Hat-tip Consumerist.

For some, the slogan "practice makes perfect" is a motto of encouragement to try again, try harder and achieve perfection. For Bank of America, it should be taken as a strong hint to try and do the right thing the first time, not to try and find a better way to seize the wrong house and then attempt to abstain from any recognizable responsibility.

It should be, but it's not.

BoA has apparently attempted to foreclose on the wrong house once again, according to an article by Laura Elder in the Galveston County Daily News:

From Wikipedia:

__________

A Cascade Effect is an unforeseen chain of events due to an act affecting a system. If there is a possibility that the cascade effect will have a negative impact on the system, it is possible to analyze the effects with a consequence/impact analysis.
__________

Cascade effects have been described for natural events (the removal of one species influencing an ecosystem enough to result in the loss of other species), in science and in finance. There is just one quibble I have with the definition, however: they're not always unforeseen.

Sometimes, people have to make decisions based on factors they cannot control, and the result of failure to account for undesired behavior or unexpected results can often be foreseen. Take, for example, the old For want of a nail rhyme:

__________

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
__________

That's a cascade effect.

It plays out in life, if someone loses their job and ends up on the streets, or can't afford healthcare. It plays out in economics -- a major plant shuts down in a small down, or a mine closes, and the surrounding population is devastated. The larger businesses like hotels and some restaurants and movie theaters close; perhaps that causes some means of public transportation like trains or small airports to close, which further squeezes the area's economic lifeblood...and on it goes.

These effects are globally observable when it comes to the topic of climate change:

One shouldn't confuse the Cascade Effect for a Rube Goldberg effect, even though I think both share a distant relationship with a chaotic little butterfly and its constant net-in-hand pursuer, Murphy.

While we're on the topic, here's an example of a Rube Goldberg device, just for you:

Happy Saturday. Relax a bit, and remember:

This is an Open Thread, and you're double-parked in the Twilight Zone...

The following piece was originally posted by Peskydang of DelphiForums here. -- GH

Right now, the RIAA and the AMPTP are engaged in enormous battles with "pirates."

The RIAA will sue a college student for a million dollars if he or she has downloaded and shared 22 songs. Not because that college student has cost them a million dollars, but because they want to terrify and intimidate other college students into not sharing files.

Does it work?

No.

It creates resentment among the biggest target audience for the music. What it creates is not less piracy, but more.

What are pirates? The RIAA would have you believe that a pirate is a loathesome villain, the scum of the Earth, plundering the wealth of those who have fairly earned it.

But the historical view of a pirate is something else entirely. Pirates were not criminal gangs as much as they were front-line fighters in an economic war against the oppressive weight of an empire. Pirates are often economic freedom-fighters. The Somali pirates aren't pirates simply because there is an opportunity there -- they are pirates because they have no government to protect their fishing rights from foreign vessels or to keep other nations from dumping toxic waste in their waters. They are an ad hoc Somali navy, providing the only influx of capital into a starving nation available to that population. To the Somalis, the pirates are heroes.

But even if pirates were everything the RIAA and the AMPTP want you to believe they are -- villainous scum of the Earth -- the weapons that these organizations are using are the wrong weapons. They are using the weapons of law to fight a battle based on economics.

OH, East is East, and West is West, and never the twain shall meet,
Till Earth and Sky stand presently at God’s great Judgment Seat;
But there is neither East nor West, Border, nor Breed, nor Birth,
When two strong men stand face to face, tho’ they come from the ends of the earth!

        -- Rudyard Kipling, The Ballad of East and West
       courtesy Bartleby.com

The EU (the "west") says that the dollar is secure as the world's reserve currency while China (the "east") calls for a new global reserve currency -- a call which the EU, naturally, rejected.

Attribution: xkcd.¹

Meanwhile, experts wonder if the EU-China Trade agreements will soon fall under even closer scrutiny as the severe undervaluation of the Chinese renminbi and other barriers to full and equitable trade practices start to cast a jaundiced eye on the nature and extent of the reciprocity of those agreements:

