I sense a right proper "Eliot Spitzering" coming up for our dear overly zealous NYAG Schneiderman...

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o Italian "Austerity" In Action: [url=www.zerohedge.com/news/2012-10-02/italian-austerity-action-maserati-its-uk-ambassador]Maserati For Its UK Ambassador[/url]


o In today's "Whodathunkit?" moment: Bill Gross, head of the world's largest bond fund, PIMCO, after building a company and career around the US debt-pyramid Ponzi, belatedly realizes that exponential debt issuance may not be a sound long-term basis for an economy:

[url=http://www.telegraph.co.uk/finance/financialcrisis/9581682/PIMCO-America...]PIMCO's Gross: America could 'resemble Greece' before 2020[/url]


o ZeroHedge commentator Bruce Krasting's latest piece - after the opening bit about the rising nationalism [or pro-debt-repudiationism, if you prefer] in Italian politics - discusses a bit of blatant [url=www.zerohedge.com/contributed/2012-10-02/politics-italian-and-american-style]pre-election vote buying by the White House[/url].

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Followup on a 21. Sep post:

[QUOTE=ewmayer;312304]Even that value-add estimation gets to be quite interesting and nontrivial - popular video games obviously provide a net benefit to their makers, but does their production, sale and consumption actually represent net wealth creation in a broad economic sense? One could argue that legions of game addicts spending most of their waking hours toggling, clicking and zapping virtual enemies represents wealth creation capacity subtracted from the economy. OTOH, people have always demanded their entertainments, so as long as gaming does not crowd out productivity-enhancing software development and usage, the software sector as a whole should still represent a form of wealth creation.[/QUOTE]

WaPo has an interesting piece on a slightly different kind of "economics of video games":

[url=www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/28/the-economics-of-video-games/]The economics of video games[/url]

Structured-finance expert and blogger (and apparent [i]Casablanca[/i] fan, based on the "shocking" quip) Janet Tavakoli has an amusing -- except for the fact that the kind of fraud alleged is endemic on Wall Street, and costs retail investors untold billions each year -- piece in today's HuffPo, on the firm run by a fellow who the Big Picture's Barry Ritholtz hails as an investing savant, an appellation Janet indicates the appellee (not to be confused with the legal usage of the term) would agree wholeheartedly with:

[url=www.huffingtonpost.com/janet-tavakoli/steve-cohens-press-releas_b_1932265.html]Steve Cohen's Press Release on SAC's Alleged Insider Trading: I'm a Genius![/url]
[quote]I'm shocked, shocked I tell you, to learn some of my managers used insider information when trading at SAC Capital Advisors LP!

I suspected it was happening at many of my competitors' hedge funds. Why? It's because I'm a genius, and they're not! Other hedge fund managers apparently think they can achieve my consistent double digit returns when U.S. Treasuries are paying a pittance just because they are taller, or fatter, or better looking than I. But they can't, because I'm a genius! When they outperform, it's because they relied on insider information passed on from an analyst they hired from an investment bank or otherwise illegally obtained insider information. When I consistently outperform, it's because I'm a genius!

How did I not know allegedly illegally obtained insider information was used by managers at my own fund? Same reason; it's because I'm a genius. If you don't get it, it's because you're not a genius. But don't worry. I'll explain it to you later in this press release.[/quote]
BTW, if you - like the rest of us poor-schlub smart-but-subgenius folk - don't get it, allow me to recommend the following trio of fabulous books, one of which I saw an aspiring Cohen-esque genius-in-training reading at the local coffee shop several years back.

[url=http://www.amazon.com/Think-Like-Genius-Todd-Siler/dp/0553379283/ref=sr_1_4?s=books&ie=UTF8&qid=1349212483&sr=1-4&keywords=think+genius]Think Like a Genius[/url] by Todd Siler (1999) ... Only 4 copies left, so hurry! And check out these fabulous tidbits, replete with a snappy biznis-motivational-speaker-style A.C.R.O.N.Y.M. for the author's patented system:
[quote]How you already think like a genius without even knowing it--page 6
The secret formula for genius: C.R.E.A.T.E.--page 22
Ways to overcome the fear that inhibits the genius within you--page 58
How to transform the cynicism of [i]I can't do it[/i] to the confidence of [i]I can do anything[/i]--page 66 [EWM: The Little Engine will be most pleased to see this]
Breaking out of mental ruts and daily routines that block your road to genius--page 77
How to turn the obvious into a work of art, a new insight, or a multimillion-dollar creation--page 92
Getting unstuck from the quicksand of indecision and procrastination--page 106
The secret essence of every stroke of genius--page 165
And much more![/quote]

