday, but shares of Bank of America rose 0.62 percent to $8.18, its highest level since September. Much of the money to pay for the settlement has already been reserved, and investors expect the settlement to remove at least one legal worry for Bank of America.

Ha Ha Ha Ha. Why not just say it? They won. Again. I'm not surprised at all.

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MEHR Mit Schweineri: The War Criminal Washington Post declared in it's usual tarted-up, Villager manner that the settlement was "rough justice — very rough — in a case of rampant, but essentially victimless, alleged law-breaking."

And, Avedon Carol weighs in from a different vantage point in the UK, courtesy of The Great Curmudgeon (paragraphing added for emphasis):

For a moment it seemed like there was good news when I saw this: "Schneiderman's Last-Minute Cancellation Spells Trouble for Foreclosure Fraud Settlement."

But then it seemed it was more like this: "49-State Foreclosure Fraud Settlement Will Be Finalized Thursday."

(And Jesus Christ, Ezra [Klein], why on earth is it good news that this deal will "help a lot in protecting banks from lawsuits"? These people stole people's homes, and you think a check for a couple of grand is some kind of compensation?

(If you get caught selling a lid of grass they confiscate every damn thing you have, but if you steal someone's house you just pay pocket change in compensation out of billions you made from cheating people? That's really nice for you - if you're a banker.

(But, you know, we don't need bankers like that! And we need to put those banksters in jail so they won't do it again - and doing more of it seems to be just what they have in mind, thanks to this deal.)

Avedon has more. Follow the links. Now.

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Hold The Mayo

Stuff Goin' On



The majority of Things going on these days aren't what I want to see happening: Syria, Egypt (still); the distinct possibility of war with Iran (did'ya know there will shortly be five aircraft carriers within striking range of the Gulf, and four Amphibious Assault Ships? Hah? Did'ya?); and, no matter how entertaining, the public transformation of the Republican Party into the Party Of Stupid Bad Crazy.

There's Russia's fictive 'democratic' government of Sad Vlad The Czar. And Yurp (as The Great Curmudgeon would say) continues to say ALL ABOARD THE FAILBOAT! HOOT HOOT!, which may result in a rapid deterioration of just about everything, and then we end up in Yurts watching our children play with toys made in China of radioactive animal dung and sold to us at an exorbitant mark-up.

But, there are good things, too. Such as, we haven't heard anything about the personal life crises of either Lindsay Lohan or Britney Spears in a good, long time. You don't know how grateful I am for that.

---

Happy Birthday Boz

God Bless Us, Every One


Hand-Lettered Calling Card Of Charles Dickens, Short-Hand Writer (1835)

Today, we celebrate someone like Steve Jobs for being an innovative businessman, for bringing an "imaginative" take to the age-old proposition of selling goods and services. It's important, now, for 'imagination' to be practical, to have a commercial application.

However, Once upon a time, human cultures celebrated the storytellers, people who were able to move us with nothing but a story, which we could read and play out (in Steven King's phrase) "in the skull cinema", the gigantic stage of our own imaginations.

Charles Dickens (1812 - 1870) was one of these Tellers of Tales, and while he was masterful at self-promotion and the commercialism of Victorian England's publishing world, what he had to offer started with a pen on paper and the telling of a tale for its own sake.

We live in a Dickensian world, these days, whether we recognize it or not; a world where the milk of humankindness is present but obscured, and one where a Darwinian interpretation of society rages in full force.

There are Pickwicks and Tiny Tims around us; and Jarndyce v. Jarndyce litigation keeping families at each others' throats; there are secrets from the past, and Miss Havershams wasting away in 'Grey Haven'-style houses -- and there are plentiful Ebenezer Scrooges, with lumps of coal in place of their hearts; far too many of them.

There are Pips, and Bill Sykes-types, in our world (and Sykes' poor dog, Bingo). There are Micawbers and Dan Peggotys and Little Emilys, going off to a new life across the sea. There are Sydney Carltons changing places with Darnay, so that his unrequited love, Lucie, can be happy.

