It’s clearly the worst play ever written.
You see, the Reykavik City Theatre has announced that it will be performing the full 2,000 page parliamentary report on the island nation’s banking collapse.
It is expected to take 72-120 hours.
Author: Matthew G. Saroff
Magnetar: Why a Criminal Pursuit of the Finance Industry Is Necessary
Criminality as a Broadway musical
Pro Publica, along with the radio folks at Planet Money, have investigated the activities of a hedge fund called Magnetar, which appears to have bankrolled the creation of mortgage backed securities so that they could bet against them.
Note that there are 8 chapters, so you may want to link to the This American Life broadcast, (about 40 minutes) which is less encyclopedic, but rather more streamlined.
Basically, at the end of 2005, it appeared that the housing bubble was moderating, which made people were less interested in investing in the mortgage backed security known as the CDO, because without double digit increases in home prices, the risk levels were higher, and the potential rewards were less.
What Magnetar did was to get banks to write more CDOs by agreeing to buy the worst tranches, the riskiest 3-5% of these instruments, and then everyone else, seeing as how the scum at the bottom of the barrel was taken, would snap up the “higher quality” stuff.
At one point, Magnetar was covering about ½ of the CDO market, and betting against everything that they could get their hands on with credit default swaps (CDS).
And the financial industry noticed their moves into the field, even if they did not know of the CDS bets, to the degree that Business Week predicted that they would be, “shredded”.
The folks at Pro Publica have uncovered emails where they were aggrissively pressuring the agents that they set up for the funds to make them as risky as possible, which makes sense, if you are betting against them.
For what it’s worth, it wasn’t only people like pension funds and municipalities who got burnt by this. J.P. Morgan lost billions by holding onto senior tranches of CDOs that they created for Magnetar, even though it was clear by that time the game that they were playing.
So, why did Morgan do it anyway? Because the people who bought the CDOs generated commissions at the front end, and were then given huge bonuses based on this, so by the time it all went pear shaped, the individual traders had a few tens of millions of dollars in the bank.
By the end of their run, it was so bad that even Moody’s refused to rate their CDOs.
This is deeply and perfidiously corrupt and well organized, and I cannot see why RICO isn’t being applied to anyone who touched this.
But seriously, read the whole thing. It is stunning in its scope and corruption, but this boggles the mind.
This is not taking out insurance on your neighbor’s house and burning it down. Paying for the road out to a sub development so that people will buy houses, and then using a squadron of B-52s to firebomb that development, only that development is our economy.
The Ever Reliable Joseph Lieberman
Remember when I said that Joe Lieberman would be preening to get his face on the Teevee with regard to the new START Treaty?
Well, I was right. He is now calling for what appears to be a massive buildup in European missile defenses and a his desire for an unprovoked nuclear strike on Iran as a condition for his support:
Appearing on “Fox News Sunday,” [big shocker there] the Connecticut Independent suggested that he himself would oppose ratification of the START II Treaty that Obama signed in Prague this past week, in part because, he reasoned, the language left America vulnerable to a nuclear Iran.
“I don’t believe that there will be 67 votes to ratify the treaty unless the administration does two things,” Lieberman said. “First: commit to modernize our nuclear stockpile, so as we have less nuclear weapons we know that they are capable if, God forbid, we need them. And secondly, to make absolutely clear that the statements by Russian president [Dmitry] Medvedev at the signing in program, that seemed to suggest that if we continue to build ballistic missile defense in Europe they may pull out of this treaty, is just not acceptable to us. We need that defense to protect our allies and ourselves from Iran.”
Basically, Lieberman is saying that unless Obama threatens Iran with nuclear attack, and promises to build up the ill-conceived European missile defense system, he’ll vote no.
Yes, he’s with on everything but Iraq, thanks for keeping him in the tent and pissing in, Harry and Barack.
This is all about Joe Lieberman getting his ego stroked, and the solution to this problem is to make it clear that there will be consequences if he f%$#s with this, not to stroke his ego: that only makes him worse.
Here is hoping that he gets caught buggering an underage hamster and will be forced to resign.
2 Bits of Economic News
Both wholesale inventories and sales rose in February, giving another sign that there is some sort of recovery on the way.
Also, it looks like the EU has dotted its “I”s and crossed its “T”s on an aid plan for Greece, which means that someone has gotten the Germans generally, and Angela Merkel in particular, to STFU, to the tune of about €30 billion in loans and guarantees.
OMFG!!!!! Epic Fail!!!!
Fighting the Kha’ak, who lack staying power
You know, it’s not, “All Your Base Are Belong To Us,” but in naming the alien race in X3: Reunion the Kha’ak, pronounced “kawk”, it appears that someone has seriously jumped the shark.
