Tuesday, September 30, 2008

Sunday, September 28, 2008

Saturday, September 27, 2008

Friday, September 26, 2008

Election Rigging

Greg Palast speech.


PAUL KRUGMAN: Well, yeah. I mean, a friend I was talking to last night, as everything went to hell, said, you know, we’re turning into Argentina with nukes. This is not—this is not encouraging. I mean, you know, what are we—we’re not going to, I hope—actually, I shouldn’t say that. I was going to say, you know, we’re not going to start trying to conquer our way out of debt, but God knows, if we have this crew still in power next year, who knows what they might try?

But it’s—you know, we’re the linchpin of the world system, like it or not, and if the United States is in a financial mess and in a political deadlock, which is where we seem to be, this can’t be good for the world. I have to say it, the reaction I had—I mean, I used to do a lot of third world disaster stuff. I was kind of an ambulance chaser. And looking at this, the scenes that we saw last night were the kinds of things you expect to see in Buenos Aires or Jakarta or Bangkok, not in the United States. But I guess we aren’t that country anymore.


Mukoma Wa Ngugi : The devastation of New Orleans by Hurricane Katrina is being compared to disasters in the "Third World" but with no specific countries or disasters named. And if not compared to this black hole or repository of disaster that is the "Third World," a comparison to Africa is as specific as it gets. "New Orleans is a scene from the Third World", "like the Third World", "US Handles the crisis like a third world country", "bodies floating on water reminiscent of Africa" etc. This has been a constant with news commentators, analysts, members of the senate and congress and other sections of America commenting on New Orleans. The accompanying statements to this have been "I cannot believe this is America" or "This is not supposed to happen in America". It is supposed to and can only happen somewhere else. Attending a food festival event in Madison, Wisconsin I overheard a joke - "Where is New Orleans again?" New Orleans is next to Somalia".

What role is the "Third World" playing in how Americans are dealing with the disaster? Where does the "Third World" fit in the imagination of the American? What does it mean to say that this is not supposed to happen in the United States?

Thursday, September 25, 2008

They order the workers

to work, but they say they can't order the lenders to lend.

RALPH NADER: Well, so far, it’s wish fulfillment. If you watch what Barney Frank, the chairman of the House Banking Committee, said yesterday, nothing has really been decided.

And also, it’s not clear at all why a bailout is needed. That’s part of the stampede in the pack and the panic that Bush and Paulson and Bernanke are pushing Congress toward. You know, it’s eerily reminiscent, when you listen to Bush yesterday, of how he stampeded the Congress and the country into the criminal war invasion of Iraq in 2003. I mean, look at all his statements: this could do this, this would do that, farms failing, small business, tada, tada. The first question we have to ask as citizens is, why is there a need for a bailout?

The only conceivable purpose of Treasury intervention, said Roger Lowenstein in the New Republic recently, quote, "is to buoy the market using taxpayer funds by paying higher-than-market prices. After all, if the government merely intended to match the market, what would be the point?” end-quote. In other words, if these mortgage-backed securities are distressed, well, they’re going to fetch a lower price. There’s huge amount of money on the sidelines in Wall Street, everybody admits that. So, as a hedge fund manager basically said, look, if the price comes down lower than what the government is trying to keep elevated, we’ll buy this paper. Warren Buffett put $5 billion into Goldman Sachs this week. There’s a lot of money to go around.


WASHINGTON - President Bush and the two men fighting to succeed him joined forces at a historic White House meeting Thursday, trying to sell resistant lawmakers on a multibillion-dollar bailout plan for Wall Street aimed at staving off what the president called "a serious economic crisis." Key members of Congress struck a deal earlier in the day but others were unwilling.

The plan's centerpiece is for the government to buy the toxic, mortgage-based assets of shaky financial institutions in a bid to keep them from going under and setting off a cascade of ruinous events, including wiped-out retirement savings, rising home foreclosures, closed businesses, and lost jobs.

The Bush administration has made concessions almost daily to demands from the right and the left from its original three-page proposal, including agreeing to limit pay for executives of bailed-out financial institutions and give taxpayers an equity stake in rescued companies.

Capital, Policy and Power

Asia needs a deal to prevent panic selling of t-bills:

Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding....

``We are in the same boat, we must cooperate,'' Yu said in an interview in Beijing on Sept. 23. ``If there's no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.''

An agreement is needed so that no nation rushes to sell, ``causing a collapse,'' Yu said. Japan is the biggest owner of U.S. Treasury bills, holding $593 billion, and China is second with $519 billion. Asian countries together hold half of the $2.67 trillion total held by foreign nations....

``Whether some kind of agreement between them to continue to hold Treasury bills is viable, I'm not sure,'' said James McCormack, head of sovereign ratings at Fitch Ratings Ltd in Hong Kong. ``It would be unusual. If it became apparent that sovereigns in Asia were selling Treasuries the market would take that quite badly, it's something to be avoided.''...

China's huge holdings of U.S. debt means it must bear a large proportion of the ``burden of sorting things out'' in the U.S., Yu said. China is not in a hurry to dump its U.S. holdings and communication between the two nations every ``couple of days'' is keeping Chinese leaders informed and helping to avoid a potential panic, he added.

``China is very worried about the safety of its assets,'' he said. ``If you want China to keep calm, you must ensure China that its assets are safe.''

Yu said China is helping the U.S. ``in a very big way'' and added that it should get something in return. The U.S. should avoid labeling it an unfair trader and a currency manipulator and not politicize other issues, he said.

