[QUOTE=xilman;301080]Personally I believe that absence of evidence is not evidence of absence. If no opinion is expressed I try hard not to draw conclusions either way. IMO, it's up to me to examine the evidence and to make my own evaluation.[/QUOTE]

I neglected to add: Whether the poster in question has a substantial posting history and if so, whether the post in question is in a vein which they have previously made explicitly commentary on, strongly figures in the making of such inferences by this reader.

/quibble/
Ewmayer seems to have a stuck LY key. In fact, it is explicitly differently reasonably certain!
/end quibble/

The onus is on the lender to ensure that a loan is appropriately collateralized. To go after the guy who applied for the loan is a miscarriage of justice.

There is a missing link here. Somewhere along the way, someone forgot to mention that the lenders deliberately made loans that should never have been. The reason is because they KNEW they would not be holding the bag because the loans were going to be sold on to some poor schmuck who believed those AAA ratings.

DarJones

[QUOTE=Fusion_power;301102]There is a missing link here. Somewhere along the way, someone forgot to mention that the lenders deliberately made loans that should never have been. The reason is because they KNEW they would not be holding the bag because the loans were going to be sold on to some poor schmuck who believed those AAA ratings.[/QUOTE]

Indeed.

You've just have to love financial derivatives....

[QUOTE=ewmayer;301076]Perhaps others feel differently, but it seems to me that if one posts an article in a medium such as this, it is important to give at least a hint what one thinks of the content.[/QUOTE]IMO the default (i.e., when not otherwise indicated by wording) assumptions for what a poster thinks about the content of what s/he posts to a thread should include:

a) that the content of the post is related to the thread topic (That's why off-topicness is so automatically noticeable, and often, objectionable, without the thread-starter's ever having said that the thread is intended to be restricted to a particular topic.)

b) that the poster thinks the content has some kind of value, which could be as simple as that it might possibly be of interest to thread-readers.

[quote]If a poster does not provide annotation, it is reasonably to assume he or she is in general agreement with the points made in the linked material.[/quote]But one can be in general agreement with such points [I]without considering, or intending to imply, that such points were superior to anyone else's view[/I] or that one cannot legitimately be in agreement with other views or arguments.

One can even emphasize, and draw attention to, particular sentences that summarize what one intends to especially bring to the attention of the other thread readers, without ever having the thought cross ones mind that those other readers were uneducated or ignorant, or that they are foolish or mistaken to advocate other views.

[QUOTE=ewmayer;301083]I neglected to add: Whether the poster in question has a substantial posting history and if so, whether the post in question is in a vein which they have previously made explicitly commentary on, strongly figures in the making of such inferences by this reader.[/QUOTE]Okay, but the making of inferences [I]that are not actually supported by any wording in the post[/I] should be held to be conditional, not certain, and not sufficient basis for attacks on the poster.

[I]Without confirmation from actual words in the post[/I], ones inferences run the risk of being baseless, or even mistaken, in a particular case. Even a poster who has a substantial posting history of explicit commentary in a particular vein is entitled to post something that is out of that vein without necessarily having to label the post with an explicit notice of "Hey, this is out of my customary vein".

A responder to a post [U]always[/U] has the option of [U]asking[/U] the poster to clarify intent or to confirm a conditional inference [U]before[/U] launching an attack based on the supposition that an inference is correct. A responder who has skipped that option before launching an attack is the one who should have the higher deeming of violation of thread etiquette than the poster who is defending himself from that attack.

[QUOTE=ewmayer;301076]Perhaps others feel differently, but it seems to me that if one posts an article in a medium such as this, it is important to give at least a hint what one thinks of the content.[/QUOTE]Important? Okay (given " in a medium such as this", which I'll take as "in this Soap Box"). Mandatory? No. Advisable? Sometimes, to avoid misjudging ones audience's likely response.

Lack of such hint being an etiquette violation justifying being targeted by attacks and having ones posts removed from the thread without the same being done to posts by attackers? No.