The developers are German, and the dialogue, which explains why they don’t understand when a native English speaker might find it amusing when a character in the game says that, “The Kha’ak are not interested in dialogue,” though it does ring true.
I’m sure that this mirrors my wife’s, as well as my XGF’s experience.
Plane Crash Kills Polish President
It appears that his plane crashed in a heavy fog, while attempting to land in Smolensk, killing Poland’s president, Lech Kaczynski.
He was on his way to the Katyn Woods, where Polish and Russian authorities were to have a memorial service for the Polish officers and politicians murdered by the NKVD in 1940, which is kind of ironic:
Russian emergency officials said 97 people were killed. They included Polands deputy foreign minister and a dozen members of Parliament, the chiefs of the army and the navy, and the president of the national bank. They included Anna Walentynowicz, 80, the former dock worker whose firing in 1980 set off the Solidarity strike that ultimately overthrew Polish Communism, as well as relatives of victims of the massacre that they were on their way to commemorate.
Among them, the Polish government said, were Mr. Kaczynski; his wife, Maria; Ryszard Kaczorowski, who led a government in exile during the Communist era; the deputy speaker of Polands Parliament, Jerzy Szmajdzinski; the head of the presidents chancellery, Wladyslaw Stasiak; the head of the National Security Bureau, Aleksander Szczyglo; the deputy minister of foreign affairs, Andrzej Kremer; the chief of the general staff of the Polish Army, Franciszek Gagor; the president of Polands national bank, Slawomir Skrzypek; and the commissioner for civil rights protection, Janusz Kochanowski.
My condolences to the victims families.
Note that President is a mostly ceremonial position under the Polish system, though a quick search through my archives seems to indicate that he was a bit of a euro-skeptic.
Cool
Pixels:
It makes me wish that I smoked dope. It would be even better then.
Guess What?
All of the big banks used Lehman style accounting tricks to goose their numbers before quarterly reporting deadlines:
Major banks have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public, according to data from the Federal Reserve Bank of New York.
A group of 18 banks—which includes Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.—understated the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods, the data show. The banks, which publicly release debt data each quarter, then boosted the debt levels in the middle of successive quarters.
Excessive borrowing by banks was one of the major causes of the financial crisis, leading to catastrophic bank runs in 2008 at firms including Bear Stearns Cos. and Lehman Brothers. Since then, banks have become more sensitive about showing high levels of debt and risk, worried that their stocks and credit ratings could be punished.
Seriously, “business as usual” is better described as an “ongoing criminal enterprise.”
It’s Bank Failure Friday!!!!
And here they are, ordered, and numbered for the year so far, and these are, of course, in addition to the rather unusual Thursday closing yesterday.
- Beach First National Bank, Myrtle Beach, SC
So, no closings last Friday, and only one this Friday.
Things may be slowing down.
So, here is the graph pr0n with trendline:
White House/Supreme Court Kremlinology
So, John Paul Stevens announces his retirement at almost the same time that Dawn Johnsen withdraws her name from consideration as head of the Department of Justice’s Office of Legal Counsel.
I wonder, is he considering nominating her?
My guess is no, but my heart says, “Yes.”
Breaking: Stupak Retiring
Bummer of a birth mark, Bart
So, after making a bid for national prominence by grandstanding on a woman’s right to choose, and getting a primary challenger, the Teabaggers are still hating on him, and Rachel Maddow uncovered the fact that he was getting bribed with below market rents while he was living at “C Street,” so he will not run for reelection:
Representative Bart Stupak of Michigan, who played a central role with fellow anti-abortion Democrats in negotiating a compromise in the final hours of debate that allowed the health care overhaul bill to pass, said on Friday that he would not seek re-election.
Mr. Stupak, a nine-term incumbent, has been under intense pressure from anti-abortion groups and others since the health care bill passed last month. At his request, President Obama signed an executive order outlining the prohibitions against the use of federal funds for abortion. But anti-abortion groups dismissed the executive order and pledged to defeat Mr. Stupak, whom they had once championed.
Let’s be clear here: The Teabaggers would always have supported a Republican in the general, because they are a Republican movement.
In fact, it could be argued that they have captured the Republican party.
And when you never had the Teabaggers, or the Republican party, and you’ve just told the Democratic party to go Cheney yourself, you do not have much left to win an election with.
BTW, here is his challenger, and now putative nominee, Connie Saltonstall’s Act Blue page.
Give generously, to keep the idiots at the DCCC and DNC from trying to anoint a Conservadem between now and the primary.
Stewart On the START Treaty
Actually, it’s really Jon Stewart on Fox News, though it is a good primer on the treaty, and yes, it’s a devastating take down of Fox News:
That’s Fox, they always would have been so unfair to Reagan.
