Deep Thoughts from Wingnuttia

Deep thoughts from Wingnuttia

He’s not completely to blame and from what I’ve seen of him of TV, GM’ now former CEO Rick Wagoner seemed like a nice man. Still, as they say business is business and with a $10 million dollar parachute he’ll find some way to struggle through. of all the screwy things being said aprt his departure is that President Obama fired Wagoner. Sure the usual right-wing bloggers who wouldn’t know a fact if it bit them on the ass are getting the story wrong, but so is Lou Dobbs, the L.A. Times and that buffoon from Arizona, John McCain. president Obama did not fire Wagoner and for that matter is is not at all unpredented for the government to remove executives that are recieving government aid, LA Times, Dobbs uncritically forward McCain’s false claim that Wagoner’s departure was “unprecedented”

In a March 31 article, the Los Angeles Times uncritically quoted Sen. John McCain saying of Rick Wagoner’s resignation as General Motors CEO: “This is a remarkable move by the federal government — I think unprecedented in the history of this country. … What does this signal send to other corporations and financial institutions about whether the federal government will fire them as well?” Similarly, on the March 30 edition of CNN’s Lou Dobbs Tonight, host Lou Dobbs stated that “[s]everal leading Republicans immediately criticized the president’s plan and blasted his decision to fire GM’s CEO Rick Wagoner. Senator John McCain said Wagoner’s dismissal is a remarkable and unprecedented act.” In fact, the government did not fire Wagoner as Dobbs claimed. Rather, the government told GM that Wagoner had to step down as a condition of GM receiving further government aid. Moreover, contrary to the characterization of the government’s action as “unprecedented,” similar actions occurred at AIG and at Fannie Mae and Freddie Mac, where chief executives were removed in September 2008 as part of agreements to accept government aid.

GM recieved $19.3 billion in the last bail-out based on Wagoners promise to make substantial progress in turning GM around. He made little progress ( and not because of labor) and was asking for more assitance. Obama agreed that some assistance might be in line, but not if Wagoner continued as CEO. Wagoner could have stayed and taken GM into Chapter 11, but chose not to. Some how, its that right-wing math, it all adds up to Obama being both a fascist and a socialist. Just a few months ago Obama was the anti-Christ and a terrorist. Maybe Obama is all these things, a kind of super hero villain that can change appearances at will, but being an adult I have my doubts. The truly pathetic thing is that this kind of rabid name calling, while not uexpected, is the best the Republican extremists can come up with. Let the contradictory epitaphs fly and hope that something sticks.

If GM, and possibly Chrysler are to be saved at this point they probably are headed for Chapter 11 or a government sponsored version of bankruptcy. Does the Press Corps Understand What Bankruptcy Is?

And it makes sense that it is. GM is not just any company. It’s a major American institution and its failure has broad ramifications for the economy as a whole. So the task of managing GM’s insolvency requires special attention, special procedures, special care. What the Obama administration is pretty clearly doing right now is trying to broker a pre-packaged bankruptcy. In order to manage expectations and control the chaos of a GM bankruptcy, they are giving the company working capital and pushing it to come up with a realistic plan of reorganization, just as a bankruptcy court would do. Because of the current state of the economy, a typical bankruptcy would likely result in liquidation. GM would not be able to get the loans it needs to stay in operation, and without some warranty guarantees, consumers would be unlikely to buy from GM during the bankruptcy process.

Advertisements

Torture Not Very Effective, Pro Obama Commenters Out To Conquer America

Detainee’s Harsh Treatment Foiled No Plots Waterboarding, Rough Interrogation of Abu Zubaida Produced False Leads, Officials Say. There is a quote from an unnamed source that claims,

“It’s simply wrong to suggest that Abu Zubaida wasn’t intimately involved with al-Qaeda,” said a U.S. counterterrorism official, speaking on the condition of anonymity because much about Abu Zubaida remains classified. “He was one of the terrorist organization’s key facilitators, offered new insights into how the organization operated, provided critical information on senior al-Qaeda figures . . . and identified hundreds of al-Qaeda members. How anyone can minimize that information — some of the best we had at the time on al-Qaeda — is beyond me.”

Even if that were true there is no evidence that Zubaida would not have given up a few bits of actionable information in interviews that adhered to the military field manual. In the same article,

Noor al-Deen, a Syrian, was a teenager when he was captured along with Abu Zubaida at a Pakistani safe house. Perhaps because of his youth and agitated state, he readily answered U.S. questions, officials said, and the questioning went on for months, first in Pakistan and later in a detention facility in Morocco. His description of Abu Zubaida was consistent: The older man was a well-known functionary with links to al-Qaeda, but he knew little detailed information about the group’s operations.

