As Mish tells us today, while
IBM was firing thousands of American workers last week, the U.S. Patent and Trademark Office published Big Blue's application to copyright a computerized system that calculates how to offshore jobs while maximizing government tax breaks.
. . . In their application to patent a "method and system for strategic global resource sourcing," five Hudson Valley IBMers describe how it weighs such plans as "50 percent of resources in China by 2010," against such factors as labor costs, infrastructure and the "minimum head count to qualify for incentives."
Lee Conrad, national coordinator for Alliance@IBM, a group trying to unionize Big Blue, was stunned to learn of the application.
"This is obviously outrageous — a patent on how to offshore U.S. jobs," Conrad said. "IBM is obviously doing all it can to decimate the U.S. work force, and it is all the more reason why IBM should not get any tax breaks or stimulus money. They clearly are abandoning the U.S. work force."
The application says the system weighs moving into or out of a particular country against criteria such as wages, political systems, "incentive contracts" and the economic impact of "violating and/or satisfying those incentives."Here's the punch line:
Q: What Makes IBM Special?
A: Filing for an outsourcing strategy patent twice in 17 months only to withdraw the application when it was publicized.
And to add to the festival-like atmosphere of our representatives taking the D.C.- saving-your-sorry-ass party overseas, Jim Kunstler at Clusterfuck Nation gives us the true insider's view on it. (Emphasis marks and little bit of editing inserted due to Jim's depression getting out of hand (understood perfectly here) - Ed.)
Mr. Obama heads to Europe now where official hostility is rising against the Anglo-American method of pounding monetary sand down the rat-holes of “non-performing” debt, bankrupt enterprise, and bubble-levitated bonds. Our poised and charming Prez may escape personal obloquy from the quaint old-world street folk, but most of the other G-20 policy playerz take a dim view of the shell-and-pea games being played by the custodians of the world’s reserve currency, including front-end-loader bank bail-outs, the shuffling of worthless securities under TARPS and TARFS, the desperate efforts to prevent the sane re-pricing of real estate, the cannibalizing of treasuries by the Federal Reserve, the now-notorious hijacking of public “liquidity” injections by third parties like Goldman Sachs, and most generally the perceived sacrifice of everybody else’s greater good for the sake of maintaining Lloyd Blankfein’s cappuccino machine.
What’s going on now is nature’s way of telling you that America’s standard of living has to be reduced by something between 20 and 50 percent. You can have it in the form of a compressive deflationary depression, including widespread bankruptcies . . . or you can have by way of inflation, in which money loses its value. But there’s one basic qualification to this: the way down is not symmetrical with the way up. That is, it’s really not just a matter of ratcheting down to a standard of living half of what it was, say, in 2006, because in the event all the various complex systems that support everyday life enter failure mode before our society re-sets at a theoretically lower level of equilibrium.
By this I mean our methods for getting food, for moving about the landscape, for deploying capital, for trading and manufacturing, for schooling, doctoring, and running public services all destabilize and, to some degree or other, fail to deliver their contribution to normal daily life. Banking (capital deployment) is already mortally wounded. It remains to be seen how this will affect the food supply half a year ahead in the harvest system. Capital is as big an “input” for our method of farming as diesel fuel or fertilizers made from methane gas. The failure of banking will combine with city and state insolvency to crush public transit, law enforcement, fire protection, and whatever flimsy local safety nets exist to keep the ultra-poor and helpless from die-off. The lowering of living standards by 20 to 50 percent essentially eliminates all but the most critical commerce, meaning that most of the stores in the malls and strip malls lose their customers and shed employees, while the mall and strip mall owners lose their rents, and the bankers lose performing commercial real estate loans. As all this occurs, tax revenues go way down, schools can’t pay their employees or buy diesel fuel for their yellow bus fleets. More people lose the ability to carry health insurance. Hospital emergency rooms are overwhelmed. Health care descends to Third World levels. Meanwhile, pensions are destroyed, the elderly live on dog food and ketchup. . . .
This is where we’re headed. It could easily be worse than the 1930's, when we still had plenty of family farms, plenty of oil, plenty of factories in good running order, and a highly regimented population of workers unaccustomed to luxury, leisure, and entitlement. We’ve hardly begun to see the potential political repercussions of economic disorder now underway. I think it will start to show in a big way not long after Memorial Day, when the current false euphoric Wall Street rally ends in yet another pool of tears, and the despair trickles downward. A crucial piece of the outcome depends on what happens over at Attorney General Eric Holder’s Justice Department – which lately seems to have seceded from the federal government. A peeved public is going to start wondering why the bankers and insurers have not been called in by the criminal division to do a little ‘splainin'. As the spring yields to summer, the Obama team’s current fix-it plans are also likely to have run out of credibility. Mr. O better be prepared to get a new game.
I spent the weekend at the yearly Aspen Institute Environmental Forum – a confab lately devoted about equally to the energy and climate fiascos. It’s a peculiar exercise, since major sponsors include the oil and gas companies and the auto industry. The Saturday center-ring panel on peak oil, for instance, was shockingly weak, led by the flack from the Shell corporation, a charming lady, highly-skilled at blowing green smoke up the public’s ass. Even more shocking is the consensus among the presenters and attendees – including the hotshots of climate and energy science and the elder statespersons of environmentalism – that the energy problem merely amounts to finding other means for running all our cars. The assumption that we must remain car-dependent remains absolutely entrenched among these people who ought to know better. Of course, the words “public transit” were barely uttered. It’s disappointing to find such idiocy among this particular elite.
But Sunday’s departure really plunged me into the epicenter of American idiocy – namely, the airline industry. They’ve been running airplanes out of Pitkin County, Colorado for at least fifty years, but they seem to discover a’fresh every morning that strange winds blow through the valley. After jerking around absolutely everybody in the terminal for a couple of hours with unexplained delays, the United Airlines ground crew announced that all flights for the day were cancelled, causing a rhino rush back out through the security checkpoints to re-booking counters. I ended up on a bus for the Denver Airport – a five hour trip, including twenty-miles of parking-lot quality traffic along I-70 where the jackass Colorado DOT had closed down one eastbound lane, despite the fact that it was Sunday and there was no work going on there.
You’d also think that after all these years, the state of Colorado might have organized choo-choo train service from Denver into the ski valleys of the Rockies, given how important the ski industry is to the state’s economy – and how incredibly fragile the airline service is. But that would be too sensible for a nation determined to become the Bulgaria of the western hemisphere. So, instead, they get up every single morning in Aspen and try to figure out whether commercial aviation works out there, and half the time it doesn’t. Anyway, the Aspen Institute was very generous in organizing the bus trek out of there, and putting up us travelers stranded overnight in airport hotels. Mine was some rummy operation called the Staybridge Inn where the vaunted in-room wireless didn’t work in my room, so I write to you in a dreary little chamber off the lobby where children are screaming from their overdoses of fry-max and melted cheese in the only dining venue (Ruby Tuesdays) along this massively over-scaled boulevard of chain motels. I can easily see the whole miserable strip becoming a ruin inside of five years as the airline industry dies. Final note: the hotel elevator proudly declares itself to be the German-made product of the ThyssenKrupps corporation. America’s so lame, it can’t even make its own elevators anymore.
Tuesday, March 31, 2009
As Mish tells us today, while
Monday, March 30, 2009
Having viewed fast-talking Timofey on George Stoopidopoulos' Sunday Morning Fest of Fools (except for Paul Krugman who, strange to report, was allotted very little time afterwards to share his critical analysis with the audience), trying to talk his way out of admitting that the major focus of his plan was to keep the criminals who caused the crisis steadfastly in business (or pay their bonuses as they say "adieu!"), it occurred to me that most people could be hoodwinked by the sexy, blonde, quicker-thinker-than-Georgie-could-ever-be exterior of the now very much man-about-town Treasury Secretary, and actually believe that something good was being done in their names.
Neil Young, having followed the Geithner plan closely, has released a citizen's lament. It's only rock and roll . . . but it's so true!