``It is not fair that we are doing this in good faith and are prepared to bear serious consequences and you are still labeling China this and that, accusing China of this and that,'' he said. ``China knows what to do. We don't need your intervention.''

The U.S. financial crisis had taught China a lesson and that was: ``Why are we piling up these IOUs if they may default?'' China's economic expansion strategy, which emphasizes export growth that has led to trade surpluses and the accumulation of $1.81 trillion in foreign-exchange reserves, is the main problem, said Yu.

``Our export-growth strategy has run its natural course,'' he said. ``We should change course.''
That's why I say I, like every American I'm speaking with, were ill about this position that we have been put in. Where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy. Um, helping, oh, it's got to be about job creation, too. Shoring up our economy, and getting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade -- we have got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today. We've got to look at that as more opportunity. All of those things under the umbrella of job creation.
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy. "It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."


"So I just did a Nexis search trying to find out when Paulson and Bernanke started talking about price discovery, which we’re now told are at the core of the plan’s logic. And the answer is …


I can’t find any use of the term, or even a hint of the argument, until yesterday’s Senate hearings.

One possible explanation. It wasn’t until yesterday that they realized that it would actually be necessary to explain themselves.

But there’s another possible explanation, which I find terrifyingly plausible: the plan came first, and all this stuff about price discovery is an after-the-fact rationalization, invented when people started asking questions.

It has seemed very strange to me that such a supposedly crucial economic program would be based on such an exotic argument. My sneaking suspicion is that they started with a determination to throw money at the financial industry, and everything else is just an excuse."

Wednesday, September 24, 2008

You mean an economic fortified island paradise supported by the US population?

Billionaire Warren Buffett, calling turmoil in the markets an ``economic Pearl Harbor,'' said his $5 billion investment in Goldman Sachs Group Inc. is an endorsement of the Treasury's $700 billion bank rescue plan.

The Obvious

Vanishing Democratic Landslides

Greg Palast:

In 2002, George W. Bush signed the Help America Vote Act.

...The result: in the 2004 presidential election, over three million votes - 3,006,080 - were cast and not counted. Like, what the !@#!?

...the Republican Secretary of State of Colorado “helped” her state vote by eliminating 19.4% of the voters from the voter rolls. That’s one in five !@#$#@ voters!

Over three million missing ballots – and now the voters themselves are disappearing by the millions. Where the hell did they go?

Tuesday, September 23, 2008

David Brooks via Greenwald:
What Paulson, et al. have tried to do is reassert authority -- the sort that used to be wielded by the Mellons and Rockefellers and other rich men in private clubs.

Inspired in part by Paul Volcker, Nicholas Brady and Eugene Ludwig, and announced last week, the Paulson plan is a pure establishment play. It would assign nearly unlimited authority to a small coterie of policy makers. It does not rely on any system of checks and balances, but on the wisdom and public spiritedness of those in charge. . . .

So we have arrived at one of those moments. The global financial turmoil has pulled nearly everybody out of their normal ideological categories. The pressure of reality has compelled new thinking about the relationship between government and the economy. And lo and behold, a new center and a new establishment is emerging.

The Paulson rescue plan is one chapter. But there will be others. . . .The country will not turn to free-market supply-siders. Nor will it turn to left-wing populists. It will turn to the safe heads from the investment banks. For Republicans, people like Paulson. For Democrats, the guiding lights will be those establishment figures who advised Barack Obama last week -- including Volcker, Robert Rubin and Warren Buffett. . . . We're entering an era of the educated establishment, in which government acts to create a stable -- and often oligarchic -- framework for capitalist endeavor.

MSNBC, via Digby:
Matthews: I've been so impressed by Lincoln's words this week --- government of, by and for the people. It isn't government of, by and for the people. This is being decided, the biggest issue of our time, this economic crisis, the worst, according to the wall Street Journal,since the 1930s, by people so much bigger headed than most voters, than most members of congress, certainly than me. This is being decided by people like Hank Paulson.

THANK GOD this president has this secretary of treasury and not the one other ones he had before, perhaps. But Richard, the people can't vote on things like this.

Wolf: (nods sagely)

Matthews: We can't understand it. I'm one of them. I don't get it. What are all these derivatives and all this short selling and all this complicated financial ... skigamadoo or whatever you call it. What is it?

Wolf: Even the candidates have problem getting through this alphabet soup. I mean, they've both mangled the players and the key terms of those involved here. Are they talking about firing the right person when he talks about Chris Cox? Is it Fannie Mac or Freddie Mae?

Matthews: I'm just wondering if it's above our pay grade? I think Carly Fiorina may have been right. These guys can run for president but they can't be Secretary of the Treasury.

Well maybe there's another thing you don't notice while you're looking at the lady in her underwear

Consider a simplified balance sheet of a typical investment bank:

Good assets: $95

Assets gone bad: $5


Liabilities to customers/counterparties: $80

Debt to bondholders of company: $17

Shareholder equity: $3


Now, as these bad assets get written off, shareholder equity is also reduced. What has happened in recent months is that this equity has become insufficient, so that the company technically becomes insolvent provided that the bondholders have to be paid off:
Good assets: $95

Assets gone bad (written off): $0


Liabilities to customers/counterparties: $80

Debt to bondholders of company: $17

Shareholder equity: ($2)


These institutions are not failing because 95% of the assets have gone bad. They are failing because 5% of the assets have gone bad and they over-stretched their capital. At the heart of the problem is “gross leverage” – the ratio of total assets taken on by the company to its shareholder equity. The sequence of failures we've observed in recent months, starting with Bear Stearns, has followed almost exactly in order of their gross leverage multiples. After Bear Stearns, Fannie Mae, and Freddie Mac went into crisis, Lehman and Merrill Lynch followed. Morgan Stanley, and Hank Paulson's former employer, Goldman Sachs, remain the most leveraged companies on Wall Street, with gross leverage multiples above 20.