Note the national origins. Noor al-Deen was from Syria and Abu Zubaida was a Palestinian. The supporters of the Iraq invasion and subsequent occupation used nonexistent connections between al-Qaeda and Iraq as one of the major justifications for taking that action. We should have, based on that childishly simplistic premise then invaded Syria and Palestinian territory. Most Americans now see the Bush cabal as liars because of the deeply flawed logic highlighted by using the likes of al-Deen and Zubaida as smoking gun proof. al-Qaeda was always a non-state actor. Invading and occupying nations at billions of dollars a month – where are the anti-Iraq tea parties by the way – when al-Qaeda was and still is a cancer that exists in small enclaves around the world. If we invaded every nation that had a few members, that would be an unproductive tragedy to normal Americans, but the ultimate dream come true for the ever paranoid Right. Tapped notes that Jane Mayer covered much of this territory in her book The Dark Side,

After Zubayda was tortured, Bush claimed in 2006 that Zubayda had provided three important sources of intelligence, among them the identity of Jose Padilla, an American who is suspected of planning to plant a “dirty bomb” in an American city. Former administration officials quoted in the article point to Padilla as proof of both Zubayda’s value and the effectiveness of “enhanced interrogation.” But Mayer writes in her book that it has been “widely reported, and undisputed” that Zubayda told interrogators about Padilla before he was tortured. (Mayer writes that the other two claims were also dubious.)

Black and White Rocky Shore wallpaper

This editorial by Andrew Breitbart BREITBART: Online activists on the right, unite! reminds me of some old John Bircher pamphlets – the Right is America’s dominate political philosophy, but they’re also America’s biggest victims. The scary liberals are hiding behind every corner. Now, with the internet they’re patrolling right-wing sites and they’re…..gasp…shudder….leaving comments.

Political leftists play for keeps. They are willing to lie, perform deceptive acts in a coordinated fashion and do so in a wicked way – all in the pursuit of victory. Moral relativism is alive and well in the land of Hope and Change and its Web-savvy youth brigade expresses its “idealism” in a most cynical fashion.

He couldn’t be bothered to do a few basic things. Brietbart could not be bothered to provide a single example. The entire column would not past muster as a sixth graders report. Merely mentioning names is enough – in the unhinged mind – liberal, Media Matters and MoveOn are like four letters words whispered behind the barn cause they might get a whopp’n if anyone overhears. The sudden thirst for truth and feigned outrage by anyone on the Right  is laughable. The Bush administration couldn’t get through the day without a distortion, a half truth, a lie of omission or blatant falsification. The Right lied about everything from Iraq to giving up golf out of sympathy for the troops.

The answer is obvious. The right, for the most part, embraces basic Judeo-Christian ideals and would not promote nor defend the propaganda techniques that were perfected in godless communist and socialist regimes.

We know the Right has no respect at all for many if not all the Commandments. They have had their share of sex scandals. They relish killing people. They lie constantly and show no shame, nor will they apologize when caught. Maybe Andrew is reading his Ten Commandments through the bottom of an old glass Coke bottle. Jesus’s Sermon on the Mount is just so much liberal propoganda to the Right. First They Came for the Comments Sections

Andrew Breitbart, who is not at all a lunatic, informs us that Barack Obama has ordered hundreds, perhaps thousands, or even squajillions of his slavishly obedient digital stormtrooper jihadis to cruelly make fun of Hugh Hewitt in his blog’s comments section.
A digital war has broken out, and the conservative movement is losing. Read the comment sections of right-leaning blogs, news sites and social forums, and the evidence is there in ugly abundance. Internet hooligans are spewing their talking points to thwart the dissent of the newly-out-of-power.

Paranoia is the lynch pin that holds the rabid Right together, so you can hardly blame them for resorting to type when they squandered away control of all three branches of government and left the country bankrupt. Otherwise they’d have to look inward and hold themselves accountable. An act that would come close to violating all the known political laws of physics.

Autumn Lake Reflections wallpaper

Blue Water Drop wallpaper and a News Round-up

Blue Water Drop wallpaper

Let’s say that Norm Coleman mangaes to steal the election as a Minnesota senator ala Bush and the Supreme Court 2000. He’ll most likely be indicted and given the boot anyway, Exec says Coleman donor ordered $100K payments

The former finance chief of a Texas company controlled by Nasser Kazeminy, a close friend of former Sen. Norm Coleman, said in a deposition last week that Kazeminy ordered $100,000 in fees be paid to a Minneapolis insurance agency where Coleman’s wife was employed.

B.J. Thomas, who was chief financial officer of Deep Marine Technology Inc., said that $75,000 of that sum was paid to Hays Companies even though he saw no evidence of Deep Marine receiving any consulting services from Hays.

[   ]…In the two weeks before the November U.S. Senate election, two lawsuits were filed against Deep Marine — one by McKim and one by a group of minority shareholders. In them, Kazeminy was accused of funneling payments to Hays to benefit the Colemans, as well as other alleged financial wrongdoing.