Neil Young - Cough Up The Bucks
William Engdahl says that "Geithner’s ‘Dirty Little Secret’" is that "The Entire Global Financial System is at Risk" and that "the Solution to the Financial Crisis becomes the Cause." (Emphasis marks were inserted for your viewing pleasure - Ed.)
US Treasury Secretary Tim Geithner has unveiled his long-awaited plan to put the US banking system back in order. In doing so, he has refused to tell the ‘dirty little secret’ of the present financial crisis. By refusing to do so, he is trying to save de facto bankrupt US banks that threaten to bring the entire global system down in a new more devastating phase of wealth destruction.
The Geithner Plan, his so-called Public-Private Partnership Investment Program or PPPIP, as we have noted previously is designed not to restore a healthy lending system which would funnel credit to business and consumers. Rather it is yet another intricate scheme to pour even more hundreds of billions directly to the leading banks and Wall Street firms responsible for the current mess in world credit markets without demanding they change their business model. Yet, one might say, won’t this eventually help the problem by getting the banks back to health?
Not the way the Obama Administration is proceeding. In defending his plan on US TV recently, Geithner, a protégé of Henry Kissinger who previously was CEO of the New York Federal Reserve Bank, argued that his intent was ‘not to sustain weak banks at the expense of strong.’ Yet this is precisely what the PPPIP does. The weak banks are the five largest banks in the system.
The ‘dirty little secret’ which Geithner is going to great degrees to obscure from the public is very simple. There are only at most perhaps five US banks which are the source of the toxic poison that is causing such dislocation in the world financial system. What Geithner is desperately trying to protect is that reality. The heart of the present problem and the reason ordinary loan losses as in prior bank crises are not the problem, is a variety of exotic financial derivatives, most especially so-called Credit Default Swaps.
In 2000 the Clinton Administration then-Treasury Secretary was a man named Larry Summers. Summers had just been promoted from No. 2 under Wall Street Goldman Sachs banker Robert Rubin to be No. 1 when Rubin left Washington to take up the post of Vice Chairman of Citigroup. As I describe in detail in my new book, Power of Money: The Rise and Fall of the American Century, to be released this summer, Summers convinced President Bill Clinton to sign several Republican bills into law which opened the floodgates for banks to abuse their powers. The fact that the Wall Street big banks spent some $5 billion in lobbying for these changes after 1998 was likely not lost on Clinton.
One significant law was the repeal of the 1933 Depression-era Glass-Steagall Act that prohibited mergers of commercial banks, insurance companies and brokerage firms like Merrill Lynch or Goldman Sachs. A second law backed by Treasury Secretary Summers in 2000 was an obscure but deadly important Commodity Futures Modernization Act of 2000. That law prevented the responsible US Government regulatory agency, Commodity Futures Trading Corporation (CFTC), from having any oversight over the trading of financial derivatives. The new CFMA law stipulated that so-called Over-the-Counter (OTC) derivatives like Credit Default Swaps, such as those involved in the AIG insurance disaster, (which investor Warren Buffett once called ‘weapons of mass financial destruction’), be free from Government regulation.
At the time Summers was busy opening the floodgates of financial abuse for the Wall Street Money Trust, his assistant was none other than Tim Geithner, the man who today is US Treasury Secretary. Today, Geithner’s old boss, Larry Summers, is President Obama’s chief economic adviser, as head of the White House Economic Council. To have Geithner and Summers responsible for cleaning up the financial mess is tantamount to putting the proverbial fox in to guard the henhouse. Read the rest of this article here.
And poor Paul Craig Roberts must be feeling pretty badly right about now as his once-proud accomplishment of getting government out of the way of big business (under Reagan!) has come back to bite him hard. (Emphasis marks inserted - Ed.)
On March 19 the New York Times reported: “The Fed said it would purchase an additional $750 billion worth of government-guaranteed mortgage-backed securities, on top of the $500 billion that it is currently in the process of buying. In addition, the Fed said it would buy up to $300 billion worth of longer-term Treasury securities over the next six months.”
The Federal Reserve says that its purchase of $1 trillion in existing bonds is part of its plan to revive the economy. Another way to view the Fed’s announcement is to see it as a preemptive rescue. Is the Fed rescuing banks from their bond portfolios prior to the destruction of bond prices by inflation?
The answer to this question probably lies in the answer to the unanswered question of how the unprecedented sizes of the FY 2009 and FY 2010 federal budget deficits will be financed. Neither the US savings rate nor the trade surpluses of our major foreign lenders are sufficient.
I know of only two ways of financing the looming monster deficits. One, courtesy of Pam Martens, is that the federal deficits could be financed by further flight from equities and other investments. Read the rest of this article here.
Sunday, March 29, 2009
So, if Timofey's plan is from Oz and George Stoopidopoulos lets Cokie F. Roberts dominate his Sunday Morning Rethuglifest by interrupting Paul Krugman's intelligent comments explaining why the Obama/Geithner plan is just one more bonus for the criminals who brought us to this fatal economic moment (for those at the bottom anyhow), how do Jonathan Mann's musical renderings not stand up? Many of us have been asking for way too long why isn't Paul Krugman Secretary of the Treasury (or at least the Federal Reserve Chairman)? Just saying, Susan ________________________
Saturday, March 28, 2009
This long-overdue outburst of populist rage could mark a decisive shift in Americans' attitudes toward income inequality. It could also prove temporary, just another populist crest in a long cycle: Revulsion at economic injustice has historically been followed by variants of the "greed is good" credo. But it would be a mistake for Obama to dismiss the current outrage as ephemeral, or as the uninformed ranting of a mob.I can never resist an article that starts like this:
The peasants are storming the Bastille. The AIG bonuses were a "let them eat cake" moment, and the Ancien Régime is trembling in its gated mansions. The American people are erupting in rage and the racket is so loud that Washington can't tune them out. You know politicians are hearing it from their constituencies when senators start hinting that disgraced businessmen may want to consider emulating their Japanese counterparts and commit suicide. Even Republicans, who normally react to any criticism of profit as if they had been given a lifetime subscription to Pravda, have been forced to climb aboard the Outrage Express: 85 GOP congressmen voted for the House bill imposing a 90 percent tax on bonuses paid by any company that receives federal bailout money.
In these parlous times, any entertainment is welcome. It provides a dollop of solace to watch the party of Crony Capitalism flailing as its Joe Six-Pack base turns on the Masters of the Universe whom they are supposed to emulate. The right's brain trust is yelling that the tax is a bill of attainder that will scare off "the investor class," but GOP politicians, facing pitchfork-waving mobs who want to string up that "investor class," have stopped following orders. The pearl of Alfred E. Neumann wisdom from the right, priceless in its political tone-deafness, is the repeated assertion that bonuses must be paid to retain "the best and brightest" executives. The best and brightest? Would that be the frauds and mountebanks who made gazillions of dollars on three-card-monte credit default swaps that destroyed the U.S. economy? For Americans who are warming themselves by burning their worthless 401Ks, like the starving artists at the beginning of Puccini's "La Boheme," the idea of rewarding these geniuses is like giving a raise to the navigator on the Titanic.
However, populism never broke out of its rural base. And powerful counter-narratives appeared to justify the extreme income inequality generated by capitalism. Social Darwinism, whose motto was "survival of the fittest," held that only the fittest survived. Society, like Tennyson's nature, was "red in tooth and claw," and those who failed to prosper were simply weak and unworthy. Social Darwinism's optimistic counterpart, the Horatio Alger myth, insisted that anybody, no matter how modest his or her origins, could succeed if they worked hard enough.
The capitalist ship righted itself. The Progressives of the early 20th century represented less of a threat to the established order than the Populists. As optimistic nationalists who believed in gradual reform, their position was epitomized by Teddy Roosevelt, who wrote, "Our objection to a given corporation must not be that it is big, but that it behaves badly." Post-World War I prosperity led to the rabidly pro-business culture of the 1920s. Bruce Barton's best-selling "The Man Nobody Knows" pictured Jesus Christ as a business executive. Calvin Coolidge demanded "stability" from the government, meaning that it should not interfere with business in any way. "Brains are wealth," Coolidge declaimed, "and wealth is the chief end of man." Income inequality widened again.
