Author: Matthew G. Saroff

And in the Further Adventures of Walker Wisconsin Asshole

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They turned in the petitions for his recall.  They needed 540,208, and were hoping for about 750K.

They got more than one million!

That’s more than ¼ of all registered voters.

The wind is blowing in from Wisconsin, and I smell toast ………… My bad that’s Scott Walker, who smells a lot like toast right now.

BTW, it’s not just Walker”

Democrats and union members also collected about 850,000 signatures to recall Republican Lieutenant Governor Rebecca Kleefisch and 20,600 names to recall [Republican] Senator [Leader] Scott Fitzgerald, about 4,200 more than necessary. Also targeted are Senators Pam Galloway, Terry Moulton and Van Wanggaard.

So, where was the Governor when this was all going on? He was in New York, raising money with Maurice “Hank” Greenberg at a $2500 a plate fundraiser.

Why was he raising large chunks of out of state cash from one of the prime architects of the AIG fiasco, whose bailout continues to cost taxpayers billions of dollars?

Why because those pesky lefties are flooding Wisconsin with masses of out of state dirty money.

Who says irony is dead?

Well, Damn! This is Interesting

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William Cohan, Bloomberg Columnist and former investment banker unloads on Mitt Romney with both barrels:

By bidding high early, Bain would win a coveted spot in the later rounds of the auction, when greater information about the company for sale is shared and the number of competitors is reduced. (A banker and his client generally allow only the potential buyers with the highest bids into the later rounds; after all, you can’t have an endless procession of Savile Row-suited businessmen traipsing through a manufacturing plant if you want to keep a possible sale under wraps.)

For buyers, the goal in these auctions is to be one of the few selected to inspect the company’s facilities and books on-site, in order to make a final and supposedly binding bid. Generally, the prospective buyer with the highest bid after the on-site due-diligence visit is selected by the client — in consultation with his or her banker — to negotiate a final agreement to buy the company.

This is the moment when Bain Capital would become especially crafty. In my experience — which I heard echoed often by my colleagues around Wall Street — Bain would seek to be the highest bidder at the end of the formal process in order to be the firm selected to negotiate alone with the seller, putting itself in the exclusive, competition-free zone. Then, when all other competitors had been essentially vanquished and the purchase contract was under negotiation, Bain would suddenly begin finding all sorts of warts, bruises and faults with the company being sold. Soon enough, that near-final Bain bid — the one that got the firm into its exclusive negotiating position — would begin to fall, often significantly.

Of course, some haggling over price is typical in any sale, and not everything represented by sellers and their bankers is found to be accurate under close examination. But Bain Capital took the art of negotiation over price into the scientific realm. Once the competitive dynamics had shifted definitively in its favor, the firm’s genuine views about what it was willing to pay — often far lower than first indicated — would be revealed.

And then there is the closing line:

I have no idea how Romney might behave in office. I do believe, however, that when he was running Bain Capital, his word was not his bond.

This guy has clearly been waiting for years to unload on Romney, and this take-down is truly a thing of beauty.

H/t The Shrill One.

A “Black Door” to Co-Opting Occupy Wall Street?

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Glen Ford’s thesis is that the recent involvement of prominent African American clergy is an attempt by the Democratic Party powers that be to co-opt the movement, and I am inclined to agree:

The Occupy Wall Street movement has, to date, “been effective in warding off cooptation by Democratic Party fronts such as Rebuild The Dream and MoveOn.org.” But OWS’s recent alliance with Black clergy-based (and Russell Simmons-backed) Occupy The Dream raises serious questions in this election year. “It appears that Occupy Wall Street’s new Black affiliate is also in ‘lock-step’ with the corporate Democrat in the White House.”

The Democratic Party may have entered the Occupy Wall Street movement through the “Black door,” in the form of Occupy The Dream, the Black ministers’ group led by former NAACP chief and Million Man March national director Dr. Benjamin Chavis and Baltimore mega-church pastor Rev. Jamal Bryant. Both are fervent supporters of President Obama.