Of course Coleman’s attorney is denying Normie got any of that cash. Nasser Kazeminy just happened to have some extra cash stuffed in wallet so he stopped by the conveniently located office where Norm Coleman’s wife just happen to work. It is a world of coincidences isn’t it.

The Market Mystique -By Paul Krugman

After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale.

[  ]…Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.

But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks.

I wish that Krugman were not right. Lawrence Summers takes a much deserved quip early in the piece, Obama is calling the shots. The president, with good intentions, is trying to bring back the good old system that many have worshipped since the eighties, the Gordon Gecko greed is good school of capitalism. Sure, Geithner has spoken about new regulations, but even with news regs we get many of the same huge companies that think they’re too big to fail, going back to pretty much the same things they were doing before. This doesn’t mean that they can’t bring the economy out of this slump short to midterm. It means that given the chance to make more fundamental changes that take another collapse of this size off the table, they’re hedging.

Republican Recovery Plan

Republicans do have a plan – MY FAVORITE BUDGET EVER

Bush, famously, described his first budget by saying, “It’s clearly a budget. It’s got a lot of numbers in it.” Indeed it was, and did. This isn’t. There are no numbers. Let me repeat that: The Republican budget proposal does not say how much money they would raise, or spend. The Oxford English Dictionary defines a “budget” as “an estimate of income and expenditure for a set period of time.” This is not a budget. It talks about balancing the budget but doesn’t explain how. It advocates tax cuts but doesn’t estimate their costs. It promises to cut programs but doesn’t name them.

Republicans did not want to pay for 9-11, Iraq, Afghanistan, New Orleans, infrastructure maintenance or improvements, expanded health-care for children and they didn’t. They, the original generational wealth thieves, borrowed the money from your children, while they gave the richest ten percent of America a huge tax cut. Their current plan, even bereft of details smells a lot like the old plan. It is not a plan so much as yet another middle finger to the concept of acting like responsible adults.

Real plumbers rip Joe the Plumber for shilling against the Employee Free Choice Act.

Greg Sargent reports that Joe the Plumber has been tapped by the anti-labor Americans for Prosperity to do “a series of events throughout Pennsylvania rallying opposition to the Employee Free Choice Act.”

“Americans for Prosperity” is another one of those fascist-lite Republican organizations that seem to pop up every other week. The larger goal is always the same, do not let people that do the actual work that creates wealth, get too much power or freedom. The “Prosperity” part is an ironic term of propagnda from Bush’s “Clear Skies” school of public relations. Clear Skies was not about clear skies, it was about allowing more toxins in the air, one assumes to help families that Republicans heart so much. AFP is about more money for the elite and making sure that actual plumbers and pipe fitters do not get too uppity.

That’s the signpost up ahead – your next stop, the Financial Zone!

The Financial Zone

The following has all been part of my reading today. I’m posting the articles/posts in the order that I came across them. Rolling Stone and Matt Taibbi start us off with some liberal leaning populist outrage, The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That’s $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG’s 2008 losses).

Taibbi takes up some familiar territory. He points the finger at Joseph Cassano who used the most deadly weapons in America, a spread sheet and a load of BS, to steal $315 million. TPM was out in front on Cassano months ago, so that was familiar ground. As is the complaint that so much of tax payer money is going into keeping AIGFP a float. I wish Taibbi and others for that matter would acknowledge in their otherwise perfectly understandable diatribes that the main part of AIG is or was profitable and does own some solid assets that include paid insurance policies, owned by ordinary working – including for example of Police Union insurance policies. I keep telling myself that AIG may be getting some money it doesn’t deserve, but much of the money is also saving a lot of working American’s life long investments. Then we have this nice article from Newsweek, seemingly written for non-economists like me who make an effort to stay informed, Treasury Secretary Geithner will use heavy incentives—and muscle—to convince banks they should sell toxic assets at a discount

In many ways, the plan is straightforward: Private-sector investors will bid to buy a stake in pools of assets—either residential and commercial mortgage loans, or securities tied to a variety of other troubled debt—and their investments will be matched dollar for dollar by the Treasury. Those funds will then be leveraged as much as sixfold through loans backed by either the Federal Deposit Insurance Corp. or the Federal Reserve.

But the same dynamic that has stymied the normal market for these securities could discourage banks from participating, investors and financial experts say.

At the root of it, banks and investors disagree about what the assets are worth. Investors point to the dramatic collapse of the housing market and rising foreclosure rates, among other factors, that mean many of the assets are unlikely to perform as advertised, particularly as a worsening economy puts further pressure on the underlying borrowers.

