I tried like heck to withhold comment, but I am really troubled by what is going on.

The sharing of the Facebook post by Senator Dean Skelos, is what set me off.

Some of the text that went along with this image is:

Every time Israel makes an attempt at peace, it is met in return with missiles, kidnappings and murders from Hamas. As such, Israel should do what it feels is necessary to protect its citizens. I am hopeful that those responsible will be found and quickly brought to justice.

My comment on this post was:

Yes, I have sympathy for anybody who is kidnapped or anybody who is murdered. I just worry about the political uses this sympathy is being put to.

I refuse to be riled into approving inhumane treatment of Israeli Arabs in general, no matter what some of them may do. We didn’t like collective punishment when the Germans used it in WWII, and I don’t like it now.

By the way, how well did the Germans do with their policy of collective punishment? Did they win a war or something?

Just as I disapprove of the inhumanity of the right wing in the USA, I disapprove of the inhumanity of certain elements in Israel.  I also disapprove of the inhumanity of some Arabs.  I can understand why some Israelis feel the way they  do.  I can understand why some Arabs feel the way they do.  I do not approve of the actions of either side when it leads to inhumanity.

Senator Dean Skelos

Temporary President
Majority Coalition Leader
New York State Senate

Who could possibly have foreseen this result – Violent clashes as Palestinians demand justice after teenager’s body found?

Tensions between Israelis and Palestinians escalated further on Wednesday, with the discovery of a body believed to be that of a 17-year-old Palestinian boy who had been abducted hours earlier from an Arab neighbourhood of East Jerusalem.

The badly burned body, thought to be that of Mohamed Abu Khdeir, was found in an area of forest to the west of the city a day after the funeral of three Israeli teenagers who were kidnapped and killed three weeks ago. The discovery prompted widespread accusations from Palestinians that he had been murdered by Jewish extremists in a revenge attack.

Naked Capitalism has the story Wolf Richter: How Private Equity Firms Manipulate the Buy-to-Rent Housing Racket.

Instead of trying to sell their tens of thousands of homes, Blackstone and American Homes are selling synthetic structured securities that are backed, not by mortgages like the toxic waste that contributed to the financial crisis, but by something even worse: rental payments, based on the flimsy hope that these homes will stay rented out. The already dumped $3 billion of this stuff. Wall Street is jubilating. The fees are going to be huge: the market for this type of synthetic concoction is estimated to be $1.5 trillion.

I have heard the term rent backed securities, but this is the first article that I have read that explains what they are.  If mortgage backed securities were the toxic asset that caused the last crash, I didn’t need an article to tell me that rent backed securities would be even more toxic.  Still, it is better to know the details in order to try to protect yourself from investing in this “asset”.

I am afraid that some investment grade bond funds do invest in these types of “assets”, so it is not that easy to protect yourself if you want “investment grade” bonds.  I know I have some exposure to this, but it is quite small.

As for protecting yourself from the indirect impact of this folly, good luck to you.  Don’t depend on government regulation to save you.  Even if you are not a believer, prayer may be your only hope.

For the doubters to my cautionary tale, I am going to do some research on what the investor actually gets when buying a rent backed security.  Untill I find that information, I found another interesting article about this.

Here We Go Again: Step Aside RMBS, Rent-Backed Securities Are Here, And With Them The Beginning Of The End

I still haven’t found the answer I am seeking, but I did find the Seeking Alpha article The Newest Trick In The Book: Rent-Backed Securities.

Then, there is the issue of managing the properties itself. In 2012, Blackstone formed a subsidiary, Invitation Homes, to fill this role. According to numerous tenant-filed grievances, it is anything but. Reports complain of cockroaches, unaddressed maintenance requests, and even larger structural issues. Meanwhile, an even larger problem looms. Poor management is the primary cause of vacancies, and empty units eat away at an investor’s promised return. If Blackstone, or any other property owner, is ever pushed to default, thousands of families may get evicted, even if they have never missed a month’s rent.

It is just amazing how hard it is to find out exactly what you get in a rent-backed security.

Motley Fool has the article Will Rental-Backed Securities Be a Hit with Investors? which does not answer the question either.