Look at the insolvent balance sheet again. The appropriate solution is not for the government to replace the bad assets with public money, but rather for the government to execute a receivership of the failed institution and immediately conduct a “whole bank” sale – selling the bank's assets and liabilities as a package, but ex the debt to bondholders, which preserves the ongoing business without loss to customers and counterparties, wipes out shareholder equity, and gives bondholders partial (perhaps even nearly complete) recovery with the proceeds.

The key is to recognize that for nearly all of the institutions currently at risk of failure, there exists a cushion of bondholder capital sufficient to absorb all probable losses, without any need for the public to bear the cost.

For example, consider Morgan Stanley's balance sheet as of 8/31/08. Total assets were $988.8 billion, with shareholder equity (including junior subordinated debt) of $42.1 billion, for a gross leverage ratio of 23.5. However, the company also has approximately $200 billion in long-term debt to its bondholders, primarily consisting of senior debt with an average maturity of about 6 years. Why on earth would Congress put the U.S. public behind these bondholders?


Excuse Me?

Army Unit to Deploy in October for Domestic Operations

Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.

Monday, September 22, 2008

Dwarf: (Verb) to cause (someone or something) to seem small by being much larger

``The downdraft on the dollar from the hit to the balance sheet of the U.S. government will dwarf the short-term gains from solving the banking crisis,'' said David Woo, London-based global head of foreign-exchange strategy at Barclays, the third- biggest currency trader, according to a 2008 survey by Euromoney Institutional Investor Plc.

At The Very Least

The process is stunning in its hubris and mendacity, and two of the most potent enablers of this unprecedented act of corporate welfare are John McCain and Barack Obama.

...Ralph Nader, who has spent his adult life battling corporations, understands more about the rise of the corporate state and the steady fleecing of American citizens by corporations than anyone else in the country.

Nader has come up with 10 market reforms that he says need to be implemented immediately along with any bailout. These reforms are:

No bailouts without conditions and reciprocity in the form of stock warrants.
No more lobbying for any company that is bailed out.
No golden parachutes or get-out-of-jail-free cards for guilty executives.
No bailouts without public hearings.
Reduce the moral hazard in U.S. mortgage markets by introducing covered bonds for the majority of mortgage products, as is done in Western Europe. That gives institutions that finance mortgages an incentive to be prudent, because they cannot just unload them and wipe their hands clean of the liability, but are instead on the hook if the homeowner defaults.
Maintain neighborhood stability and housing security by passing a law with a sunset clause allowing below-median-value homeowners facing foreclosure the right to “rent to own” their homes at fair market value rates.
Avoid future housing bubbles by removing implicit government guarantees for new mortgages that exceed thresholds of greater than 15 to 20 times the annual fair market rent value of the home.
Make the Federal Reserve a Cabinet position, so it is accountable to Congress, as well as make sure all Federal Reserve Bank presidents are appointed by the president and answerable to Congress.
Reduce conflicts of interest by taking away power for auditor and rating agency selection from companies and placing it in the hands of the SEC to be administered on random assignment.
Implement a securities speculation tax, starting with derivatives, to deter casino-style capitalism.

You can vote for Obama or, if you are really into self-delusion, you can support McCain. But you owe it to yourself, even if you erroneously blame Nader for the election of George W. Bush, to remember these Nader reforms. Hold them up against the proposed reforms that will soon be issued by the McCain and Obama camps. If the Nader reforms are not adopted, if we bail out our corporate masters with hundreds of billions of tax dollars without instituting draconian market reform and launching criminal prosecution, we will be left to bear the cross of corporate malfeasance. We will pay for corporate crime. We will leave those who robbed us free to plunder.

Chris Hedges

More on the crisis of the minute

Bernie Sanders, Dean Baker and Robert Scheer on Democracy Now

Sunday, September 21, 2008

the splendid blond banking beast

London Banker:

The text of the proposed emergency markets legislation is now available. Just as expected, it will contain a provision to provide immunity from any review by any court or executive agency. Either get with the collaborationists or get with the insurgents. There is no other choice. The USA doesn't exist as we once knew it.

The relevant text from the legislation:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Good luck, everyone. We're in uncharted waters now. There is no rule of law if this passes - there are no markets. We've all been had, and the worst is yet to come.

More and More

Why you should hate the bailout proposal:

Yet as we discussed, the plan makes no sense unless the Orwellian "fair market prices" means "above market prices." The point is not to free up illiquid assets. Illiquid assets (private equity, even the now derided CDOs were never intended to be traded, but pose no problem if they do not need to be marked at a large loss and/or the institution is not at risk of a run). Confirmation of our view came from a reader by e-mail:

I worked at [Wall Street firm you've heard of], but now I handle financial services for [a Congressman], and I was on the conference call that Paulson, Bernanke and the House Democratic Leadership held for all the members yesterday afternoon. It's supposed to be members only, but there's no way to enforce that if it's a conference call, and you may have already heard from other staff who were listening in.

Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won't sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that's because he didn't want to admit that the government would just keep offering more and more.

One thing at least is very clear: that the clique who proposed this are 100% certain they will be choosing the next treasury secretary; they have not amassed, and do not continue to attempt to further amass, dictatorial powers with the slightest risk they may devolve upon people who don't serve them.


Or I should say, the plan does nothing to address the lack of capital unless the Treasury overpays for assets. And if that’s the real plan, Congress has every right to balk.

The Human Cost

"A lot of those people will have to sell their homes, they're going to cut back on the private jets and the vacations. They may even have to take their kids out of private school," said Frank. "It's a total reworking of their lifestyle."

He added that it's going to be no easy task.

"It's going to be very hard psychologically for these people," Frank said. "I talked to one guy who had to give up his private jet recently. And he said of all the trials in his life, giving that up was the hardest thing he's ever done."

Oh so this is socialism

STEPHANOPOULOS: Conservatives are saying this smacks of socialism.

Oh well, that's not very good is it. Good to know.

Don't Think Just Sign

Another Patriot Act - hurry before the anthrax is everywhere! - another desperate preventative invasion before the mushroom cloud, the dirty bomb, the flocks of diseased birds, another midnight ultimatum to the Louisiana governor; everything in panic, surprised, breathless, desperate, at gunpoint - just the flagrant conman's game, it's really astounding. How many times can you run the same con?

STEPHANOPOULOS: Let’s talk about some of the details.

The original legislation we saw said that you would be buying up the mortgage-related assets from financial institutions having headquarters in the United States. Yet last night, the fact sheet put out by the Treasury seemed to expand that. It said only that the financial institutions have to have significant operations in the U.S., and that you could waive that at your discretion.

So, will foreign financial institutions be eligible to have their assets bought?

PAULSON: Yes, and they should, because, as you think about this, if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution.

That’s a distinction without a difference to the American people. The key here is about protecting the system.

Now, I need to say to you that we have a global financial system. And we are talking very aggressively with other countries around the world and encouraging them to do similar, and I believe a number of them will.

But, remember, this is about protecting the American people and protecting the taxpayers. And the American people don’t care who owns the financial institution. If the financial institution in this country has problems, it’ll have the same impact...


PAULSON: ... whether it’s U.S. or foreign owned (ph).

STEPHANOPOULOS: But they might wonder what they’re getting from the firms in return.

So, let’s say you go into a financial institution and buy up their bad assets. What do the financial institutions have to do?

Some Democrats in Congress have said, for example, that they should have to accept limits on their executive compensation. Are you open to that?

PAULSON: Well, let me describe it this way. In instances where institutions fail, and the Federal Reserve or the government comes in...

STEPHANOPOULOS: But these haven’t failed yet.

PAULSON: No, that’s what I’m saying. In instances where they do fail and you come in, obviously, there are limits. That’s what we saw with the GSEs. That’s what we saw with AIG, OK. Now, what we’re doing here is, we’re trying to do something well in advance of failure. We’re trying to offer a program across the whole financial landscape to buy the assets that are clogging up the system, so that the markets can work.

And I believe, to have this program work, we don’t want to make it punitive and make it difficult for...

STEPHANOPOULOS: And let me just play devil’s advocate here. But then, if you’re a taxpayer watching it, and you say, OK, these financial executives are going to be freed up to go make millions more -- and the taxpayers are taking the risk.

PAULSON: George, I totally agree with the frustration there. Because, remember, what we’re doing right now is, first, stabilizing the market.

That is only part of it. Once we stabilize the market, we need to ask ourselves: How did we get here, and what do we do about it so we don’t get here again?

I’ve spent a lot of time, well before this problem, developing a regulatory blueprint, looking at our outdated, outmoded regulatory system that doesn’t fit the modern financial world, looking at how policies and practices need to be changed.

We need a lot of reforms. And this is going to be something Congress and the next administration is going to be working on for a long time.

But these can’t be done, and shouldn’t be done, in a matter of days. And we need this program in days in order to protect the American people.

STEPHANOPOULOS: Many in Congress also say that there should be protections for homeowners facing foreclosure in this bill, for example, giving bankruptcy judges the power to adjust the terms of loans.

Are you open to including that?

PAULSON: George, we’ve been focused on homeowners for a long time, working to avoid foreclosure, working with servicers, industry participants. And it sure seems to me that, as we buy these mortgage- backed assets, we will have much more leverage in working on the kinds of programs we need to work on.

But the key question here is, we want to help those homeowners that want to stay in their home and have the financial capability to stay in their home.

And the vast majority of foreclosures in this country -- as regrettable as they are, and as painful as they are -- are coming from people who either don’t want to stay in their home and live up to their obligations, or those that never had the financial capability to stay in their home, took out loans they couldn’t afford as the result of irresponsible lending practices.

STEPHANOPOULOS: So, it sounds like you’re saying you don’t want any new protections in this bill. You want this plan just to be passed as is -- no stimulus plan, no foreclosure protections, no restrictions...

PAULSON: Well...

STEPHANOPOULOS: ... on compensation for executives?

PAULSON: What I’m saying is, we need this to be clean and quick, and we need to get it in place.
I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother fuckers.