[quote]If a poster does not provide annotation, it is reasonably to assume he or she is in general agreement with the points made in the linked material.[/quote]If a poster has not provided annotation, a responder is _not_ powerless to do anything but draw inferences from previous history and/or assume that general agreement implies anything further. A responder [U]always[/U] has the option of [U]asking[/U] the poster to clarify intent or to confirm an inference the responder has drawn -- [U]always[/U]. Failure to exercise that option never excuses a responder from his own responsibility, or justifies opening fire on the poster.

Furthermore, the responder should keep in mind the possibility that s/he has misinterpreted the points made in the linked material, or at least interpreted them in a way that never occurred to the poster. Failure to confirm ones interpretation, or at least confirm what it is that the poster agrees with, can easily lead to making false accusations. Such false accusations might even be bewildering and "out of the blue" to the poster because s/he has no idea what might be the basis for the accusations.

[url=http://in.reuters.com/article/2012/06/02/eu-crisis-soros-idINDEE85106L20120602]Germany has three months to stem euro crisis - Soros[/url]:
[quote]Germany and its central bank are unlikely to lead the way out of the euro zone debt crisis within three months time, after which it will be too late, U.S. billionaire George Soros said on Saturday.[/quote]
It`s already too late -- the only questions are with respect to the sequence of events of the inevitable breakup, and whether some European currency sub-union survives or emerges from the rubble.
[quote]Speaking at an economic conference in Trento, Italy, Soros said that the euro crisis - which he defined as a sovereign debt crisis and a banking crisis closely interlinked - threatened to destroy the European Union and plunge it into a lost decade like Latin America in the 1980s.[/quote]
Whenever sovereigns encourage Ponzi-economic debt-fueled "prosperity" bubbles and then fail to force the resulting bad debt to be written off and insolvent banks to be taken out of business, with bond and shareholders taking the losses due them, such sovereign/bank interlinkage is guaranteed. And my vote is on at least a lost generation, Japan-style, especially if the various sovereigns keep trying to kick the can down the road, allowing the rot to spread farther and deeper.
[quote]Soros said he expected Greek elections in June to produce a government willing to stick by the current bailout agreements, but which would find it impossible to do so.[/quote]
I expect Greek elections in June to produce no government, period. Even if they surprise me on that score, there is zero chance of them producing a government willing to tackle the three most-needed actions of

[1] Reversion to own currency;
[2] Default on Euro-denominated debt;
[3] Massive, long-term structural reform.

The latter must begin with a major shrinking of the bloated, unproductive public sector and couple that with an economic "Manhattan project" to nurture innovation and productive economic activity. Getting out from under the fiscal yoke of Euro-denominated sovereign debt will help greatly to free up capital needed for this, but it must be coupled with slashing of government bloat, privatization of the economic sectors the government has no legitimate business running, tax, wage and pension reforms with teeth, all those things businesses need to start and thrive.

An investment in a German-style public/private partnership to support competitive, high-value-add manufacturing and the trade schools training young people for such work would also help. That could be paid for by ending government subsidies for European social-welfare-state-style "permanent student" university studies. If you want to study "comparative philology and the politics of clitoral imagery in Sumatran tribal groups" for 20 years, finally earning a degree about a year before retirement, fine - do it on your own [strike]dime[/strike]drachma.

And "U.S. billionaire George Soros'" proposed solution for the problem? Why, even more sovereign/banking-debt interlinkage, of course:
[quote]Soros urged creating a European deposit insurance scheme and called for direct bank access to the euro zone's rescue fund, as well as for joint financial supervision and regulation.[/quote]

-------------------------

[i]Edit: I see ZH commentator Bruce Krasting has a lovely rant this evening along similar lines "stop lying and pretending!" lines, and more -- his missive is more U.S.-centric, but the disease is essentially the same worldwide, just involving slightly different regional variants of FIV (Fiscal Insanity Virus):

[urL=www.zerohedge.com/contributed/2012-06-02/shills-technocrats-politicians-and-sinking-ship]On Shills, Technocrats, Politicians and the Sinking Ship[/url][/i]

The asian bourses are in turmoil with Japan at the lowest level in 28 years. Indications are that the U.S. markets will tumble when trading opens. What is causing the turmoil? Apparently it is a lack of clear market direction in Europe and cooling economies in China and India.