But the collapse of the financial markets in 1929, which took the country down with it into the Great Depression, spurred another revolt against unregulated capitalism. Prodded from the left by a revived Socialist Party, empowered labor unions and Louisiana populist Huey Long, FDR faced down conservative objections and created the great institutions of the New Deal: Social Security, bank regulation, the National Labor Relations Board, more control of the stock market and insured deposits. Then, as now, conservatives screamed that liberals were destroying the free market.
. . . This individualist ethos was the engine of tremendous creativity and helped make American-style capitalism the most potent economic force in human history. In turn, the wealth generated by American capitalism raised enough boats so that only a few radicals or malcontents dissented from the consensus. Any potential populist discontent at economic inequity was adroitly redirected by GOP operatives like Karl Rove into the culture wars, a process described by Thomas Frank in What's the Matter With Kansas?, which argued Republicans have used God, guns and gays to keep heartland populists supporting GOP policies that actually hurt them.
Meanwhile, conservatives have continued to proclaim Social Darwinist precepts. "In America," said right-wing jurist Robert Bork, "the 'rich' are overwhelmingly people - entrepreneurs, small businessmen, corporate executives, doctors, lawyers, etc. - who have gained their higher incomes through intelligence, imagination and hard work." (Bork might like to read Malcolm Gladwell's Outliers, which argues success and wealth in America are the result of social currents and luck more than individual intelligence and hard work. It has been the top-selling new nonfiction book for most of this year.)
But if Americans have largely accepted such rationalizations for uncontrolled capitalism, they have always been troubled by doubts. They have been quiescently aware that Social Darwinism is a profoundly amoral (and, ironically, un-Christian) doctrine, and that the Horatio Alger myth is like a cheesy Hollywood movie with a happy ending: inspiring but not a portrait of reality. That slumbering awareness comes to life whenever the system breaks down. Which brings us to today. Americans are being forced to come to terms with the fact that our great wealth-generating system has become rotten to the core. Confronted with the terrifying reality that they may never again be as well off as they were before, middle-class Americans have had enough. The outrage over the AIG bonuses is just the tip of the iceberg. As Americans learn more about the rigged system that has been gamed by insiders for years, they are beginning to demand a fundamental change in that system. What would have seemed like wild-eyed radicalism just last year is coming to Main Street.
. . . Both political parties are responsible for this corrupt system. But two Republican administrations deserve special mention. By claiming that "government is the problem" and encouraging extreme individualism, Ronald Reagan undercut Washington's moral authority and hence its ability to rein in buccaneer capitalism. George W. Bush practiced what Reagan (mostly) only preached: He simply abandoned regulation and abdicated to business. His tax cuts were responsible for the greatest transfer of wealth to a tiny fraction of a population in human history.
Just as in the Gilded Age, a corrupt government and predatory Big Business came together to loot the country. In 2005, the top 1 percent of Americans made almost 22 percent of the nation's reported income, and the top 10 percent made half of it. Things get even more outrageous when you compare the average compensation earned by big executives with that earned by everyone else. In 2007, the average S&P 500 CEO made 344 times what an average worker made. The top 50 investment fund managers made 19,000 times more than the average worker.Read the rest of this fine essay here.
Matt Taibbi teaches us how to properly empathize with the badly-taken-advantage-of AIG execs.
Like a lot of people, I read Wednesday's New York Times editorial by former AIG Financial Products employee Jake DeSantis, whose resignation letter basically asks us all to reconsider our anger toward the poor overworked employees of his unit.
DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano's toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn't even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn't, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.
I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.
AIGFP only had 377 employees. Those 400-odd folks received almost $3.5 billion in compensation in the last seven years, a very large part of that money coming from the sale of credit default protection. Doing the math, that averages out to over $9 million of compensation per person.
Ask yourself this question: If your company made that much money, and the boss of the unit made almost $280 million in just a few years, exactly how likely is it that you wouldn't know where that money was coming from?
Are we supposed to believe that Jake DeSantis knew nothing about Joe Cassano's CDS deals? If your boss and the top guys in your firm were all making a killing selling anything at all - whether it was rubber kayaks, generic Levitra or credit default swaps - you really wouldn't bother to find out what that thing they were selling was? You'd really just mind your own business, sit at your cubicle and put your faith in the guys up top to fill you in if there was something you needed to know?
This would be a believable claim for an employee of some other wing of AIG, a company with well over 100,000 employees. But DeSantis works for tiny, 377-person AIGFP, a unit that had only two offices - one in London and one in Greenwich, Conn.
And we're talking about financial professionals, the most shameless group of tirelessly envious gossips ever to walk the face of the earth. The likelihood that Cassano would pull in $280 million for himself, and his equally greedy, hopelessly jealous employees wouldn't know not only exactly how he made that money but every last ugly detail about his life - from what skank he's sleeping with to what side of his trousers he hangs on - is almost zero.
I know plenty of people who work in this world, and I've met very few who didn't hate with every cell in their bodies anyone in their own companies who made more money than they did or got bigger bonuses at Christmastime. Gossiping about each others' bonuses, and bitching about each others' compensation, is the national pastime for these people.
So forgive me if I don't buy this story that poor Jake and his buddies didn't know about Cassano's CDS business.
Also, there's this: let's just say, Jake, that you're telling the truth, that you don't know anything about this toxic portfolio. If that's the case, then why the fuck does anyone need to retain you at an exorbitant salary to help unwind that very portfolio? If these transactions aren't and never were your expertise, then where the hell is your value here?
When I spoke to Christine Pretto, the AIG spokeswoman, and asked about those bonuses, she said that AIG needed to retain people like you in order to take advantage of your "knowledge of these transactions." So if you don't have knowledge of these transactions, what are you being paid for? Your winning attitude?
Then there's the matter of Jake's other job offers. About that: It was apparent as early as last February that Cassano had basically destroyed not only the unit but perhaps AIG itself. The company announced over $11 billion in losses around that time.
If I'm Jake DeSantis, and I'm really innocent, I'm looking for a job that very instant. And I'm taking the first good job anyone offers me. Because by then I'd have realized that I was working for the latest version of Enron. That the man I've been working for the last six or seven years has turned out to be one of the most irresponsible Wall Street villains of all time, a man who single-handedly destroyed the 18th-largest company in the world. If I'm Jake DeSantis, I'm quitting out of moral disgust, because I don't want to be associated with this kind of behavior.
The only reason I'd stay is if I didn't have a choice. Which I feel sure is what happened here. If Jake DeSantis didn't take advantage of an opportunity to get a better job elsewhere with a company that didn't hide billions in losses and make $500 billion bets with money they didn't have, that's his fucking problem.
The notion that I the taxpayer have to pay this asshole a million-dollar bonus because he turned down a better job at a less-guilty company is repugnant to begin with; the notion that he stayed at AIGFP because he expected me to pay him this bonus makes me hate him even more.
But it's all moot, because I feel quite sure it's a lie. As one trader for another firm told me not long ago when I asked what he thought about the need to pay these "retention bonuses" to these "valued employees" at AIGFP:
"Yeah, right. Who would hire these guys? They'd stay for a dollar if you offered it to them, much less a million."
I mean, half of Wall Street is unemployed right now. There are plenty of unemployed traders out there whose resumes don't include such entries as "Worked for years at small unit of AIG that helped destroy the universe; throughout that time was completely ignorant of burgeoning global disaster unfolding 5 feet from my desk."
The idea that other companies would be so eager to pass over the seas of truly innocent available people in order to scoop up some still-employed veteran of AIGFP - and that they would be so enthusiastic in their pursuit of said AIGFP employees that AIG would need to pay those AIGFP folks million-plus retention bonuses to get them to stay - is so ludicrous it almost defies comment.
Show me, anywhere, the Wall Street firm that's willing right now to spend more than a million dollars poaching still-employed midlevel executives like DeSantis, when they can just put an ad in the paper and have 500 recently unemployed CEOs begging for work at almost any salary in five minutes.