F words

- If he'd called it The Audacity of Bullshit, would that have gone too far? Doubtful. The groupies would stroke their chins and remind us sagely that as Kant teaches us, after all, bullshit does matter.

- Notice the "bailout" bill provides for the guaranteeing to investment banks, and perhaps some new outfits set up just for the purpose of handling the treasury's business, all kinds of immunities enjoyed by government contractors.

Saturday, September 20, 2008

Superbubble and Superbubbleheads

This is the New York Times:

It is far from clear how much distressed debt the government will end up purchasing, though it seemed likely that the $700 billion figure was large enough to send a reassuring message to the jittery markets. There are estimates that firms are carrying $1 trillion or more in bad mortgage-related assets.

The ultimate price tag of the bailout is virtually impossible to know, in part because of the possibility that taxpayers could profit from the effort, especially if the market stabilizes and real estate prices rise.

(via) That's printed in the paper of record.

We'll see if there's a correction today.

Bush's Final Gift

Here is the current draft for the latest plan. It's elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [Sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [Sec. 10]; and (3) best of all: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" [Sec. 8].

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.

Playing to Win

Video Here. Jim Chanos says banks pulled the plug on eachother and traded ahead of that knowledge.


If it's too big to fail, it's too big to exist.

McCain: "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."

Friday, September 19, 2008

Ooopsie V - Headline! Crisis!

Feels like 9/11 a little? Big story. Dwarfs everything. Urgent opining. The camera has learnt really to swivel at CNBC. Financial martial law declared to protect the recent plunder accumulated by the superrich. Much like demonising tort lawyers and placing caps on punitive damages. Wall Street wisdom says: we must because fear is stronger and more irrational than greed. Maybe, but whose fear and whose greed? Would be an error to underestimate the strength of the greed, utterly unchecked by fear (for good reason), driving this power-grab-amidst-the-chaos. Or the cunning. The White House has been discreetly directing intervention in the markets for years[pdf], [html] pumping up the stock prices of holders of this ponzi poison which the market - the actual market, in which function institutional investors and other rational prudent parties - in fact has been wanting to punish and chastise from the start. The Feds stepped in too to thwart any attempt by the States to slow the scam.* Business as usual, yes, but more lawless, more daring, and accelerated, because only after years of unrelieved public panic mode and the consolidation of power could today's policies be imaginable. And how easily the image pools combine...already scattered references to financial terrorists. So, a slump and panic just long enough for the latest wipeout of the riff raff and extraordinary mergers, and the bubbles will resume. Sooner than you think. The American public has a very short memory.

*Eliot Spitzer: 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.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

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.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.
This is hardly subtle: Sinister images of two black men, followed by one of a vulnerable-looking elderly white woman.

Tuesday, September 16, 2008

Darkness Visible

Told that someone’s mood disorder has evolved into a storm – a veritable howling tempest in the brain, which is indeed what clinical depression resembles like nothing else – even the uninformed layman might display sympathy rather than the standard reaction that “depression” evokes, something akin to “So what” or “You’ll pull out of it” or “We all have bad days.” The phrase “nervous breakdown” seems to be on its way out, certainly deservedly so, owing to its insinuation of a vague spinelessness, but we still seem destined to be saddled with “depression” until a better, sturdier name is created.

The depression that engulfed me was not of the manic type – the one accompanied by euphoric highs – which would have most probably presented itself earlier in my life. I was sixty when the illness struck for the first time, in the unipolar form, which leads straight down. I shall never learn what “caused” my depression, as no one will ever learn about their own. To be able to do so will likely forever prove to be an impossibility, so complex are the intermingled factors of abnormal chemistry, behaviour and genetics. Plainly, multiple components are involved - perhaps three or four, most probably more, in fathomless permutations. That is why the greatest fallacy about suicide lies in the belief that there is a single immediate answer – or perhaps combined answers – as to why the deed was done.

The inevitable question “Why did he [or she] do it?” usually leads to odd speculations, for the most part fallacies themselves. Reasons were quickly advanced for Abbie Hoffman’s death: his reaction to an auto accident he had suffered, the failure of his most recent book, his mother’s serious illness. With Randall Jarrell it was a declining career cruelly epitomized by a vicious book review and his consequent anguish. Primo Levi, it was rumoured, had been burdened by caring for his paralytic mother, which was more onerous to his spirit than even his experiences at Auschwitz. Any one of these experiences may have lodged like a thorn in the sides of the three men and been a torment. Such aggravations may be crucial and cannot be ignored. But most people quietly endure the equivalent of injuries, declining careers, nasty book reviews, family illnesses. A vast majority of the survivors of Auschwitz have borne up fairly well. Bloody and bowed by the outrages of life, most human beings still stagger on down the road, unscathed by real depression. To discover why some people plunge into the downward spiral of depression, one must search beyond the manifest crisis – and then still fail to come up with anything beyond wise conjecture. - William Styron

I Could Care Less

...that David Foster Wallace hanged himself. Yes indeed. Not a great deal, admittedly. But it is very sad, and there are hints in the press that he had been subjected to barbaric, profitable medical practises/tortures over many years, drugging and even electroshock 'therapy'. One could say he was 'softened up' for the cocaculture bombardment.