The European Union (EU) presented on Tuesday, October 24th, 2006, "EU-China: Closer partners, growing responsibilities" which establishes the bases for a new, extended partnership and cooperation agreement with Beijing. This new agreement is necessary since the current 1985 "Trade and Co-operation Agreement" does not reflect the recent surge in trade between the two regions. Even though China has passed the first law targeting money-laundering, the EU keeps criticizing that China’s current market barriers, intellectual property violations, and continuous state intervention to maintain an undervalued currency are undermining the beginning of a prosperous new era of EU-China economic relations -- especially, if the currency devaluation were to continue, even after being member of the World Trade Organization (WTO). In fact, the International Monetary Fund (IMF) has said that despite China having allowed more movement in the currency since September, a faster appreciation of China’s currency, the renminbi, is required since the surge in China's net exports and increase in its foreign exchange reserves demonstrates that the currency remains extremely undervalued. Furthermore, China is also being heavily criticized for opening the market to foreign banks too slowly, stating that a "free for all" would "damage the system." This situation will be a truly devastating zero-sum game for Europe because the EU will be loosing jobs and reducing the living standard, while subsidizing China's poverty with European money. For this reason, EU has stated that "there is a growing risk that the EU-China trading relationship will not be seen as genuinely reciprocal. Political pressure in the EU to resist further openness to Chinese competition is likely to increase if these problems are not addressed."

So much for a Sunday morning free of complex thoughts and concerns.

This is an Open Thread.

The recent furor over the $165 million in bonuses paid to AIG executives -- allegedly for "retention" even though 11 of 17 recipients are now no longer at the firm -- has resulted in a whirlwind of activity on Capitol Hill and from the White House, resulting in statements and claims that virtually every last dollar of those ill-gotten gains (the bonuses) will be recovered.

According to this piece on Reuters, U.S. to claw back AIG bonuses, lawmakers eye tax,

WASHINGTON (Reuters) - The Obama administration turned up the heat on AIG (AIG.N) on Tuesday over its employee bonuses, saying the embattled insurer will be forced to repay U.S. taxpayers before it gets another bailout of $30 billion.

Treasury Secretary Timothy Geithner laid out the conditions in a letter to congressional leaders as irate lawmakers moved quickly toward legislation that would slap a heavy tax on $165 million in bonuses paid by American International Group Inc.

[...snip...]

Beyond the bonuses, anger flared anew on Sunday when AIG disclosed that Goldman Sachs Group Inc (GS.N) and a host of European banks were the major beneficiaries of $93 billion in payments from the insurer -- more than half of the U.S. taxpayer money spent to rescue it.

The ongoing bruhahas -- which I strongly suspect won't be the last ones related to this burgeoning crisis -- are not completely unexpected. For some interesting reading regarding clawbacks and the "polluter pays principal" see the following Journal articles by Michael Thomas:

Use Clawbacks to Fund Wall Street Bailouts, by Michael Thomas
		Attorney Michael Thomas shares his insights from working with dot com and venture capitalists and witnessing first hand how they cleaned up the dot com bubble mess using clawbacks. He has some suggestions for the Wall Street One Percenters.
Read more...
Use Polluter Pays Principle to Fund Bailout, by Michael Thomas
		Michael Thomas recognizes that the Bailout bill that failed to pass in the House on Monday was at best, a compromise. Instead of a 700 billion dollar bailout, Thomas suggests that there is a viable alternative for funding the bailout through the concept of the "Polluter Pays" principle used in Super Fund Cleanup legislation.
Read more...

Check 'em out, and keep an eye open for more "good stuff" as it comes along on both the ePluribus Media Journal and over here, on our Community Site.

This is an Open Thread.

Posted with permission of author.

Is Obamanomics Conservative or Revolutionary?

The human costs of the U. S. financial crisis are coming into clear focus.  Family members lose their jobs, then their homes, and the cascade of ruin begins in earnest.  Health problems are ignored, anxiety and depression increase, and domestic violence is more common.  Many are on the edge, anticipating their worst fears:  losing their home or apartment then struggling to find the next meal.  The biggest issues right now are about basic needs -- food and shelter.

There's a rational, reasonably immediate solution to a good part of the economic disaster.  The banks won't like it but you will.   But first the sad facts.

There were 2.3 million default notices to homeowners in 2008, up 80% over 2007.  It will be worse in 2009 with Option ARMs coming due (those favorites of Alan Greenspan).

Typically the nation's economic leader, California, saw foreclosures increase by 160% in 2008.  As a result three percent of California homes, 240,000 in all, became bank properties.  These are the same banks that slithered up to the bar and demanded a double shot of the new elixir for failed financial institutions, federal bailouts.  Put it on the tab.

BENEATH THE SPIN • ERIC L. WATTREE

Is Rush Limbaugh on Drugs Again, or Simply the World's Biggest Ego Trip?

Ultra Conservative Political shock jock, Rush Limbaugh, seems to have finally slipped off the reservation. It is hard to know whether he's back on drugs, or if the recent election returns have caused him to lose his mind all together.