There are Fagins, and 'Monks', Creagles and Steerforths and Bumbles, Pecksniffs and Chuzzlewits, who believe that cruelty and an ignoble grasping for whatever they can lay their hands on, that acts crabbed by meanness and spiked by fear are the proper responses to living, and the world.

There are the Merrys and Cherrys, too, with their spoiled and ridiculous Paris Hilton-expectations of what they are entitled to. There are the Little Nells and orphans. There are those who believe in work-houses and prisons, who seem to believe that many should die and decrease the surplus population. And there are those who do far better things than they have ever done, and remember with tenderness their connections to the people in their past, and to Others. Dickens chronicled them all.

Objects sold in the marketplace, no matter how clean and sleek they appear, and no matter how much they "change the way we listen to music / communicate / work", they don't reconnect us with portraits of our Common humanity.

They're pretty, and efficient; but they don't remind us that we are born and, at some point unknown to us, have to die -- and that the story of the journey between those two fixed and immutable points is the important thing. Whether we were kind, or daft, or ignoble or courageous; whether we turned out to be the heroes of our own lives, or if that station was held by someone else.

Dickens reminded us of that, and on his 200th birthday it's worth taking the time to remember. Happy Birthday, 'Boz'.

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How Google Nearly Destroyed My Life

Brigmann Back On The Air

I'm not even going to waste time trying to describe it, but if you ever, ever have a problem with your Google account, then you are to be pitied. Truly, and forever, as though you had been cast into the descending, circular pit that Dante envisioned in his Purgatorio.

And, yes; I'm fully aware of the irony of broadcasting this on a Google-owned platform.

But, hey; good luck dealing with a faceless bureaucracy. And, in the words of Forrest Gump, that is all I have to say about that.

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Newt?

'My Plan Maintains Our Dignity'


Ethel -- That Thing's Standing Out On The Wing Again. And He Keeps
Looking At Us. (Courtesy of this little Tumblr thing, "Newt Judges You")

Today is Florida's Rethuglican primary, pitting Randyman™ against One Of America's Richest Politicians © -- and followed, of course, by the Harold Stassen (What? Oh, for pete's sake; look it up) of the Rethug world, Ron Paul, who will be handing out little black plastic UN helicopters to supporters -- which, due to his sensitivities around issues of race, Ron will refer to as "ebony".


Mitzy Thrills The Crowd With His "I Can Beat Obama" Face, Borrowed
From The 'Judge Doom' Character In "Who Framed Roger Rabbit"

And, all America™ is thrilled by the level of campaigning shown by the Rethug front-runners -- a sex addict, and a stiff, utterly clueless Wealthy Person.

Randyman is widely expected to have been outspent by America's Richest Politician ©, and Florida is sinking under the sheer weight of rhetoric showing Newt to be a Randyman, flip-flopping liberal crazy person who shot a man in Dallas just to watch him say, "Better watch what you do with that squirt gun, mister". Mitzy, on the other hand is saying I Am One Of You!! You Are One Of Mine!! I Paid For You -- I Own Youuuuu!! over and over, until led away by his handlers.

How many days is it until Iran gets attacked? And who in the name of anything held sacred in human history names their child "Newt"?

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Random Barking

Woof Woof Woof

The state of our Union is getting stronger -- we've come too far to turn back now.
--President Barack Obama, State Of The Union Address; January 24, 2012

In looking over a wide variety of blogs and websites -- it struck me that more than any other generation that's preceded us, we have access to factual details and a wealth actual data in support, clearly showing how badly we have been screwed; by whom; and effects of their predations, given that this slow-motion aircraft crash is very far from being over.

And how clear it is (short of an out-and-out revolution) that we're effectively powerless to do anything about it, or bring those responsible to any legitimate form of justice.

Just sayin'.