Try to forget for a scond that you think the administration’s plan is mostly bad or good and focus on the bold emphasis. This is Paul Krugman’s major concern as I understand it and those, like myself that think that the tax payers would get a little more bang for their buck if we would just nationalize the bad banks. Reorganize them in something like we did with some banks and S&L’s under Reagan back in the 80s. Yes some paper pushing jerks that get way too much money for doing stuff that is so complicated its supposedly like financial quantum physics will still get more money then they deserve, but small price to pay to save the nation billions of dollars. Next stop, this blogger who makes a Krugmanesque argument with lots of nice graphs, but at the center, is the now standard issue of toxic assets and their value, Modeling an FDIC Robbery

The problem for markets is we don’t know what these “toxic waste” assets are worth. If I was a hedge fund whiz-kid, or even a normal ho-hum banker worried about credit defaults on my portfolio of regular mortgages, I’d be assuming the value would look like a lognormal distribution (to be fair, at the end I’ll cover this, I’d normally assume that the losses, not values, look like a lognormal distribution – but these are not normal times).

I don’t want to steal the guy’s thunder so I’ll leave the snip at that.While I think that he might be just a little carried away with some data value assumptions, knowing what we know no, they’re not awful assumptions. This link is something of a break, but good news is welcome at this point, Geithner to Propose Vast Expansion Of U.S. Oversight of Financial System

An administration official said the goal is to set new rules of the road to restore faith in the financial system. In essence, the plan is a rebuke of raw capitalism and a reassertion that regulation is critical to the healthy function of financial markets and the steady flow of money to borrowers.

The government also plans to push companies to pay employees based on their long-term performance, curtailing big paydays for short-term victories. Long-simmering anger about Wall Street pay practices erupted last week when the Obama administration disclosed that AIG had paid $165 million in bonuses to employees of its most troubled division, despite losing so much money that the government stepped in with more than $170 billion in emergency aid.

The administration’s signature proposal is to vest a single federal agency with the power to police risk across the entire financial system. The agency would regulate the largest financial firms, including hedge funds and insurers not currently subject to federal regulation. It also would monitor financial markets for emergent dangers.

“Sources” say most of this new regulatory power will go to the Federal Reserve. I’d prefer the FDIC, but at least, nationalization issues aside, they get it as far as making sure that Wall St is not run like Vegas. Probably not a good comparison since Vegas management has the odds down to a science and the house never loses. The final article adds a twist of irony, “Has the Gaming of the Public-Private Partnership Begun?”

Has the Gaming of the Public-Private Partnership Begun?, Naked Capitalism: It certainly looks as if Citigroup and Bank of America are using TARP funds, not to lend, which was one of the primary goals of the program, but to scoop up secondary market dreck assets to game the public private investment partnership.

And it fleeces the taxpayer a second way: the public has spent enough money on both banks so that in an economic sense, they ought to have been nationalized. Yet for reasons that are largely ideological and cosmetic (the banks’ debt would need to be consolidated were they owned 100% by Uncle Sam), they remain private. So not only are they seeking to extract far more than was intended even with the already generous subsidies embodied in this program, but this activity is also speculating with taxpayer money.

This sort of thing was predicted here and elsewhere. Welcome to yet more looting.

If you appreciate dark humor one cannot help but smile at the idea that the guys who are gettig a lifeline, a transfsion of funds from tax payers, are using said funds to buy up the assets that have been described by just about everyone as toxic. Progressive bloggers, moderate economists and Democratic leaders all agree there are nearly worthless assets out there ( derivative paper is worthless in my opinion), but we are all having some healthy disagreements over how much many of the toxic assets might be worth in the part of Geithner’s plan that includes selling off assets to bidders. Some people are not waiting to find out,

As Treasury Secretary Tim Geithner orchestrated a plan to help the nation’s largest banks purge themselves of toxic mortgage assets, Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market, sources told The Post…

But the banks’ purchase of so-called AAA-rated mortgage-backed securities, including some that use alt-A and option ARM as collateral, is raising eyebrows among even the most seasoned traders. Alt-A and option ARM loans have widely been seen as the next mortgage type to see increases in defaults.

One Wall Street trader told The Post that what’s been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.

Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids.

The secondary market represents a key cog in the mortgage market, and serves as a platform where mortgage originators can offload mortgages in bulk that have been converted into bonds.

Yields on such securities can be as high as 22 percent, one trader noted.

BofA said its purchases of secondary-mortgage paper are part of its plans to breathe life back into the moribund securitization market….

While some observers concur that the buying helps revive a frozen market, others argue the banks are gambling away taxpayer funds instead of lending.

Moreover, the MBS market has been so volatile during the economic crisis that a number of investors who already bet a bottom had been reached have gotten whacked as things continued to slide.

Around this same time last year some of the same distressed mortgage paper that Citi and BofA are currently snapping up was trading around 50 cents on the dollar, only to plummet to their current levels.

One source said that the banks’ purchases have helped to keep prices of these troubled securities higher than they would be otherwise.

Both banks have launched numerous measures to help stem mortgage foreclosures, and months ago outlined to the government their intention to invest in the secondary market to expand the flow of credit.

