.

The world has been dealing with the recrudescence of popular sovereignty for the last thousand years. Aristocracy is very favored by aristocrats.
We will make no truce with kings.

There have been few developments on display today.

This was the condition I found at about noon ET.

I will post a few more things before sleep.

http://www.nakedcapitalism.com/2012/06/links-62612.html

Links 6/26/12

Apologies for being thin on my own posts. Some blog-related meetings on longer-term projects, and a lot of non-blog demands this week. But the caliber of guest posts and Lambert’s political coverage is hopefully keeping you happy.
Role of stress in dementia investigated BBC
Complex Thinking Behind the Bow and Arrow Science Daily (Chuck L)
Iterated Prisoner’s Dilemma contains strategies that dominate any evolutionary opponent William Press, Freeman Dyson, PNAS (Chris M)
Living organ-on-a-chip could soon replace animal testing ExtremeTech (Carol B)
On Orbitz, Mac Users Steered to Pricier Hotels Wall Street Journal
Is science a girl thing? mathbabe
Chesapeake and rival plotted to suppress land prices Reuters
Radioactive hot spots found in Tokyo park NHK
Cocaine Expansion in Peru Raises Fears of Global Spread Wall Street Journal. Does cheaper cocaine = more speedy traders = more speedy markets?
RBS boss says outsourcing not to blame for computer glitch Guardian (Richard Smith)
Rape charge against local Chinese official again raises questions of corruption McClatchy
BRICs Biggest Currency Depreciation Since 1998 To Worsen Bloomberg
The European Atrocity You Never Heard About The Chronicle (Chris M). Comment from Mark Ames:

I’ve read a lot about this part of hidden history, and related material—Vonnegut’s Slaughterhouse Five about the RAF cooking 100,000 German civilians, Celine’s great trilogy about when he fled through Germany with his cat Bebert during the firebombings, Beevor’s book about the Soviet counter-offensive and destruction of Germany which included probably the largest mass-rape campaign since Genghis Khan and the mass ethnic cleansing of East Prussia (now Kaliningrad)…I’m sorry though, after reading all through it all as a war history buff, getting through the shock of huge edited out episodes like this, and reimagining the context — which is really a two act holocaust starting with WW1 and ending in the 2-3 years after WW2—this is hardly the worst of the under-recognized human rights atrocities. And having read some of the far-right Holocaust revisionist historians and far-right historians in general, the fact is that this part of the story is exactly what they emphasize to prove their point about the poor Germans, and in their hands, it is contrarianism with all the worst intentions.
The bottom line, which we forget: Europeans were bloodthirsty savages. Two world wars ended that. Now it’s just us and the Russians who have the bloodlust, among Northerners at least.

Merkel Hardens Resistance To Euro-Area Debt Sharing Bloomberg
Contagion in Europe: Evidence from the sovereign debt crisis VoxEU. Note this does not allow for the driver of the slow motion bank run: the fear of having deposits in the wrong country/bank in the event of a eurozone exit.
File Sharing and the Greek Crisis Media Piracy (Lambert)
Why The Hierarchy Fears The Nuns Talk to Action (Chuck L)
Justice Scalia Rages Against Obama On Immigration TPM (Ed Harrison)
More Revelations of Favorable Stock Trading By Members of Congress David Dayen, Firedoglake
Princeton’s Blinder Says Fed Has Weak Weapons For Growth Bloomberg
Principal Reduction Most Effective Type of Mod: Amherst DSNews
States Lacking Income Tax Get No Boost In Growth: BGOV Barometer Bloomberg
Possible Deal on Student Loan Interest Rates in the Senate David Dayen, Firedoglake
FHFA Wants Money Transferred from Local Government to Bondholders Adam Levitin, Credit Slips
Analysis: Money’s Retreat Home Threatens Globalization Reuters. Ahem, we’ve noted that the Reinhart/Rogoff work on financial crises showed that large international funds flows were correlated with severe financial crises. So more stability may require less integration.
Corporate Profits Just Hit An All-Time High, Wages Just Hit An All-Time Low Clusterstock (Carol B)
America is no longer a land of opportunity Joseph Stiglitz, Financial Times
Exclusive Interview: Joseph Stiglitz Sees Terrifying Future for America If We Don’t Reverse Inequality Alternet. This is pretty pointed.
* * *

http://hat4uk.wordpress.com/2012/06/26/greek-deficit-how-berlin-encouraged-papandreou-to-big-up-the-2009-greek-deficit/

John Ward is crazy but he is not stupid. He is the blogger here.