Occupy The Dream’s National Steering Committee is made up entirely of clergy, as are its Members at Large, but its secular inspiration comes from media mogul (and credit card purveyor) Russell Simmons, who was a frequent visitor to Manhattan’s occupied Zuccotti Park. Simmons is co-chairman, with Dr. Chavis, of the Hip Hop Summit Action Network, whose website is now mainly dedicated to the Occupy The Dream project. It is through Simmons that the ministers hope to attract entertainers and athletes to Occupy The Dream events.

………

Far from tamping their Obama fervor, the OWS brand equips the “Dream” ministers (and Simmons’ entertainment assets) to accomplish a special mission: to insulate the president from the Occupy movement and the national conversation on economic equality – or, better yet, to make him appear to be part of the solution. If they so choose.

………

We do, indeed, face a test in 2012: Will the Democratic Party be enabled to swallow up the Left – as it does every four years – including the fragile and tentative structures of the Occupy Wall Street movement? And, will the Democrats enter through the Black door?

Let’s be clear, if Obama’s campaign political operatives are not trying to co-opt OWS, they are incompetent, and this seems to be a low risk-high payoff tactic to accomplish this, so I’m inclined to believe that Plouffe’s or Axelrod’s finger prints are on this.

H/t Yves Smith.

Only In America

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There’s a deli near where I work, the Charwood Deli.

It’s a little shop located in an industrial park.

It has the full range of deli sandwiches, along with hot sandwiches like cheese steaks, and their fries are very nice.

The proprietors are Korean, and they have about a dozen Korean and Korean inspired items which are quite good.

Well today, I got a Gyro, the Greek lamb based wrap.

Greek ethnic food cooked up for me, and done quite well, by Korean immigrants.

This is a microcosm of the immigrant experience in the United States, and something to be admired.

Another Gem From Matt Taibbi

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His latest is called, “Wall Street: Everything You Need to Know.”

The nickel tour is that this is about one Jeffrey Verschleiser, who went beyond what Obama calls, “Immoral but not illegal.” He engaged in what was pretty much black letter fraud, and not only has he not been called to the dock, he is flush enough to buy all 94 rooms in an Aspen hotel for his daughter’s Bat Mitzvah.

This is a guy who was at the core of Bear Stearns’ corrupt financial transactions that took down the firm, and he was telling his associates that he was “putting lipstick on a pig”, and some of his actions appear to be straight out embezzlement.

Why he is not facing criminal prosecution is beyond me.

Read Taibbi’s piece. It puts it all in context.

You Know It’s an Election Year, Because ………

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The Obama administration has come out against the most draconian measures in the rent seeking anti-piracy bills in the House and Senate:

The Obama administration won’t back legislation to combat online piracy if it encourages censorship, undermines cybersecurity or disrupts the structure of the Internet, three White House technology officials said.

Their statement, posted yesterday on the White House website, was a response to online petitions on legislative proposals to combat online piracy. The movie and music industries support such measures as a means of cracking down on theft.

“While we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response, we will not support legislation that reduces freedom of expression, increases cybersecurity risk or undermines the dynamic, innovative global Internet,” Aneesh Chopra, Victoria Espinel and Howard Schmidt wrote in a blog post.

The statement marks the administration’s most significant foray into a fight between content creators and Internet companies that has been playing out in Congress. The Senate is scheduled to hold a procedural vote Jan. 24 on starting debate on an anti-piracy bill.

The first thing to note is that this is a very tepid condemnation.

They didn’t make a Friday night release of this blog post, it was around noon on a Saturday when it was competing with the NFL playoffs, and Obama himself has not made a comment here.

That being said, I think that this is the first time that the Obama administration has come out against rent seekers as versus the general public.

I think that the Obama administration has made a tactical decision that they will get plenty of money for the campaign, and so they it isn’t necessary at this time to sh%$ on a motivated and tech savvy part of the electorate.

Another Example Why the Credit Default Swap is the Toxic Waste of the Financial World

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On an article about how Greek government debt may take down the Euro, we find this little gem:

Lagarde’s demand for a larger haircut smacked into an onslaught of leaks from the bond-swap negotiations between the government and private sector bond holders. First, there were rumors that the banks had largely agreed on a deal. Then there were rumors that hedge funds that had acquired some of these bonds at a discount were refusing to go along with anything. They were betting that they could profit from a default because it would trigger CDS payouts. And if the majority agreed to the haircut, they would also profit because Greece would eventually redeem the bonds.