While the whole concept of lease-backed securities sounds a bit shaky, that might be just what investors crave in these times of low-investment returns. Not only can rental checks be counted on less than mortgage payments, but these securities would not have the backing of Fannie Mae and Freddie Mac, as most mortgage-backed securities do. This makes them more risky, but also increases the potential for higher returns. Particularly with the Fed scooping up MBSes, this new type of security will likely have investors lining up to buy them.

OK,I give up. I cannot find an explanation of a rental-backed security that explains what happens when the rents run out, you stop getting your income payments from the security, and the security becomes worthless. In particular, I want to know who owns the real-estate from which the rent was to be derived. My suspicion is that is is not the investor in the rental-backed security.

Does it strike you as odd that there is a huge market in these securities, but you cannot get a definition of what you are buying when you buy one of these securities?

I emailed info@blackstone.com.

Please point me to a prospectus for a rental-backed security.

Consortium News has the article NYT Revamps Its False Ukraine Narrative.

The Ukraine crisis really emerged from the European Union’s offer of an association agreement that President Yanukovych was initially inclined to accept. But it was accompanied by harsh austerity demands from the International Monetary Fund, which would have made the hard life for the average Ukrainian even harder.

Because of those IMF demands and a more generous $15 billion loan offer from Russia, Yanukovych backed away from the EU association, angering many western Ukrainians and creating an opening for U.S. neocons, such as Assistant Secretary of State for European Affairs Victoria Nuland and Sen. John McCain, to urge on protests to unseat Yanukovych

I know I have posted this type of story innumerable times on this blog.  I thought it might be good to refressh your memory so that you can appreciate the recent post EU Association Agreement with Ukraine Is a Gift to Kleptocrats.

I wonder how many times The New York Times has to blatantly lie to you before you believe that the NYT may very well be up to its usual tricks. See for example The Source of the Trouble.

Pulitzer Prize winner Judith Miller’s series of exclusives about weapons of mass destruction in Iraq—courtesy of the now-notorious Ahmad Chalabi—helped the New York Times keep up with the competition and the Bush administration bolster the case for war. How the very same talents that caused her to get the story also caused her to get it wrong.

It really makes no difference why The New York Times published such erroneous stories, the fact is that they did publish them, and they may very well be doing it again.

The Institute for New Economic Thinking (INET) has the interview Andy Haldane: Preparing For The Next Financial Crisis.

This interview is about how the international financial system needs to be changed to prepare for the next financial crisis. The interview does not touch on how an individual person should prepare.

I find this kind of interview to be valuable to me because it introduces me to new ideas and new thinking about the crisis and how to resolve it. Part of that introduction helps me understand the limitations of what I knew before in trying to prepare for the next crisis. One example of this is the discussion of why the old Glass-Steagall legislation, which helped get us out of the depression, cannot just be reinstated to prepare for the next crisis. The idea of such legislation to prepare for the next crisis must comprehend the irreversible changes to circumstances that has occurred since the Glass-Steagall era.

I make no claim that this interview makes me an expert in any of the areas discussed. That would be far too much to expect from an introduction to new ideas. It is, however, a catalyst to start thinking about things that I had not thought about before and may not even have had a prior inkling about. This is a big enough pay-off for listening to these types of interviews.

The Institute For New Economic Thinking (INET) has the interview Simon Head: Innovation And Its Potential To Damage Society.

The benefits of innovation are seldom questioned. Virtually every single growth initiative formulated by governments around the world to deal with today’s challenging economic conditions invariably circles back to the need to promote innovation as a panacea.

But what if innovation is not an unalloyed good for society? What if it simply adds to our current dystopian dysfunction?

It is rather depressing to think that I have been part of the problem all along. What is ultimately questioned is the tendency in macro economics whether of the neo-liberal (conservative) kind or the progressive kind to think that more knowledge and control of the mechanics of the economy will lead to a better world.

More concern with the social impacts on individuals needs to get much more focus from the field of economics.

One of the things that struck me was the discussion about SAP. For one reason or the other, I am quite aware of the world wide dominance of this German company in the field of software for managing large corporations. In a thoroughly scientific, 100% sample of people sitting in my home office with me, I find, as expected, that the general population has no awareness of what SAP is nor of its dominance in the world of corporate management software. I fear that people hearing the interview might think the interviewee is some wild eyed academic who is fretting over some irrelevant, unknown company.

The Real News Network has the interview EU Association Agreement with Ukraine Is a Gift to Kleptocrats.