"GREEK DEFICIT: How Berlin encouraged Papandreou to big-up the 2009 Greek deficit

Defence of German banks a key factor

Schäuble and Merkel….implicated in an incredible scam

How Venizelos fired ELSTAT moles to cover up the truth

Spanish European Commissioner backs story of international fraud

The Western MSM have never questioned the ‘received truth’ that Athens understated its liability and obligations for several years following the launch of the euro. But few if any outside observers know the truth behind what happened when Papandreou took over the Premiership in Greece….and for Machiavellian reasons, the debt was suddenly overstated.

In October 2009, George Papandreou stepped into what one Athens source has called ‘the shitfilled shoes of Kostas Karamanlis’, and discovered that the two previous administrations had lied about both the size of the National Debt, and the ongoing level of government spending. In Greece, the folks you go to see to find out this kind of stuff hang out in an organisation called ELSTAT – the Hellenic Statistical Authority.
What happened in the weeks following was quite bizarre – and pretty fully documented. Somewhat panicked by the degree of mendacity he’d discovered, Papandreou confided to key Cabinet cronies that the real fiscal situation involved not balanced books, but a 7.8% deficit…well beyond the limits allowed by Brussels – although Brussels had, from Day One, been something of a paper tiger when it came to enforcing the currency rules. An insider from that time comments:
“Papandreou thought there was a serious chance he’d be thrown out of the eurozone. Unbelievable I know, but he did. But then things went rapidly from bad to awful. He really did have no idea what was coming.”
Rather like an Olympics Budget, the deficit figure kept rising with each week, as the new government opened more and more worm-cans. First ELSTAT said 7.8%, then 9.8%, then it went to 11%, before finally settling at 13.6%. Only then – some time shortly before Christmas 2009 – did Papandreou talk to Brussels, Paris and Berlin about the possible need for a bailout.
In fact, through her Interior Minister Wolfgang Schäuble, Angela Merkel already know about the Greek deficit lies. Schäuble became Finance Minister shortly after Papandreou came to power. Although Angela Merkel had shafted the wheelchair-bound assassin’s victim on at least two previous occasions, she wanted him now for three reasons: first, as Minister of the Interior, he had an excellent head for secrecy and covert operations. Second, he was hugely in favour of EU political union. And third, he didn’t have the scruples of his SPD predecessor, Peer Steinbrück. A lack of scruple was going to be crucial: for Merkel also knew that German banks were heavily exposed to the Athens deception.
Thus, if the eurozone members didn’t put their hands in thir pockets bigtime, Germany could be facing a severe financial crisis. (Sarkozy, says a Parisian diplomatic source, was even more terrified, in that all his exposed banks were completely guaranteed by the State).
Somewhere in the midst of these talks, Berlin requested a smaller meeting with the Greeks. At this meeting, three sources (two Greek and one German) allege, the small German delegation made an astonishing observation: the situation would “have to look more desperate” in order to justify a bailout to the other eurozone members. That is to say, only widespread fear of the entire eurozone being damaged would get the member States to pile in with bailout monies.
What Berlin was really worried about, of course, was that the Franco-German banking system might collapse if Greece wasn’t saved. And at that stage, little or nothing had been done to make the sector better able to withstand a derivatives wave.
The European Commission had in fact already issued a warning in July 2009 that Greece’s deficit was likely to reach 10% of GDP – if no counter-measures were taken to curb public spending – and that Commissioners regarded the official 6% GDP forecast as “over-optimistic”. But, Berlin argued, only something, say, 50% or more above that potential second figure would frighten eurozoners enough to get them to part with their cash.
Without assuming much, one has to observe that this plan does have Schäuble written all over it. And sure enough, in due course (November 2010) the eurozone learned that the Greek deficit was ‘currently running at 15.8%’. George Papandreou had meanwhile announced his first austerity package in January 2010, and in May of that year EU leaders unveiled a €110bn bailout with money from the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF)….the so-called Troika. So clearly, the crisis was real enough….and the bailout fully justified. It seemed.
Fast forward now to 2011. Enter from left field former Hellenic Statistical Authority (ELSTAT) board member Zoi Georganta (pictured) who caused a sensation by alleging that the declared deficit for 2009 had been been massaged upwards in November 2010 by her boss Andreas Georgiou.
And lest any nasty male chauvinists out there want to dismiss Zoi Georganta as a lone madwoman, I should point out that six Elstat board members had been dismissed in June 2011 after clashing with Elstat chairman Georgiou. They too had spotted the Tippex liberally applied to the ‘revised’ data.
Says one Athenian source, “She was trying to tell everyone forever that she knew Pasok purposely sabotaged Greece at Germany’s request, to ensure our cooperation”. Zoi was off the money with her motive guesswork, but she was in no doubt that the figures had been got at and inflated. Investigators visited her, after which everything died down. It was said that she had changed her statement.
But now comes our old friend Evangelo Venizelos – author of the legislation to grant legal indemnity to all Greek Ministers: and in September, he orders the entire ELSTAT board (including Georganta) to resign….except the key villain, Andreas Georgiou. Just fancy that. And when Evangelo gets involved in the mire, you know a sh*tload of mire is being covered over with carefully planted (and watered) roses.
But given that Ms Georganta was not the only whistleblower at ELSTAT, the rumour persisted…albeit (as usual) without any awareness of this spreading scandal in the Western MSM. It persisted, in fact, throughout the eurozone. And in March this year, Zoi found an unlikely ally.
Joachin Almunia Amann is a former left-wing Spanish politician, and now a prominent European Commissioner. Currently responsible for Competition, in February 2010 – a crucial moment in the debt-inflation plot – he was the European Comissioner for Economic & Monetary affairs…the role now owned by Olli Rehn. Amann was thus in an unparalleled position to watch Greco-EU-German affairs unfold between the austerity announcement and then bailout agreement of 2010.

