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Dan Burns

Shadow banking reaches new depths of excess

by Dan Burns on August 19, 2014 · 1 comment

explosionI’m passing along a couple of recent economics articles. I’m not convinced that another big bubble/crash is swelling right now, but I’m not convinced that it’s not, either.
 

Among those hot topics was the runaway shadow banking system, defined by Investopedia as “The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions.” Examples given include hedge funds, derivatives and credit default swaps…
 
All the king’s horses and all the king’s men could not rein in the growth of the shadow banking system, despite the 828-page Dodd-Frank Act. Instead, the derivatives pyramid has continued to explode under its watch, to a notional value now estimated to be as high as $2 quadrillion…
 
Worse, raising interest rates could implode the monster derivatives scheme. Michael Snyder observes that the biggest banks have written over $400 trillion in interest rate derivatives contracts, betting that interest rates will not shoot up. If they do, it will be the equivalent of an insurance company writing trillions of dollars in life insurance contracts and having all the insureds die at once. The banks would quickly become insolvent. And it will be our deposits that get confiscated to recapitalize them, under the new “bail in” scheme approved by Janet Yellen as one of the Fed’s more promising tools (called “resolution planning” in Fed-speak).
(Truthout)

…READ MORE

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Rep. Nolan opposes Enbridge Sandpiper route

by Dan Burns on August 18, 2014 · 0 comments

1098432_644541492223499_1490753966_nWith so much attention focused on the Keystone XL proposal, it can slip one’s mind that there are proposals from Big Filthy Fossil Fuels for pipelines everywhere.
 

Citing both environmental and economic concerns, Minnesota’s Eighth District Congressman Rick Nolan has expressed his opposition to the proposed route for the Enbridge Sandpiper pipeline.
 
In a letter to the Environmental Manager of the Minnesota Department of Commerce, who is evaluating the project’s application, Rep. Nolan spoke of his ongoing concerns, as well as those of local residents, regarding the proposed route’s threat to environmentally sensitive areas of Minnesota. The current route requires the pipeline to cut through vulnerable northern wetlands, porous sandy soil and water tables used for drinking water, and some of the clearest lakes in the state.
 
“There’s no compelling reason why the Sandpiper pipeline can’t be rerouted to avoid environmentally fragile areas,” said Nolan. “From my meetings and communication with agencies and local advocacy groups, it’s clear there are several alternative routes out there that would take the pipeline south of this region, and thereby prevent a devastating ecological disaster in the event of a pipeline spill.”
(Rep. Nolan press release)

Here’s an overview of the Sandpiper project. Opposition to the proposed route is in fact not a brand new phenomenon.
 
…READ MORE

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MN-07: GOPer Westrom’s Romney moment

by Dan Burns on August 15, 2014 · 2 comments

imagesCAAWKF7LOK, I’m not going to claim that I’ve ever been exactly what you’d call “on fire” for Rep. Collin Peterson (D-MN). But, better a conservative Democrat than a right-wing Republican. Torrey Westrom is the Republican running for Peterson’s seat.
 

The defining gaffe of the 2012 presidential race came when Mitt Romney was recorded saying, “There are 47 percent of the people who will vote for the president no matter what… These are people who pay no income tax.”
 
…Turns out that more than two months before Romney made that infamous comment, Torrey Westrom, a Republican Minnesota state senator representing a west-central part of the state, made essentially the same comment during a town hall meeting, only he didn’t single out income taxes as Romney did.
(City Pages)


 
Westrom’s fundraising has been solid but certainly not mind-blowing, and I’ve thought all along that MN-07 is only getting national attention as purportedly competitive because there are so few House races that even loosely fit that description, this cycle. I think MN-07 will fade from the national radar, between now and Election Day. If it turns out that I’m wrong, I’ll say so.
 

