Criminality and Indecency

Citigroup will be fined some one hundred million for stealing 700 million, without having to affirm or deny guilt.

BY CHAD BRAY

A federal judge sharply questioned the Securities and Exchange Commission about why it didn't force Citigroup Inc. to admit to "what the facts are" before the agency agreed to settle a mortgage-bond case for $285 million.

During an hour-long hearing Wednesday, U.S. District Judge Jed S. Rakoff, an outspoken critic of the SEC's approach to securities-fraud settlements, challenged the SEC on why the regulator allowed Citigroup to settle the case using boilerplate language in which it neither admits or denies wrongdoing.

Well, of course, and the judge can get as mad as he wants, but it is just grandstanding unless he is wiling to throw Citigroup and the SEC lawyers in prison for contempt of court. It ain't gonna happen, because the government is controlled by Citibank, and not the other way around.  And judges are government workers. But the judge is on to something.... and that is an idea that you get to keep what you stole if you simply explain how you stole it.  If you broke any laws, and you tell how you broke them before you get caught, you are immune from prosecution.  So if the Citibank people explain how they stole the 700 million, they can keep it and not be prosecuted.  As it is they can keep it and no be prosecuted, but we still have no idea how they did it (well, we can figure it out, but it would be beneficial to have Citibank admit it, so those people whose pensions are now gone can reflect in their old age how foolish they were to believe in capitalism, as many old Russians reflect on how foolish they were to believe in communism.)  And here is the real payoff, if we knew how wicked the bankers were, would we not withdraw our business and watch them get punished by going out of business?  As it is now, the charade of a court case, the judge just gives cover to Citibank criminality.

And here is a CIA review of a CIA overthrow of a South American elected government, Guatemala, in the 1950s.  The CIA historians lay out a very well argued case that in fact both houses and both parties were on board for the overthrow, so it was not an instance of a right-wing cabal running a rogue operation.  There was a resolution which was opposed by only one congressman, a William Langer.  Thus it ever was, one sane voice in congress.

Well, good to know, except just because congress was on board does not mean it was good or right to do.  In fact, it was wrong and brought much misery for many people in its wake.  Further, the Soviet menace it was meant to check fell within 40 years anyway.  But it is good to see the CIA airing its dirty laundry, if only after that fact, so we can see it has always been an org of doubtful decency.

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My Kind Of Politician

After giving a wee speech on overthrowing the established order to an assembly of political hacks, I was approached by a high ranking party official who inquired as to whether I would consider running for state senator.  Apparently they wanted to lose.  I explained I was an anarchist, and they should not consider me, let alone me them.

Now here is a politician who wants to disband a government.  But we do not need to hve a government in order to disband it...  anyway, watch through to the end...  pretty funny (hat tip to Mish)

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Fresh Fish

Or at least eel, and here it is so fresh that although it has been gutted, it is still twitching.  Vietnamese immigrants opened a fish store in the worst part of Seattle, and worked it to where they own the land around and are now building a state of the art modern facility.  Wish these people had time to teach...

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Septmber 2011 Int'l Trade

Here is the latest report on imports and exports, and it looks fine.

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Cut Taxes And Save Economy?

The deficit reduction super congress that is addressing the govt crisis in USA is expected to drop the tax on repatriated overseas income from 35% to 5.25%, at least for a one time shot.  If it is a one-time shot, it must be a bad idea, but certainly if it is a good idea once, it should be a good idea always.  At any rate, it means at some point, it will be a good idea to take back to USA overseas-based USA-money.

Another policy Republicans are fighting for is allowing corporations with foreign subsidiaries to repatriate capital back to the U.S. at a one-time tax rate of 5.25% (on income already taxed once in the country of origin) instead of having to pay a charge as high as 35% today.

It is also a recognition that USA companies operate overseas to avoid USA taxes.  Of course the best idea is to cut taxes so companies do not play these games, but that is not going to happen when we maintain a standing army.

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1951 Political Leaders

It is astonishing that a Barack Obama can be elected today, that a John McCain would be a Republican candidate... listen to this young man...

Anyone who has decency, self-respect or ideas would not run for politics. So can we do without politicians? Of course!

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Ten Commandments of China Watching

Back in the late 1970s I met Laszlo LaDany in Hong Kong a few times, a Hungarian Jesuit and acknowledged the foremost China watcher.  For those studying China, you cannot do better than Jonathan Spence, for anything he has written, plus two books by LaDany.

The Communist Party of China and Marxism 1912-85: A Self Portrait




The Law and Legality in China: the testament of a China-watcher


Careful to get these in US$ prices, since used copies often carry Hong Kong $ price tags in the hundreds.  Here are Ladany's ten commandments for China Watching, from one of his books:

Number seven is particularly good.  In our society, the powers that be advance their agenda with campaigns:  War on Poverty!  War on Drugs! No Child Left Behind!  The game is to foment a crisis, fashion a solution (which is actually just more of what they wanted anyway) and cram it down our throats.  The Patriotic Act was sitting around the Clinton Administration for years, but Clinton did not have the chutzpah to push it.  Come 9-11, it was dusted off by Bush.

But the reverse is true, too.  Embrace and extend...  As more state legalize marijuana, the bad guys among the powers that be will accept it and embrace it and extend it.  The communist party in China accepted the natural entrepreneurial tendencies in the Chinese to liberate their country, and now free trade is most expanded under Chinese Communism. Talk about paradox.

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Increase Sales, Go Out of Business

Long ago I heard that phrase from an accountant, who noted most businesses increase sales just before they close down.  What with liquidation sales, this makes sense, but he was talking about the people who cut prices or run gimmicks to bring in more customers, not realizing what it does to the profit margin and profitability.

