Reason Morning Links: Banks Say No to California IOUs, Obama Officials Mount Case for Second Stimulus, More Ethnic Clashes in China

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• Obama's Justice Department to use Sherman Act to aggressively pursue large companies for what it calls anti-competitive practices.

• Recession has led to a spike in sperm and egg donations.

• Big banks say they will refuse California state government's IOUs.

• Ethnic tensions mount in China's Xinjiang province, as minority Uighurs clash with the ruling Han Chinese.

• Obama economic advisor Laura Tyson says the federal deficit will be worse than predicted, and that we should begin preparing for a second economic stimulus package.

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  1. Obama economic advisor Laura Tyson says the federal deficit will be worse than predicted, and that we should begin preparing for a second economic stimulus package.

    Um. Oh. Ahhh?

  2. “A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.”

    “Full faith and credit.” Hang in there.

  3. Shut the fuck up, Laura Tyson.

    Fall into the ocean already, California.

  4. “… Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked …”

    “Felt”, huh? How about a little mathematics?

    “The Federal Reserve is not going to allow the U.S. to inflate away its debt,” she said.

    Cross your heart?

  5. xeones has it right; fall into the effing ocean, CA.

  6. Obama’s Justice Department to use Sherman Act to aggressively pursue large companies for what it calls anti-competitive practices.

    Philip Morris better watch out.

    Oh wait …

  7. Big banks say they will refuse California state government’s IOUs.

    The dope man don’t accept no pissy 3.75%. Maybe it’s time for rehab.

    Props to Warren.

  8. Full faith and credit

    It ain’t what it used to be.

    Oh, and 3.75% is BS.

  9. Agorism is looking better and better every day. Anybody want to give me some venison in exchange for IT work? Fuck currency, yo.

  10. “Obama’s Justice Department to use Sherman Act to aggressively pursue large companies for what it calls anti-competitive practices.”
    hmmm — maybe someone refused to play ball? cuz this admin has been all about “anti-competitive practices” from day one.
    TARP/bailout/stimulus payment, anyone?

  11. Tyson dispelled concerns about the ballooning U.S. fiscal deficit that is estimated to hit nearly 10 percent of gross domestic product, and its possible inflationary consequences.

    Umm, no. She may have “pooh-poohed” those concerns, but she did not dispel them.

  12. 3.75%!!! hahahahahha

    Brazilian 1yr bonds were yielding 8.97% yesterday. Brazil can at least sell off the Amazon if the going gets tough. What is California willing to sell?

  13. What is California willing to sell?

    Citizens’ rights? Worked so far.

  14. Water, death, ocean depths

    Water rising rising rising
    Mountains sliding sliding sliding
    California’s falling falling
    into the ocean.

    Friction, rust, salt air, lust

    Passion in its final heat
    Real life with its final cheat
    California’s falling falling
    into the ocean.

    Beaches, kelp, bodies, we need help

    Arizona stands as the new frontier
    There’s nothing left of Santa Monica pier
    Science fiction calling calling
    California’s falling falling

    God kills his children
    God kills his children
    We are drowning
    We are drowning

  15. J sub D,

    What very, very little hope I had for a positive administration from Bush ended when they fired O’Neill.

  16. > Umm, no. She may have “pooh-poohed” those concerns, but she did not dispel them.

    P, good word-watching! Gotta keep wearing those transparency glasses …

  17. California is paying 3.75% on $3 billion of IOUs?

    How generous of those thieving assholes. They should have to pay-out the same rate the state would charge a taxpayer for failing to pay $3 billion in state taxes.

  18. A man balances the budget, a parasite writes IOUs.

  19. Why would they deliberately put a spike in an egg or sperm donation?

  20. How does one (in the west) properly pronounce “Uighur”?

  21. Lamar,
    This is clearly a case of Domestic Terrorism. Probably some guy with a Ron Paul bumper sticker. I’ll call DHS straight away.

  22. “What is California willing to sell?”

    Hopefully, a lot more weed.

  23. And Obama’s poll numbers continue their slow but steady descent.

    Keep it up the way you’re going, Barack; the country is finally learning just who and what you are.

  24. I read the anti-trust story last night before it became restricted content (seriously WSJ?).

    Basically, the DOJ wants to investigate telecoms for, amongst other heinous crimes against humanity:

    -Verizon and AT&T, combined, service about 60% of wireless, internet and land-line customers.

    -“gobbling up communications spectrum”

    -Locking popular phones so they only work on a particular network.

    Truly, it is the Lord’s work that Obama is doing.

  25. “Obama’s Justice Department to use Sherman Act to aggressively pursue large companies for what it calls anti-competitive practices.”

