Jesse Hearts ECONNED

Jesse gave us :

Why people care about these sorts of things puzzles me but here goes…

I do keep a select set of books next to my chair for reading in the late and quiet hours of the evening after all the family is put to bed, the doors locked, and the windows closed.

From this I am re-reading sections of Econned by Yves Smith which is an awesome work about the financial crisis and its roots. If you do nothing else read the introduction thoroughly and you will know more about the financial crisis than most. I rarely read the same book twice unless it has real substance.

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21 comments

  1. William

    I like Jesse’s blog. I really like the image of the ‘moderator’ wife, holding a whip with the “behave yourself” caption. Cfdtrade is the best blog I’ve been lucky to read. Yves is obviously making a difference.

  2. psychohistorain

    Congratulations! Well deserved. I am a person that usually reads a book cover to cover in 24-48 hours and ECONNED took me almost 6 months to consume.

    I hope you have a continuing strategy for success and watching your backside.

    As and after the world goes through the collapse of “America”, your book will be referred to as the consummate tell of the excesses of the financial sector of that era, IMO.

  3. Rex

    Several times through my life certain synchronicities seemed to indicate that it was time to seek new knowledge to steer me through a transition that was either beneficial or inevitable. Usually I would look for a book to guide me and eventually would find one. Once it was Kernighan and Ritchie’s “The C Programming Language”. (I pine for the days when the answers could be so linear and concrete.)

    The crash of 2008 left me flat footed, yet certain that something so big, though made of complex interactions, had some forces behind it that could be reduced to some basic zeitgeist drivers that could explain the main part of what had happened. If I could find some answers that resonated, I’d have information or tools and wouldn’t be caught so off guard in the future.

    I read a few books about the crash and basic economics that informed me a bit, but I still was far from satisfied in my quest. Then I found Yves’ Econned. It is so satisfying when you find something that seems to resonate and fill a broad mosaic (a la Marshall McLuhan).

    Thanks, Yves, for providing the book I wanted to fill the void I sensed in my awareness.

    The bad news seems to be, that like global warming (now climate change), the rational evidence of need for big adjustments and adaptations, will be beat down by corporatist powers and ignored or denied until utter collapse is inevitable.

    Cue Louis Armstrong “What a Wonderful World”

    1. Rex

      On the Corporatist theme, Kieth Olbermann was (it seems) suddenly fired by MSNBC Friday.

      Gee, there couldn’t be any coincidence with the recent news that Comcast bought the NBC family, could there? Soon will it be only Fox and the similar talking point, unquestioned – unanalysed tidbits, that make up the main-stream networks “news”?

      I am stupefied by how fast the “land of the free; sweet land of liberty” is devolving.

      1. Michael H

        So I guess it’s only a matter of time before Dylan Ratigan gets fired as well?

        And as for Econned, I’ve read the introduction, and plan on ordering my own copy within the next week or two.

        1. Yves Smith Post author

          I have some with people with decent insight into what is up at MSNBC. This does seem to have more to do with Olbermann than Comcast per se (although the regime change may have indirectly had something to do with it, as in the new guard may have been willing to settle whatever deal points remained open in their ongoing negotiations to be done with him).

          I’m told his replacement, Cenk, is actually more to the left than Olbermann was, but the lower degree of stridency means people may not see it that way (which would support the Freddie deBoer contention that stridency is too often confused on the left with the substance of the person’s actual position).

          1. readerOfTeaLeaves

            Interesting, as the biz reasons for firing your top host seemed pretty muddy from where I sit; obviously, there are … ‘layers.’
            And Olbermann had seemed pretty intense post-Elder Care.

            If Cenk can lower the stridency, he’s got a shot.
            I have a soft spot for Olbermann, but the stridency ratio was getting a bit high for my particular antenae.

            IIRC, Cenk went to Wharton, so if he comes after Ratigan’s program and hits the economic explanations, it could all be good.

            My personal view is that MSNBC is really aiming at mobile and devices going forward. Their rollout of Maddow Show iPad app last week was interesting, so I’m guessing they have a whole hidden pack of plans for mobiles and devices — with Comcast generating revenue by generating content that can generate revenue (lather, rinse, repeat…)

            And since Cenk originally – apparently fairly entreprenurially – started his online program ‘The Young Turks’, that deepens my hunch that teevee is history, it’s alot about wireless and cable and broadband.

            Every time that I go to MSNBC’s site the past few weeks, the first ad they serve up is their free iPhone app. (So far, I’m not biting, but hey… I’ll probably weaken.)

            Unfortunate about Olbermann, who as near as I could tell gave MSNBC enough traction for it to have a shot at bringing the rest of the new hosts online.

            I read Cenk as: MSNBC-Comcast targeting mobiles, devices, and building in more social media as they move forward. If that’s their plan, then bringing on Cenk would seem to be a very shrewd move. But on a mobile, too much ‘stridency’ is overkill; on a 320 x 480 inch screen, simple talking is plenty.

            Be interesting to see what transpires.

  4. I used to debate JesseL at Prudent Bear in the early 2000’s. He has done well with his blog. I plan on reading your book as well Yves. I can’t stop reading and commenting on these blogs I visit long enough to read the ones I have recently bought. It will be in my next group. Thanks for your work here.