Online retail sales are still only about 6% of all retail activity, but boom-time big businesses, price cutters, are trying to get a jump on each other by opening early and earlier on the day after Thanksgiving, BlacK Friday.  How being open more hours with more overhead to sell products at lower prices helps a business, I do not know.  If I was in charge in these times, I would be closed Sundays, and no doubt have the same amount of sales at 1/7th reduction in cost.  If you have what people want, they will arrange to be there when you are open.

At a Halloween party I listened as two 40+year employees of a major department store chain talk about how the entire loss prevention team was laid off.  They estimated it was about a million a year in savings for the one store they worked in, and guess that any increase in theft was less than that.  Now this may be temporary, as many companies lay off well paid crews and then rehire replacements at minimum wage.  In any event, according to the salesperson, stuff is disappearing fast, and it is provoking since their commissions are based on sales and if the good stuff is gone they cannot do better than minimum wage.  Obviously the thieves have figured it out.  I wonder if the loss prevention crew laid off contacted past arrestees to notify them the store is wide open, with a view if the losses are too dear they will get rehired?  Who knows, but perhaps eBay will have the best selection of new garments this Christmas season.

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It Gets Down To Gold

The economic crisis in Europe has gotten to the point where the players have asked Germany to put up its gold as collateral for Greece.  This must be curious to those who wonder at why gold might be important.

Most market transactions in the history of mankind are free will offerings, as when your neighbor gives you a pie.  Think of all the hunter gatherer societies in history where the men brought in a mastodon and shared it out.  No money involved.

Money strictly defined is a medium of exchange.  Yes, it could be anything, but in most instances it has been gold and silver, gold for kings, silver for peasants. It emerged to facilitate trade when division of labor made more better cheaper faster of new things, and the problem of coincidence of wants needed to be solved.  I have a lamb for sale, you have knives.  You don't want a whole lamb, and I want only one knife.  If we cut up the lamb for a fair trade of leg or lamb for one knife, I now have rotting lamb for sale.  If my apple crop comes off the tree in October, and your winter wheat in April, my fruit rots before your wheat is available to trade.

For these more advanced economies, tallies were kept.  Various means were maintained to account for who got what and who owns what to whom.  Tallies would be made to show I got the knife from Bob, and Jim got the lamb, and I owe Bob some lamb, which Jim will give him when he finds enough people who want lamb to slaughter the animal.  Tallies will show Steve got apples in October and in April I'll use those tallies as a claim to collect some winter wheat.  Still no need for gold and silver.

As the economy got more complex and distances goods moved got farther, something better than tallies was needed.  Gold and silver have these benefits: universally recognized, dense (high value to weight and measure), easily divisible, does not rot, relatively stable value, and a value not realized until recently, antibiotic.  This last one is important as gold actually exchanged had to hand, and gold suppressed disease as it traded.  It may be just coincidence, but the plague spread in Europe at the same time paper money began to replace gold.  It would be an interesting masters thesis to track the plague and the introduction to paper money, so see how tight the correlation is.  At any rate, gold and silver foots the bill as a medium of exchange.

The reason this medium of exchange is important for these farther distances is that the traders may very well never see each other again.  Tallies will not work, so there needs to be a way to settle up that is a final accounting.  This is how gold and silver work throughout history.

When Germany and USA/UK were at war, there was still plenty of trade going on between the two warring nations.  The British needed German ball-bearings for their aircraft, the Germans needed oil.  These trades were settled up in Switzerland in gold. When the outcome is in doubt, people want to settle up in gold and silver.

When the US Armed forces wanted to mountain fighters of the Northern Alliance to liquidate Osama Bin Laden at Tora Bora, the USA forces presented the $25 million fee in USA currency.  The Northern Alliance demanded gold.  The assault was delayed (and OBL escaped) as the USA forces scared up the fee in gold.

I went to a lecture at UW a week or so ago in which the professor traced the history of Egyptian gold coins.  It seems at times of change, or disaster, gold coins emerge.  The last pharaoh before the Ptolemys conquered the country, was obliged to mint gold coins to pay the mercenaries to defend Egypt.  Tallies would not work.  A soldier can take gold anywhere, but a tally depends on the Pharaoh winning and Pharaoh then honoring his promises.  Gold is better.

Spooner noted the amount of gold in coins in circulation is perfectly matched to demand since with the price of gold drops, coins are melted down and made into "decoration, plate and jewelry."  When the price of gold rises (crisis times) that decoration plate and jewelry is melted down and made into coins.  Where are in a meltdown mode right now.

We largely stay put because of our vast resources in tallies.  Even if you are unemployed, you will not move to China where you can get a job teaching English (some do, but almost nobody as a percentage of the unemployed).  You stay put, unemployed because of all of the family connections, help, support etc, that you will get, that is owed you, that you would lose if you go to China.  Most of our resources are in tallies and connections, not in "money."

Another observation from the audience at the lecture was a correlation between freedom and gold.  Gold is suppressed as freedom is suppressed.  As USA converted to socialist country back in the 1930s, gold was outlawed.  It was legalized again in the 1970s, but we are returning to restrictions and taxes on gold, a forerunner of suppression.

So how does gold relate to money, that folding stuff in our wallets and what is in our bank accounts and retirement funds.  Well, none of that is money, it is all tallies.  And at any point Pharaoh can say what value it has, and do as he wills.

We are in a time of crisis, and we do not know if Pharaoh can settle up.  bankers are asking that the bailout of Greece be backed by German gold. In times of crisis, the mercenary knows to say "pay me in gold."  You should know this.

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