For me, Lynch's movies' deconstruction of this weird irony of the banal has affected the way I see and organize the world. I've noted since 1986 (when Blue Velvet was released) that a good 65 percent of the people in metropolitan bus terminals between the hours of midnight and 6 A.M. tend to qualify as Lynchian figures – grotesque, enfeebled, flamboyantly unappealing, freighted with a woe out of all proportion to evident circumstances . . . a class of public-place humans I've privately classed, via Lynch, as "insistently fucked up." -DFW

Could care less was one of the locutions David Foster Wallace - devoted Safiriste in more ways than one, indeed an extremist (he had some objection to the transitive verb to grow) - brought forward as evidence of the doomed, damned, dying culture. I'm not an offender personally in this case; I never say could care less. Whence I come, this was an exclusively Italian American thing, along with "this is beautiful" and "I trust you implicitly" to mean "what a disaster" and "don't think I don't know you're four-flushing". But I could not possibly care less than I do that others now frequently utter that form in my hearing. For DFW, as for so many of his complexion, could care less was, simply, wrong, not sarcastic like big deal. Once upon a rain delay, long ago, Tim McCarver asked his companion in the broadcast booth "whah duz sleeem chaince an' fat chaince mean thu syme thang?"

A small but influential group of writers who came of age during the Reagan presidency, to which DFW belonged, mistook the power shifts of their parents' generation, and capital's aggressive reaction, for a general decline of Authority and meaningfulness. It wasn't a random error; they were guided along this path to righteous, convinced wrongheadedness every step of the way by Safire, Lynch and the rest of the Reaganite culture posse.

This carefully packaged, deluded nostalgia for never-existing norms in grey flannel suits served as well to sustain a backdrop for the lovingly and meticulously depicted pseudo-eccentricity upon which their literary projects would rely. An historical accident - the belated introduction of Ignatius Reilly to the literature-consuming public - multiplied and intensified temptations to fraud, the seduction of which theoretical discourse probing Authenticity sweetened with guarantees of both legitimacy and fashion. Variations of histrionic self-importance resulted. The reader-consumer's ability to care less was challenged; it survived, but enfeebled.

The Financial Genre

August 24:

Richard Fuld's days as Lehman Brothers chief are numbered as a plan is being hatched within the troubled Wall Street investment bank to strip him of his executive duties.

The planned coup comes amid rumours a Korean investor is planning either a sizeable investment in Lehmans or an outright acquisition of the firm.

Now the tale is Greek and gripping: one man's tragic flaw: Hubris, Hubris, Hubris, Hubris, and more Hubris. You can't help thinking of Michael Corleone with his jaw wired.. They might like a story like that. Good story, familiar, impactful. Has a grandeur - more appealing than those odious Coens and their invitation to the unconscious irony of the mark who is sure he's conning the conman. (People are so dumb. Lord yes, and some are even dumber.*) Meanwhile, even more engagingly, in those chambers of conspirators, those smoked filled rooms with baize tables, we glimpse Paulson and the Treasury and the players as they rediscover the market, risk, and the taxpayers. In the grip of their beliefs and election season! Sure that works. That's great. Not really a swiss watch but no loose ends. But the audience, the over 35 anyway, is going to say to themselves hooeeeeee there must be one Himalayan heap of bodies buried in that rubble.

*Uh-huh. Then there is, also, dumbest.

Friday, September 12, 2008

Sunday, September 07, 2008

Saturday, September 06, 2008

From The Annals

Worth remembering:

We're all citizens of Nato's republic

By Jeremy Hardy
Saturday April 3, 1999

Those who are not confident in their views often resort to abuse - the bastards. This may seem like homespun psychology, but it appears to be very much the case with the pro-war lobby. Anyone who is not convinced that bombs are the best way to defeat Milosevic is met with a tirade of juvenile insults along the lines of, 'What's the matter, fancy him, do you?' Then, of course, Hitler is mentioned, in order to suggest that anyone asking exactly what are the aims of this war, is a closet Nazi.

I shall not return the bile. I do not question the integrity of those on the left who support the bombing. I do not need to question the integrity of the cabinet because they are demonstrably free of it. But I should like the war's left-wing supporters to stop sneering at the rest of us and listen. I do not think that they are bad, shallow or stupid; I just wonder why they are so vindictive about those of us who strongly believe that Nato is making things worse.

One might understand why the families of those mired and shelled in the futile horror of the Somme resented conscientious objectors. But for most of the British today, war is a computer game. Unless and until ground troops are used, that will remain the case in the Balkans. Even in the Gulf, scarcely enough young working-class men returned in body bags even to remind a spectating public that the thing was really happening. Ground troops in Serbia and Kosovo would probably incur far more casualties, and I doubt whether the Government will risk it. Instead, Britain will be engaged in the kind of war that we could fight indefinitely, funds permitting.

We won't even reap the refugee whirlwind. Funny how the British press suddenly loves Albanian refugees. The trouble is that all the words like 'tide' and 'overwhelming' were exhausted describing the tiny number who have come here in the past 18 months. There is nothing left but 'weary procession' to denote the hundreds of thousands who are leaving Kosovo now. And it is unlikely that many of them will be able to make their way to Britain. Nato has made sure of that. Unless, our Government launches a programme to bring huge numbers of them here, one might suspect that driving them into neighbouring countries was part of the plan.

I have not seen a substantive counter-argument to the view that the war is destroying local opposition to Milosevic. It might be true that the cause of Kosovan independence is not widely popular among Serbs, but there has been persistent opposition to Milosevic's terror. That opposition has now been silenced. Perhaps this confirms a suspicion in the minds of Nato's supporters that Serbs are just bad people. There is a widespread view that the terrible misery which ruthless leaders have orchestrated in the past decade springs from the Serb character. Rather than considering Alex Salmond's description of 'top-down nationalism', some on the centre-left have wandered towards the conclusion that the Serbs are just racists, that it's in their blood.