---

Kein Schwein Ruft Mich An

Episode XVI: Kicking A Can So Big It Cannot Fail

Jack Ewing, in the Paper Of Record, in the wake of Davos and in advance of the meeting of EU Leaders on January 30th:

DAVOS, Switzerland — World leaders turned up the pressure on Europe on Saturday to erect a more formidable wall of money against the sovereign debt crisis, warning that the eurozone continues to pose a severe threat to the global economy.

George Osborne, the chancellor of the Exchequer in Britain, said a bigger firewall was “a key to unlocking further confidence,” while Christine Lagarde, managing director of the International Monetary Fund, said the fund should be big enough to eliminate any doubts about European resolve.

“If it is big enough, it will not get used,” she said on Saturday during a panel discussion at the World Economic Forum here.

The firewall being discussed is the European Stability Mechanism (ESM), a separate fund set up by the EU and the European Central Bank in collusion cooperation with the IMF and the World Bank, holding 500 Billion Euro ($656 Billion USD) as an emergency contingency fund, to provide Eurozone governments with loans when austerity policies fail to reduce sovereign debt.

The 'economic charter', agreed to in principle by all but one of the Eurozone nations in December of last year (Britain opting out rather spectacularly) and still needing ratification by 16 governments, included a promise to complete setting up the ESM and having it ready for operation by July of this year.

These governments are faced with deficits in simply running their governments. They use short-term bond sales to raise cash -- but these auctions don't go well, because the interest rates on the bonds may be high. The governments end up paying more to bondholders than originally projected; an unanticipated addition to their deficits, which the bonds were supposed to help solve. Here, the ESM would step in to provide the government with a loan to ensure 100% on the Euro was repaid, plus interest, to all the bondholders.

The idea's supporters are saying that if the amount of funding in the ESM was huge, gigantic, then "The Market" should understand that it can invest in bonds from Greece and elsewhere with confidence, and interest rates for new short-term bonds should be lower. Maybe. The total ESM fund may have to be much larger than the $500 Billion Euros already suggested.


Obligatory Cute Small Animal Photo In Middle Of Financial Blog Rant.
Today, We Offer Reddy Kilowatt, In Advance Of The Pending Attack On Iran

Angela Merkel and Nicholas Sarkozy have tied the ESM's creation to the EU / Eurozone's acceptance of changes to centralize the Eurozone's economic policies; the ESM is part of that general framework.

Merkel couldn't get a consensus of the full 40-nation membership in the December, 2011 EU meeting to change the Treaty of Lisbon; however, she was able to pull together the Eurozone countries (minus England) to approve a separate 'economic charter' that would initiate a framework for more economic cooperation, but also to enshrine Austerity policies in EU economic regulation.

Austerity is the chosen method to end the cycle of debt in the Eurozone. 'Spendthrift' nations must cut their governments' budgets and reduce their annual deficits. If they don't (so the 'economic charter' lays out), in some cases they can be fined, or lose more autonomy in handling their nations' finances to the EU.

Austerity is an exceptionally bad idea, and many economists have weighed in against it. More Austerity means cutting government budgets because further deficit spending is viewed by the Austerians as an absolute evil. Austerity means (best case) stagnation, and no growth, or (worst case) full Recession.

Eventually, a European economic slide will effect global markets and economies -- and that's what Austerity ultimately means. It will prolong economic hardship for nearly everyone, except the already-wealthy. It will increase social stratification and continue destroying the so-called Middle Class in most Western nations.

For Europe, it means being shoved head-first towards an unknown period of higher unemployment and crime, lowered expectations and standards of living, and the general grit and depressive shabbiness which comes with all of that.

People in Europe understand this on an intellectual level, but many still have yet to experience fewer jobs, buses, streetcars and garbage pickups; reduced public health coverage and increased work loads for remaining employees of corporations who demand higher productivity: There's always someone else who will do your job for less -- so shape up and shut up. People in Greece and Ireland particularly, followed by Spain (where unemployment is nearly 23%) and Portugal, and soon, Italy, are already experiencing it.