Justice Stevens to Retire
Obviously, the question now is who Obama will nominate to succeed him.
My predictions:
- They will be Protestant
- Stevens is the only Protestant on the court, the rest are Catholic or Jewish.
- They will be a woman and/or a minority.
- Because it will be his way to pander to the base when he chooses a basically conservative nominee.
- They will be tepid, at best, on Roe v. Wade and a woman’s right to choose in general.
- Since Barack Obama has always been tepid, at best, on Roe v. Wade and a woman’s right to choose in general.
- They will generally favor a very expansive definition of the powers of the Presidency.
- Since Barack Obama has aggressively asserted a very expansive definition of the powers of the Presidency.
- They will generally be rather pro corporate, though not as much as Scalia, Thomas, Alito, Roberts, and Kennedy.
- Since Barack Obama is ……… You get the picture.
- They will not be particularly pro organized labor.
- Obama has clearly been tepid on labor issues, as shown by his efforts to soft pedal the EFCA (Card Check).
What I would like to see, beyond ideology, is that:
- They not have worked as a prosecutor, which tends to set people off on a legal path that is hostile to the rights of the accused.
- That they not, and have not been, a sitting Federal Judge, which is increasingly the norm, and we need more diversity of experience in there.
- Nominating someone who is publicly an atheist.
Things that could make this amusing, but will not happen:
- Nominating Bill Clinton, just to make the ‘Phant’s heads explode.
- Nominating a Muslim.
- Nominating Hillary Clinton, just to make the ‘Phant’s heads explode.
But these will not happen.
A Bit Late on This But………
Robert “Bad Hair” Ehrlich, who lost his bid for reelection against Martin O’Malley 4 years ago, has announced his intention to run for governor again.
Ehrlich seems to think that anti-incumbency gives him a leg up, but he has lost the advantages of incumbency, he cannot run against former Maryland Governor Paris Glendenning, as he did when he ran against Glendenning’s Lt. Governor, Kathleen Kennedy Townsend,* and O’Malley got his signature issue from 8 years ago, slots as a source of revenue, done.
And then there is the 800 pound gorilla in the room, which is that Ehrlich still speaks very positively of his former Lt. Governor, Michael Steele, which may harm him more among Republicans than Democrats.
On the plus side for him is the fact that he is keeping his radio show on WBAL until he formally files his paperwork in June, which gives him a very big megaphone to toot his own horn.
Still, I Ehrlich has to run the table, and O’Malley has to have a major stumble for him to be competitive in this thoroughly blue state.
*She’s a smart lady, she kicked Ehrlich’s butt during the debate in 2002, but she is the worst campaigner in the history of the Kennedy clan, and perhaps the worst candidate in the history of history.
I Wholeheartedly Approve
Someone on DU related their experience with reporting someone threatening violence against Obama to the Secret Service: (Click for full size screen shot)
I called the Secret Service on a wingnut threatening Obama
Edited on Fri Apr-09-10 12:13 AM by Jack_Dawson
on his Facebook. “We need to take him OUT! BY ANY MEANS!” he said Friday night at 10:30 (one can only speculate whether alcohol played a factor).
I called my local SS field office on Saturday. Sent them screenshots. They followed up with him, and he mysteriously removed the OP. But that wasn’t good enough for the Secret Service. They called me again today to send them more screenshots – to see if he had redacted his comment. He had not.
Then about an hour ago, he posted this:
“I suggest REMOVING Obama from office through legal, lawful and Constitutional methods ONLY! I DO NOT AND WOULD NOT ADVOCATE VIOLENCE!
If you see / hear something similar, I suggest contacting your district office. They do follow up.
Indeed. There has been a lot of violent eliminationist rhetoric, and when it devolves to the point of being a specific threat, reporting it to the authorities is a civic duty.
I am not suggesting the sort of reaction that got Richard Humphreys 37 months in the clink for making “Burning Bush” jokes, but when speech becomes explicit threats, or an exhortation to specific violent action, it’s a problem.
Another Good Start
Thomas Joseph Petters was convicted of running a Ponzi scheme, and he was sentenced to 50 years in prison, which has him released when he is 102.
There should be more of this, because it would deter these guys in the future.
The idea of 3-5 in a minimum security prison, followed by a lifetime of leisure does not cut it.
Obama Authorizes Assassinations of American Citizens
Radical Imam Anwar al-Aulaqi has now been placed on the Joint Special Operations Command (JSOC) target list, which means that he can be killed if spotted. (See also here)
Based on the reports that I’ve seen in the media, it’s pretty clear that there is probable cause to apprehend him on suspicion of a number of crimes, but basically, the JSOC is a hit list.