  5. mindful

    I started following Cfdtrade a few months ago, and now find it to be one of my primary sources for news and analysis. I particularly enjoy the many links that you provide every day– I can’t begin to sort through all of the news availalbe on the website.

    I would love to see you start a recommended books feature on your blog. I have to admit that some of the economic concepts discussed here are sometimes a little over my head. Any recommendations that you can provide that would help us without advanced degrees in finance, law or economics would be helpful.

    1. YankeeFrank

      There is an excellent blog hosted by Bill Mitchell that I find very helpful in explaining economics concepts in a clear way — using MMT (modern monetary theory) as its framework, which to me is the only valid view of how our modern economies work. You must be careful because too much of the economics literature and text books are written by neo-liberals (ya know, the ones responsible for our current mess). Bill Mitchell’s blog is at: His writing can be dense at times but he has many old posts that go into detail on things that really help, as well as a weekly quiz with answers. Good luck to ya.

  6. LeeAnne

    Yves, I am heartened that people more articulate and able than I praise your work; Jesse is so talented.

    And, although self critical for spending so much time on NC particularly, and other finance blogs linked from this blog as well, I am in such good company (a feeling like skiing after watching champions race down the hill), realizing the greatest education of my life as a result. I’ll never give it up. You’ll have to take the Internet out of my cold dead hands.

    I pray, after this Comcast/NBC abomination, that we won’t have to look back on this time as the golden age of the Internet.

  7. Salmon Rising

    Finally got my hands on Econned this week and am about a third of the way through it. My surprise (even thought I am a long time reader of this blog) is how highly entertaining the book is to read. A really first rate job. Thanks.

  8. jo6pac

    Jesse gave us a generous comment on his blog yesterday:

    Us should read You for your hard work.
    I always enjoy this site and Jesse

  9. Justicia

    What are we to make of this?! Yves, your insights would be most welcome.

    Accounting Tweak Could Save Fed From Losses

    Reuters
    | 21 Jan 2011 | 04:58 PM ET
    Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.

    The significant shift was tucked quietly into the Fed’s weekly report on its balance sheet and phrased in such technical terms that it was not even reported by financial media when originally announced on Jan. 6.

    But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world’s most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.

    “Could the Fed go broke? The answer to this question was ‘Yes,’ but is now ‘No,'” said Raymond Stone, managing director at Stone & McCarthy in Princeton, New Jersey. “An accounting methodology change at the central bank will allow the Fed to incur losses, even substantial losses, without eroding its capital.”

    The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability.

    This enhances transparency by providing clearer, more frequent, snapshots of the central bank’s finances, analysts say. The bonus: the number can now turn negative without affecting the central bank’s underlying financial condition.

    “Any future losses the Fed may incur will now show up as a negative liability as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible,” said Brian Smedley, a rates strategist at Bank of America-Merrill Lynch and a former New York Fed staffer.

    “The timing of the change is not coincidental, as politicians and market participants alike have expressed concerns since the announcement (of a second round of asset buys) about the possibility of Fed ‘insolvency’ in a scenario where interest rates rise significantly,” Smedley and his colleague Priya Misra wrote in a research note.

    Copyright 2011 Thomson Reuters. Click for restrictions.
    URL:

  10. Bev

    I need to read your book.

    Also, I find the graphic up at Jesse’s right now interesting and important…guessing who Nero will be to take the whole place down.

    With the voting machines in the hands of the right wing
    (see:
    and in the group is listed previous owners Haliburton and The Carlisle Group–Cheney and Bush) there can be no change…and you can guess as easily as I who Nero is.

    Support the return of real evidence in elections–hand counted paper ballot evidence–to see any real economic, political and environmental climate change.

    from:

    EDA is also probing the polling methodologies that have yielded red-shifted polls to match red-shifted elections, making everything seem right enough. We know, for instance, that the now universally adopted sampling protocol known as the Likely Voter Cutoff Model is a red-shifting, methodologically unjustifiable ploy that nonetheless accurately predicted last Tuesday’s results. EDA is asking “Why?” We expect to issue a detailed study of polling distortions and fudge factors in the coming weeks.

    We at EDA are accustomed and fairly hardened to nights like last Tuesday by now. The most maddening part for us may well be listening to the Wednesday post-mortem analyses in which very astute pundits on, say, CNN or NPR read the tea leaves with straight faces and 100% faith in the gospel of the official results as their unquestioned premise. Official results that we, sleepless and still crunching numbers in an attempt to keep honest score at home, had already recognized as likely lies.

    Excepting Dan Rather on HDNet TV on October 26, there have been virtually no journalists courageous enough to tell this story. Much of our work going forward will be to persuade those same pundits and opinion leaders to scale the towering wall of never-happen-here denial that is putting our nation at such grave risk.

    How many more elections can our democracy survive with the use of concealed vote-counting, where there is no meaningful oversight by citizens, election officials, or the media? How many more elections where the will of the public is ignored? Time is running out on our democracy.

    We must get the facts about our electoral system into public dialogue to create a foundation for a rational and unblinking examination of evidence and for serious investigation.

    If anyone reading this has access to any public figures who might help us get the word out, please write to us at [email protected] as soon as possible.

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