I cannot do justice to this, so just go and read it.
Category: Good Writing
Stewart On Guns
Best news analysis in the media
If you want to get a good background on the whole gun safety issue, you’d may not find a better primer than what Jon Stewart did last night.
He outlines the basics of the debate, and how the NRA has castrated both the ATF and the ability to collect meaningful data about gun violence.
Funny and educational.
Dean Baker on Timothy Geithner, That’s Gonna Leave a Mark
This is positively brutal:
Treasury Secretary Timothy Geithner’s departure from the Obama administration invites comparisons with Klemens von Metternich. Metternich was the foreign minister of the Austrian empire who engineered the restoration of the old order and the suppression of democracy across Europe after the defeat of Napoleon.
This was an impressive diplomatic feat – given the widespread popular contempt for Europe’s monarchical regimes. In the same vein, protecting Wall Street from the financial and economic havoc they brought upon themselves and the country was an enormous accomplishment.
Just go read it.
Quote of the Day
The only problem is, the suit is being filed by maybe the biggest douchebag of all time, Hank Greenberg (and his company, Starr International), a man who has not only been proven to be corrupt and a fraud, but who perhaps more than anyone else was responsible for the galactic balance-sheet goat-f%$# that caused AIG’s implosion in the first place. If there is such a person as an innocent AIG shareholder who was harmed by the government’s conduct, it sure as hell isn’t Hank Greenberg.
—Matt Taibbi, on Greenberg’s suit against the US because he did not get well paid enough for running AIG into the ground.
(%$# mine)
FWIW, In an unexpected outbreak of sanity AIG has decided not to join Greenberg’s lawauit.
Still, “Galactic Balance Sheet goat f%$#,” that is good, even by Matt’s high standards.
Just Go Read Matt Taibbi
He is on fire when writing about the nature of the bank bailouts:
………
Through behavior like this, the government has turned the entire financial system into a kind of vast confidence game – a Ponzi-like scam in which the value of just about everything in the system is inflated because of the widespread belief that the government will step in to prevent losses. Clearly, a government that’s already in debt over its eyes for the next million years does not have enough capital on hand to rescue every Citigroup or Regions Bank in the land should they all go bust tomorrow. But the market is behaving as if Daddy will step in to once again pay the rent the next time any or all of these kids sets the couch on fire and skips out on his security deposit. Just like an actual Ponzi scheme, it works only as long as they don’t have to make good on all the promises they’ve made. They’re building an economy based not on real accounting and real numbers, but on belief. And while the signs of growth and recovery in this new faith-based economy may be fake, one aspect of the bailout has been consistently concrete: the broken promises over executive pay.
………
The implications here go far beyond the question of whether Dimon and Co. committed insider trading by buying and selling stock while they had access to material nonpublic information about the bailouts. The broader and more pressing concern is the clear implication that by failing to act, federal regulators have tacitly approved the nondisclosure. Instead of trusting the markets to do the right thing when provided with accurate information, the government has instead channeled Jack Nicholson – and decided that the public just can’t handle the truth.
………
So what exactly did the bailout accomplish? It built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Failier, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors. The bailout has also made lying on behalf of our biggest and most corrupt banks the official policy of the United States government. And if any one of those banks fails, it will cause another financial crisis, meaning we’re essentially wedded to that policy for the rest of eternity – or at least until the markets call our bluff, which could happen any minute now.
Other than that, the bailout was a smashing success.
Seriously, just go read, and then scream at your congresscritters.
More Financial Fraud Enforcement Theater from the Obama Administration
Yesterday, I heard the news that the 271 year old Swiss bank, Weglin, was shut down following a US Department of Justice investigation into their actions supporting tax evasion and money laundering.
It sounded too good to be true, and , as Yves Smith so eloquently points out, it was too good to be true.
The Nickel version is that the bank’s asserts were transferred to another entity, Raiffeisen, and the proceeds likely given to the owners in the weeks power to its being shut down.
Finally, the DoJ is saying NOTHING about whether the got information about the accounts, and the people who used them too avoid taxes.
This its a pretty good tell that they hour no data: If they had, they would be trumpeting it to the heavens, because they would thereby induce people to turn themselves in.
Go read the while thing, including the reader comments.
Posted via mobile.