The best I can see, it looks like market turmoil will continue for at least the next 3 months and most likely through at least the end of the year. What does this mean for investors? They will be moving into safety investments in droves. Cash anyone? Gold?

DarJones

[QUOTE=Fusion_power;301197]Cash anyone? Gold?

DarJones[/QUOTE]Gold warehoused with MF Global also took a haircut when they went bankrupt. Better take physical delivery the next time I suppose.

[url=http://links.reuters.com/r/TVKJ6/G0ETV/ORIX6J/QSL32/4C1M5N/YT/h?a=http://links.reuters.com/r/TVKJ6/G0ETV/ORIX6J/QSL32/B56D8U/YT/h]U.S.: Restitution impractical for Stanford victims[/url]: [i](Reuters) - The government said it would be "impracticable" to enforce an order of restitution against financier Allen Stanford to victims of his estimated $7 billion Ponzi scheme and that it should be permitted to compensate fraud victims with forfeited assets.[/i]
[quote][i]Mon Jun 4, 2012 10:15pm EDT[/i] -- In a Monday filing with the federal court in Houston, the Department of Justice said the large number of victims, the difficulty of calculating their losses and the freezing of Stanford's assets in various jurisdictions would make restitution difficult.

A federal jury on March 6 convicted Stanford, 62, on fraud, conspiracy and obstruction charges over what prosecutors called the sale of bogus certificates of deposit from his Antigua-based Stanford International Bank Ltd.

Stanford is scheduled to be sentenced on June 14 and could spend the rest of his life in prison. The jury also found that federal authorities should try to seize $330 million of frozen funds that Stanford stashed in 29 foreign bank accounts.

Once considered a billionaire, Stanford later claimed to be indigent.

The Justice Department said restitution would be complicated because customer accounts were credited with $1.3 billion of interest that was not paid and some customers but not others withdrew "fictitious" interest or principal from their accounts.

It said it has agreed in principle with the U.S. Securities & Exchange Commission on a joint distribution process.

The Justice Department also said a receiver winding down parts of Stanford's business will to ensure fairness try to calculate "net" amounts lost by each investor. Such an approach is also being used in the winding down of Bernard Madoff's firm.[/quote]
Given that the U.S. is itself running the biggest Ponzi scheme in history, let`s fast-forward a few years to the aftermath of that one blowing up, and imagine that there is some mythical global super-entity prosecuting the fraud. Using the above piece as a template, and just making the needed minor changes to account for the different operators of the two Ponzis and the disparate scales of the two scams:

[url=http://futiure.links.reuters.com/r/link-to-be-provided-later]World: Restitution impractical for U.S. victims[/url]: [i](Reuters) - The world government said it would be "impracticable" to enforce an order of restitution against the United States to victims of its estimated $37 trillion Ponzi scheme and that it should be permitted to compensate fraud victims with forfeited assets.[/i]
[quote][i]Mon Jun 4, 2022 10:15pm EDT[/i] -- In a Monday filing with the world court in Kuala Lumpur, the World Ministry of Justice said the large number of victims, the difficulty of calculating their losses and the freezing of United States assets in various jurisdictions would make restitution difficult.

An international jury on March 6 convicted the United States, age 245, on fraud, conspiracy and obstruction charges over what prosecutors called the sale of bogus certificates of sovereign debt from its Washington-DC-based Department of Treasury.