So the idea that the rest of Wall Street is breaking down AIGFP's doors to lavish its idiot personnel with million-dollar offers is just utterly preposterous. The fact that DeSantis expects us to believe this is insulting in itself.
Also, remember, DeSantis until this year was probably the recipient of performance bonuses. This year, obviously, there was no performance, so AIG doled out these "retention" bonuses instead. And the value of these retention bonuses is seriously in question if AIG never really needed to pay extra to retain this personnel, which I personally believe they didn't.
I personally believe these "retention" bonuses were a ruse cooked up by management to suck a few more dollars out of the company before it sank to the ocean bottom. So if DeSantis is "owed" these bonuses, it's only in the sense that someone up above agreed to cheat the shareholders by paying these bonuses when they weren't really necessary; they weren't "earned" in any real sense.
But all of this is really secondary to the tone of DeSantis' letter. He acts like he's a victim because he didn't get to keep his after-tax bonus of $742,006.40 in the middle of a global depression. And he really loses his fucking mind when he writes:
"None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house."
First of all, Jake, you asshole, no plumber in the world gets paid a $740,000 bonus, over and above his salary, just to keep plumbing. Second, try living on a plumber's salary before you even think about comparing yourself to one; you're inviting a pitchfork in the gut by even thinking along those lines. Third, Jake, if you were a plumber, and the electrician burned the house down -- well, guess what? If you and that electrician worked for the same company, you actually wouldn't get paid for that job.
Out in the real world, when your company burns a house down, you're not getting paid by that client. It's only on Wall Street, where the every-man-for-himself ethos is built into an insanely selfish and greed-addled compensation system, that people like you expect to get paid in a bubble - only there do people expect their performance bonuses no matter how much money the shareholders lose overall, no matter how many people get laid off after the hostile takeover, no matter how ill-considered the mortgages lent out by your division were.
You expect that money because you think it's owed to you. But what money? The money is gone. Your boss, if not you, set it all afire. You want the money, but where exactly do you think it's coming from?
Do you just not understand that that money now would have to come out of someone else's pocket? That it would have to come from middle-class taxpayers, real plumbers, people who didn't make millions over the years in equity and commodity trading?
Here's the real problem with people like Jake DeSantis. Throughout this whole period, they never were able to connect the dots - to grasp the fact that when they skimmed a million here or a million there off the great rivers of capital that flowed through their offices, that that money came from somewhere, from someone. To them, it wasn't someone else's money, it was just money, and why shouldn't they have it?
It's remarkable that when DeSantis, in his letter, touts the reason he deserves his high compensation, all he can talk about is how much money he made: "The profitability of the businesses with which I was associated clearly supported my compensation."
For a guy like this, his worth as a human being is wrapped up in buying a bag of beans for $10 and selling it for $11. He states this like it's a law of nature: he was a good equities-and-commodities trader, therefore he should make a lot of money.
Only a person with a habitually overinflated sense of self-worth could think he deserves a $700,000 retention bonus, even if it has to be paid by taxpayers, when in reality no one "deserves" that much money. It may be that some people do get paid that much, but most people who make that much money have enough sense to realize their cushy lifestyles are an accident of fate, of birth, of class, not something that is "supported" by some unwritten natural law of compensation.
Hey Jake, it's not like you were curing cancer. You were a fucking commodities trader. Thanks to a completely insane, horribly skewed set of societal values that puts a premium on greed and severely undervalues selflessness, communal spirit and intellectualism - values that make millionaires out of people like you and leave teachers and nurses, the people who raise your kids and clean your parents' bedpans, comparatively penniless - you made a lot of money.Read the rest of this mind-clearing rant here.
Thursday, March 26, 2009
Keep Your Eyes Averted From The Real AIG Conspiracy By Watching the Purple-Faced Shouting Congressmen?
I read Professor Michael Hudson whenever I can. He's always right on the money (and in this case . . . exactamente). (Emphasis marks have been added (for your increased pleasure) - Ed.)
It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AIG scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days.
What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong? Even the Wall Street Journal has gotten into the act. The government’s takeover of AIG, it pointed out, "uses the firm as a conduit to bail out other institutions." So much more greed is involved than just that of AIG employees. The firm owed much more to other players – abroad as well as on Wall Street – than the assets it had. That is what drove it to insolvency. And popular opposition has been rising to how Mr. Obama and Mr. McCain could have banded together to support the bailout that, in retrospect, amounts to trillions and trillions of dollars thrown "down the drain." Not really down the drain at all, of course – but given to financial speculators on the winning "smart" side of AIG’s bad financial gambles.
"The Washington crowd wants to focus on bonuses because it aims public anger on private actors," it accused in a March 17 editorial. But instead of explaining that the shift is away from Wall Street grabbers of a thousand times the amount of bonuses being contested, it blames its usual all-purpose bete noire: Congress. Where the right and left differ is just whom the public should be directing its anger at!
Here’s the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1% – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a "pass-through" to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG. For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.
Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reporters had said was rumored: Mr. Paulson’s own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. So here’s the picture that’s emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.
It now looks as if Mr. Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG’s counterparties. This is where public outrage should be focused.
Instead, the leading Congressional shepherds of the bailout legislation – along with Mr. Obama, who came out in his final, Friday night presidential debate with Sen. McCain strongly in favor of the bailout in Mr. Paulson’s awful "short" version – have been posing as conspicuously as possible for the media to cover a deflected target – the AIG executives receiving bonuses, not the company’s counterparties.
There are two questions that one always must ask when a political operation is being launched. First, qui bono? Who benefits? And second, why now? In my experience, timing almost always is the key to figuring out the dynamics at work.
Regarding qui bono, what does Sen. Schumer, Rep. Frank, Pres. Obama and other Wall Street sponsors gain from this public outcry? For starters, it depicts them as hard taskmasters of the banking and financial sector, not its lobbyists carrying water for one giveaway after another. So the AIG kafuffle has muddied the water about where their political loyalties really lie. It enables them to strike a misleading pose – and hence to pose as "honest brokers" next time they dishonestly give away the next few trillion dollars to their major sponsors and campaign contributors.
Regarding the timing, I think I have answered that above. Talking about AIG bonuses has effectively distracted attention from the AIG counterparties who received the $183 billion in Treasury giveaways. The "final" sum to be given to its counterparties has been rumored to be $250 billion, so Sen. Schumer, Rep. Frank and Pres. Obama still have a lot more work to do for Wall Street in the coming year or so.
To succeed in this work – while mitigating the public outrage already rising against the bad bailouts – they need to strike precisely the pose that they’re striking now. It is an exercise in deception.
The moral should be: The wetter the crocodile tears shed over giving bonuses to AIG individuals (who seem to be largely on the healthy, bona fide insurance side of AIG’s business, not its hedge-fund Ponzi-scheme racket), the more they will distract public attention from the $180 billion giveaway, and the better they can position themselves to give away yet more government money (Treasury bonds and Federal Reserve deposits) to their favorite financial charities.But who's looking for a moral at this late date?
Tuesday, March 24, 2009
Tim Gatto is sure that we've seen this coming for some time. What do you think? And is it too late to affect the outcome as Jim Kunstler believes? If, as Paul Krugman stated quite eloquently to Charlie Rose last evening, Geithner's (Obama's) plan is just recycled (and previously discarded) Hank Paulson's revenge with a few more bells and whistles for the circus crowd, does this affect your plans?
Has the ultimate endgame has arrived? Rude Pundit would agree. " . . . maybe Obama and Geithner and Summers know something we don't. Maybe they know how to put a corpse back together and use lightning to reanimate it. The problem will be making sure they didn't use a criminal's brain in there."
The country is coming to conclusions that a year ago would be unthinkable. The current turmoil on Wall Street has convinced many Americans of something that has been said for years, but nobody really believed…entirely. That something was that lawyers and bankers cannot be trusted. The American people know by now that the advice is largely true, they can’t be trusted. Neither can politicians, stockbrokers and financial advisors. In fact, people are starting to realize the entire concept of capitalism can’t be trusted, not just for the average Joe, but for the entire country. Capitalism is not your friend; it never has been and will not be in the future. It will continue to feed the rich, in fact, more than just feed them, but it won’t help the average wage earner realize the American dream. That’s never what it was designed to do. It was put in place to insure that the rich got richer and that the not so rich would stay where they were and to be grateful they could feed their families.
