Links: 2013-08-28

Obama’s higher education proposal: incomplete | Ana Marie Cox | Comment is free |

“Any solution to the college affordability crisis – or loan crisis – depends on disrupting the marketplace for higher education”

‘The Great Shift’: Americans Not Working –

“Yes, the unemployment rate has fallen. But almost the entire reason it has fallen is the drop in the number of people in the labor force — either working or actively looking. As Binyamin Appelbaum has noted, the share of adult Americans with jobs is essentially unchanged over the last three years.”

Updated: UK newspapers clash over Snowden surveillance scoop claims — paidContent

“The Independent claims reporting restrictions limited The Guardian‘s recent surveillance coverage, but Edward Snowden claims The Independent‘s new Middle East scoop is a government plant.”

The American dream should really be called the American debt | Chris Williams | Comment is free |

“With college loan debt hitting us where it hurts, the American dream has become the American farce for Generations Y and Z”

Before You Conclude That ‘Precision’ Bombing Makes Sense With Syria … – James Fallows – The Atlantic

Everything I have read says that the U.S. is going to bomb Syria. The only question is how to win over the American people in the court of public opinion. So that’s where the Göring quote comes in. Basically, he’s saying that dictatorships are not so dissimilar from democracies if leaders can use fear and nationalism to bring people around.

More Americans Have Supported Syrian Air Strikes Than Opposed |

“Forty-nine percent of Americans back strikes by cruise missiles and drones that don’t risk U.S. lives, the Quinnipiac poll found, with 38 percent opposed”

Mish’s Global Economic Trend Analysis: Is Obama Another Bush Clone? Another Nixon Clone?

I am trying to avoid politics but this particular post by Mish had to go into the links because the preponderance of evidence given suggests that President Obama has moved significantly away from positions he held before he became President. And given the likelihood of war in Syria, it is good to reflect on that

Anger at IRS Powers Tea-Party Comeback –

“After a tough 2012 election season, the tea-party movement is on the rebound. Mrs. Martin, head of the Tea Party Patriots, is riding a revival of interest sparked by controversy over the IRS’s much-publicized targeting of conservative groups. She says the Patriots, the tea party’s largest umbrella group, suffered because of the IRS’s refusal to grant it tax-exempt status but now is benefiting from the backlash. Her group’s monthly donations, she says, have tripled recently, and its staff has doubled.”

U.S., Allies Prepare to Act as Syria Intelligence Mounts –

“Positions hardened in the international standoff over Syria, as U.S. officials said privately that a flood of previously undisclosed intelligence, including satellite images and intercepted communications, erased any last administration doubts that the Syrian regime had used chemical weapons against its own people.

French, U.K. and U.S. military officials talked Tuesday about coordinating their response to the alleged attacks.”

Merrill Lynch to pay $160 million to settle racial bias lawsuit: NYT | Reuters

“Longtime Merrill broker George McReynolds filed the lawsuit in 2005 accusing the brokerage of steering blacks into clerical positions and diverting lucrative accounts to white brokers, resulting in lower pay and fewer career growth opportunities.”

Leaker’s Security Check Faulted –

The NSA outsourced Edward Snowden’s top secret security clearance to a private firm. That’s the takeaway from this article. The two factors to the whole story are outsourcing national intelligence and the full access telecom firms give to the NSA.

More Young Adults Live With Parents –

“In a report on the status of families, the Census Bureau on Tuesday said 13.6% of Americans ages 25 to 34 were living with their parents in 2012, up slightly from 13.4% in 2011. Though the trend began before the recession, it accelerated sharply during the downturn. In the early 2000s, about 10% of people in this age group lived at home.”

Streaming TV Doesn’t Infringe Copyrights, Court Told – Bloomberg

“A company that streams TV shows to subscribers petitioned appeals judges in California to overturn a lower-court ruling that granted broadcasters’ bid to shut down the service in the state.

FilmOn X LLC, based in Beverly Hills and founded by Alki David, told judges at a hearing in Pasadena today that it isn’t infringing copyrights by capturing broadcasters’ over-the-air signals with its small remotely located antennas and retransmitting the programming to its customers. “

Oil hits six-month high, shares fall on Syria fears | Reuters

“”We could see a wider spillover into the region which could easily push oil prices up, at least temporarily, to $120 or $125 a barrel,” Gallagher said.