One fact about the ESM is that it cannot be made large enough to cover all the potential deficits in national budgets of the 16 participating Eurozone nations. Creating it is more than just a political gesture, but as Felix Salmon noted in December,

... All of Europe’s hopes right now are being placed in ... the European Stability Mechanism ... [which] is going to have to be constructed with the ability to put out fires of any conceivable size. And as such, it’s going to have to be able to borrow enormous amounts of money, and lend them on to countries which have found themselves in trouble.

But that would make the ESM, essentially, a bank. And the European leaders seem determined, today, to prevent the ESM from operating as a bank at all. Which means it will never get the firepower it needs to be taken seriously... the ESM seems set to be capped at a mere €500 billion euros ... compare [that] to Italy’s total debt of roughly €2 trillion. And that isn’t even counting Spain, or Portugal, or Ireland, or whatever money Greece might yet still need.

Many Europeans already are beginning to understand that Austerity will not be experienced equally. Some countries within the EU which don't have as high a GDP-to-debt ratio (specifically, Germany and France) will not experience as rapid a rate of change, or as steep a drop, in their living standards as the 'spendthrift' nations of the Eurozone. And with that will come political tensions between EU countries, and between political parties in those nations where the bite of Austerity is felt most strongly.

Some EU politicians agree with this; some don't -- and the disagreement is over both making Austerity The economic policy, and giving up some control of their country's economies (including their banks) to a larger EU organization. The British voted 'No' to that, and other EU politicians are worried that support for the Eisen Kanzellerin and her 'policy of Less' might hurt them politically -- because not everyone in Europe Hearts Little Angela.

Eurozone leaders are more focused on dealing with what they see as the more immediate danger of a Greek default, and less on testing their taxpayers’ patience by increasing the size of the firewall...

“I’ve never been as scared as now about the world,” said Donald Tsang, chief executive of Hong Kong... “We do not know how deep this hole would be when the whole thing implodes on us,” he said...

Nouriel Roubini, a professor of economics at New York University known for his pessimistic views, forecast Saturday that Greece would have to leave the eurozone this year, and said that there was at least a 50 percent chance that the eurozone would break up within three to five years.

“The euro zone is a slow-motion train wreck,” Mr. Roubini said during a separate panel discussion.

...Speakers on Saturday did not say how big they thought the European firewall should be. But, again echoing American officials, they agreed it should be so enormous that no investor would question its integrity.

In other words, it should be made "Too Big To Fail".

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MEHR: The Independent UK (courtesy of The Great Curmudgeon) reports:

Europe's leaders remained locked in dispute yesterday over the size of the eurozone bailout funds, as it emerged Germany is pushing for Greece to be stripped of powers to control its budgets.

The move to make Greece hand over control of budgetary policy as the price for agreeing a €130bn rescue package [this tied to an approaching deadline to redeem short-term Greek government bonds, plus interest; see above] would represent a humiliating blow to Greece's hopes of controlling its own destiny but could offer a means of staving off financial ruin.

The proposal was made by Germany as the euro group considered how extra finance should be offered to countries such as Greece which need support but are "continuously off-track" with their budgets... [that] European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy.

Hey -- Austerity forced on 'spendthrift' governments, as determined by Angela's model! Now that's an idea that will have broad, popular support among Greeks! Huh? You think? Well, okay; maybe not...

Details of the proposal emerged as finance ministers met at the World Economic Forum in Davos where France and Germany publicly disagreed over the size of the "firewall" needed to protect European economies.

Also, too, Bloomberg reports that new 30-year Greek bonds may well carry a cap on interest rates.

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Dort Tanz Lu-Lu

Ah-ha-ha; Ooo-hu-hu: Liveblogging The State Of The Union Address
We've never done this before. A little music while we wait.

6:05 PDST:
Interesting that ABC touts this as the SOTU, "And The Republican Response". Guess that's 'equal time'. I'm on CBS.

Okay; the President has been announced. He's making his way down the aisle, and appears on his game: Confident, a little jocular, laughing (the way you do when you have a little nervous energy to burn).

