Imagine if the Tea Party Was Black
H/t Americablog.
Category: Good Writing
What Paul Krugman Said
His conclusion is all too true:
But the fact is that we’ve been devoting far too large a share of our wealth, far too much of the nation’s talent, to the business of devising and peddling complex financial schemes — schemes that have a tendency to blow up the economy. Ending this state of affairs will hurt the financial industry. So?
Until people in power realize that the basic problem with our financial system is that it is too big relative to the rest of the economy, and that it needs to be cut down to size, we will continue to have failures like these.
Have I Mentioned that I Love Jon Stewart?
Well Bernard Goldberg, former CBS news man, and the slightly smarter side of the comedy team Goldberg and Goldberg (Bernie and Jonah, no relation and in particular order), had decided to challenge Jon Stewart once again.
Bad move, dude.
Jon Stewart responds, and this time he has backup of gospel singers:
It is a righteous take-down, but damn, Jews can’t dance to gospel for sh%$.*
*So says this yid.
True Dat
I don’t know why it takes a comedian to tell the truth
Following the passage of (admittedly tepid) healthcare reform, the Republicans are now saying that they won’t cooperate with the Democrats.
Of course, there was exactly 0% cooperation before, so we should not worry.
In any case, Bill Maher (at about 2:55 on the vid) says it with his characteristic aplomb:
New Rule: You can’t use the statement “there will be no cooperation for the rest of the year” as a threat if there was no cooperation in the first half of the year. Here’s a word the president should take out of his teleprompter: bipartisanship. People only care about that in theory, not in practice. The best thing that’s happened this year is when President Obama finally realized this and said, “Kiss my black ass, we’re going it alone, George W. Bush style.”
Two months ago, conservative Fred Barnes wrote, “The health care bill is dead with not the slightest prospect of resurrection.” Well, if it’s dead, you just got your ass kicked by a zombie named Nancy Pelosi. Seriously, the last time a Democrat showed balls like that John Edwards’ girlfriend was filming it. Make all the botox jokes and she-shops-too-much jokes you want, but this is the biggest political victory a woman has ever achieved in America. Yes, Nancy Pelosi likes nice clothes. So does Sarah Palin. The difference is Nancy Pelosi pays for hers.
This should be the policy on financial reform too.
The Democrats should break out the parts that they can demagogue, and dare the Republicans to vote against. Make the Republicans vote against the sound bites, just like the Republicans did to the Democrats.
A British Patriot
J.K. Rowling, author of the Harry Potter series:
No, I’m afraid not. The 2010 election campaign, more than any other, has underscored the continuing gulf between Tory values and my own. It is not only that the renewed marginalisation of the single, the divorced and the widowed brings back very bad memories. There has also been the revelation, after ten years of prevarication on the subject, that Lord Ashcroft, deputy chairman of the Conservatives, is non-domiciled for tax purposes.
Now, I never, ever, expected to find myself in a position where I could understand, from personal experience, the choices and temptations open to a man as rich as Lord Ashcroft. The fact remains that the first time I ever met my recently retired accountant, he put it to me point-blank: would I organise my money around my life, or my life around my money? If the latter, it was time to relocate to Ireland, Monaco, or possibly Belize.
I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles.
A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. On the available evidence, I suspect that it is Lord Ashcroft’s idea of being a mug.
You will inevitably find people, both in the UK and the US who will make noise about moving their primary residence, or their company’s “headquarters” to some other country because of taxes or regulations that they do not like.
These people are Quislings, and they should be viewed as the lowest of the low, and their opinions should be of no concern of any person who cares about this country.
Jon Stewart……Fox News……Fish……Barrel
The folks at Fox must hate Jon Stewart.
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.
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.
Quote of the Day
This is as about as succinct a statement as to what needs to be fixed as anything that I have thus far seen:
Our position was simple: products having no economic purpose except to achieve questionable accounting, tax or regulatory goals; or that raise serious concerns that customers will use them to issue materially misleading financial statements; or that meet any of the other bullet points in the 2006 statement’s list, should, at a minimum, be labeled presumptively prohibited.
—Susan P. Koniak, George M. Cohen, David A. Dana and Thomas Ross in a New York Times OP/Ed
Basically, any transaction that has as a significant part of its purpose to obscure the material health of the firm should be be used only with prior approval.
Of course, it’s much to sensible to be adopted, either in regulation by Geithner,* et al, or in law by Congress.
*But remember, the Cossacks work for the Czar.
Jon Stewart Goes After Jon McCain
Ouch!
John McCain, in a tough primary fight with a man whose political corruption John McCain covered up is now denying that he was ever a maverick.
Considering the fact that it was every 3rd or 4th word out of his mouth in the campaign, this merits some comment, of a particularly scathing nature.