[url=http://www.amazon.com/How-Think-Like-Leonardo-Vinci/dp/0440508274/ref=sr_1_1?s=books&ie=UTF8&qid=1349212483&sr=1-1&keywords=think+genius]How to Think Like Leonardo da Vinci: Seven Steps to Genius Every Day[/url] by Michael Gelb (2000) ... Because anyone can do it if they just buy this book and follow the recipe!! (Stay tuned for the forthcoming followup [i]How to Sculpt Like Michelangelo: Seven Steps to Becoming a Master Chiseler[/i] ... I hear this will be a lavishly illustrated high-priced coffee table tome, but don't hold back just because of the naysayer who accuse the author of being a Master Chiseler, that is a typical sub-genius response to such rampant, intimidating geniality.

[url=www.amazon.com/Discover-Your-Genius-Historys-Revolutionary/dp/B0002NQ2ES/ref=sr_1_2?s=books&ie=UTF8&qid=1349212483&sr=1-2&keywords=think+genius]Discover Your Genius : How to Think Like History's Ten Most Revolutionary Minds[/url] by Michael Gelb (2003) ... The creation of a million-odd latter-day da Vincis amongst the readership of his first book apparently not having sufficed, Gelb now reveals the secrets to becoming a universal genius!!! One of the readers is kind enough to list Thomas 'the Full Monti-cello' Jefferson's ten-point plan for personal improvement, which alas left out the crucial "0 Item" which is key to enabling all the others - Here, allow me to remedy that omission:
[i]
0. Never pass up an opportunity to be born into the landed gentry, and spend your life having hundreds of slaves to further your wealth and free you from the burdens of being a wage earner.[/i]

(No disrespect to Jefferson's intellect, but it's a lot easier to "unleash the genius within" under those kinds of circumstances. Any latent genii among his slaves alas were doomed to remain so.)

methinks Ewmayer has been reading Isaac Asimov robot books. The three rules of robotics were documented early, but it was much later that he came up with the 0 rule.

DarJones

[b]Friday Humor, "It's Wednesday Evening and Ernst is Studiously Avoiding the Blatherfest Known as 2012 Presidential Debate #1" Edition:[/b]

(Would appreciate if anyone overhears snarky commentary on either candidates' delusional economic prescriptions as "jobs creationism", though.)

[url=http://www.zerohedge.com/news/2012-10-03/let-presidential-debate-drinking-games-begin]Let The Presidential Debate Drinking Games Begin[/url]: [i]Far be it from us to encourage excess consumption; but, should you feel the need to numb yourself a little during the ensuing battle-royale between Obama and Romney, we present - for your imbibing pleasure - the official drinking game of the 2012 election debates.[/i]

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[b]Currency Collapse in Iran Accelerates[/b]

[url=www.nytimes.com/2012/10/04/world/middleeast/clashes-reported-in-tehran-as-riot-police-target-money-changers.html?_r=1]Violence and Protest in Iran as Currency Drops in Value[/url]: [i]TEHRAN — The first outbreak of public anger over Iran’s collapsing currency and other economic maladies jolted the heart of the capital on Wednesday, with the riot police violently clamping down on black-market money changers, hundreds of citizens marching to demand relief and merchants in the sprawling bazaar closing their shops in protest.[/i]
[quote] Iran’s official news media said an unspecified number of people, including two Europeans, had been arrested in the turmoil, which was documented in news photographs, at least two verifiable videos uploaded on YouTube and witness accounts.

Economists and political analysts in Iran and abroad said the anger reflected the accumulated impact of harsh Western economic sanctions over Iran’s disputed nuclear program, as well as the government’s inability to manage an increasingly acute economic crisis.