6:10 PDST:
Scott Peley and CBS's White House Correspondent, Bob Schaeffer, note that Supreme Court Justices Alito, Thomas and Scalia are absent. They're such nice people; we wish everything for them that they wish for Obama. And more.

6:12 PDST:
Obama has reached the podium. Leading with the return of soldiers from Iraq. "We gather tonight knowing that this generation of heroes has made America safer and more respected around the world..." Leading with national security and defense issues. Subtext: Don't come at me, or the Democratic party, from that direction.

"Imagine what we could accomplish if we followed their examples.... We can do this! I know we've done it, because we've done it before."

6:19 PDST:
A few making it well, the rest not getting by so well; "all must play by the same rules", and almost everyone in the room applauds. Even the Rethugs. Interesting.

The Financial Crisis: "It was wrong -- it was irresponsible... and left hard-working Americans holding the bag."

6:25 PDST:
'I will fight obstructionism and the failed policies that got us in this predicament in the first place'. Where it begins, he says, is American manufacturing -- not sure about that, given how globalization has changed the face of how business is conducted. Unless we can offer corporate business an advantage by investing in America, not sure how that can happen.

Oh, I see: "We can't bring back every job that's left our shores... it's more expensive to do business [these days] in China." Ask how you can bring back jobs to America and the government will help you.

American businesses here are hit by bad tax rate (Uh-Oh). If you outsource, you shouldn't get a tax break; multinationals should pay a fair tax, and advantages go to those who hire in America (Ruh-Roh). Well, this sounds nice...

"Send me these tax reforms, and I will sign them". Good luck with that; President Boner keeps scratching his face. He has a disease? He can't stay still?

6:30 PDST:
We've brought trade issues with China at twice the rate as [Lil' Boots Bush], he says, and Obama announces a new regulatory unit to cover intellectual and product safety issues with China. That's fine, but they won't love hearing that.

6:38 PDST:
Teachers. Cut the deadwood; don't teach to the test. A proposal that in every state, teenagers stay in school by law until they graduate or turn 18. States need to make higher education a priority in their budgets, and "higher education is not a luxury".

"We should be working on comprehensive immigration reform, right now." The Rethugs won't stand up for that.

"Women should have equal pay for equal work". Yeah; everybody better stand up for that and applaud; isn't that supposed to be a reality already?

President Boner looks like he has gas; his eyes keep darting back and forth. President Yertle The Turtle has a tiny, tiny smile on his tiny, smooth face.

Don't lose the race for the future. Make more energy! We have natural gas! We can safely develop it. Hundreds of thousands of jobs. We don't have to choose between our economy and our environment. Fracking = good.

6:45 PDST:
"We've subsidized oil companies for generations."

No reason Congress can't set clean energy standards? Sure there are. There are 200-plus of them in the House and forty-plus in the Senate. "Send me a bill to create these jobs."

Now, infrastructure: "During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge... take the money we are no longer spending at war, and use some of it to do some nation-building right here at home."

6:50 PDST:
It's time to have a nation of accountability. We need smart regulations to prevent irresponsible behavior (Uncertain Applause), which will strengthen the financial system. "No bailouts, no handouts, no cop outs".

And a very bad joke about oil and spilled milk.

And, I will not back down from protecting our water and air; I will not go back to the bad old days of health insurance coverage, and where Wall Street plays by its own rules. If you're a bank, you can't play with depositors' and investors' monies in the Big Casino any more.

Pass legislation to prosecute fraud; send me the bill -- the Justice Department is going to investigate the packaging and selling of bad home loans (Hey Angelo! You got a problem!)

"Pass the payroll tax cut without delay." And Little Eric Cantor politely applauds.


Obligatory Cute Small Animal Photo Smack In Middle Of State Of Union

6:59 PDST:
A quarter of all millionaires paid less taxes than millions of American households. Doe we want the Bush tax cuts, or everything else? Because if we want to pay down the debt, we can't have Lil' Boots and things for The People.