Much like the Twilight Zone, The Financial Zone has an ironic little twist in the story at the end. In addition to banks buying semi-toxic assets, new home sales are up, but unemployment is also up. At least for today the the Obama administration scores a few points for its plan by way of some ethically dubious behavior by some banking scourdrels. If they think some of these questionable assets are worth investing in – I know why should we trust their judgement now – then maybe long term the administration is close to the path if not on it.

Blue United States wallpaper and a News Round-up

Tapping AIG Furor, Regulators Seek Power to Seize Nonbanks

While the power seems likely to be granted by Congress, it’s unclear which wing of the government would be given the authority. Mr. Geithner proposed that any emergency action be based on a determination by the Treasury secretary along with the Federal Reserve and the federal regulator overseeing the company.

Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee said that discussions were still ongoing as to what agency would have the ultimate control of those non-bank financial services companies, but he mentioned the FDIC in the possible mix. Since the FDIC is the least politicsized and has a history of solid performance dating back to The New Deal, I’m leaning toward them. This was an interesting aspect of the AIG mess that I had not heard before,

Still, Messrs. Bernanke and Geithner on Tuesday faced continued criticism over other decisions on AIG and the wider government financial-rescue efforts. Mr. Bernanke was asked repeatedly about the tens of billions of dollars AIG has paid out to major banks, including foreign institutions, using government money. He maintained that AIG needed to meet its obligations to prevent a default that he said would cause “chaos in financial markets.” He also noted that European governments have bailed out their banks without distinguishing between European and American creditors.

That revelation takes some of the wind out of some of my own populist outrage. Still, that AIG paid Goldman-Sacks full value for its investments stinks when tax payers are the ones guaranteeing the pay out. One reporter asked president Obama about Americans making sacrifices. One could ask why Goldman couldn’t have scarified some profit via AIG via the bail-out. On the subject of sacrifices, this e-mail from an executive VP at AIG,

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

That’s the thing about a certain kind of crude outrage, it assumes everyone is guilty. Still Mr. DeSantis might not understand how lucky he is compared to the more then ten percent of the work force expected to be unemployed in the next year. He can afford to not just quit your job, but donate hundreds of thousands to charity. And he is quitting because, well, his feelings were hurt, not because his factory closed. He and some other employees in the same boat could have called the NYT or CNBC where they probably would have been glad to let them air out their grievances. This is an interesting side note about DeSantis, who comes from a working class background,

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

Which is all great. Though it is another nail in that right-wing coffin that claims investments in people don’t pay off. He received some aid, but got a solid career going and has paid that aid back in taxes, which in turn allows the same opportunity for someone else from a modest economic background.

Bush missing from USA Today/Gallup poll response options to question about AIG bonuses

A USA Today/Gallup poll question about who was to blame for the AIG bonuses left out the Bush administration as a suggested response, despite the administration’s decision to give AIG billions in aid without requiring that the company withhold the bonuses.

The AP has a Ron Fournier problem

I CAN SEE WHY McCAIN WANTED TO HIRE FOURNIER

McCain wanted an ideologically reliable hack. Fournier has established himself as an AP hack and he doesn’t disappoint in this article. First, note all the teleprompter mentions. Those are reflections of the wingnut meme that Obama is literally an empty suit without one.

All presidents make their opening remarks at press conferences suing a teleprompter. Most pols from both parties that make speeches from a TV studio use them. Its another chapter in the its OK when Republicans do it, but proves Obama isn’t such a brilliant orator after all. It was just a coincidence that Obama beat McCain in three debates. If the Associated Press’s Ron Fournier, friend to Mccain and supporter of Karl Rove wants to rattle off right-wing talking points he got off Rush Limbaugh, that’s fine. Just identify himself, not as a news analyst, but a far Right pundit.

Obama ‘Overexposed’: The Media’s New New Obsession

So, for weeks and weeks and weeks, the White House has been inundated with a clarion call from the media: “Why have you not fixed the economy yet? You better explain it soon! Oh My God, look at the Dow Jones! It falls, because of you, and your lack of a solution.” So, President Barack Obama went on the Tonight Show, and did an interview with 60 Minutes, and will do another news conference tonight. These appearances will help Obama advance an explanation of his bank bailout program, and offer reporters a chance to publicly question the president. One would think that this would be a good thing. But NO! God, no! Doesn’t Obama realize that he’s risking over-exposure, with all the explaining and answering questions and being a public figure? How dare he?

That’s the recent message that’s been advancing through the press. After Obama appeared on a rival network’s late night show, CBS’s Chris Wragge was given to wonderment: “The Obama blitz, the President’s appearing everywhere, but is his media tour taking attention away from his message?”