You’ll have to watch the interview to understand how the kleptocrats got what they have so that they can sell lit to the EU. The excerpt I chose to feature below only tells you about the great deal that the citizens of the Ukraine are not going to get.

WORONCZUK: So, then, what would a progressive trade policy between Ukraine and the E.U. look like?

HUDSON: Well, it would have been one that marked the very beginning of the common market and the beginning of the agreements with Poland. Western Europe would say, okay, Ukraine, we realize that your economy has not been modernized, unlike Poland and Czechoslovakia and the other areas, so now that we’ve agreed to sort of plan to take you in, we’re going to put a lot of investment in. We’re going to build roads and infrastructure and schools, and we’re going to make sure that what the kleptocrats have taken, we’re going to apply European-type progressive taxation. We’re going to tax, we’re going to put an economic rent tax in, and we’re going to recapture what has been privatized so that all of these natural resources–your land and your agriculture and your mining–can be the fiscal base. And we’re going to make sure that you the Ukrainian government can tax the wealthy like we do in Europe. But instead the Europeans are saying, don’t tax the wealthy, tax labor even more, squeeze labor by raising gas prices, by removing the subsidies of gas, so that your labor is going to be squeezed and we can grab what you have more easily. So the Europeans are treating the Ukrainians not like they’re treating themselves, not like they’re treating the former Soviet countries brought in, but really like a defeated enemy to be burdened with reparations, and especially to rule through their sort of proconsuls as the kleptocratz that have been assigned as governors by the military junta that took over in Kiev.

Have you gotten this kind of understanding of what this is all about from anything you have read in the Lame Stream Press? If you had, would you think that it makes sense for the Ukrainian population to be clamoring for such a deal?

The Real News Network has the video The Forces Behind SCOTUS Anti-Union Ruling.

DESVARIEUX: The National Right to Work Legal Defense Foundation is the non-profit arm of the National Right to Work Committee, a lobbying group that has gotten so-called “right to work” legislation passed in 24 states across the country. It’s even gotten a right-to-work law passed in former union strongholds like Michigan. On their website, they explain that “Right to Work law guarantees that no person can be compelled, as a condition of employment, to join or not to join, nor to pay dues to a labor union.”

But after an investigation by Center for Media and Democracy, they found out who exactly is behind what they call an anti-union crusade. According to the report, in 2012, billionaire energy tycoons the Koch brothers funneled $1 million to the National Right to Work Committee. Right-to-work organizations have also received significant funding from the owners of Walmart, the Walter Family Foundation, and the beer corporation Coors family’s Castle Rock Foundation; also Wisconsin’s Bradley Foundation, the John M. Olin Foundation, and the Searle Freedom Trust.

I guess you might call this the usual suspects. What are the chances that they have the interests of workers at heart?

Jessica Desvarieux mentions the FSRN. This is Free Speech Radio Network.

The Boston Globe has the article Central bankers issue strong warning on asset bubbles. I was looking for something sensible in this article.

The organization, which reflects a widespread view among central bankers that they are bearing more than their share of the burden of fixing the global economy, often uses its annual reports to send a message to political leaders, commercial bankers, and investors.

Well that certainly looked promising.  Monetary policy cannot fix what ails the world economy.  It needs some fiscal stimulus.  Let’s see what the central bankers recommend.

The organization said governments should do more to improve the performance of their economies, such as reducing restrictions on hiring and firing.

Well they missed that easy target by a mile.  Maybe they have some advice for corporations.

The organization also had harsh words for corporations, which it said were not taking advantage of booming stock markets to step up investment.

I wonder what part of the following scenario these bozos don’t understand.

Ms. CEO is pondering what to do next.  She responded to the economic crash by cutting back her corporation’s production, closed, plants, and laid off  workers because she wasn’t able to sell all the goods her  corporation was producing.

Now that she has reduced the production level to match the lowered demand, her corporation is making profits again.  In fact they are piling up.  She has already got research and development rolling to come up with new products that will make old products obsolete.  This is about the only way to get people to buy some more stuff because the people who have old stuff don’t need more, and the people who need more stuff don’t have the money to buy it.

Still the profits are piling up.  So Ms. CEO gives herself and her staff whopping income increases.  She ups the dividends to the stock holders, and investors flock to buy more shares so that they can get some level of earnings.