    Jane! Stop this crazy thing!!! Jane!!!!!

  26. The world leader currently posing the greatest threat our America way of life isn’t Putin or Chavez or Kim or MamaDidaJohn, it’s Barack Obama.

  27. -Locking popular phones so they only work on a particular network.

    If OBAMA CAN STOP THAT I WILL FORGIVE HIS SINS.

  28. OOOOH, I forgot the best part:

    Some antitrust experts said the U.S. would have a tough time opening a Sherman Act case against telecom providers and showing a company was abusing market power. “It would be a very hard case to make,” said Donald Russell, a Washington attorney who reviewed a number of telecom mergers as a DOJ antitrust lawyer in the Clinton administration. “You don’t have any firm that’s in a dominant position.”

    “Investigations don’t necessarily lead to court cases,” said Ketan Jhaveri, an attorney with Simpson Thacher & Bartlett LLP who once worked on the Justice Department’s telecom antitrust task force. He noted that antimonopoly litigation consumes a lot of resources.

    “What you’ll probably see is a lot of investigations opened, but they’ll bring cases where they have the best shot of succeeding in litigation and clarifying the law,” Mr. Jhaveri said. He added that the scrutiny itself might help deter anticompetitive behavior, even if suits aren’t filed.

    “Even though we know this is a total waste of time and taxpayer money, we’re pursuing it anyway just to let the cell phone companies know who’s boss.”

  29. Obama economic advisor Laura Tyson says the federal deficit will be worse than predicted, and that we should begin preparing for a second economic stimulus package.

    I see Tyson is still the same fluffbrain she was back in the Clinton administration.

  30. I’ve heard it pronounced whiggers.

  31. I’ve heard Wee-gers.

  32. good god, obama is nothing but a red sore asshole to everyone. If yours isn’t fired up and hurting yet, just wait, it will be.

  33. Wigger rhymes with nigger. Who the hell says NEE-ger?

  34. The state government of California is composed of such unmitigated cocksuckers that I almost can’t believe it.

    First they shaft people by paying them in IOU’s. And now that an informal secondary market in the IOU’s seems to be developing spontaneously [as one of course would] they are now trying to crush it. Because of course, just handing out IOU’s doesn’t fuck people over enough. You also have to make sure that people who need to be able to turn their IOU’s into cash won’t be able to. Otherwise, these people won’t be truly destroyed by California’s action, and true destruction is all that the state will be satisfied with:

    http://www.latimes.com/business/la-fi-california-ious7-2009jul07,0,3106808.story

  35. PAILIN, Cambodia – Don’t ever accept an invitation to go fishing in Thailand. You might not come back.

    Almost daily, bodies are washing ashore along the coasts of Thailand, Malaysia, Burma, Cambodia. These are unfortunate migrants, most of them from here in Cambodia. These people were sold to Thai fishermen who took them out to sea, worked them until they starved to death and then threw them overboard. It happens all the time.

    More at:

    http://www.twincities.com/opinion/ci_12765634

  36. “Wigger rhymes with nigger. Who the hell says NEE-ger?”

    The News Hour on PBS fo one.

  37. (weeger not neeger)

  38. That would be because the mere idea of being thought to be racist makes PBS people poop themselves, and so they can’t bring themselves to say anything that rhymes with nigger. Watch for this next time the chigger population gets out of control.

  39. “Responding to the proliferation of offers to buy the warrants, state Treasurer Bill Lockyer’s office said Monday that it wouldn’t redeem IOUs sold by one person to another unless they were accompanied by a notarized bill of sale signed by the original recipient.”

    “”They are a form of payment,” said Garin Casaleggio, a spokesman for Controller John Chiang.”

    With the state of CA’s credit rating, these “warrants” are plummenting closer to junk bond territory, but with only a mere 3.75% return. And now the state treasurer doesn’t want to redeem this “form of payment” without all sorts of additional paperwork?

    Drop dead, Lockyer. Please just step in front of a bus, overdose on heroin, or shoot yourself in the head.

  40. Wasn’t chigger a derogatory term for southwest indians?

  41. monkey, they’re just trying to keep the illegal metsican syndicate from stealing the iou’s and cashin em in.

  42. > Some antitrust experts said the U.S. would have a tough time opening a Sherman Act case against telecom providers and showing a company was abusing market power. … “You don’t have any firm that’s in a dominant position.”

    What if the gov’t takes over telecom?

  43. “Watch for this next time the chigger population gets out of control.”

    I hear that this year, the chiggers are bigger.

  44. Telly | July 7, 2009, 11:15am | #
    good god, obama is nothing but a red sore asshole to everyone. If yours isn’t fired up and hurting yet, just wait, it will be.