That’s Gonna Leave a Mark
One of the “journalists” at Fox News asked a really stupid question alleging that Hillary Clinton was faking being sick to avoid testifying before Congress, and State Department spokesman Phillippe Raines “apologized” for this:
“Toria, can you expand on why Secretary Clinton can’t testify on Thursday about this? It seems that she has not been available to testify on the Benghazi situation on some very key dates, including the Sunday after 9/11 and now this Thursday.”
I just called them and read them the riot act for putting such misleading, accusatory, and absolutely asinine words in your mouth. Because after what we and her doctors explained over the weekend regarding her health, you couldn’t possibly have been insinuating the ulterior motives that question implies. No way. No credible journalist would do that without any basis whatsoever. But even more so, I really went to bat for you with folks here and told them that while I know the media can often be incredibly self-involved, there is no way you, an informed reporter, would equate one’s testifying before the United States Congress – made up of duly elected Senators and Representatives empowered by Article I of our Constitution – with going on tv. I don’t know Chris Wallace all that well, but I’m pretty sure he wouldn’t place his television show on par with one of the three branches of our government. And therefore, saying that this has happened on multiple ‘key dates’ is simply a blatant lie and grossly misleading to the public.
Anyway, our sincere apologies. If you send us what you really said, I’ll make sure it’s properly reflected.
This is just a thing of beauty.
Starting off the New Year With Praise to an Organization I Loathe
Fox News, yes thank you Fox News, for telling us how an apology should be done:
H/t JR at the Stellar Parthenon BBS.
Just Read This
She really isn’t. Rather, Liza Long is describing the issues involved with raising her son, an extremely intelligent, and very troubled 13 year old., from the mom of a troubled adolescent, but there is a bigger issue that it obliquely address we look at the most prominent mass shootings in the past few years, they seem to be marked by the complete breakdown of the mental health infrastructure in this country.
Starting with Ronald Reagan, we have systematically dismantled our mental health infrastructure, so now we have the the emergency room, jails, and acute inpatient facilities.
For chronic, less severe mental health problems, there is nothing out there, except, “Take 3 pills daily,” or moving to some place with a less antediluvian public health system, like Canada, or Spain, or Portugal, or India(!), or Egypt(!!), or Greece (until a year ago, when Angela Merkel demanded that they adopt the US’s 3rd world health system because Greek pain equals German votes).
Tax the Rich, or Eat the Rich, Your Choice
John Judis demolished the idea that rich need piles of money for our economy to grow:
As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs – as many as 700,000, according to House Speaker John Boehner.
Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class. “I’m not going to ask students and seniors and middle-class families to pay down the deficit while people like me who make more than $250,000 are not asked to pay a dime more in taxes,” he has declared.
Obama is right that a tax increase on the rich would not cost jobs; and he is certainly right that it would be fairer to tax the wealthy whose incomes have shot up, even during the downturn. And he is also correct that taxing the rich will actually benefit the economy–but not primarily for the reasons he cites. If the government extracts income from the wealthy, and then spends it on a $50 billion infrastructure program, an extension of unemployment insurance, and a Social Security payroll tax cut, as Obama has proposed, that will not only boost the recovery, but will also discourage the wealthy from rerouting their savings into the kind of speculative activity that helped create the Great Recession. A closer approximation of income equality is not only better for our souls—it’s also better for the economy. The question of fairness aside, the rich have been making relatively too much money for the country’s good.
Last September, the Congressional Research Service published a report countering Republican claims that lowering top tax rates would lead, or had led, to higher economic growth. “Changes over the past 65 years in the top marginal rate and the top capital gains tax rate do not appear correlated with economic growth,” the report concluded. Republican Minority Leader Mitch McConnell responded by having the report suppressed, but its findings were incontrovertible.
………
Regressive policies can also lead to financial crises. When firms suffer from global overcapacity or merely from domestic overproduction – when a glut arises of automobiles, ships, textiles semiconductors or fiber optic cable — as happened in the late 1920s and again in the earlier part of the last decade, the wealthy, joined by corporate treasurers and bankers, have tended to pour their money into speculation rather than productive investment. The financial sector has become a casino for the rich, where they have gambled away funds that could have fueled the economy. So redistributing income through tax policy isn’t just fair; it is one way to began restructuring the economy to prevent future slowdowns and crashes.