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MN-08: Mills wrong about unemployment up north

by Dan Burns on August 14, 2014 · 1 comment

millspartying2The other week I posted about how the GOP candidate for Sen. Al Franken’s (D-MN) job, Mike McFadden, had been babbling very inaccurate numbers about unemployment in northern Minnesota. At the end I typed:
 

The Republican congressional candidate in MN-08, Stewart Mills III, has also talked a lot about joblessness in northern Minnesota, purportedly as a result of Democratic policies – including, presumably, insufficient tax cut welfare for very wealthy people like himself. But it seems that for once he’s shown a bit of sense, if only inadvertently, and has not spouted specific figures that can be factually refuted.

Mills has in fact made at least one specific allegation about this issue. And it too was an exaggeration.
 

Mills is the vice president of Mills Fleet Farm Corporation, and he made a campaign stop in Duluth on (June 2). He called out Nolan on unemployment in the 8th district.
 
“We have an 8 percent unemployment rate currently. Contrast that with a 4.5 percent unemployment rate statewide. We know we can do better,” Mills said.
(WDIO)

It’s not that hard to get this stuff right. A quick search, a click or two, and:
 

As of June, 2014, the unemployment rate in this area was 5.8%; compared to the state where the rate was 4.6%. One year earlier, the rate in the area was 6.5%; compared to the state where it was 5.2%.
(My District Data)

8% is about 38% in excess of the correct figure. The national number in June was 6.1%. In context, this is far from Stewart III’s most craptacular display of blundering idiocy, but it’s certainly part of a relentless pattern. Nobody this clueless and careless should be handed political power, at any level.
 

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Minnesota primary election liveblog

by Dan Burns on August 12, 2014 · 15 comments

11:10 – Hagedorn will win his race, Whelan romped in Otto-esque fashion in hers, and I’m headed for seven hours or so of the dreamless. Thank you to everyone who stopped by.
 
10:49 – Don’t mean to flip anyone out, Steve Simon will win, but something strange went down in the DFL Secretary of State primary.
 
10:43 – With 75% reporting it looks like Jeff Johnson will be the GOP gubernatorial candidate in November. He’s ahead of Kurt Zellers 30 to 24.5. But it’s a dismal showing for the party’s endorsed candidate.
 
10:10 – About 37,000 votes were cast Since I’m pretty sure one could vote for multiple candidates in the Minneapolis School Board race, I don’t know how many voters actually showed up, and Ira Jourdain beat Doug Mann for the fourth and final spot in November by 50 votes. I don’t know whether Mann can get a recount or not. Also, Applebaum did win 44B, but only by 37 votes over Tony Wagner.
 
10:00 – With almost 50% reporting the GOP governor thing is not over. Johnson 31, Zellers 24, Honour 22, Seifert 20.
 
9:50 – With almost 40% reporting in MN-01 Jim Hagedorn has about a 60-40 lead over the endorsed candidate, Aaron Miller.
 
9:41 – Matt Entenza has conceded the auditor’s race. I’m quite interested, though, to see whether that 70% spread continues to hold. If so, it will be, among a lot of other things, an indicator that the “sulfide mining uber alles!” crowd doesn’t have anything like the political heft that they (and corporate media) claim that they have.
 
9:37 – With all but one precinct reporting Rebecca Gagnon, Don Samuels, and Iris Altamirano will advance to the Minneapolis School Board general. It will be determined when that last precinct reports, whether Ira Jourdain or Doug Mann will as well.
 

9:30 – With almost 30% reporting Johnson is holding steady at about 1/3, with Zellers next at 24% and Honour in the low 20s. Also, it looks like Jon Applebaum will triumph in 44B.
 
9:15 – With all precincts in those districts reporting Phyllis Kahn and Jenifer Loon have won.
 
9:03 – 83-17, with almost 12% in. Jeff Johnson leads the GOP governor race, with almost precisely one-third of the vote.
 
8:21 – Only 1 % reporting, but it may be worth noting that Rebecca Otto is off to an 85%-15% lead.
 
Races of particular interest for me include:
 
- Otto/Entenza
- GOP governor
- Kahn/Noor (DFL60B – Minneapolis)
- An “embarrassment of riches” tripartite DFL primary in the west metro (Wagner/Tollefson/Applebaum – 44B – Minnetonka, etc.)
- Loon/Kihne (R48B – Eden Prairie)
- Minneapolis School Board at-large
- Hagedorn/Miller (R-MN01)
- And, mostly for perverse amusement, a Republican primary in the north metro featuring two real pieces of work, Abby Whelan and Justin Boals (R35A – Anoka, etc.)
 