This isn’t the first time that capitalism has failed. Every time it fails we use a form of temporary socialism to shore up the economy. When things start to return to normal, we give everything back to the capitalists. Why is that? Could it be that we have no choice?
Ever notice how people equate capitalism with belief in God and country? They defend capitalism as if any other kind of government will lead them into slavery. The truth is that capitalism is an express ticket into slavery. Still, for every worker that recites a story of abject horror, there is an example of how the shining example of individualism embodied in the dogma of “free enterprise” has lifted a poor person out of his or her misery into nirvana. Pulling yourself up from your bootstraps is another way of contributing to the myth that capitalism works for everyone. I would like to see the ratio of millionaires that inherited their wealth vs. those that made their own money. If it were true that people surmounted the difficulties of amassing wealth and that many had truly “made it on their own”, the empirical evidence would be touted from every capitalist media outlet to every citizen in the country, just to prove that “free enterprise” works, yet it just isn’t there.
We Americans watch as our leaders try every trick in the book to grease the skids of our languishing economic system. We watch as AIG and other parasitic financial institutions grasp at every stray dollar they can con out of the people in a vain attempt to shore up their crumbling empires. The Federal government has allocated another trillion dollars to shore up the secondary real estate market and attempt to get Americans to buy real estate again. Meanwhile, Richard Cook, an economist that worked on NASA’s budget proposes that instead of trying to ignite the fires of consumerism with money given directly to large capitalist financial markets, the government could better stimulate the economy by giving citizens $1,800.00 vouchers monthly to pay their utilities and mortgages and to buy food and other essentials. This he claims would stimulate the economy by putting hard cash in the hands of consumers. Wouldn’t this be the end result the government is trying to achieve? Yet nobody takes this proposal seriously, at least not the government or those failing institutions with their sweaty palms out. Seems as they believe that money would be better off left in the hands of those that have brought us to where we are today, to hoard it or to siphon it off in undeserved salaries or bonuses, anywhere but on the streets so that consumers could spend it.
If one were to look back and take an honest look at the economy, they would see that writers such as me and many others on both sides of the political spectrum were trying to capture the nation’s attention five years ago when the Middle Class was losing almost two thousand dollars a year. This was happening year after year. Not only was the median income slipping, but benefits were being cut, full time jobs were being outsourced overseas and many Americans found themselves working two part time jobs just to keep up their mortgage payments. Some writers and economists were using phrases such as “class warfare” to shock some sense into the political parties and the employers. Still the government did nothing to alleviate the suffering of the hourly wage earner. It wasn’t until the situation started to affect the affluent did the government start to heed the warning signs.
Now it is a common sight to see a politician on a news clip railing at the excesses of Wall Street. Where were these politicos when the average wage earner was being cut from the American dream? Were they still listening to the vermin that call themselves lobbyists telling them that all was well? We can see now that we had more than enough time to understand that everything wasn’t at all well. The people that believed in the fairy-tale of “trickle-down” economics should have been concerned when nothing at all was reaching the lower end of the economic spectrum. They should have started becoming concerned when more businesses were going under, when people were cutting back on their medications so that they could put food on their families table.
This should really erase any doubts about the myth of unfettered capitalism. Unregulated, gluttonous capitalism didn’t just “appear” when Goldman Sachs and Lehman Brothers started to cry “Uncle!”. The signs were there long before that. This time when we finally realize that anything too big to fail should be nationalized, when we understand that government regulation should be mandatory when dealing with predators, let’s not take a giant step backwards and slide back into “free enterprise capitalism”, giving the reigns of financial power back to the people that only care about themselves.Can't wait for that recovery. (Gulp!)
Sunday, March 22, 2009
The political world which has been in such a tizzy last week over the miserly bonuses AIG paid to its stoolies for their silence (when compared to the billions it stole freely without apology before) is just about to awaken to the magnitude of the real crimes committed against their interests and in their names (destroying their futures (and their children's and grandchildren's ones as well)).
Matt Taibbi, who deserves to be included in your will (if you have two cents left at the end of your life to give to anyone who has done you a massive favor by being one of the very few truthtellers at this moment in history), tells us that (emphasis marks are inserted - Ed.):
People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.Read his entire expose in the always serious-as-a-heart-attack-about-politics Rolling Stone:
Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.
Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.Read on friends and don't weep this time. Remember - the ones who skimmed so much money so successfully (and hid it well) heretofore will be sitting pretty when the whole shebang collapses.
Create a financial structure for making the United States of America a true vehicle for freedom and democracy in our world, instead of the one that has been creating death and destruction while ensuring that democracy and freedom would never reign again.
It's your last chance.
P.S. Remember Charlie Rose having his best friend, Maurice "Hank" Greenberg, the head of AIG, on his program on October 22, 2008 (what a lucky coincidence!), to reassure the country that AIG was sound? I was laughing out loud then (darkly, to be sure), but now it seems like a proper scheme doesn't it?
Thanks, Charlie! I'll be looking for you in the stands in the Greensboro Coliseum tonight!
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people's money would make his dick bigger.
That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington's deregulation of the Wall Street casino. "It's all about the regulatory environment," says a government source involved with the AIG bailout. "These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that."
The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.
The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you'll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or "tranche." They then convinced ratings agencies like Moody's and S&P to give that top tranche the highest AAA rating — meaning it has close to zero credit risk.
Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.
The problem was, none of this was based on reality. "The banks knew they were selling crap," says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. "They had some back room somewhere where a bunch of Indian guys who'd been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years," says one young trader who sold CDOs for a major investment bank. "It was nuts."
Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages — read: enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets — some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or "warehousing" CDOs when they wrote more than they could sell. And that's were Joe Cassano came in.
Known for his boldness and arrogance, Cassano took over as chief of AIGFP in 2001. He was the favorite of Maurice "Hank" Greenberg, the head of AIG, who admired the younger man's hard-driving ways, even if neither he nor his successors fully understood exactly what it was that Cassano did. According to a source familiar with AIG's internal operations, Cassano basically told senior management, "You know insurance, I know investments, so you do what you do, and I'll do what I do — leave me alone." Given a free hand within the company, Cassano set out from his offices in London to sell a lucrative form of "insurance" to all those investors holding lots of CDOs. His tool of choice was another new financial instrument known as a credit-default swap, or CDS.
The CDS was popularized by J.P. Morgan, in particular by a group of young, creative bankers who would later become known as the "Morgan Mafia," as many of them would go on to assume influential positions in the finance world. In 1994, in between booze and games of tennis at a resort in Boca Raton, Florida, the Morgan gang plotted a way to help boost the bank's returns. One of their goals was to find a way to lend more money, while working around regulations that required them to keep a set amount of cash in reserve to back those loans. What they came up with was an early version of the credit-default swap.
In its simplest form, a CDS is just a bet on an outcome. Say Bank A writes a million-dollar mortgage to the Pope for a town house in the West Village. Bank A wants to hedge its mortgage risk in case the Pope can't make his monthly payments, so it buys CDS protection from Bank B, wherein it agrees to pay Bank B a premium of $1,000 a month for five years. In return, Bank B agrees to pay Bank A the full million-dollar value of the Pope's mortgage if he defaults. In theory, Bank A is covered if the Pope goes on a meth binge and loses his job.
When Morgan presented their plans for credit swaps to regulators in the late Nineties, they argued that if they bought CDS protection for enough of the investments in their portfolio, they had effectively moved the risk off their books. Therefore, they argued, they should be allowed to lend more, without keeping more cash in reserve. A whole host of regulators — from the Federal Reserve to the Office of the Comptroller of the Currency — accepted the argument, and Morgan was allowed to put more money on the street.