Admittedly, the supporters of Serbian nationalism say the same about the Croats. It must be tempting to point out that the Ustashe, Hitler's Croatian allies, were as brutal to Serbs as they were to Jews. But the post-war period was remarkable for its ethnic harmony, especially given what had just happened. It's not enough to say that Tito kept a lid on things; people gravitated towards each other as we naturally do. I am not of the view that we are genetically primed to be intolerant, although I'm sure someone can show me a breed of toad that puts toads with different surnames into concentration camps.

Neither do I support the view of right-wing appeasers that Balkan genocide is centuries-old simmering stuff and none of our business. The war's supporters are right to say that we all live in the same world. Indeed, some have pointed out that British socialists volunteered to fight Franco. But so far, no one I know has volunteered to fight Milosevic. Fair enough, the armed forces are public employees like the bin men, but the thing looks a tad less heroic in that context. It is also worth mentioning that the Government's new anti-terrorism legislation is aimed at suppressing people here who agitate against foreign regimes. Under it, those recruiting for the International Brigades would have been liable to arrest.

I think we have to look at who is fighting this war and why. We could just say that, if Milosevic loses, it'll all have been worthwhile, but, as Mark Steel argued this week, to support this war is to encourage Whitehall and Washington to fashion the world to their liking. Internationalism is one thing, a world subservient to the Pentagon is another. Ken Livingstone has earned praise for articulating the pro-war case. 'My socialism and driving moral force are not defined by lines on a map,' he said. Strange then, that he voted for the new Asylum Bill.

But perhaps all of this would be dwarfed by events if Nato's war were to bring about peace and justice in the Balkans. Not very likely, though, is it?

Wednesday, September 03, 2008

AntiSemites and Hoares

This guy, Marko Attila Hoare, is the son of Branka Magas, a propagandist for the nationalist Croatian seperatist project, an expansionist mass murdering campaign flying Ustasha banners and resulting in the most openly antiSemitic, most openly neonazi government in postwar Europe, of which Magas wrote: "The aberrations associated with Franjo Tudjman's period in office were exacerbated, no doubt, by the aggression to which the country was subjected from the very moment of its proclamation of independence" -this is Magas' description of a unilateral secession, refusing negotiation and arbitrarily claiming sovereignty over a population to which the new ethnic nationalist rulers were intensely hostile and threatening; this 'aggression' of which she writes begins when the legal Federal government comes to the aid of hundreds of thousands of its own citizens menaced by ethnic supremacist neoUstasha extremists who plotted, successfully (in part thanks to all the propaganda cover in the British and US press including that contributed by Magas), to bloodily drive them from their homes where their communities had been settled for centuries - "and by the policy of appeasing Belgrade long followed by Western governments". Also in her obituary of Franjo Tudjman, the only head of state in Europe ever to be considered a Holocaust denier by the Simon Wiesenthal Center, whose unabashed glorification of Croatian Nazis and enthusiastic revival of Nazi ideology was so brazen the Israeli State, usually willing to set aside small matters like raving antiSemitism and the persecution of Jews in deference to Washington's sentiments, broke off diplomatic relations, she went so far as to validate his Holocaust revisionist claims which sought to reduce the full extent of Croatian Nazi crimes. In that article, which summed up Tudjman's life without a whisper of a reference to his rabid anti-Semitism, she claimed* that "new research disclosed that deaths in Ustasa concentration camps was far smaller" than the estimates published by Yad Vashem and reputable holocaust historians, and she attributed a supposed inflation of Nazi murderousness in Croatia to "some" anonymous "Serb nationalists." (Not to the Croat Tito). Tudjman, who denied outright that Jasenovac was an extermination camp, does not appear in Magas’ obiturary as a deceitful revisionist, rather as a man who courageously publicised inconvenient truths that, she insinuates, vexed “Serb nationalists” engaged in a conspiracy to defame Croatia’s Nazi puppets and suppress evidence. Magas, along with her husband Quentin Hoare who dismissed accurate descriptions of Tudjman as an anti-Semite and apologist for the Ustasha as propaganda issued by "Belgrade" and “demonstrably rubbish” ( Socialist Worker Review, January 1992), went on to attack her critics and the critics of the neoNazi Croatian nationalists whose cause Hoare and Magas promoted with a libel suit the defendants could not afford (but would probably have won had they adequate funds to fight it). Now the Hoares and Magas, having shown themselves litigious bullies, act as though simply because their opponents weren’t rich enough to enjoy the right to call a spade a spade and an apologist an apologist, it has somehow been proved that Magas and Hoare did not deliberately whitewash the most openly neoNazi head of state in Europe and did not insist his odious views expressed in Wastelands of Historical Truth, with it lyricism of the natural law of genocide, are not justly described as raving anti-Semitism and Nazi apology. Disgusting. Her son is just as bad and that's probably why the ultra right racist looney website "Stirpes" features his work.