It came a day after Iran’s president, Mahmoud Ahmadinejad, said at a televised news conference that the plunge in the value of Iran’s currency, the rial — which has fallen by 40 percent against the dollar this past week — was orchestrated by ruthless currency speculators, the United States and other unspecified internal enemies of Iran. He urged people to stop selling their rials for dollars, a currency he once characterized as “a worthless piece of paper,” and warned that speculators faced arrest and punishment.

But Mr. Ahmadinejad, whose stewardship of the economy has been increasingly challenged by other Iranian politicians in the last year of his term, offered no new solutions to arrest the slide in the rial, which is a major inflationary threat and has become the most visible barometer of Iran’s economic travails. Because of the sanctions, Iran is facing extreme difficulties in selling oil, its main export, and in repatriating dollars and other foreign currencies, because Iran has been cut off from the global banking system.

Unscripted protests in Iran are highly unusual, particularly since the political opposition in the country was crushed after Mr. Ahmadinejad’s disputed re-election in 2009. Iran experts said the outbreak on Wednesday was significant because it appeared to offer an insight into the degree of public weariness.

“It may not be widespread yet, but it demonstrates not just unhappiness with the Ahmadinejad government, but also dissatisfaction with the Islamic republic’s failure to stem the economic crisis brought about by incompetence, mismanagement and sanctions,” said Alireza Nader, a political analyst at the RAND Corporation, a research and consulting firm. He said that “the regime is going to face much greater instability in the future, especially if it loses the support of Iran’s business and merchant class.”

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, said in an audio commentary on the group’s Web site that the sanctions had effectively halved Iran’s oil exports, choked its ability to import essential goods and left its currency worth a fraction of its value compared with early this year. “These are hard times for ordinary and upper-class Iranian people,” he said. [/quote]

[QUOTE=ewmayer;313561]
[url=http://www.zerohedge.com/news/2012-10-03/let-presidential-debate-drinking-games-begin]Let The Presidential Debate Drinking Games Begin[/url]: [i]Far be it from us to encourage excess consumption; but, should you feel the need to numb yourself a little during the ensuing battle-royale between Obama and Romney, we present - for your imbibing pleasure - the official drinking game of the 2012 election debates.[/i][/QUOTE]

I saw the second one on Facebook, and IMO it's slightly smarter (not that I would know).

[QUOTE=Fusion_power;313558]methinks Ewmayer has been reading Isaac Asimov robot books. The three rules of robotics were documented early, but it was much later that he came up with the 0 rule.

DarJones[/QUOTE]Perhaps so. However, there are other examples of the 0 rule. The zeroth law of thermodynamics was formulated after the first three. The zeroth law of program optimization, [i]First get it right, then get it fast[/i], may have been but I'm not so sure of that one.

"First get it right, then get it fast" This is so true. I had an excel macro written by a colleague that took 10 minutes to complete on a dual processor computer with plenty of memory. I used it for 7 years before finally getting irritated at the run time. The re-written routine takes 45 seconds to generate the same exact data and uses 20 fewer lines of code.

The debate held last night was all about showmanship. Romney arguably won the war of words, but he was seriously short on facts. Obama meandered and muddled too much while Romney took potshots at his record. At this point, I would seriously question whether either one of them would get tough on wall street. I would also question whether either one will ever do anything significant about the deficit (other than increase it).

DarJones

[QUOTE] Romney arguably won the war of words, but he was seriously short on facts[/QUOTE]And yet, one of the criticisms I've seen online is that he cited too many facts. Damned if you do, damned if you don't.

But on the topic of the economy, I found the following article about housing interesting: [URL="http://www.nationalreview.com/articles/329370/obama-s-november-surprise-dan-murphy"]Housing loans on the taxpayer dime.[/URL]

Mish on last night's presidential debate #1:

[url=http://globaleconomicanalysis.blogspot.com/2012/10/romney-wins-debate-1-hands-down-not.html]Romney Wins Debate #1 Hands Down; Style Over Substance; Tweedledum vs. Tweedledee[/url]

Mish also has nice in-depth piece on the [url=http://globaleconomicanalysis.blogspot.com/2012/10/hyperinflation-hits-iran-monthly-70.html]Iranian currency crisis[/url].