Two media appearances and one special news conference is far from overexposure, especially considering that the President is making an attempt to talk to the American people about their urgent concerns during a national crisis. He could pull a Cheney and hide in a unknown location or pull a Bush and go cut some brush on a fake ranch. The last administration’s attitude was they were the deciders, everybody shut up and leave  them them alone. On the other hand Obama might well do better explaining his message if he had all the surrogates the Bushies had. Obama doesn’t have a whole network like Fox pushing his message everyday. Conversely, Bush didn’t have a whole network (Fox) twisting, falsifying and spinning everything he said, while Obama does have that layer of noise to break through.

Blue United States wallpaper

Obama Tries to Save Capitalism – The Right Whines

U.S. Seeks Expanded Power to Seize Firms

The administration’s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed’s other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG’s most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

You have various factions who for their own reasons – some logical and bizarre – that are against nationalizing the banks drowning in toxic debt or non-bank financial institutions like AIG(insurance). At the head of that pack are probably the Wall Str inner circle. As president you hedge your bets. You’re a known centrist that is perhaps so pragmatic that you’re hesitant to startle everyone with drastic changes. So you come out with a revised rescue plan that has a compromise public-private bent. Maybe your advisers are aware that the plan doesn’t cover every contingency and are not immune to opinions from  Paul Krugman or Kevin Drum at Mother Jones. You line up your ducks, so to speak, in a way that nationalization is still in the mix, but as an emergency option.

If, several weeks ago, you had charged a task force with figuring out how to successfully nationalize a big bank, what do you think they’d say you had to do? Three things, at least: (1) you have to figure out a widely acceptable way to value the toxic assets on bank balance sheets, (2) you have to set up a fair and consistent test for evaluating bank solvency based on those values, and (3) you need to make sure you have the legal authority to take over a huge, multinational financial conglomerate in an orderly way.  Is it just a coincidence that these are precisely the things Tim Geithner has set in motion over the past month?  I wonder.

AIG is clearly a blood sucking emergency on the rescue plan and tax payers. Right Wing News without a hint of irony runs this headline, Obama’s Creeping Fascism: Power To Seize Private Firms. By all means let’s not stop firms like AIG from funneling bail-out funds to Goldman Sachs in a blatant example of the kind of corporate crony socialism that Conservatives like Right Wing News promoted for years. maybe the Right wants to make sure that companies like AIG, Goldman and Citigroup keep their offshore tax havens. A Republican site called The Strata-sphere is wrong on so many levels one wonders if he has read a newspaper in the last ten years, much less the entire WaPO article, “…team Obama thinks it can also take control of our nation’s businesses.” The government has had private-public participation with business since Thomas Jefferson invented a wine elevator for his dining room. Obama is not taking over “businesses”, he going to Congress for permission to take over financial firms like AIG, should the need arise, to save the good or bad old capitalism that Strata feels is being trampled on. Couldn’t find a post over there where he expressed similar concerns about Wall St destroying $10 trillion dollars of America’s wealth or objecting to no bid contracts that became the norm under Bush. The stock market is so fickle that I hardly pay attention to the daily ups and downs, but they must all be socialist too, For Stocks, Treasury Plan ‘May Be a Game-Changer’

Investors looking for any reason to drive stocks higher found their elixir in the government’s bailout plan for toxic assets, and some think it could be only the beginning.

Before even getting a chance to sort through its multi-layered details, Wall Street soared higher, capitalizing on the positive news cycle and an oversold market to resuscitate dreams that a bull market was just over the next horizon and paved with more billions in bailout money.

[  ]…Stocks gained sharply on the news, and the rally gathered even more steam after an economic report showed a surprising increase in home sales for February.

For those that do have money its a home buyers market.

If Obama is a socialists for taking drastic steps to save the economy from a crisis that he inherited, then so is Saint Ronnie, who nationalized one of the nations’ biggest banks during the S&L crisis of the 80s, S&Ls, Big Banks and Other Triumphs of Capitalism

Unable to find a buyer for Continental, the F.D.I.C. became its owner. As Judy Woodruff put it, “The nation’s eighth-largest bank had, in effect, been nationalized by the most conservative Administration in fifty years. Nothing like this had ever happened before.” Once again the formula had been capitalism for profits, socialism for losses.

The Obama/Geithner plan, whether one likes the details or not, is not to make the government the owners of the financial sector in perpetuity, but to brace the financial sector up until it can operate on its own. That’s rescuing capitalism, not destroying it.

The right-wing’s latest meme against President Obama is that he can’t do a thing without a teleprompter. The Right thinks this propaganda tact is clever. Seeing that most of the Galters will not have enough money or guts to actually leave the country, the rest of us can enjoy the irony of yet more kool-aid drenched campaigns to smear President Obama. The poor things seem incapable of having a cogent opinion about economics so the failure to get traction on these petty attacks is no surprise.

The latest teleprompter meme from the Right is based solely on his mispronunciation of the word Orion.