What Cassano did was to transform the credit swaps that Morgan popularized into the world's largest bet on the housing boom. In theory, at least, there's nothing wrong with buying a CDS to insure your investments. Investors paid a premium to AIGFP, and in return the company promised to pick up the tab if the mortgage-backed CDOs went bust. But as Cassano went on a selling spree, the deals he made differed from traditional insurance in several significant ways. First, the party selling CDS protection didn't have to post any money upfront. When a $100 corporate bond is sold, for example, someone has to show 100 actual dollars. But when you sell a $100 CDS guarantee, you don't have to show a dime. So Cassano could sell investment banks billions in guarantees without having any single asset to back it up.
Secondly, Cassano was selling so-called "naked" CDS deals. In a "naked" CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope — it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A's mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else's house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn't have the cash to pay off if the kick went wide.
In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn't have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.
Initially, at least, the revenues were enormous: AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money — and then it all went to shit.Read on.
Thursday, March 19, 2009
I guess it's about time (past time in my estimation - way past) for Elly to start the spitzing (schvitzing?) anew
It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.
But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?
The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.now that the public is incensed over the pittance thrown away on the AIG bonuses (in light of all the billions tossed into the banksters' maws) h/t to Rude Pundit. As I mentioned long ago, Goldman Sachs, et al. made off with the spoils while AIG draws the fire (h/t to Melina via Jill at C&L). (Emphasis marks inserted - Ed.)
Elliot Spitzer is back and he(')s talking. The thought of this, no doubt, brings a small shiver to the boardrooms of some of the perps walking around trying to figure out how to hide the money this week. Today Edward Liddy testified that there have been death threats made to or about executives who received bonuses, so no names will be put on the record, but these anonymous players must know that the jig is up in the land of easy-money. Isn't what to do a no-brainer for these great Americans?
Spitzer may be as "disgraced" as any anonymous sex loving Republican loser, but America is known for its great second acts, and we may be witnessing the curtain rising on Spitzer's.
Today in Slate Elliot Spitzer has a short op-ed that speaks volumes about what is going on, and indirectly, if you follow the money, what happened to him. Plainly stated, Spitzer brings the AIG Ponzi Scheme one step closer to the revered establishment when he explains how the bailout money was funneled straight into the top players, with Goldman Sachs being the name that comes up again and again. These top players already got bailout money, and Goldman is looking at zero losses at this point, while regular Americans are being asked to make concessions or just plain losing everything. Here are the biggest financial entities in the world, making billions on what appears to have been nothing but air traded back and forth, and having gutted the American people, they are walking away with 100% return to their stockholders. In return AIG seems to think that it's appropriate to pay themselves bonuses with the leftover funds. This leaves AIG still a wobbly shell with no plan of how to go forward, and the threat of the collapse of all of the world's financial markets still up in the air. So, what was all that bailout money for? Apparently to make sure that no one at Goldman or the other few top firms in the hand-out-line lost anything!
The relationship between AIG and Goldman goes back long enough that one would think that Goldman would know, having bought so much of this "insurance" or whatever it was, whether the "products" were . . . er . . . real or feasible at all. Indeed, Goldman and AIG almost merged a few years ago, but Spitzer notes that the unknown black hole of AIG's business practices were probably what prevented it. Still, that didn't stop the incestuous dealings; it almost makes one think that this whole thing was a setup.
This is country that Spitzer is familiar with; he has been a terrible liability to entities that, under the Bush administration, were allowed to literally gut the country and its citizens. All of this seems to have been part of the Bush Administration's own Ponzi Scheme, which figured that the illusion of an ownership society, terrified of the "terraism" and steeped in the me, me, me, culture would look the other way while they finished clearing out the vault. Beyond that, it's clear that the media-hyped housing bubble encouraged the house-flip mentality and the idea that anyone could be rich. The idea of the lottery dropping on our own heads made us more protective of the rich, because we might one day be one . . . or look, we could be one with no money down, if we could just balance that on this, and flip that house!!
Every week came a new offer from our bank or credit card to just put the enclosed check into the bank for a $50,000 loan, unsecured and with a low APR!! Who would know that those same banks would go out of their way to cause a day or week default by changing the cycle or stopping refusing cards that went over-limit, in order to charge fees and raise the rates. Who could know that the fine print on all those little fliers talking about privacy rights and how they are selling all of our information, also said that by-the-way the interest rate is now 25% and the minimum payment has tripled! Default on that and likely AIG has sold insurance to your lending institution that should repay them for making the bad loan in the first place . . . no money down mortgages? No problem . . . its the same story. This is the ownership society and we all need to own alot of stuff. It is . . what did he say? . . . uniquely American!
Spitzer was questioning this back in February 2008 when he wrote his Valentine to predatory lenders in the Washington Post. He detailed that Attorneys General across the country had entered into litigation in an attempt to protect the people of their states from predatory lending. The response from the federal government was astounding!
Greg Palast reveals that (click for podcast!):
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
. . .
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation. Now, they will say that they fought the consumer protection laws to actually protect the consumers and assure that they could get credit in the future. But actually, Americans could get credit; just credit that they were able to handle and could, by reasonable standards, pay back. This was just more of the same in hindsight. Looking back that all that the Bush administration has done, the beginnings of this disaster looks almost quaint, and not like an institutionalized foray into the dirty underside of criminal activity. There were quotas passed by the government as to who got the loans and the focus was on certain populations who would be helped into homeownership even if they couldn't maintain the credit. It was treated as some sort of fulfillment of the American Dream for people to own something, but really had more to do with the insurance on the loans than the people involved. The American dream is dead, as we well know, but what it was, way back then, was that people could afford to own a house and put their kids in college!
AIG sold insurance to the biggest entities in the financial world to cover the proliferation of bad loans. This insurance became so common that it was impossible that the lions of finance didn't somehow have an inkling that something was wrong. Didn't Goldman and the rest of these huge firms know something about the stability of an impossible business plan? Hadn't Goldman gone over everything in their bid to merge? And what of the government and their mandating of certain loans that were bound to go bad. There were people involved in these things, and its not like regular people understand the ins and outs of the financial industry. They rely on brokers to explain it to them. But these brokers were being forced to see a certain product to an unqualified population. How could they? Why would they? Those are questions for another time.
Spitzer has been fighting these guys and asking questions all along. Coincidentally, right after the WSJ editorial appeared on Valentine's Day 2008, Spitzer was caught up in what was an extremely unusual sting. So unusual is an investigation like this that it seems almost like it was a set-up; and considering where it all came from and how it all came down, it might well have been.
It seems that Spitzer's bank was investigating expenses under the auspices of the newer Homeland Security laws of the Bush administration. Greg Palast wrote about this compellingly, and in light of how the whole thing is shaking out now, and what Spitzer said back then about this financial mess and what he tried to DO about it, Palast had a pretty good early grasp on what had gone down. So now, with Spitzer poking his head up from the underground of "healing his family," at this most compelling of moments, its probably worthwhile for Americans to screw their heads on straight and forget the details of the hooker, and look at what Spitzer was working on when he was taken down. We might all find ourselves wanting to thank the egotistical crime fighter who can(')t keep it in his pants.
I am no apologist for breaking the law, and usually its the highest and mightiest that fall the hardest. But when the mainstream is showing us the shiny object, we must resist the temptation to succumb to our base natures and try to see the bigger picture. There was never a real case against Elliot Spitzer, and no charges were filed. The release of embarrassing personal information was at the discretion of the Bush Administration's Justice Department.
Why was this information released? It wasn't that he was a crusader against such crimes, because many who have been caught were exactly the same and their information has been kept quiet. It wasn't that the press is all so great in their investigative journalism, either . . . because we know they're loathe to get off their asses if they can just read a talking point; as is evidenced by the reportage on this case.
Not all crimes lead to federal bust or even public exposure. It’s up to something called “prosecutorial discretion.”
Funny thing, this ‘discretion.’ For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the ‘discretion’ of Bush’s Justice Department.
Or maybe we should say, 'indiscretion.'Bush's Justice Department.
Its clear to me that all things being equal, this was at the very least, not a transsexual streetwalker a la Hugh Grant, and it was all very ho-hum and quiet. So, whatever the problem that leads to this sort of behavior, I don't want to know about it...its personal, so just walk on by . . . nothing to see here.