Well, luckily, Jon Stewart writes a lot better than I do, so I will just leave you with his comedic flaying of the “straight talking maverick” from Arizona:
But even with all that, you never felt like the guy was selling his soul. You just felt like he was maybe shaving little slivers of his soul …off …for money. But you still always felt like he maintained a controlling interest in his soul. Fifty-one percent of his soul. The majority shares of his soul. Until now.
And then he goes say that McCain is making “soul default swaps on the back end,” in a masterful juxtaposition of corruption and our opaque financial system.
Really, I cannot do justice to what he does in just 5 minutes and 4 seconds.
He shows the hypocrisy and political cowardice of the the man that the Beltway pundits, and the Sunday talk show hosts, love beyond measure.
Of course the aforementioned Beltway pundits Sunday talk show hosts will never acknowledge that their guy is basically a selfish and petulant politician, but I think that the rest of America is starting to realize this.
God Bless The Onion
Good Writing
Matt Taibbi, once again, this time on how the banks used complex products to rape Jefferson County, Alabama when they wanted to issue debt to upgrade their sewer system:
What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human sh%$ into billions of dollars of profit for Wall Street — and misery for people like Lisa Pack. [a county employee laid off when the debt exploded]
………And once the giant sh%$ machine was built and the note on all that fancy construction started to come due, Wall Street came back to the local politicians and doubled down on the scam. They showed up in droves to help the poor, broke citizens of Jefferson County cut their toilet finance charges using a blizzard of incomprehensible swaps and refinance schemes — schemes that only served to postpone the repayment date a year or two while sinking the county deeper into debt. In the end, every time Jefferson County so much as breathed near one of the banks, it got charged millions in fees. There was so much money to be made bilking these dizzy Southerners that banks like JP Morgan spent millions paying middlemen who bribed — yes, that’s right, bribed, criminally bribed — the county commissioners and their buddies just to keep their business. Hell, the money was so good, JP Morgan at one point even paid Goldman Sachs $3 million just to back the f%$# off, so they could have the rubes of Jefferson County to fleece all for themselves.
(%$# mine, emphasis original)
I believe that I have described him as this generation’s Hunter S. Thompson, but I was wrong.
He is this generation’s Upton Sinclair, though there is certainly a lot of Thompson in his prose.
It’s a fairly long read, and the twists and turns of the deal, where Morgan Stanley paid a middleman to bribe people, and now will be getting off Scott free, and I really can’t do justice with a summary, so just read the whole thing, and at the end, you will agree with him when he says, “This isn’t capitalism. It’s nomadic thievery.”
I wish that I could write like him.
Hoocoodaode?
Michael Burry, who made millions from the collapse of housing bubble, talks about how it was all perfectly obvious that we were heading at 95 miles per hour into a brick wall:
Alan Greenspan, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.”
But that is not how I remember it. Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, Scion Capital, that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy. My prediction was based on my research into the residential mortgage market and mortgage-backed securities. After studying the regulatory filings related to those securities, I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble; it would mean that prices had risen — with the expansion of easy mortgage lending — as high as they could go.
I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers — those with the weakest credit. The lenders generally then sold these risky loans to Wall Street to be packaged into mortgage-backed securities, thus passing along most of the risk. Increasingly, lenders concerned themselves more with the quantity of mortgages they sold than with their quality.
He is one of many people who began to worry about an over-inflated housing market,* though he has the distinction of being one of perhaps a dozen people who actually researched it thoroughly enough to risk his, and his clients’ money at Scion Capital.
And he made a killing, to the tune of about $¾ billion.
Of course, Alan “Bubbles” Greenspan take on all this is that he was just lucky:
Since then, I have often wondered why nobody in Washington showed any interest in hearing exactly how I arrived at my conclusions that the housing bubble would burst when it did and that it could cripple the big financial institutions. A week ago I learned the answer when Al Hunt of Bloomberg Television, who had read Michael Lewis’s book, “The Big Short,” which includes the story of my predictions, asked Mr. Greenspan directly. The former Fed chairman responded that my insights had been a “statistical illusion.” Perhaps, he suggested, I was just a supremely lucky flipper of coins.
Mr. Greenspan said that he sat through innumerable meetings at the Fed with crack economists, and not one of them warned of the problems that were to come. By Mr. Greenspan’s logic, anyone who might have foreseen the housing bubble would have been invited into the ivory tower, so if all those who were there did not hear it, then no one could have said it.
If Greenspan had no naysayers talking to him, it was because, as Paul Krugman so ably notes, it was, “Because Greenspan insulated himself from people who told him what he didn’t want to hear.”