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Some more in-depth followups on the JPM/fraudclosure story:

Chris Whalen - who notes having worked for Bear Stearns in 2 separate stints - comments on the civil (since criminal law clearly does not apply to banksters) lawsuit filed against Bear acquirer JPM by the NY AG's office. Chris notes that aside from generating some loud headlines (typically followed by much less action on the actual-prosecutions side) in fact Schneiderman has been very un-Eliot-Spitzer-like in going after the TBTF banks for the epic mortgage ^ securitization fraud they perpetrated, either directly or by way of their now-wholly-owned subsidiaries. Pay special attention to the bit about "multiple pledges", and note a pair of comments and accompanying links by reader "teribuhl":

[url=www.zerohedge.com/contributed/2012-10-02/memo-jamie-dimon-you-still-think-bear-stearns-not-material]Memo to Jamie Dimon: You Still Think Bear Stearns is Not Material??[/url]
[quote]A couple of years ago, JPMorgan Chase CEO Jamie Dimon told investors that the acquisition of Bear, Stearns & Co. would not be material to investors. In the years that have followed, a tiny group of analysts and managers have watched as the Bear Stearns transaction has festered into a festival of fraud. But most supposed Sell Side analysts and Buy Side investors who pretend to follow financials still don’t seem to get the joke.

The basic problem with Bear Stearns was fraud, massive, deliberate fraud. The firm’s activities in the mortgage securities space were so sloppy and negligent as to rise the level of legend on Wall Street. And now even Eric Schneiderman, the do-nothing NY AG, has finally been forced to take action against JPM.

“The New York attorney general's office has hit JPMorgan Chase & Co. with a civil lawsuit, alleging that investment bank Bear Stearns — prior to its collapse and subsequent sale to JPMorgan in 2008 — perpetrated massive fraud in deals involving billions in residential mortgage-backed securities,” reports the Wall Street Journal.

Now this mess is amusing and troubling both. It is amusing that JPM did not seem to anticipate that the unliquidated claims against Bear Stearns from creating bad residential mortgage backed securities (RMBS) would eventually come back to haunt the bank. Dimon and his bankers thought they were so cute stuffing the New York Fed with the accumulated detritus in Bear’s mortgage conduit – what later became known as the “Maiden Lane” vehicles.

...
What is really interesting is that the legal complaint filed by Schneiderman talks about sloppy procedures for loan selection, but still does not get to the real fun, namely multiple pledges of loans for different RMBS. And you can be sure that Schneiderman does not really want to go that far because it might force him to ask the same question about the other, far larger issuers of RMBS.[/quote]

Bloomberg's Jonathan Weil comments on the NYAG's "thoroughly unimpressive lawsuit" - [url=http://www.bloomberg.com/news/2012-10-02/eric-schneiderman-will-have-to-do-better-than-this.html]"Eric Schneiderman Will Have to Do Better Than This"[/url]. Weil points out glaring errors of fact such as this:
[quote]What’s especially worrisome: One section of the complaint, about advice rendered to Bear Stearns by the accounting firm PricewaterhouseCoopers, is sloppy to the point of inaccurate. It says: “Defendants’ external auditor, PricewaterhouseCoopers, in August 2006, advised defendants to stop asserting EPD claims against sellers on securitized loans before determining whether a breach of representations and warranties of securitization agreements also existed.” The complaint then goes on to describe related advice that Pricewaterhouse provided to Bear Stearns that year.

[u]The problem with that section is Pricewaterhouse wasn’t the external auditor for Bear Stearns in 2006. Deloitte & Touche was[/u]. (Pricewaterhouse is JPMorgan’s longtime auditor. But remember, JPMorgan didn’t buy Bear Stearns until 2008.)[/quote]

[url]http://news.yahoo.com/prices-facebook-stock-since-long-awaited-ipo-212925363--finance.html[/url]

The numbers are interesting, but we wonder if you can consider this an actual news article? Journalism is a dying art! (A chart or graph would have been more appropriate, too!)

@xyzzy: W ... T ... F. Someone is in dire need of an introduction to data visualization.