Now, there are rumors that the government wants to compel these hedge funds to join the bailout majority. Tool: retroactive “collective-action clauses”—if a majority of bondholders agrees to the deal, the recalcitrant minority could be forced to go along.

Of course, the question is how you can make money for this.

It comes down to the fact that there is something called the “naked” credit default swap.

The nickel tour is that a CDS is an insurance policy, you pay your premiums, and in the event of “something” happening, you get a payout for the “loss”.

The reason that I put “loss” in scare quotes is because unlike most forms of insurance, there is no requirement to hold an interest in the continued existence of whatever you are insuring.

This has been case since 1746 (!) when Parliament passed the Marine Insurance Act.

Basically, if I purchase a CDS on something risky, like Greek sovereign debt, I have to pay a lot of money, but let’s engage in a little mental exercise:

  • Assume a billion dollars in a specific debt issue.
  • Buy $1 million dollars in debt at a discount from someone who is scared, let’s say it’s 50¢ on the dollar. So you spend $500,000.
  • You purchase a CDS on the whole issue, let’s assume that it’s a 30% payment, or $300 million.
  • Refuse to accept a haircut, triggering a default, and a full payout on the CDS.
  • So, you spent $300.5 million, and get a $1 billion payout.

This is vulture capitalism at it’s worse.  You don’t just wait for something to die, you figure a way to pluck out the eyes to hasten the demise.

This is a microcosm for everything that is wrong with “Anglo Saxon” hyper-capitalism.

Good News on the Campaign Front

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On the Congressional side.

First, in Maryland’s 4th district, Donna Edwards will be running unopposed in the primary, former PG County States Attorney (DA) Glenn Ivey declined to run, which basically means that she will be reelected.

The primary was actually a matter of some concern, because the redistricting moved a lot of Montgomery County was moved out, and a lot Anne Arundel county moved in.

Because AA county is more Republican, it meant that PG County, and the (largely corrupt) PG County machine had a lot more influence over any primary contest, and Edwards is not a their friend, having taken down their golden boy, the then-incumbent Al Wynn in 2008.

Not only is she honest, but she is an unabashed liberal, so 2 snaps up.

Additionally, in the Massachusetts Senate race, Elizabeth Warren out-raised Scott Brown in 2011, $8.9 million for the year and $5.7 million for the quarter as versus $8.7 million and $3.2 million, though Brown still has about twice her cash on hand, $12.8 million versus $6 million.

Considering the fact that Brown is Wall Street’s favorite Senate candidate, this is surprising, and welcome, news.

Seriously, We Are Becoming Incapable of Develping New Weapons Systems

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We’ve seen this with the Future Combat Systems, EFV (the landing craft former known as the AAAV), the Comanche helicopter, DDG-10000, and the slow motion implosion of the LCS and the JSF.

We see that the programs start with over-ambitious requirements, which lead to protracted development schedules, escalating costs.

This leads changes to the requirements, leading to further schedule and cost slippage, rinse, lather, repeat.

I’m generally not to concerned about this, I’m of the belief that superior training, tactics, and situational awareness will win the day. The success of the F4F Wildcat versus A6M Rei-sen (Zero) is an example of this.

Superior tactics and situational awareness are largely function of effective communication, so to my mind the cancelation of the Joint Tactical Radio System (JTRS) is a bigger deal than most of the higher profile cancellations:

…

What tied them down was their radios: a forest of plastic and metal cubes sprouting antennae of different lengths and sizes. They had short-range models for talking with the reconstruction team; longer-range versions for reaching headquarters 25 miles away; and a backup satellite radio in case the mountains blocked the transmission. An Air Force controller carried his own radio for talking to jet fighters overhead and a separate radio for downloading streaming video from the aircraft

…

Almost fifteen years ago, the Army launched an ambitious program, the Joint Tactical Radio System [3], aimed at developing several highly-compatible “universal” radios. Together, the JTRS radios would replace nearly all older radios in the American arsenal, greatly simplifying communications and freeing up combat units “to tap into the network on the move,” according to Paul Mehney, an Army spokesman.