Language master

There is an odd assortment of blogs and politicians, including myself that are not comfortable with passing a special tax directed at a hand full of people. The AIG bonuses were awful, but there are other ways to get most if not all of them back,  Attorney General Andrew M. Cuomo of New York  Says Most Huge A.I.G. Bonuses Were Returned

He also said 15 of the largest 20 bonus recipients in A.I.G.’s financial products division had agreed to give back the money, for a total that he estimated at about $30 million. “Those bonuses will be returned in full,” Mr. Cuomo said during a conference call with reporters.

The attorney general noted that about 47 percent of $165 million in retention bonuses was awarded to Americans, accounting for nearly $80 million. All told, Mr. Cuomo said, A.I.G. employees have agreed to return about $50 million in bonuses.

Mr. Cuomo acknowledged that some bonus recipients declined to give back bonuses, especially those overseas who are outside the jurisdiction of New York State

Multiple Choice – Save the banks or save the economy for the long haul

We didn’t have to wait a few days. Brad Delong and Paul Krugman disagree on the Obama administrations public-private partnership rescue plan for the nation’s banks ( and by default a few foriegn banks). Several bloggers have already hit the highlights. MyDD has the major points of disagreement between Krugman and Delong here, D-Day for Geithner .

And as just as on-line bookmarks for readers and myself, the direct links

Financial Policy Despair – Krugman’s initial declaration that the “zombies” have won.

The Geithner Plan FAQ – Professor Delong

I Think Paul Krugman Is Wrong – Professor Delong

Brad DeLong’s defense of Geithner – Nobel winning economist Paul Krugman

Delong thinks those toxic assets that we keep hearing about will be worth something eventually. That part of me that appreciates smart people having a civil difference of opinion thinks this is great. The part of me that worries about bills, my neighbors problems and those of my fellow citizens wishes there was a more definitive answer. Which gifted economist should I believe. Delong is not as well known as Krugman, but I read his blog a couple times a week and happen to see him once on C-Span at a Congressional hearing. Excetionally bright guy, but I’m leaning toward Krugman and James K. Galbraith – No Return to Normal

In addition, some of the biggest banks are bust, almost for certain. Having abandoned prudent risk management in a climate of regulatory negligence and complicity under Bush, these banks participated gleefully in a poisonous game of abusive mortgage originations followed by rounds of pass-the-bad-penny-to-the-greater-fool. But they could not pass them all. And when in August 2007 the music stopped, banks discovered that the markets for their toxic-mortgage-backed securities had collapsed, and found themselves insolvent. Only a dogged political refusal to admit this has since kept the banks from being taken into receivership by the Federal Deposit Insurance Corporation—something the FDIC has the power to do, and has done as recently as last year with IndyMac in California.

Geithner’s banking plan would prolong the state of denial. It involves government guarantees of the bad assets, keeping current management in place and attempting to attract new private capital. (Conversion of preferred shares to equity, which may happen with Citigroup, conveys no powers that the government, as regulator, does not already have.) The idea is that one can fix the banks from the top down, by reestablishing markets for their bad securities. If the idea seems familiar, it is: Henry Paulson also pressed for this, to the point of winning congressional approval. But then he abandoned the idea. Why? He learned it could not work.

The short and simplistic take is that Obama and Company want to save the banks in such a way that everything returns to the way it was with a few tweaks and new regulations. Galbraith doesn’t think it should be done that way and at least some of us, while I would wish he were not, tend to think he is right. Galbraith points out that lots of people from across the political spectrum believe that given a push here or there the economy will recover. That is one reason I prefer the natural sciences to the social sciences, the former is less reliant on beliefs. Trash this public- private nonsense. Tax payers will be picking up the tab if we go Krugman’s way or Team Geithners. Could we be piratical enough to go down the road that costs less and promises more fundamental change. At the same time stop crossing our fingers for things to return to whatever normal was a few years ago – so that what – twenty years from now we can have the sequel to this recession. Some non-crude populists outrage from this diarist at DKos, Depressed

And the fact is: a lot of players bet against AIG that things would go wrong – after all, if it was obvious to more than a few of us peones that there was a massive, unsustainable bubble, you’d expect that some of the smarter hedgies would have noticed it too – and indeed they did: except that, as some noted, instead of screaming about it on blogs, they rather more profitably bet against it.

And now, AIG is paying out these bets – with your money.

Geithner & co are now saying that this is necessary to save the system – which is wholly untrue: what they are doing is trying to save those that bet against AIG (ie Goldman Sachs et al.), by honouring, wihout cause, AIG’s commitments with taxpayer money. And what’s more annoying is that they’re not even talking about that – they’re still talking about the toxic assets that banks supposedly hold, and that everybody sane in the financial markets has already discounted down to their true value, ie close to zero – the second-order problem in that mess.

Again: the bigger problem is not worthless assets, it’s unlimited liabilities on all the financial bets that were made.