I usually go to the SoS website for the latest. If that gets balky, as has been known to happen, CBS Minnesota has been prompt and reliable.
 

I’ll be back starting around 8:30, give or take.

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(Just gotta throw in a blurb that tonight I will be liveblogging primary election results.)
 
I recently posted an item that had a reference to a major disaster at a mine in Canada. Specifically, it’s at Mount Polley in British Columbia, and here’s video.
 

 
Aaron Brown asked PolyMet about this.
 

That was the very question I posed to LaTisha Gietzen, PolyMet spokesperson, yesterday. How would PolyMet prevent what happened at Mount Polley from happing at a nonferrous mine in the Lake Superior watershed?
 
Though the specific details of what happened at Mount Polley aren’t yet known, Gietzen pointed out several differences between what’s known about the Mount Polley mine and PolyMet’s proposal in Hoyt Lakes, Minnesota.
 
“We have a high level of confidence that our tailings impoundment is and will remain safe based on the size, design, location, construction and general nature of the structure,” said Gietzen.
 
Among the observable differences between Mount Polley and PolyMet, Gietzen said the Mount Polley Mine taps into a porphyry deposit in a much hillier location — two factors that influence the toxicity and water pressure in the pond.
 
“Porphyry deposits often contain higher sulfide levels and clay,” said Gietzen. “The clay tends to keep material in suspension and hamper drainage in tailings. PolyMet plans to mine a low sulfide deposit that does not have appreciable amounts of clay minerals. Therefore the geochemistry of our tailings will be different and the water in our tailings basin will be in the pH neutral range.”
(Star Tribune)

Uh-huh. It is of course not my business to try to dictate to anybody whether or not she should put more stock into what PolyMet has to say, rather than in the clear example of what can very well go wrong when these kinds of mining projects are allowed to happen. I will note that there are many examples of tailings pond failures that had nothing to do with sulfide levels and pH. They were just inadequately designed and maintained from the beginning, because that’s what mining companies do, far too often.
 

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Big McFadden blunder on steel imports

by Dan Burns on August 11, 2014 · 1 comment

The article’s mostly about the public debate at Farmfest. But this found its way in.
 

(Sen. Al) Franken said, though, that he has supported measures to guarantee the pipeline is built with American-made steel. After the debate, (Mike) McFadden said he wouldn’t be a stickler for that requirement, just that any steel, even if it comes from overseas, would need to be acquired through “free and fair trade.”
 
“What I’d love to see is us to use American products where we can, but we’ve got to be cost-competitive where we can. I am a supporter of free and fair trade,” he said. “But I think we’re going off on a tangent right now. What’s real is, we’ve got to get this pipeline built.”
(MinnPost)

The real fun starts at 2:00, though it’s preceded by a rather bizarre little fantasy from Nutshot about a pro-fossil fuels mega-majority in the Senate. This video is from The Uptake.
 

 
Labor leaders in particular are absolutely pounding him.
 

It’s hard to nail down what the plan for the pipe really is. This 2012 report from the National Resources Defense Council noted (on page 3) that a good deal of pipe has already been shipped in from Asia. TransCanada claims that nonetheless most of it would end up being made “in North America.” Me, I always trust what the corporations say. Because I’m as gullible as they make ‘em.
 

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amd_300You know, this is accurately indicative of what this whole sulfide mining misadventure has really been all about, so far.
 

The company that designed, engineered, and oversaw the construction of the (collapsed) Mount Polley tailings dam, Knight Piesold, also provided the Department of Natural Resources and PolyMet with technical advice on the current proposal for the PolyMet project. In fact, Knight Piesold Vice President Bryan Ulrich is listed as a Geotechnical Engineer on the DNR’s Supplemental Draft Environmental Impact Statement for the PolyMet project.
 