But JTRS, pronounced “jitters,” failed to live up to its promise. Overly ambitious, poorly managed and saddled by incompatible goals, the program burned through $6 billion dollars while producing little working hardware. Delays forced the Army to spend $11 billion more on old-style radios to meet the urgent demands of the Iraq and Afghanistan wars.

The Army eventually reduced the planned purchase of JTRS radios and cut the types of radios in development. In October, it canceled the vehicle-mounted version of JTRS, the most important of the new radios, which by then had grown to the size of a dormitory-sized refrigerator. For all practical purposes, JTRS is dead — at least in its original guise.

…

JTRS’ history is one of grand but naive technological ambition colliding with the unbending laws of physics and the unforgiving exigencies of modern warfare. After years of work, the Army discovered for itself what experts had been warning all along: It’s impossible for a single radio design to handle all the military’s different communications tasks.

The more capabilities that the Army and prime contractor Boeing packed into JTRS, the bigger, more complex and more expensive it became — until it was too bulky and unreliable for combat. In its relentless drive for conceptual simplicity, the Army found itself mired in mechanical complexity.

The Army wasn’t alone in its doomed pursuit of a technological pipe dream. The past decade has by many accounts been an era of grand ambition, flawed management and wasted treasure for all the military branches. A lengthy Harvard Business School study for the Pentagon concluded in April that despite many attempts at reform, “major defense programs still require more than 15 years to deliver less capability than planned, often at two to three times the planned cost.”

Unlike most of the high tech systems, which have next to no relevance in our current conflicts, there are very real shortcomings in the complex and frequently non-interoperable hodgepodge of communications equipment used by our forces. (The article linked above refers to one such situation in Afghanistan)

If our defense procurement and R&D system takes 15 years to take a radio system from concept through cancellation, we are completely f%$#ed.

Our own corrupt military-industrial complex appears ready to implode under the weight of its own dysfunction.

This is not the Best Newspaper Correction Ever

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Correction, New York Times, 30 December 2011

Yes, it’s an amusing correction, but it’s not the best ever.

The reigning champion, this year, as it has been for nearly 100 years, the Grauniad’s* Corrections and amplifications column.

The material there is extensive and voluminous, but I believe that the best correction of all time comes from their effort on 2 February 2009:

The absence of corrections yesterday was due to a technical hitch rather than any sudden onset of accuracy.

Seriously, corrections simply do not get any better than that.

*According to the Wiki, The Guardian, formerly the Manchester Guardian in the UK. It’s nicknamed the Grauniad because of its penchant for typographical errors, “The nickname The Grauniad for the paper originated with the satirical magazine Private Eye. It came about because of its reputation for frequent and sometimes unintentionally amusing typographical errors, hence the popular myth that the paper once misspelled its own name on the page one masthead as The Gaurdian, though many recall the more inventive The Grauniad.”

Your Friday Scott Walker Dump

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First, it looks like they will deliver something like ¾ of a million signatures to recall him, about a 50% buffer, some time next week.

What’s more it looks like a major scandal is brewing, we could see major revelations just in time for the recall elections.

First, we have 3 of his aids accused of embezzling from a veterans charity, and one of them was tied to his room mate’s trolling for child sex.

And finally, his 2010 campaign is charged with over 1,000 violations of campaign finance law, and faces over $½ million dollars in fines.

Pass the popcorn.

Heh.

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It looks like it will be just Romney and Paul on the Virginia primary ballot, because the VA Republican party actually started verifying signatures:

Santorum, the former Pennsylvania senator who came within a few votes of winning the Iowa caucuses, didn’t get on the ballot in Virginia or the District of Columbia. His campaign also filed incomplete slates of delegates in Illinois and Ohio, which could limit his ability to win delegates in those key states.

Virginia has been a tough ballot to crack for several GOP candidates because the state requires campaigns to collect signatures from at least 10,000 registered voters. Romney and Paul were the only ones who made theballot for the March 6 primary.