    Not terribly worried now that I have seen Obama in action. ‘Give ’em enough rope’ as they say. By this time next year the most common word associated with Obama will be ‘ineffectual’.

    Which will prove to be overly generous.

    However, Once you are called ineffectual though, you might as well kiss your Jimmy Carteresque ass good bye.

  45. “What if the gov’t takes over telecom?”

    We’re back to tin cans and string.

  46. alan, it will all depend on what the economy does and more importantly, how long the Bush hating voters will continue the blame game.

  47. Responding to the proliferation of offers to buy the warrants, state Treasurer Bill Lockyer’s office said Monday that it wouldn’t redeem IOUs sold by one person to another unless they were accompanied by a notarized bill of sale signed by the original recipient.

    Interesting. I believe if I was a CA taxpayer, I would

    (a) hit the open market and buy up some of these warrants at whatever discount they are getting,

    (b) get my notarized bill of sale, and

    (c) send them back to the state in lieu of my tax payment.

  48. Interesting point J-sub; I wonder if the state of CA would even accept their own worthless paper IOUs for a tax payment, or if the holder of that paper is stuck with them until such time as the state can afford to redeem them for cash. I would think 3.75% is probably cheaper money than the state can finance itself through the bond markets with their current credit rating and outlook.

  49. Sorry, meant RC Dean (not J-sub)

    I need more caffeine…

  50. I hear that this year, the chiggers are bigger.

    The chee-gers are bee-ger?

  51. The problem with that strategy is that the procedures for IOU redemption appear to depend completely on the whim of state officials like the execrable Mr Lockyer. Not the best climate for investment, methinks.

    On the other hand, this could be a good object lesson for Californians to learn why economies subject to arbitrary state meddling tend to be so shitty.

  52. “The chee-gers are bee-ger?”

    Yes, but only in Wee-ger.

  53. -Locking popular phones so they only work on a particular network.

    The sad thing is that this was the point most commented on in that article. So you bought an iPhone but didn’t want to use AT&T? Then why the fuck did you buy it? It’s not like this was some secret nugget of wisdom.

  54. That would be because the mere idea of being thought to be racist makes PBS people poop themselves, and so they can’t bring themselves to say anything that rhymes with nigger. Watch for this next time the chigger population gets out of control.

    Just so long as they are not niggardly with their praise for The Ascended One.

  55. (c) send them back to the state in lieu of my tax payment…

    …and wait for the retroactive tax law not allowing this.

  56. brotherben | July 7, 2009, 12:37pm | #
    alan, it will all depend on what the economy does and more importantly, how long the Bush hating voters will continue the blame game.

    With the current talk of the town, I get the idea there will be a second Obama era stimulus (long forgotten already is the Bush Spring ’08 stimulus). This will be printed on the collective psyche as an acknowledgment of failure no matter how the package is dressed up. Likely, the smarter ops in the administration are aware of this, but at some point, panic will ensue, it will start in Congress, and a second stimulus will take hold.

    Normally, criticism of stimulus begins with the premise that whatever temporary benefits there are to be gained from a stimulus are outweighed by the long term ill effects such a diversion of capital has on the economy.

    This time, we are not even seeing the short term gains. I will address the claim of this statement I have made because there are those who dispute it:

    “‘The champagne-cork-popping performance of the second quarter,’ adds
    The Rude Awakening’s Eric Fry, ‘obscures a few trends that should be
    worrisome to the celebrants. First, the S&P 500 has gained no ground
    whatsoever since May 8, the first trading day after the Federal Reserve
    triumphantly announced the results of its banking sector ‘stress
    tests.’

    “‘Second, the BKX Index of financial stocks has DROPPED more than 16%
    since May 8. As we have noted in prior editions of the Rude Awakening, the finance sector has been leading the overall stock market – both to
    the upside and downside – for the better part of four years. So the
    sluggish recent performance of the BKX index is probably not a
    ‘nothing.’

    “‘Lastly, most gauges of investor sentiment – like the VIX Index of
    option volatilities – are flashing readings of extreme investor
    optimism. Typically, as contrary indicators, such readings presage a
    market sell-off.'”

    Back to the topic at hand. Why such a poor performance from the stimulus? One hint is in a report I saw on one of the Big Three networks news shows (probably ABC) where local public offices are being deluged with more money than they can handle. One office that does something a bit more useful than shuffling papers, winterizing homes for the county it serves, has an annual budget of around five million. They received several times that amount from the federal stimulus, and the head official says he now has a case of insomnia worrying about how to translate that money into something other than waste.

    Keynesians, from JMK to Krugman, have long taken a shit on the idea that a structure of production is necessary for resource allocation, it makes the models they develop messy and unsustainable.

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