He blogs sometimes at Harry's Place which has been relentlessly pillorying a Croatian born British academic and her colleagues on an academic union activist mailing list for a link in a message to the list to an article which HP claims to find distasteful because of its antiSemitic innuendo. The offending article is in fact objectionable antiSemitic trash but even so contains nothing so flagrant as Hoare's own shameless celebration of what he has the gall to call "the liberation of Krajina", a massive campaign of military terror and ethnic cleansing operation carried out by the self-proclaimed inheritors of the Ustasha project, nor could the results of this supposedly intolerable "circulation" of some dumb article on a mailing list which influenced nobody who received it be anywhere near as harmful to Jews and other Nazi-defined underpeople as the US backed policies including mass murder and expulsions carried out by swaggering Croatian neoNazis, which policies Hoare continues to cheer. Hoare repeatedly insists that the result of such policies - which we can all see is the achievement of a little ethnically purified Croatian statelet brimming over with vulgarian homophobes, racists and antiSemites zealously retailing Jewish plot theory and raising monuments to Nazi heroes - is so glorious and worthy it is to be celebrated regardless of the regrettable consequences to the hundreds of thousands of ethnic minority insufficiently-racially- Croat victims of the violent means of achieving it (what the New York Times called the “single greatest” ethnic cleansing of the Yugoslav civil war of the 1990s); Hoare does not regret one penny of the hundreds of millions of dollars he and his parents helped mount a propaganda campaign to extort from European and American taxpayers to fund and arm these mass murdering fascist pigs. He's not curious to know just how much of it went into promoting anti-Semitic publications and venues for pop stars so popular with vile Croatian elites who have made their charming coastline one great sewer of racism, homophobia, and Jew hatred; if there ever was a group of people whose fitness to govern themselves was questionable, the Croat nationalists whom Hoare and HP have such fondness for would be they.

So, now Operation Storm having been endlessly celebrated, Operation Tempest in a Teapot must be created to be vociferously denounced, thus this fuss over a link on a mailing list, which these loons are finding oh. so. unbearable: one can't but suspect the whole show is a scapegoating operation by which HP and Hoare wish to dump the guilt for their own loathesome service to very serious antiSemitic activities, ongoing today, on a ceremonial Croat, whose vilification and sacrifice will thus bring about their own rebirth as down with da Jooz.

*Magas: “new research disclosed that deaths in Ustasa concentration camps was far smaller than the 700,000 or more that some Serb nationalist sources claimed for the Jasenovac camp alone”. Notice the weasly equivocation about the origin of the claim and the figure, the way two seperate claims are latched together to validate one (far fewer than 700,000 people murdered by Ustasa and Nazis in the region’s camps) by attaching it to a vague insinuating allegation of victim inflation against the usual targets of Magas' racist attacks. This kind of slipperiness is typical of the style of Holocaust deniers; Magas, seemingly relying on Zervajic, slyly attributes an unusually large estimate of victims to ‘some Serb nationalists’, projecting bias, in order to cover that she herself inflates the highest common estimate for Jasenovac and to cast doubt on the true estimates by insinuation, refusing to define ‘far smaller’ or to admit even the slightest possibility that the "new research" is anything but a "disclosure" and "revelation" of unscrupulously buried truths. She clearly wishes to leave the reader with the impression that indeed the Holocaust and the Ustasha's role in it has been exaggerated by legitimate historians, to imply that Tudjman's revisionist and antisemitic book and views were therefore legitimate corrections to the accepted record which has "demonised" Croatia's genocidaires, and to blame Jews only for retailing an exaggeration initiated by sinister "Serb nationalists". Let us recall the horrific history that Magas is seeking to cast doubt upon. According to Yad Vashem:

“Located in Croatia 62 miles south of Zagreb, Jasenovac was Croatia’s largest concentration and extermination camp. Jasenovac, was a network of several sub-camps, established in August 1941 and dissolved in April 1945. The Nazis gave control of Jasenovac to the puppet Croatian government, which was run by the fascist Ustasa movement. A large number of Ustasa members served in the camp, most notably Miroslav Filipovic-Majstorovic, who was notorious for killing prisoners with his bare hands.

In total, about 600,000 people were murdered at Jasenovac, including Serbs, Jews, Gypsies, and Croats who opposed the Ustasa Government. Of that number, some 25,000 of the victims were Jews - most of whom had been brought to Jasenovac before August 1942. (at which point the Germans began deporting the Jews of Croatia to Auschwitz).

Jews were brought to Jasenovac from all over Croatia. Most were killed upon arrival, whilst a small number of skilled professionals were kept alive to work at the camp. Prisoners endured horrible conditions and brutal treatment at the hands of the Ustasa guards. Near the end of the war, Jasenovac's administration blew up much of the camp and killed most of the prisoners, in an attempt to conceal evidence of the mass murders that took place there.”

Magas writes: “history will judge [Tudjman] harshly,” – poor thing! - “because of his cavalier attitude to the country's true interests, because of his policy towards neighbouring Bosnia- Herzegovina, and not least because of his persistent hostility to Croatia's citizens of Serb and Bosnian descent - all of which has contributed to the country's present international isolation.” Not so much as a passing mention of his being a neonazi and anti-Semite - which contributed far more to this isolation - about whom David Harris of the American Jewish Committe wrote in a letter to the NYT that he asserted in his book "Wastelands: Historical Truth" (1988), [Jews] used their supposed traits of "selfishness, craftiness, unreliability, miserliness, underhandedness and secrecy" to gain control of the Jasenovac concentration camp (where tens of thousands of Yugoslav Jews and others perished) and victimize others. Jews, he alleged, are commanded to 'exterminate others and take their place' because they consider themselves the chosen people.