Perry sued, and was later joined in the lawsuit by Gingrich, Huntsman and Santorum. But on Friday, a federal judge in Richmond refused to add them to the ballot, saying the candidates should have challenged Virginia’s primary qualifying rules earlier.

Whatever you say about Paul, his campaign has it’s sh%$ together, and Romney, with his high dollar campaign, is on all the ballots as well.

The rest of them are running a junior varsity campaign.

It’s On (Sort of)

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Stephen Colbert has passed the Colbert super PAC to Jon Stewart, (the special effects involved could be best described as “low budget”) and established an “exploratory committee” to “explore” run for the Republican nomination in his native South Carolina.

Cool.

He could probably beat John Huntsman.

The video will be up on Comedy Central tomorrow some time.

Good News Everyone! Bigots Don’t Get to Steal Property.

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So a bunch of bigots were upset with the Episcopal Church not hating on te ghey enough, so they left the Episcopal Church, and affiliated with a “Kill the Gays” Anglican Bishop in Nigeria.

Well, now a judge has ruled that their churches are property of the Diocese of Virginia:

A Virginia judge has ruled against seven conservative congregations that broke away from the Episcopal Church in 2006, rejecting their argument that they should be able to keep some $40 million in church real estate that the national denomination also claims.

The case has drawn worldwide attention because it involves a cluster of large, prominent churches with well-known conservative pastors and because the issues at hand — particularly the Episcopal Church’s acceptance of same-sex relationships as equal to heterosexual ones — are roiling much of organized religion. Various Protestant congregations in particular have wound up in litigation across the country.

The 113-page ruling was handed down Tuesday by Fairfax County Circuit Court Judge Randy Bellows.

A spokeswoman for the congregations said they were considering their next step, but a letter sent to some 4,600 congregants sounded as though they are bracing for the worst. Each congregation has a contingency plan if they have to vacate, said Caitlin Bozell Manaois.

Couldn’t happen to a more repulsive group of people.

For too many people, religion is just an excuse to hate.

BTW, it appears that Caitlin Bozell Manaois is Brent Bozell’s daughter.  (She works at CRC Public Relations, which is one of his front groups)

Brent Bozell is the head of the “Media Research Center” and is probably best known for referring to Barack Obama as a, “skinny ghetto crackhead.”

Manning is Referred For Court Martial

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22 counts, including “aiding the enemy, which carries a potential death penalty, for leaking thousands of files to Wikileaks.

It appears that the “the enemy” is the American public.

It’s a f%$#ing kangaroo court, as evidenced by the convening authority refusing to allow the most of the defense’s witnesses, because the goal, of both the military and the Obama administration is to suborn perjury from Manning, so that they can manufacture a case with which to prosecute Julian Assange.

It’s Jobless Thursday

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Not good news.

Initial claims just rose to 399,000, up 24K from last weeks “already revised upward” number, basically the dividing line (rule of thumb 400K) between getting worse, and not getting worse, with the less volatile 4-week moving average rising by 7,750 to 381,750, with continuing claims rising as well, though emergency claims fell.

One step forward, one step back.

Supreme Courts Says that there are Limits to Campaign Donations

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So, if you are a foreign person, you are still forbidden from making campaign donations:

In a terse four words, the Supreme Court on Monday issued an order upholding prohibitions against foreigners making contributions to influence American elections.

The decision clamped shut an opening that some thought the court had created two years ago in its Citizens United decision, when it relaxed campaign-finance limits on corporations and labor unions. On Monday the Supreme Court, upholding a lower court’s decision in Bluman, et al., v. Federal Election Commission, refused to extend its reasoning in Citizens United to cover foreigners living temporarily here.

Foreign nationals, other than lawful permanent residents, are completely banned from donating to candidates or parties, or making independent expenditures in federal, state or local elections.

The Supreme Court’s order did not discuss the merits or suggest that there was any dissent among the justices.

It sounds to me like they just said that foreign persons cannot make campaign donations, but under Citizens United, foreign corporations can.

Our political system, brought to you by BMW, the ultimate driving machine.