There won’t be any efforts to capture him, this means that he’s going to be taken out by a Predator drone or suchlike, and I find this to profoundly troubling.
Glenn Greenwald makes the point that this is authorizing the killing of an American citizen on the decision of one man, the President, a power that even George W. Bush did not claim, and I agree, though I am not quite as strident in my views.
Additionally, this has the effect of legitimizing the use of lethal force by other governments against those whom they deem terrorists.
Under the rules adopted, I could see the Chinese assassinating Uighur activists, the Russians assassinating Chechen activists, or the Turks assassinating Kurdish activists, on US soil.
Also, from a purely tactical perspective, if you have a person who is willing to die to accomplish their mission, and al Qaeda does, then it is rather simpler to locate the President of the United States than it is to locate Anwar al-Aulaqi or Saddam Hussein.
This may have the effect of encouraging direct action against American officials.
I Call This a Good Start
The labor union the SEIU is starting a 3rd party named North Carolina First in that state.
They are collecting signatures to get qualified as a state party, and the implication is that they will be running candidates in the general against the Blue Dogs Heath Shuler and Mike McIntyre, as well as conservative Larry Kissell.
My attitude is that this is a good thing.
To quote James “I hate that smarmy bastard” Baker, “F%$# them, they didn’t vote for us.”*
I don’t have a problem with this. There is a difference between a conservative Democrat, and particularly in a conservative district, I understand the difference.
Shuler, McIntyre, and Kissell are disloyal democrats, and they can reliably be counted on to vote against healthcare, financial reform, and fair labor rights.
Truth be told, if they want to go after just one of them, I would suggest going after Shuler.
He’s the whip of the Blue Dogs, and taking him down would make the rest of those guys think twice about playing to Fox News as a political strategy
I would note that my hostility towards Shuler might be a function of his tenure as a Washington Redskins over-priced first round draft pick washout.
*Yes, I am aware that Baker said this about Jews and the Republican party while serving in the Poppie Bush administration.
Economics Update
Well, today is jobless Thursday, and the the new unemployment numbers disappointed big time, with initial claims rising to 460,000, as opposed to falling slightly to 435,000, with the 4-week moving average rising 2,250 to 450,250.
On the bright side, continuing claims fell by 131K to 4.55 M, though one wonders how much of that was because of Tom Coburn’s petulant filibuster against extended unemployment benefits, which likely has depressed the number, which (full disclosure) has effected me directly. (Will no one rid me of ……… Oh, never mind.)
Meanwhile in consumer spending, February consumer borrowing fell at a -5.6% annual rate, wiping out, and then some, the growth in consumer borrowing in January that had economists crowing, though the Institute for Supply Management’s service sector index grew faster than it has since July 2004 in March.
On the brighter side, delinquencies in consumer loans fell in the 4th quarter of 2009.
In the world of national finance and central banks, we have a few developments with the 3-year, 10 year, and 30 year treasury notes falling and their yields rising, which implies that investors expect interest rates to increase, at least a bit.
Meanwhile, in central bank land, the Bank of England has left its benchmark interest rate and its quantitative easing unchanged, and the Bank of Korea also left rates unchanged.
In real estate, it’s been a pretty busy few days with the 30 year fixed rate mortgage hitting an 8 month high, which, unsurprisingly has depressed mortgage applications.
In residential real estate, foreclosures are still rising, and distressed home sales hit a new high of 29% in January, though delinquencies on sub-prime mortgages fell for the first time since 2006.
I’m thinking that the sub-prime delinquency rate fell because we have finally run out of people who have those mortgages who haven’t yet been forced out of their homes.
In commercial real estate, mall vacancies have hit an at least 10 year high, there are no records prior to this, and office vacancies hit 17.4%, the highest since 1994.
Meanwhile, in energy and currency, the bad job numbers drove crude prices down, and new concerns about Greece have driven the dollar higher.
This is a Big Deal
The US and Russia have signed a treaty calling for a 30% reduction of their respective nuclear arsenals.
This is a very positive development, though it is more timid that I would have liked.
Of course, it still needs a ⅔ vote in the Senate to be approved, and Republican Mike DeMint seems to be determined to be the turd in the punch bowl, and attempt to extract promises for an extensive missile defense installation in Europe, which the Russians consider a deal breaker.
Pretty much everyone who isn’t tied to Bush/Cheney, of both parties, find this a good deal, but considering the fact that many Congressional Republicans sold their souls, and their testicles, to the Bush/Cheney agenda some years back, it should get interesting.
Also, I predict that Joe “Shanda before the Goyim” Lieberman will speak forcefully about his deep concerns regarding the treaty, in the hope of getting lots of face time on the teevee.