H/t to Batocchio for this latest essay from Spitz (and more!).
Wednesday, March 18, 2009
Have Timofey Geithner and Sir Lawrence-on-a-very-dark-horse Summers been replaced yet? And why not? As Glenn Greenwald writes in The dishonest 'Blame Dodd' scheme from Treasury officials:
There is a major push underway - engineered by Obama's Treasury officials, enabled by a mindless media, and amplified by the right-wing press - to blame Chris Dodd for the AIG bonus payments. That would be perfectly fine if it were true. But it's completely false, and the scheme to heap the blame on him for the AIG bonus payments is based on demonstrable falsehoods. Jane Hamsher has written the definitive post narrating and indisputably documenting what actually took place. The attempt to blame Dodd is based on a patently false claim that was first fed to The New York Times on Saturday by an "administration official" granted anonymity by Times reporters Edmund Andrew and Peter Baker (in violation, as usual, of the NYT anonymity policy, since all the official was doing was disseminating pro-administration spin). The accusation against Dodd is that there is nothing the Obama administration can do about the AIG bonus payments because Dodd inserted a clause into the stimulus bill which exempted executive compensation agreements entered into before February, 2009 from the compensation limits imposed on firms receiving bailout funds. Thus, this accusation asserts, it was Dodd's amendment which explicitly allowed firms like AIG to make bonus payments that were promised before the stimulus bill was enacted. That is simply not what happened. What actually happened is the opposite. It was Dodd who did everything possible - including writing and advocating for an amendment - which would have applied the limitations on executive compensation to all bailout-receiving firms, including AIG, and applied it to all future bonus payments without regard to when those payments were promised. But it was Tim Geithner and Larry Summers who openly criticized Dodd's proposal at the time and insisted that those limitations should apply only to future compensation contracts, not ones that already existed. The exemption for already existing compensation agreements - the exact provision that is now protecting the AIG bonus payments - was inserted at the White House's insistence and over Dodd's objections. But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption. Jane's post documents this sequence of events without any possibility for doubt. The debate that took place over limits on executive compensation for bailout-receiving companies only occurred six weeks ago, and it is all documented in the public press. Dodd was the one fighting against the White House in order to apply the prohibition to all bonus payments, i.e., to make the compensation limits retroactive as well as prospective. As but one crystal-clear example that proves this, here is a February 14 article from the Wall St. Journal on the debate over executive compensation limits:Read the rest here (and don't miss the update at the bottom!). Suzan _________________The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses. As word spread Friday about the new and retroactive limit - inserted by Democratic Sen. Christopher Dodd of Connecticut - so did consternation on Wall Street and in the Obama administration, which opposed it.Can that be any clearer? It was Obama officials, not Dodd, who demanded that already-vested bonus payments be exempted. And it was Dodd, not Obama officials, who wanted the prohibition applied to all compensation agreements, past and future. The provision which shielded already-promised bonus payments from the executive compensation limits ended up being inserted at the insistence of Geithner. A spokesperson for Dodd, who is now consumed by these completely unfair attacks, finally confirmed today that these provisions were inserted at the direction of Treasury officials:Senator Dodd’s original executive compensation amendment adopted by the Senate did not include an exemption for existing contracts that provided for these types of bonuses. Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made, including adding the exemption, to ensure that some bonus restrictions would be included in the final stimulus bill.During the debate over these provisions, The Wall St. Journal article identified above reported explicitly that it was Geithner and Summers who were rejecting Dodd's limits on executive compensation as too broad and demanding that already-vested payments be exempted: exactly the exemption that protected the AIG bonuses and which they're now trying to blame on Dodd:The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider, these people said.At the same time, The Hill reported that "President Obama and the chairman of the Senate Banking Committee [Dodd] are at odds on how to rein in the salaries of top executives whose companies are being propped up by the federal government" and that "most of the administration's concern stems from the Dodd's move to trump Obama's compensation provisions by seeking more aggressive restrictions." Let's repeat that: the Obama administration was complaining because the compensation restrictions Dodd wanted were too "aggressive." Yet now, the Obama administration is feeding reporters the accusation that it was Dodd who was responsible for the exemptions that protected already-vested bonuses. The Times article from Saturday that started the Dodd scandal thus contains this outrageously misleading claim:The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place.And yet another New York Times article from today ("Fingers Are Pointed Across Washington Over Bonuses") - this one by David Herszenhorn - contains this White-House-mimicking, misleading passage:But Mr. Reid mostly ducked a question about whether Democrats had missed an opportunity to prevent the bonuses because of a clause in the economic stimulus bill, part of an amendment by Senator Christopher J. Dodd, Democrat of Connecticut, that imposed limits on executive compensation and bonuses but made an exception for pre-existing employment contracts.That was the exact provision that Geithner and Summers demanded and that Dodd opposed. And even after Dodd finally gave in to Treasury's demands, he continued to support an amendment from Ron Wyden and Olympia Snowe to impose fines on bailout-receiving companies which paid executive bonuses (which was stripped from the bill at the last minute). But now that Treasury officials are desperate to heap the blame on others for what they did, they're running to gullible, mindless journalists and feeding them the storyline that it was Dodd who was responsible for these provisions. And today, during his White House Press Conference, Robert Gibbs advanced this dishonest attack by repeatedly describing the offending provisions as the "the Dodd compensation requirements." This is working because, as the White House well knows, Dodd is very politically vulnerable. He is a major target of the Right because of his genuinely questionable involvement with various banks, including his Countrywide mortgate, and this story (fueled by the fact that Dodd is a receipient of substantial AIG campaign donations), inflames those accusations. As predictable as can be, right-wing news outlets like Fox, Drudge and others have blown this Dodd story up today into a major scandal - heaping blame for the AIG payments on Dodd - and it was all started by Obama officials to ensure that no blame for these provisions was laid where it belongs: at the feet of Geithner and Summers. I'm not defending Chris Dodd here. As I said, there are all sorts of legitimate (though still unresolved) ethical questions about Dodd's personal financial matters. And if he were responsible for these compensation exemptions, then he ought to be blamed. But he simply wasn't responsible. He opposed them vehemently (The Hill at the time even noted that "Dodd is not backing down" from his opposition to the exemption that Geithner/Summers were demanding, and Jane has much more evidence, including the legislative history, conclusively demonstrating what really happened here). Geithner and Summers obviously thought that the exemption was justified when they were running around protecting those past compensation agreements, and they simply ought to explain why, rather than trying to sink Chris Dodd's political career in order to protect themselves.
Tuesday, March 17, 2009
Paul Krugman quoting Nassim Taleb blogs that:
It would be like buying insurance on the Titanic from someone on the Titanic.in response to these facts:
The cost of buying protection against the risk that the United States will default on its mounting debt has surged in the past months, outpacing the rise in corporate-credit costs, now that the government has absorbed more private-sector debt.
The spreads on credit-default swaps for U.S. government debt jumped to 97 basis points Tuesday, nearly seven times higher than a year ago and 60% higher than the end of last year, to a level roughly in line with those of France, according to data supplied by Markit. The spreads also hit a record last week.
Has the risk of a US government default risen? Probably. Nonetheless, the people buying these contracts are crazy. A world in which the US government defaults would be a world in chaos; how likely is it that these contracts would be honored?And Joe O’Shaughnessy sums up what's really wrong with our response so far to this continuing nightmare:
If I recall, it was Schacht who introduced Hitler and eased the path for him with the German Industrialists, who were skeptical. Certainly Cheney gets my vote as the one who carried the water for the Neocons with the Corporations, the “Schacht” of the Bush Administration.
The close connection between the Nazi Party and the German Industrial machine was certainly analogous to the Neocon-International Corporation alliance of the last 8 years. We know enough about bribery, outright power grabs, torture, kidnapping of American citizens, political threats, firings and flaunting the law. against other branches of government and against the people.
We know that the Bush Administration set up a false legal document to create confusion and expand unlawfully the authority of the President and the Executive Branch.