What is so depressing is that money is being thrown at banks in the guise of solving the asset problem, when it goes to not solving the liabilities problem (because it’s so much bigger) – and that markets know that it’s not solving anything (they have the liabilities on their books, and guess that others have the same).

Bank assets, like your home or three of your neighbors are worth saving, but to echo, why save the bets that AIG and the hedge funds made. They gambled, they lost. AIG does hold quite a few assets in the form of individual insurance policies – save assets like that, not the institution or as the diarists writes,” What is so depressing is that the goal still seems to be to save banks when it should be to save the economy.. ” The new bank/financial services bail-out is being called Treasury Secretary Timothy Geithner, but it sure smells like Obama’s National Economic Council director Lawrence Summers. If Geithner, who is more wonk then ideologue was taking his direction from Eliot Spitzer or Paul Krugman we’d have a better plan, The Real AIG Scandal, Continued! By Eliot Spitzer

The AIG scandal is getting ever-more disturbing. Goldman Sachs’ public conference call explaining its trading relationship and exposure with AIG established, once again, that Goldman knows how to protect itself. According to Goldman, even if AIG had failed, Goldman’s losses would have been minimal.

How did Goldman protect itself? Sensing AIG’s weakening capital position through 2006 and 2007, Goldman demanded more collateral from AIG and covered outstanding risk with instruments from other firms.

But this raises two critical questions. The first is why $12.9 billion of taxpayer money went from AIG to Goldman. What risk—systemic or otherwise—was being covered? If Goldman wasn’t going to suffer severe losses, why are taxpayers paying them off at 100 cents on the dollar? As I wrote earlier in the week, the real AIG scandal is that the company’s trading partners are getting fully paid rather than taking a haircut.

[  ]…But what were the government officials possibly thinking? The only rationale for what we should call the “hidden conduit bailout” to AIG’s trading partners is that the cascading effect of AIG’s inability to pay would have been devastating. But Goldman has now said very clearly there would have been no cascade. Not even a ripple.

Is the same true of AIG’s other counterparties, including several foreign banks? What examination of the impact of an AIG failure did federal officials undertake before deciding to spend countless billions bailing out AIG and its trading partners?

Spitzer suggests a break-up of this large ‘can’t fail’ institutions. Since the administration still has the majority of public support for whatever it does and a new fist full of cash, now would be the time. Break off that piece of AIG that owns paid or mostly paid insurance policies and start a new nationalized entity or sell them to a profitable insurance company. Joe Conason at Slate has some related concerns over just where AIG’s or rather our money is going when it gets to AIG, It’s time to reform offshore banking, and see what untaxed wealth big business is hiding in overseas tax shelters

According to the Government Accountability Office, nearly all of America’s top 100 corporations maintain subsidiaries in countries identified as tax havens. As the GAO notes, there could be reasons other than avoiding the IRS to set up branches in places such as Singapore, Luxembourg and Switzerland, where taxes are light or nonexistent and keeping clients’ illicit secrets is considered a matter of national pride.

But what reason other than evasion could there be for Goldman Sachs Group to set up three subsidiaries in Bermuda, five in Mauritius, and 15 in the Cayman Islands? Why did Countrywide Financial need two subsidiaries in Guernsey? Why did Wachovia need 18 subsidiaries in Bermuda, three in the British Virgin Islands, and 16 in the Caymans? Why did Lehman Brothers need 31 subsidiaries in the Caymans? What do Bank of America’s 59 subsidiaries in the Caymans actually do? Why does Citigroup need 427 separate subsidiaries in tax havens, including 12 in the Channel Islands, 21 in Jersey, 91 in Luxembourg, 19 in Bermuda and 90 in the Caymans?

So Republicans, the same guys that lead the anti-regulation crusade that encouraged its all about me behavior have the answers. America has to then throw up its arms and scream rinse and repeat for Conservatives to have an opening. Think about this for a minute; so far the Right have convinced themselves that Senator Chriss Dodd and Congressman Barney Frank are omnipotent gods that have been running the economy and have had utter control over Congress for the last twenty years. Are We Home Alone?

I saw Eric Cantor, a Republican House leader, on CNBC the other day, and the entire interview consisted of him trying to exploit the A.I.G. situation for partisan gain without one constructive thought. I just kept staring at him and thinking: “Do you not have kids? Do you not have a pension that you’re worried about? Do you live in some gated community where all the banks will be O.K., even if our biggest banks go under? Do you think your party automatically wins if the country loses? What are you thinking?”

If you want to guarantee that America becomes a mediocre nation, then just keep vilifying every public figure struggling to find a way out of this crisis who stumbles once…

Well Mr Friedman, that is exactly what Republicans think. They think if they just obstruct as much as possible from the sidelines they can emerge on white stallions out of a glowing white mist to save the day. The problem with that, besides their history, is a brain dead Martian opponent can claim they did more positive things for the country then Republicans, and win.

Black and White Lighted Bridge Skyline wallpaper