Republican pleas to retain tax breaks for the wealthy and corporations and to eviscerate social programs do suggest a Romneyesque indifference to the 99 percent; they also presume an economy that no longer exists. “These incentives,” Livingston writes, “are merely invitations to inflate speculative bubbles.” Obama’s concession to arguments about the deficit, which come from Tea Party Republicans and business groups like Fix the Debt, is understandable, but unfortunate. There will come a time — when unemployment dips, say, below six percent, and the countries’ businesses are at full capacity – when it will be important to reduce government deficits. And raising marginal taxes on the wealthy will be one way – along with other measures – to bring the deficit down.
But bringing down the deficit should not be the principal objective right now. What’s important is to continue the recovery from the Great Recession and to take measures to prevent future crises. Supply-siders were right about one thing: the best way to reduce the government deficit is to create economic growth. Obama’s proposal to raise taxes on the wealthy and to transfer those revenues to workers and the unemployed isn’t just the fair thing to do; it is exactly what’s right for the economy.
Not only does coddling the rich not help the economy, it destroys it.
Go read, and supply your recipes below.
Quote of the Day
Tyrie to Hornby: It would appear the ability to see risk is inversely proportional to the time spent trying to model it.”
— David McKibbin (@creditplumber) December 3, 2012
This really does
encapsulate the essence modern finance in just 19 words.
H/t Naked Capitalism
This Should Not be a Surprise
The inestimable Murray Waas uncovers the fact that Wall Street’s “favorite private eye” engaged in a systematic spying and character assassination in support of Alan Stanford’s Ponzi scheme:
In 2006, Allen Stanford had yet to be identified as the mastermind of one of the largest and longest-running Ponzi schemes in U.S. history, but he faced mounting pressure.
Federal securities examiners were pushing for an investigation into his investment operation, which tens of thousands of soon-to-be victims had entrusted with nearly $7 billion. Some of the Texas financier’s own employees were threatening to tell authorities what they knew about his fraud.
Stanford was so concerned that a former senior State Department official named Jonathan Winer might expose his colossal con game that he ordered an investigation into Winer’s private life, according to Stanford’s previously secret records obtained by McClatchy.
Kroll Inc., an international corporate intelligence firm that Stanford had retained for over a decade, obliged. Tom Cash, a Miami-based a managing director of Kroll, soon informed Stanford in an email that he was looking into whether Winer’s ex-wife was a lesbian, according to the internal documents obtained by McClatchy.
………
They looked into the sexual orientation of Winer’s ex-wife, and Stanford used the information collected to blackmail regulators, politicians, and journalists.
What’s more, it worked:
SEC examiners concluded as early as 1997 that Stanford was running a massive Ponzi scheme, agency records show. But Stanford was able to stall the opening of any formal inquiry for a full decade, much like the man behind the only bigger U.S. Ponzi scheme, Bernard Madoff.
The biggest whopper told by Kroll, when a representative says that “its employees had no clue they were helping to conceal the second-biggest Ponzi scheme in U.S. history.”
No, they were told to collect information so that Stanford could blackmail people, and it’s clear from the emails from Stanford that this was what he charged them to do.
Sorry, but that dog don’t hunt.
Even if they did not have specific information about Stanford being a fraud, they had to have known from what he wanted that he intended to use this information for to extort silence from people.
H/t Felix Salmon.
Holy Sh%$, We Are Running out of Gullible Idiots
I understand that all resources are finite, but I never thought that it would apply to human gullibility and stupidity, indicating a continuing fall in trading volume.
His explanation is that we are finally running out of rubes willing to trust Wall Street:
The uptrend bit is easy: volumes, at least until 2009, always went up over time, especially when they were helped along by things like decimalization and high-frequency trading. But what explains the downtrend? It’s not the decreasing number of stocks: that might explain a bit of what’s going on in the US, but it wouldn’t explain the rest of the world.
Instead, I think that what we’re seeing is the slow death of the stock-market investor — the kind of person who subscribes to Barron’s, idolizes Warren Buffett, and thinks of stock-market investing as a do-it-yourself enterprise. During the dot-com bubble, lots of people thought they were really smart when it came to stock-market investing, and then after the dot-com bubble burst, the rise of discount brokerages helped encourage new people to step in to the market and try their luck.