Representatives of the former United States are scheduled to be sentenced on June 14 and could spend the rest of their lives in prison. The jury also found that federal authorities should try to seize $3.3 trillion of frozen funds that the United States stashed in 2976593757 foreign bank accounts.

Once considered the world's largest economy, the United States later claimed to be indigent.

The Justice Ministry said restitution would be complicated because customer accounts were credited with $13 trillion of interest that was paid in counterfeit currency and new certificates of sovereign debt in a long-running fraudulent "rollover of maturing debt" scheme and some customers but not others withdrew "fictitious" interest or principal from their accounts.

It said it has agreed in principle with the Global Exchanges Commission on a joint distribution process.

The Justice Ministry also said a receiver winding down parts of the United States's global empire will to ensure fairness try to calculate "net" amounts lost by each investor. Such an approach is also being used in the winding down of the former United Kingdom, Japan and the now-defunct European Union.[/quote]

Wisconsin Gov. Walker Handily Wins Recall Election
 

[url=http://globaleconomicanalysis.blogspot.com/2012/06/congratulations-to-governor-walker-in.html]Congratulations to Governor Walker in Winning Recall Election; Message From FDR on Public Unions[/url]

In my neck of the woods, Measure B passed easily -- This local election issue was off the national-media radar, but conveys a similar message as the Walker-recall vote:

[url=http://www.mercurynews.com/elections/ci_20794968/san-jose-employee-unions-file-lawsuit-challenging-pension]San Jose unions sue to block pension reform - San Jose Mercury News[/url]
[quote]San Jose police officers Wednesday made good on promises to legally challenge San Jose's voter-approved pension reform with a lawsuit filed in Santa Clara County Superior Court.

San Jose Police Officers' Association President Jim Unland said the lawsuit argues that the measure -- approved by almost 70 percent of voters Tuesday -- violates employees' "vested rights" to their pensions. He based that on a history of court rulings that effectively hold that government employers cannot cut back workers' retirement plans without offering a comparable benefit in return.

The officers asked the court to block implementation of the measure's provisions until the case is decided, Unland said.

"If we lose, so be it, but we'll at least try to fight it," Unland said, adding that the measure has poisoned any chance of cooperation between the city and its cops, who had offered pension cuts for new hires, which the city rejected as insufficient. "The days of trying to work with these folks are over. ... We'll see you in court."

The pension measure limits retirement benefits for new hires and requires current employees to either pay up to 16 percent of their salary more for their current pension plan or switch to one that is less generous. It also would allow the city to temporarily suspend cost-of-living pension increases for retirees in a fiscal emergency.

San Jose Mayor Chuck Reed, who urged approval of Measure B, said the city Tuesday asked a federal court to rule quickly on its legality.

"It asks the court to validate the ballot measure provisions so that we get an early ruling on whatever legal issues there may be," Reed said, calling the union lawsuits predictable. "This is California; nothing important happens without litigation."

Reed was confident Measure B will withstand legal challenges because the state constitution and city charter grant its elected leaders authority over employee compensation.[/quote]

So what is the underlying problem with the Euro? Why is it at risk?

The Euro is a single currency used in multiple independent nations. Each nation supposedly gets the benefit of transactions in common with all other Euro countries. Where it gets difficult is when one nation is economically stronger and another is weaker. Think of Germany and Spain. Why would anyone want to put Euros into a Spanish bank when they could put them into a much stronger and more stable German bank. Also, with fractional reserve lending, a Spanish bank can be brought to its knees very quickly if the local economy goes into a tailspin. In effect, the bank has more bad loans on the books than the stated equity making it a zombie bank. By comparison, the stronger German bank is able to continue lending because it is not being hit with bad loans.

In the final analysis, there is only one solution to this discontinuity. The disparate Euro banking systems MUST be centralized so that all banks operate from a single central system. But the devil is in the details! As you may guess, Germany is going to be royally pissed when they have to act as surety for Greek and Spanish banks. The only other alternative would be to restrict fractional reserve lending and that is NOT going to happen.

DarJones