The American people know what the right thing to do is. You can call this class welfare all you want. The American Dream is not because we envy the rich, but because we believe we can be like them.

America, built to last, is not one where there is no shared sacrifice.

7:05 PDST:
Ahh, Congress. And President Boner wipes his nose again.

None of this can happen unless we lower the temperature in this town. Politics shouldn't be about mutual destruction. Even though Obama has already been slapped and stepped on by the Rethugs time and again, he's still (publicly, anyway) extending an olive branch.

"We should all want a smarter, more effective government... because together, there's nothing the United States of America can't achieve."

7:10 PDST:
And now, the Arab Spring is mentioned. Ghaddafi Duck is dead, and human dignity in Syria cannot be denied (Oh, cannot it? Ask folks in Hom 'bout that).

Tyranny is no match for liberty. America will take no options off the table in preventing Iran from developing nuclear weapons, but "there is still an opportunity for a peaceful settlement" -- the best way, but we have never been closer to Israel.

"Anyone who says that America... has waned, they don't know what they're talking about... America remains the one, indispensable nation in world affairs, and... I intend to keep it that way."

7:16 PDST:
Man; President Boner is just Buzz Killington tonight. Maybe he'll cry. It's Republican credibility!

Those of us have been sent here to serve can learn... from our troops. When you put on the uniform, it doesn't matter if you're" whatever you are. "You fight for the people beside you; you rise and fall as one unit -- one nation".

When we nailed bin Laden, no one thought about differences, just the mission. The SEALs succeded because everyone on the team trusted each other... "So it is with America."

This nation is great because we built it together.. because we built it as a team... as long as we maintain our common purpose...

A real, solid close.

7:20 PDST:
ABC reports that before the speech, Vice-President Biden told a roomful of Democrats that the speech, in essence, was "bin Laden is dead; General Motors is alive".

Peggy Noonan, a Reagan and Bush Republican: Speech was too long; why is he talking about all this stuff he should've been talking about in the past three years?

CBS reports that Obama is defining the election about the road ahead, while the Rethugs want it to be a referendum on his Presidency. Mitch Daniels, Republican Governor of the Grrrrrreaat State of Indiana, will deliver the Rethug response.

7:23 PDST:
Cut to commercial! And who gives a damn what Fox is saying. Not surprised if they ran audio of the speech while showing a crudely-drawn caricature of an African-American man on video -- The sort of thing that warms the heart of Crafty Ol' Aussie Little Rupert.

7:29 PDST:
Mitch Daniels, with his faint Southern accent.

Thanks for killing bin Laden, and the President is a good family man. However, the last three years have been horrifying and he's responsible.

Trillions added to the national debt (oh, give it up; 42% of all increases in the Debt since 2000 came from Lil' Boots Bush. Talk to the CBO). As Republicans, let us compare America's financial situation to Greece and Yurp, even though our economic systems are completely different.

We talk tonight to Americans who want to do better by offering "a private economy" as the solution. Pull yourself up by your bootstraps. Be pro-growth, private sector jobs for everyone!

Fewer tax rates! Don't penalize "job creators"! Energy extremists are bad!

We must save Medicare and Social Security, but we have to build all new programs! The dollars need to go to those who need them most (seniors who can vote for Newt), but in future we need better ways!

We're not obstacles; we're victims of the President and his Democratic allies (yes, Mitch actually used the word "Democratic", not "Democrat")! If we fail to go to a pro-growth government, it will be bad.

Republicans aren't divisive; we're not obstructionists -- all you have to do is agree with us, do what we want, and we'll just ignore you! Better than if we pay attention to you.

7:40 PDST:
The Democrats claime we can't govern ourselves -- the Democrats are dividing us! We must strike out boldly that America is still the land of More Fore The Rich opportunity. The President is lying about how bad things are -- FEAR! FEAR THE FUTURE! FEAR IT!!

"Nothing mature and freeborn citizens cannot set right... the city shining on a hill". What in the utter fuck is he talking about -- "mature and freeborn"??

Thank you, and Good Night.

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