At one point those concerns had pushed Brent crude above $117 a barrel and the U.S. benchmark to its highest level in over two years, though both subsequently eased off these highs in volatile trading.

In the Middle East, Dubai’s stock index .DFMGI shed 1.4 percent to add to the 7.0 percent loss recorded on Tuesday, leaving it near a six-week low.”

EconoMonitor : Great Leap Forward » Krugman Rediscovers the Wheel: Commercial Banks As Creators of Money

“only insured deposits are guaranteed to never “break the buck”. For that reason, banks are special. This has nothing to do with them being “money creators” versus “intermediaries”—it has to do with sovereign government backing.

And if a bank suffers a clearing drain, it goes to the Fed Funds market to borrow reserves, or to the Fed’s discount window. Often shadow banks have relations with commercial banks to provide clearing for them. A recent—somewhat shocking—discussion at the Fed indicates that the Board is thinking about letting a wide range of firms, including nonfinancials, hold reserve accounts. If that happens, even the shadow banks and the nonbanks might do their clearing directly at the Fed.”

Not Quite Noahpinion: Popping the “Bubble” Bubble

On P/E ratios, this article is interesting but it’s not the absolute P/E level that matters, but where it’s moving – up or down. The author even says that at the beginning but then does an analysis that completely ignores this. P/E ratios are moving up. That says discount rates are a factor.

Analysis: After mega-LBO boom, a massive private equity cleanup | Reuters

“U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter.

The company is arguing that it should pay less to settle the claims by the U.S. Federal Housing Finance Agency, according to the source, who was not authorized to speak for attribution.”

U.S. seeking $6 billion from JPMorgan to settle mortgage claims: source | Reuters

“U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter.

The company is arguing that it should pay less to settle the claims by the U.S. Federal Housing Finance Agency, according to the source, who was not authorized to speak for attribution.”

Angela Merkel: Greece should never have been allowed in the euro – Telegraph

Merkel is just electioneering. So she’s going to say this.

“Angela Merkel has said Greece should never have been allowed into the euro and put the blame on former chancellor Gerhard Schroeder.”

Central bankers have given up on fixing global finance –

“The world is doomed to an endless cycle of bubble, financial crisis and currency collapse. Get used to it. At least, that is what the world’s central bankers – who gathered in all their wonky majesty last week for the Federal Reserve Bank of Kansas City’s annual conference in Jackson Hole, Wyoming – seem to expect.

All their discussion of the international financial system was marked by a fatalist acceptance of the status quo. Despite the success of unconventional monetary policy and recent big upgrades to financial regulation, we still have no way to tackle imbalances in the global economy, and that means new crises in the future.”

Indian rupee hurtles lower as foreign investors flee | Reuters

“The pummeling in markets sent the rupee reeling 3.7 percent to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995.

It closed on Tuesday at 66.24/25.

In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever.”

BBC News – US bank chief pleads guilty to using bailout cash to buy home

The Wise Men of Iraq Give Us Counsel About Syria – James Fallows – The Atlantic

Portugal’s recovery isn’t really a recovery at all – Telegraph

“Nearly two and a half years later and despite relentless austerity packages, Portugal is still – while not technically in recession – suffering the effects of its harshest economic contraction in 40 years, with unemployment at a record rate of nearly 17pc. “

Why Haters Have to Hate — PsyBlog

#cliffgate Officially Begins Next Tuesday | Stan Collender’s Capital Gains and Games

“There will be only 9 legislative days before fiscal 2014 starts on October 1. Approximately 15 calendar (but no more than 10 legislative) days later, the Treasury says the government will not have the cash it needs to pay all its bills. At that point either the federal debt ceiling will have to be raised so the government may borrow more or a technical or actual default will occur.”

Calculated Risk: Case-Shiller: Comp 20 House Prices increased 12.1% year-over-year in June

This is a lot of house price inflation. But we are talking about the period just before rates started to rise. Let’s see what this looks like in 3 months

Thai Stocks Slump 21% From High in Longest Decline Since 1998 – Bloomberg

“Thai stocks retreated for a ninth day, sending the benchmark index down more than 20 percent from this year’s high, amid concern foreign outflows will accelerate as the economy weakens. The baht and government bonds dropped. “

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