Nowadays, however, the message is sinking in: it’s a rigged game, you can’t win, and you’re better off with a passive strategy.
It is very hard for me to believe, but the idea that Wall Street is finally running out of hard-working, regular folks who are willing to be cheated is not an unreasonable thesis given this data.
Telco Breakup Has Hit the Mainstream
Because it’s hit the New York Times:
Since 1974, when the Justice Department sued to break up the Ma Bell phone monopoly, Americans have been told that competition in telecommunications would produce innovation, better service and lower prices.
What we’ve witnessed instead is low-quality service and prices that are higher than a truly competitive market would bring.
After a brief fling with competition, ownership has reconcentrated into a stodgy duopoly of Bell Twins — AT&T and Verizon. Now, thanks to new government rules, each in effect has become the leader of its own cartel.
The AT&T-DirectTV and Verizon-Bright House-Cox-Comcast-TimeWarner behemoths market what are known as “quad plays”: the phone companies sell mobile services jointly with the “triple play” of Internet, telephone and television connections, which are often provided by supposedly competing cable and satellite companies. And because AT&T’s and Verizon’s own land-based services operate mostly in discrete geographic markets, each cartel rules its domain as a near monopoly.
The result of having such sweeping control of the communications terrain, naturally, is that there is little incentive for either player to lower prices, make improvements to service or significantly invest in new technologies and infrastructure. And that, in turn, leaves American consumers with a major disadvantage compared with their counterparts in the rest of the world.
On average, for instance, a triple-play package that bundles Internet, telephone and television sells for $160 a month with taxes. In France the equivalent costs just $38. For that low price the French also get long distance to 70 foreign countries, not merely one; worldwide television, not just domestic; and an Internet that’s 20 times faster uploading data and 10 times faster downloading it.
It’s not from their editorial board, it’s from former Times correspondent David Cay Johnston, whose beat is consumer protection and tax loopholes, but the fact that anyone gets space in the “Gray Lady” to suggest that deregulation will not create a telecommunications utopia is worth noting.
Matt Taibbi is Right
When he observes that Paula Broadwell’s hagiography of David Petraeus was indistinguishable from what the rest of what the press corps said:
The book is so one-sided that it is almost supernaturally dull, and I was forgetting about it just minutes after I put it down.
Then it hit me – it was an interesting book, after all! Because if you read All In carefully, the book’s tone will remind you of pretty much any other authorized bio of any major figure in business or politics (particularly in business), and it will most particularly remind you of almost any Time or Newsweek famous-statesperson profile.
Which means: it’s impossible to tell the difference between the tone of a reporter who we now know was literally sucking the dick of her subject and the tone of just about any other modern American reporter who is given access to a powerful person for a biography or feature-length profile
.(Emphasis Mine)
Modern American journalism, by which I mean access journalism, where sucking up to highly placed sources trump shoe leather and intellect is deeply flawed.
Stewart Misses the Point
Jon Stewart faults his own journalistic chops on l’affaire Petraeus:
Yes, he interviewed Paula Broadwell, and did not pick up anything untoward, but so did a lot of people.
What he has is enough self-awareness to realize that he missed a big story.
It could be worse. Robert MacNeil, formerly of the MacNeil/Lehrer report, on November 22, 1963, at Dealy Plaza, he ran into a man, and asked where he could find a phone.
The man he ran into was Lee Harvey Oswald.
Journalists don’t have any more senses than the rest of us, and Jon Stewart has an almost unrivaled ability to call out bullsh%$ in a clear and concise matter.
I do think, and Jon Stewart would agree, that it’s f%$#ed up that a comedian is arguably one of the finest journalists on cable today, but we are living in a f%$#ed up world.
I Gots to Get Me a Super PAC
Stephen Colbert retires his Super Pac, and talks with his lawyer.
Spoiler: He gets to keep all the money and do whatever he wants with it.
I am laughing and wicked pissed off.
Signs of the Apocalypse
James Fallows of The Atlantic, has written the following:
For the first time in my conscious life, the Democratic party is now more organized and coherent, and less fractious and back-biting, than the Republicans. It is almost stupefying to imagine that.
OMFFSM!*
He’s right, and it’s a sign of the end of times.
I fully expect cats to start sleeping with dogs.
*Oh My F%$#ing Flying Spaghetti Monster.