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Latest BLS [URL="http://www.zerohedge.com/news/2012-10-05/reason-todays-unemployment-rate-plunge-part-time-jobs-economic-reasons-surge-most-qe"]jobs numbers today[/URL] confirming my [URL="http://mersenneforum.org/showthread.php?t=16404"]start-of-year prediction[/URL] that the official unemployment rate would drop below 8% by election time, giving Obama a major boost, even though the real trend (e.g. total-employed and employment-population ratio) shows no material improvement over the 2009 bottoming-out numbers.

Here in California, the big story the past week - besides both bay area MLB teams making the playoffs - is a sharp rise in gas prices, which are now way above previous records for this time of year, and approaching the all-time highs of the oil-price-bubble summer of 2008:

[URL="http://www.mercurynews.com/bay-area-news/ci_21698813/bay-area-gas-prices-suddenly-soar-toward-record?source=inthenews"]TweetBay Area gas prices suddenly soar toward record levels[/URL]
[quote]The bruising at the pump that began earlier this week has turned into a full-fledged assault, as supply shortages pushed Bay Area gas prices up toward $4.50 a gallon and some Southern California stations threw in the towel and shut down.

Duff Criley, a general contractor from Cupertino, figures he'll spend $150 on gas this week to keep his GMC Sierra running to job sites -- 20 to 30 bucks more than a few days earlier.

"This is ridiculous," said Criley, 55, who pulled into a Valero station off Hamilton Avenue in San Jose where gas was selling for $4.61 a gallon. A station attendant told him that he had just raised the price 20 cents five minutes earlier. "It had been holding at $3.99 for a couple of weeks. Now this. You betcha this hurts."

Commuting to her job at an insurance broker in Pleasant Hill, Glenda Bray saw prices at the local Chevron station climb 10 cents at lunch on Wednesday and another six cents by the time she got home. On Thursday, the station raised the price another 30 cents.

"I was afraid to go to lunch," said Bray, a 61-year-old Fairfield resident.

...
The problem continues to be lack of supply. A major Exxon Mobil refinery in Southern California is still struggling after losing power on Monday amid sweltering temperatures, leading to production problems.

It comes as Chevron's Richmond refinery continues to produce less fuel after its Aug. 6 fire. Chemical problems forced the shutdown of a pipeline that feeds gas from the Central Valley to the Bay Area earlier this week, and Phillips 66 plants are undergoing maintenance work at both ends of the state.

It could be worse, Bay Area. Some stations in Southern California, including Costco, are reportedly shutting down pumps because the wholesale prices are so high -- sometimes more than $5 a gallon -- that they can't make a profit.[/quote][B]Friday Humor:[/B]

How to buy a $25,000 car for just $1500:

[URL="http://www.zerohedge.com/news/2012-10-04/guest-post-one-very-strange-use-silver-coins"]Guest Post: One Very Strange Use For Silver Coins[/URL]
[quote]But what can anyone do about it? Lobby the state legislature? Rock the vote? Protest… and hope we don’t get arrested, beaten, or shot by those sworn to protect and to serve? Give someone at the DMV a stern lecture about economic freedom?

Trying to change this system is a waste of resources. It’s a race that everyone will lose. Besides, you could spend your whole life lobbying to change one law, and by the time you succeed, they’ll have already passed another 10,000 new, even dumber laws.

Fact is, no one can do anything about this. Just like nobody can prevent Ben Bernanke from dropping money from helicopters. We can’t stop the price rises from monetary inflation, we can’t stop out of control spending (and theft) at all levels of government.

What we CAN do is take sensible steps to protect what’s ours… and then use their own stupid rules against them. It’s a much easier way to win.[/quote]The way the above transaction was conducted actually seems to me to be transparently fraudulent - The way to go here is to convince the seller to "do the math" and accept the coins as payment, after which he can do with them as he wishes. Even that may run afoul of "fair value" laws for transactions, designed to prevent tax evasion by way of collusive sale-at-below-fair-value prices. (Similar laws apply to barter transactions - but without a state agent to observe such transactions, they are obviously difficult to enforce.)

Anyhoo, if the seller who accepted the coins subsequently can convince some poor slob of a coin dealer to pay above face value for the coins, more power to him - although he would incur a tax liability on any proceeds. Death and taxes...