Krugman notes a number of people, Dean Baker, Robert Shiller, himself, etc., and notes that Greenspan’s alibis are an artifact of his lack of menschlichkeit (integrity).
I would actually go further: He actually had a political and electoral purpose to his policies, which was that he held, and kept rates low, and encouraged things like exotic mortgages, because he wanted the Republicans in general, and George W. Bush in particular, to implement policies that he supported, such as the dismantling of Social Security, and by propping up the economy, he put the wind at their backs.
The independent Federal Reserve is largely a myth, and treating it as such leaves us with people like Alan Greenspan running the show to the detriment of everyone else.
*Hell, I was issuing dire warnings on the by invitation only Stellar Parthenon BBS regarding what I thought was, and is, an over valued US dollar and increasing interest rates KOing the housing market in 2004, so I was right about there being a housing bubble, and the effects of low interest rates, but wrong, at least so far, as to the mechanism for the collapse of it all.
Jon Stewart: National Treasure
I don’t think that Jon Stewart is saying that all Republicans are Racists, but he is saying that this Republican calling into to CSPAN is a racist, and he is also making a comment on the sort of, “Opinions on the shape of the Earth differ,” coverage that you see amongst people who see themselves as members of the journalistic community.
Fundamentally, one of the major problems in our political discourse these days is that fact that there is literally nothing that a right-winger can say, no matter how bigoted or deceitful, that can get a meaningful push-back from the gentleman in the 4th estate.
Jon Stewart Nails CNN
I really do not to ever piss off Jon Stewart!
He comments on Eric Erickson, who has moved from the Red State blog to a pundit at CNN, and Stewart notes that the expressions of shock from CNN about the incendiary nature of his posts rings about as true as, “The guy at the strip club who says, ‘I’m going to hang out, but I’m not getting a lap dance, I’m here for the buffet.’ “
BTW, Erickson’s latest, that he would pull a gun on census takers.
Props to David Frum
He is Quote of the Day
You know what Sarah? If we were killing off useless people, you’d be the first to know.“
–Bill Maher, on Leno
I don’t watch Leno, I picked this one up at the by invitation only Stellar Parthenon BBS.
Runners Up in the 2010 April Fools Competition
- Lloyd Blankfein: Time Man Of The Year [He is CEO of Goldman Sachs]
- New ETF to Offer Fresh Ways to Lose Money Investing With Options
- France ‘claims’ best pizza maker title (video, the BBC approaching the perfection of the spaghetti harvest)
- Merkel Places Hopes in Lysistrata Initiative, calling, “on the women of Greece to withhold sexual privileges from their partners until they file their tax returns.”
- U.S. Government To Save Billions By Cutting Wasteful Senator Program. Not sure if this is a true April Fools gag, since The Onion does this every day.
- Google Jail, which is actually a Fastcompany.com joke about Google’s April Fools jokes.
- Google is no longer named Google, it is now
, which come to think of it, is an awful lot like being incarcerated. - Paul Krugman and NPR’s Talk of the Nation propose shortening the year to reduce the deficit.
- Breaking: Florida’s Senator Bill Nelson To Leave Democratic Party
- Obama fills out census form, lists “Kenya” as birthplace
- Stupak Democrats to lose committee seats (How I wish this one was real)
- Farnborough beckons for Italian UAV display team (the Photoshops on this are prize)
I Miss The Muppet Show
H/t Huffpo.
I Call Best April Fools of the Season
Click for full size
Gotta love the Grauniad*
Well, we now have a report that Labor is going to campaign on reports that Gordon Brown is violent and abusive with people:
In an audacious new election strategy, Labour is set to embrace Gordon Brown’s reputation for anger and physical aggression, presenting the prime minister as a hard man, unafraid of confrontation, who is willing to take on David Cameron in “a bare-knuckle fistfight for the future of Britain”, the Guardian has learned.
Following months of allegations about Brown’s explosive outbursts and bullying, Downing Street will seize the initiative this week with a national billboard campaign portraying him as “a sort of Dirty Harry figure”, in the words of a senior aide. One poster shows a glowering Brown alongside the caption “Step outside, posh boy,” while another asks “Do you want some of this?”
Brown aides had worried that his reputation for volatility might torpedo Labour’s hopes of re-election, but recent internal polls suggest that, on the contrary, stories of Brown’s testosterone-fuelled eruptions have been almost entirely responsible for a recent recovery in the party’s popularity. As a result, the aide said, Labour was “going all in”, staking the election on the hope that voters will be drawn to an alpha-male personality who “is prepared to pummel, punch or even headbutt the British economy into a new era of jobs and prosperity”.
………
It’s not real, but it should be, and Barack Obama might want to consider a similar course of action.
*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.”