A few miles up the road, the Twin Metals mining project has employed the engineering firm URS. Many Minnesotans remember them as the contractor hired to evaluate the fatigue of the 35W bridge before it collapsed, and the designer of the Martin Olav Sabo Bridge over Hiawatha Avenue, which was forced to close after a design malfunction a year and a half after it opened.
(Mining Truth)

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McFadden job claims were false

by Dan Burns on August 7, 2014 · 3 comments

Mike McFaddenSomebody reality-based looked up the numbers, and it turns out that U.S. Senate candidate Mike “Nutshot” McFadden was talking through his hat. The article goes into plenty of detail.
 

What do we learn from this from this analysis? First, the unemployment data do not match Mike McFadden’s description of what is happening in these local economies. Unemployment is not stuck at 10 or 11 percent in areas such as Bemidji or the Iron Range.
 
Second, the data indicate that these areas experienced a sharp recession that was similar to other areas of the country with industries tied to the manufacturing sector (e.g. mining.) Unemployment spiked and returned to its pre-recession level; wages continued to be flat, just as they were before the recession and as they’ve been under Democratic and Republican administrations and Congresses for 40 years; labor participation rates are lower than they’ve been in 30 years for a variety of reasons, none of which are specific to Minnesota’s economy or to current economic policy.
(MinnPost)

The Republican congressional candidate in MN-08, Stewart Mills III, has also talked a lot about joblessness in northern Minnesota, purportedly as a result of Democratic policies – including, presumably, insufficient tax cut welfare for very wealthy people like himself. But it seems that for once he’s shown a bit of sense, if only inadvertently, and has not spouted specific figures that can be factually refuted.
 

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Aerial_photo_of_downtown_Minneapolis(Update: I was wrong about this. School board elections are non-partisan, and both candidates will be on the general ballot in November. There is no primary.)
 
Three Minneapolis school board districts have elections this year. Districts 1 and 3 are uncontested. District 5 has two candidates, and since both are DFLers, next Tuesday’s primary is for the prize. Nelson Inz beat Jay Larson for DFL endorsement, with 73% on the first ballot.
 

- Nelson Inz.

 

Inz believes he has an understanding of the issues facing public schools “from being on the ground and in being in the classrooms,” he said, “and being in daily contact with students.” Trained in adolescent Montessori education with an IB in three different disciplines, he currently teaches at Great River Montessori High School, a charter school in Saint Paul. There he has served on the board and has acted as chair of the personnel committee.
 
Because Inz has worked in both public schools and charter schools, he said he believes he understands the ongoing debate between which types of schools are best for students and the state. And in his campaign, he said he wants to highlight student-centered education.
 
With holistic student-centered education, the education needs to be more of a priority than the testing, he said. That doesn’t mean that testing isn’t important, but kids need a mix of tools to keep them engaged in learning, he said. In addition, Inz said he feels that the district needs to focus on lowering class sizes and reducing the reliance on testing and narrowing curriculum. “You have to have some testing, obviously,” he said, “but you can’t base your entire educational philosophy on limited results.”
(TCDP)

- Jay Larson.

 

Larson said he’s very supportive of teachers and their unions and that he believes in organizing and giving others a voice. Growing up in the North St. Paul, he said teachers really helped him through his parents’ divorce, and became heroes to him.
 
These days, as a parent, Larson has an impressive track record as a volunteer and organizer. When Larson and his wife, Sara, first moved into District 5, in the far southeastern portion of Minneapolis, Larson said that no one sent their kids to the surrounding public schools. It was just assumed, he said, that the schools in their area, such as Keewaydin and Wenonah, were not any good; instead, many kids in District 5 were going to charter schools or other nearby school districts. There was even talk, Larson added, that Keewaydin Elementary School would soon be closed.
 
But Larson has been committed to sending his own kids to public schools, he said, especially after Wenonah and Keewaydin merged into Lake Nokomis Community School in his neighborhood.
 
He began attending community meetings about the need to expand the Keewaydin building, he said, and was “amazed by other parents’ passion and unwavering support” for Lake Nokomis Community School. This reinforced his idea that “community schools are the backbone of a neighborhood,” he said.
(TCDP)

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