In a letter to the parliamentary committee of inquiry concerning allegations of deliberate deficit inflation of March 2012, Amman crucially stated that, ‘there was no obligation on each national statistical authority in the EU to follow Eurostat’s ESA 95 code on the inclusion of public utility accounts in the deficit’. But for some reason – suddenly – ELSTAT had decided to add it into the pot. In remarking upon this, Joachin defended the six resignees from 2011. (And thus, by implication, Zoi Georganta as well).

Highly significantly, Amann also observed that had the 2009 warnings from his Commission been been enacted even as late as Papandreou’s arrival, ‘the measures would have succeeded if they had been properly and promptly implemented without any need for a bailout’.

So it was that last Monday (June 25th 2012) Zoi appeared before the deficit Enquiry in Parliament. Having been the unhappy subject of quite a bit of interior ministry ‘attention’ over the last year, Ms Georganta decided to be more circumspect. She dumped on 2009 finance minister Giorgos Papaconstantinou, observing, “I have investigated the matter and found that he does not have any great experience with statistics, with economic issues. In my view, you cannot appoint such an inexperienced minister at such a crucial time.” Unless you don’t want any trouble, in which case you do. But she stuck to her guns about the debt being inflated, telling the Enquiry that the deficit for 2009 should have been 12.5% of GDP – and could have easily been brought to below 10 percent with immediate measures.

Crucially, Georganta, a professor of econometrics, confirmed to Greek media representatives that ELSTAT intentionally, and after being pressured by Eurostat (the EU’s tame body), inflated the 2009 revised deficit from roughly 12-13% to 15.8% using “non-scientific methods in order to justify the adoption of more and tougher fiscal measures in Greece.”

What conclusions should we draw?

Three years ago, I wouldn’t have touched a story like this with a bargepole. But since studying both the EU and the Greek tragedy in more detail in recent times, I’ve realised that a well-documented and sourced account, without collusion and based on trusted informants and mainstream Greek media reports, is more likely to be true than invention. Of course, a great many players on the geopolitical and european stages have agendas, axes to grind, and scores to settle. But when something fits, makes sense, and is in line with other discoveries made along the way….well, all I can say is that absolutely nothing surprises me any more.
So the conclusion I draw is that we have here opportunity, motive, testimony, media reports, personal ‘form’ and a jigsaw piece that fits very well with others upon which The Slog has reported over the last two years. In order to illustrate that assertion, let me introduce as a quartet four people I believe to have been pivotal in recent-history world affairs: Tim Geithner, Dominique Strauss-Kahn, Angela Merkel, and George Papandreou.
I will start by relaying this email content received from a heavyweight player in Greek affairs and a student of geopolitics. I’m sure he wouldn’t mind the tiny changes I’ve made here and there to improve his English grammar. He observes:
‘One very important person, I believe, is Strauss-Kahn. His connection with Papandreou is well known, and verified by his interview where he admitted that he had discussions with Papandreou a lot before the Greek door opening to the IMF [in 2010]. The point here is not the connection of S-K with Papandreou, but the timing of the dalliance which he was accused. I believe that S-K was at that point an ally of Merkel.
‘By the end of 2009, the international economic balance seemed to have permanently changed, and a new scene brought to being in which Europe was in a better position than the U.S. At the hub of the wheel there is Germany, asserting the role of economic power model, which could assure international monetary and financial stability.
‘The dramatic announcement by the Greek government of the imminent danger of bankruptcy [January 2010] opened the bag of Aeolus, revealing the weak and until then, unseen side of the euro. The Director of the International Monetary Fund, Dominique Strauss-Kahn, Minister of Commerce of France in the critical years of the early 90s when they entered the foundation for the creation of the euro, and Finance Minister of Germany, Schäuble, interior minister of Germany during secret agreements of the same period, realized that the U.S.would not let the window of opportunity that had opened be wasted – and that Greece would become the bridge for an attack on the Eurozone.’
The source is not a million miles away from where I am on this one. That is, DSK was taken out of the game for geopolitical reasons, and replaced with “our gal” (as Geithner calls her) Christine Lagarde. You can read several pieces related to this shift in my dedicated page here, The Strauss-Kahn Waltz. Left without an ally in establishing the hegemony of Europe at America’s expense, both Merkel and Schäuble now became deeply (and rightly) suspicious of the Geithner ‘amputation plot’ hatched in New York between late 2011 and early 2012 by a combo of Wall Street, Pentagon and Fed Treasury appointees. You can read more on this at US Bankers given a timetable for Greek Default and also at Greek default planners falling out over firewall.
The Americans hoped to gain a firewall, military bases and access to precious raw materials by befriending a post-euro Greece. That ambition still remains, but what the story unveiled above shows is that Angela Merkel and Wolfgang Schäuble are more than worthy opponents in the murky world of geopolitical jockeying.
I would like to thank all the American, French, German, British, Canadian and Greek sources who contributed so generously to helping my feeble brain understand at least some of the above events and allegations. I would also like to offer special thanks to one credit dealer and two journalists, without whose refereeing skills it would’ve remained a mystifying case of underwater rugby without the ball."