Still the profits are piling up.  Ms. CEO discovers that the corporation can play games with financial investments, derivatives, and financializing the company as an easy way to make even more profits.

She and her fellow CEO’s have trillions of dollars in liquid assets  that they don’t know what to do with.  Suddenly she makes a discovery.  The stock market is booming, her corporation is raking in money hand over fist, yet there is still no demand for more production output from her idle factories.  “I know” she says, “I’ll invest in cranking up my  factories so I can give stuff away for free.  That will fix my problem of too much profit piling up.”  Yeah, right!!!

So what is it that the central bankers expect corporations to invest in?  Does it take deep study of the latest theories in economics to understand the situation.  It’s as simple as “What part of no freakin’ customers do you not understand?”

Some experts are selling the idea that if we focus more wealth at the top of society, that will surely encourage more demand.  How many more  mansions, yachts, and private jets can one billionaire buy.  Eventually they run out of places to spend their money.  They certainly aren’t going to use their money to open up idle factories and hire workers when they already have factory output in balance with the now lowered consumer demand.

So central bankers and congressional experts of a right wing persuasion, I again ask,

“What part of no freakin’ customers do you not understand?”

Politico has the story Harris v. Quinn ruling: Unions hit, but not fatally, by SCOTUS.

By a 5-4 vote, the justices ruled in Harris v. Quinn that home health care workers in Illinois cannot be compelled to pay dues to a union they don’t wish to join.
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Union leaders had feared that the justices might strike down those state laws as unconstitutional. The justices did not go that far. They issued a more narrow ruling that the home health care workers at issue in the case are not “full-fledged public employees” because they are hired and fired by individual patients and work in private homes, though they are paid in part by the state, via Medicaid.

Apparently it is not enough that workers have a vote in what their unions do, if you don’t like how they represent you, then you can refuse to pay for the work they do even though the majority of other workers agree with the union.

Can I refuse to pay the government the taxes that they use for purposes that do not get my approval? Why just limit myself to the specific part of the taxes they use to carry out a policy I don’t like? Why can’t I just refuse to pay all taxes? This seems to be the logic that follows from this decision.

Perhaps only if I refuse to become a full-fledged resident can I avoid paying my taxes.

From the Syllabus of the decision, we have a discussion of a precedent here called Abood:

(3)Extending Abood’s boundaries to encompass partial public employees would invite problems. State regulations and benefits affecting such employees exist along a continuum, and it is unclear at what point, short of full-fledged public employment, Abood should apply. Under respondents’ view, a host of workers who currently receive payments from a government entity for some sort of service would become candidates for inclusion within Abood’s reach, and it would be hard to see where to draw the line. Pp. 27–29

To dig deeper, I’d have to learn exactly what service the union provides the workers. Is the Supreme Court making a value judgment on the service provided versus the payment that is mandated? Is this something a Supreme Court ought to decide?

This all reminds me of some of the lyrics to the song If I Were a Rich Man.

The most important men in town would come to fawn on me!
They would ask me to advise them,
Like a Solomon the Wise.
“If you please, Reb Tevye…”
“Pardon me, Reb Tevye…”
Posing problems that would cross a rabbi’s eyes!

Are the eyes of judges crossed yet?

Mother Jones has selected what they think are The 8 Best Lines From Ginsburg’s Dissent on the Hobby Lobby Contraception Decision. Here is an example of one of the 8.

“Approving some religious claims while deeming others unworthy of accommodation could be ‘perceived as favoring one religion over another,’ the very ‘risk the [Constitution’s] Establishment Clause was designed to preclude.”

If it is against your religious principles to hire someone who is not of the same religion, has the Supreme Court just given you the right to discriminate?

This is only one example of self-contradiction in the U.S. Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Or maybe not. This only says that Congress may not do it. Was the original intent that only the Supreme Court could establish religion and choose the ones that would be established? Otherwise, how can you make no law prohibiting the free exercise of religion without establishing what a religion is. Establishment must have the meaning I am attributing to it in this context, because the other meaning would not make any sense. Try the following substitution of words to see the problem – “Congress shall make no law respecting a church, or prohibiting the free exercise thereof;” How do you exercise a church?

Thanks to Jennifer Kaplan’s Facebook post for bringing the Mother Jones article to my attention.