Promoted. -- GH

Yves Smith at Naked Capitalism picked up an excellent article by former economics columnist Jeff Madrick, who attended the just-concluded annual conference of the American Economics Association, How the Entire Economics Profession Failed. Madrick writes:

At the annual meeting of American Economists, most everyone refused to admit their failures to prepare or warn about the second worst crisis of the century.

I could find no shame in the halls of the San Francisco Hilton, the location at the annual meeting of American economists that just finished. Mainstream economists from major universities dominate the meetings, and some of them are the anointed cream of the crop, including former Clinton, Bush and even Reagan advisers.

There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent.

“No one questioned their contribution to the current frightening state of affairs, no one humbled by events.”

I heard no calls to reform educational curricula because of a crisis so threatening and surprising that it undermines, at least if the academicians were honest, the key assumptions of the economic theory currently being taught.

There were no sessions about why the profession was not up in arms about the deregulation of so sensitive a sector as finance. They are quick to oppose anything that undermines free trade, by contrast, and have had substantial influence doing just that.

Yves Smith adds some excellent commentary in her piece, Why So Little Self-Recrimination Among Economists?, inclduing an insightful quote from Thomas Palley, in April 2008:

Originally posted 2009-01-06 10:17:07 -1000 - promoted by roxy.

This was posted at the Daily Kos yesterday, where it got rescued, but was still little noticed. I'd like to reprint it here as my first post because it is a pretty good introduction to who I am at this moment: a philosopher in economic trouble (there's a shock), exploring the dark hallways of unhappiness, stress, pain, and despair. It seems to help a little.

Happiness is always a by-product. It is probably a matter of temperament, and for anything I know it may be glandular. But it is not something that can be demanded from life, and if you are not happy you had better stop worrying about it and see what treasures you can pluck from your own brand of unhappiness.—Robertson Davies

What a crock. Here's a man who's father was a Canadian Senator. He never went hungry or cold. His family owned a media empire. Was there anything he ever had to worry about? Did he have unhappiness to pluck treasures from, or did his treasures just show up via the family bank account?

The NY Times reports that both the Chicago Tribune and the LA Times are declaring bankrupcy. Their parent company, the Tribune Company has already filed.

Economics and Finance News - Dec 1, 2008

Did the 2005 Bankruptcy “Reform” cause the world financial collapse?

Federal Reserve Bank of New York Staff Report No. 358 - Seismic Effects of the Bankruptcy Reform.

Remember the Bankruptcy Abuse [sic] Reform act of 2005? Yeah, the one that the credit card companies and bank got passed by buying the very best Congress money can buy. Turns out, according to the New York Fed's research, that since people going bankrupt after the BAR found it more difficult to stop paying their unsecured debts - i.e. credit cards - they were forced to stop paying their mortgages instead. Over 120,000 of them a year, according to the NY Fed researchers.

Hmm, Citibank: that is one of the biggest credit card issuers around, right? So, lezzee here. Citi went and bought itself a new bankruptcy bill in 2005. One result was that, (let’s give ‘em a break and multiply two years instead of three) a quarter of a million people had to default on their mortgages. That in turn caused a crisis in U.S. sub-prime mortgages. That in turn blew up the whole damn world financial system. And now, Citi is getting $308 billion in our money to save its sorry ass?!?

This would be effing hilarious if it weren't destroying so many peoples' lives at this point.

Originally posted Posted Sat, 11/29/2008 - 21:32, bumping for fresh eyes - standingup

We are in a worse situation than The Great Depression

Barry Ritholtz linked to a video of Paul Solomon of the PBS News Hour interviewing with Dr. Nassim Nicholas Taleb, famous economist and author of The Black Swan : The Impact of the Highly Improbable” and Taleb’s mentor, French mathematician, Dr. Benoit Mandelbrot, Professor Emeritus of Mathematics at Yale University. Dr. Mandelbrot, a pioneer in the development of chaos theory, is regarded as the father of fractal geometry. Both say that the present economic situation is actually more serious than the Great Depression. In fact, they fear the U.S. is in the worst situation it has been in since the American Revolution.

promoted by roxy for discussion ....

Economic and Financial News Nov 28, 2008

The following items have come to my attention the past few days, and, dear reader, I deem them worthy of your attention and perusal, and just generally good stuff for your edification and amusement.

This 60-minute interview with the Obamas is full of substance, beginning with a discussion of the question of a bailout for the automobile industry. Obama's comment (paraphrased) was: I am looking for management, the union and shareholders in the industry to come up with a plan for a sustainable future for the automobile industry. This has to be a bridge loan to somewhere.