http://www.nytimes.com/?adxnnl=1&adxnnlx=1340714700-uUdUPvzjtKKKooa0d4bGjA

Euro Zone Leaders to Debate Joint Banking Union

By STEPHEN CASTLE 8:51 AM ET

Details of a plan for tighter fiscal unity, including the creation of a sort of finance ministry, emerged Tuesday.

Greece Names Stournaras as New Finance Minister 9:17 AM ET

Not a hope.

http://www.guardian.co.uk/business/debt-crisis

UK economic outlook getting worse, warns Bank of England
26 Jun 2012: Governor Mervyn King tells MPs he is more 'pessimistic' about the eurozone and its effect on the British economy than he was in May
Robert Mundell, evil genius of the euro
26 Jun 2012: Greg Palast: For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan
Will this week's eurozone summit achieve anything?
Poll, 26 Jun 2012: Leaders will gather on Thursday and Friday to look for solutions for the eurozone crisis
Leaders draft federal plan to save the eurozone
26 Jun 2012: Four European presidents make proposals to ramp up the powers of eurozone authorities over national governments
Moody's downgrades credit ratings of 28 Spanish banks
26 Jun 2012: Announcement comes on day Spain's government formally asks for help in cleaning up sector
Cyprus leader unhappy with remedies forced on bailed-out countries
25 Jun 2012: President Demetris Christofias likens the EU, European Central Bank and IMF to a 'colonial force'

http://www.telegraph.co.uk/finance/financialcrisis/

Debt crisis: Spain and Italy face crucial bond auctions

New proposals for a “banking union” pose a threat to London, proposals prepared for Friday's EU summit show, as Spain pays sharply higher borrowing rates in an auction of short-term debt.

26 Jun 2012

EU banking union plans 'a threat to London'

The illuminated euro sign is seen in front of the headquarters of the European Central Bank (ECB) in Frankfurt

New proposals for a “banking union” pose a threat to London as Europe's main financial centre as the EU moves against the European Banking Authority, blaming it for a failure to address the Spanish bank crisis.

26 Jun 2012

| Comment

Italy to put €2bn into world's oldest bank

The Italian government said Tuesday it will provide struggling Banca Monte dei Paschi di Siena, the world's oldest bank, with up to €2bn to cover a capital shortfall.

26 Jun 2012

| Comment

Mervyn King: UK outlook has worsened due to eurozone

The outlook for the UK economy has worsened over the past few weeks due to turmoil in the eurozone, the Bank of England governor has said, as public sector net borrowing rises much more than expected.

26 Jun 2012

EU could be allowed to change countries' budgets

Euro coins are seen in this photo illustration taken in Rome

The European Union could be handed powers to change countries' budgets if they breach debt and deficit rules, according to a draft document.

26 Jun 2012

| Comment

Germany 'risks being centre of empire'

Germany must change its "can't do" policy against forging a consolidated European fiscal and banking union, or risk becoming "the centre of an empire" responsible for the eurozone's collapse, George Soros has said.

26 Jun 2012