The Bush Administratoin structured their actions based on an unlawful memo they requested from the Justice Department. They succeeded in usurping the power of the other branches and created deliberate uncertainty about the relative powers of the three branches of government. They ignored legal subpoenas from the Legislative Branch. Why these people are not in jail mystifies average citizens who are not allowed to ignore subpoenas.
Because they acted under the false authority of that memo, the infamous, “John Yoo” memo, we are now told by constitutional scholars that we lived in a technical dictatorship from then until the end of his term. Bush regarded himself as the ultimate “decider” in more than rhetorical terms. And we can be sure that Cheney acted accordingly.
Therefore, those who worried about whether Bush would pull some last minute coup were right to worry. Unless we have an investigation we will never know the reasons they did not. They certainly acted and still do with utmost secrecy, not only for legal reasons, but because that is the way that oligarchs act. They do not see elected office as leading. They see it as the acquisition of power, as a form of ruling. They had John Yoo write them what they considered a “Get Out of Jail” card.
Now we find that Cheney may have had “hit” squads presumabley made up of CIA or, hopefully, ex-CIA agents acting even here in the United States. While Bush and Cheney may say that they think what they did is legal, just as Willie Horton may have thought that the money in banks belonged to him–they were wrong. Like any other criminal, if they committed illegal acts, they should go to jail.
We need a major investigation to know just how close we came to real Nazi-style despotism, or whether some of us did, in fact, experience it.
We need to know whether some of these curious coincidences, the deaths of people in government, people under investigation and people who were very inconvenient for the Bush Administration were more than accidental. And we need to act quickly before the trail gets cold.
We now know for a fact that there was a conspiracy against Clinton. We know that Bush and Cheney lied about the Iraq war. We know about rendition as a fact. We know the entire judiciary and the Justice Department was corrupted, packed with “party loyalists.” What more evidence do we need to start a serious investigation? Now.And then, there's always Ivan's worthy two cents:
Our “Lords of Finance” on Wall Street predicted the Great Recession at least 2 years before it happened. Rather than stop it they endeavored to profit from it.
The Bankruptcy Abuse Prevention and Consumer Protection Act took effect on October 17, 2005
This change (at a time when there were very few defaults and was unneeded) was a smoking gun.
Get out a graph of housing prices in most states and correlate it to October 17, 2005. You will see a kink in the charts a month earlier which indicated a “change in the change” of the rise in housing prices — what they call in calculus the 2nd dirivative. That was the beginning of the roll over of the real estate markets.
Wall Street knew exactly what was going to happen and aided by Republicans they put mechanisms in place two years before the downturn that started in 2007 in order to fleece the unwashed masses and squeeze blood out of turnips in the down market they were expecting.
— Ivan - March 15, 2009John Mauldin, ever the happy camper says it's all struggling against the inevitable. As usual.
Right now, it is just small amounts and nothing that will rock the system. But these things can get a life of their own. If the Swiss can move to take their currency lower, then there will be a score of countries that will ask why they shouldn't be allowed to do the same. And the one currency they all want to be lower against? The dollar. Even though our economy is in shambles and consumer spending is falling, it is still a huge spending machine. And every export-growth-led country wants a piece of it. We are getting ready to run a huge, $3-trillion deficit, and the Fed is going to print a lot of money and inject it into the economy. There is real reason to worry about the strength of the dollar. And yet, the dollar is the weakest currency except for all the others. As much as we in the US worry about the fall of the dollar, it could rise over the coming year. That is going to put a lot of pressure from a lot of sources on President Obama, who ran as a populist. Here is hoping that his advisors steer him away from starting a round of trade protectionism that could beggar the world, just as Smoot-Hawley did 75 years ago. This bears watching closely.Just saying. Suzan _____________________
Sunday, March 15, 2009
Are Most Economists, Policy Makers and Politicians Just Liars? (Well-Meaning, To Be Sure, But Still)
We knew pretty much that Goldman Sachs, Bank of America and Morgan Stanley - or was it J.P. Morgan Chase? - I can't remember who's who anymore - (among lesser players) were the hands-down winners of our latest economic blackmail adventure; some interesting (is this still controversial?) economic commentary is found at The Baseline Scenario on the sellout at the G20 meeting:
I think most economists, policy makers and politicians are a bunch of liars.
The US economy is a Ponzi scheme anyway. Our GDP is inflated by 20 to 30%. Michel Chossudovsky, Professor of Economics (imagine that) and author of The Globalisation of Poverty, has the best insight that I've heard. Don't miss his essay at the Center for Research on Globalization. You can think of this as unconscionable hysterics on his part or the canary in the coal mine that's trying to give you a heads-up before it's too late.
Guns and Butter, KPFA
The administration's 2010 budget will entail the most drastic curtailment in public spending in American history, leading to social havoc and the potential impoverishment of millions of people. Defense spending and bank bailouts will consume all government revenue resulting in fiscal collapse that will lead to the privatization of the state.
America's Fiscal Collapse
"Strong economic medicine" with a "human face"
“Promise amid peril.” The stated priorities of the Obama economic package are health, education, renewable energy, investment in infrastructure and transportation. "Quality education" is at the forefront. Obama has also promised to "make health care more affordable and accessible", for every American.
At first sight, the budget proposal has all the appearances of an expansionary program, a demand oriented "Second New Deal" geared towards creating employment, rebuilding shattered social programs and reviving the real economy.
The realities are otherwise. Obama's promise is based on a mammoth austerity program. The entire fiscal structure is shattered, turned upside down.
To reach these stated objectives, a significant hike in public spending on social programs (health, education, housing, social security) would be required as well as the implementation of a large scale public investment program. Major shifts in the composition of public expenditure would also be required: i.e. a move out of a war economy, requiring a movement out of military related spending in favour of civilian programs.
In actuality, what we are dealing with is the most drastic curtailment in public spending in American history, leading to social havoc and the potential impoverishment of millions of people.
The Obama promise largely serves the interests of Wall Street, the defence contractors and the oil conglomerates. In turn, the Bush-Obama bank "bailouts" are leading America into a spiralling public debt crisis. The economic and social dislocations are potentially devastating.
Obama's budget submitted to Congress on February 26, 2009 envisages outlays for the 2010 fiscal year (commencing October 1st 2009) of $3.94 trillion, an increase of 32 percent. Total government revenues for the 2010 fiscal year, according to preliminary estimates by the Bureau of Budget, are of the order of $2.381 trillion.
The predicted budget deficit (according to the president's speech) is of the order of $1.75 trillion, almost 12 percent of the U.S. Gross Domestic Product. From Mother Jones we get some inside(?) information (emphasis marks were inserted - Ed.):
Watchdog to Fed, Treasury: Where's AIG's Money Going?
March 13, 2009
The reason that taxpayers have had to prop up AIG to the tune of $173 billion is that AIG is now basically a conduit — it owes money to so many other companies that the cash just pours right through. If AIG doesn't pay its counterparties — the entities on other end of its bad bets on the subprime mortgage market, the counterparties might go belly-up, too. That's why the bailout of AIG is sometimes referred to as a "backdoor bailout" for other companies. The people and companies on the receiving end of the "backdoor bailout" are AIG's counterparties, and so far, the Treasury and the Fed have been keeping their names secret. Now the Project on Government Oversight (POGO) is trying to change that.
On Thursday, Danielle Brian, POGO's executive director, wrote to Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernanke warning that "the government's unprecedented effort to rescue the American International Group (AIG) from collapse has been marred by a lack of disclosure and a troubling appearance of favoritism toward Goldman Sachs, one of AIG's most prominent counterparties." Former Treasury Secretary Henry Paulson was Goldman's CEO.
The department's assistant secretary in charge of the bailout, Neil Kashkari, and chief of staff, Mark Patterson, among others, are also former Goldman employees. "By withholding crucial details about Goldman Sachs and the other counterparties to AIG, you have given the public ample reason to question the integrity of the government's decisions related to the bailout," Brian wrote.So, how's your Goldman stock holding up today? Time to buy again? (I hear they are buying GM.)
And is this drop in the market really a sideshow?
(Need louder music.)
(And where is the American left while all this hell is breaking loose? Yes, I already saw the awesome MoveOn ad.)