On a Totally Unrelated Note
Posted on September 30th, 2008 at 7:20 pm by Steve

So apparently the financial system is becoming unraveled because too many institutions loaned too much money to too many other institutions without proper oversight, accountability, or capital reserves.

Remind me again – how is the US paying for the Global War on Terra?

More “Untidy Freedom”
Posted on September 30th, 2008 at 12:01 pm by Steve

More sad news out of Iraq this week:

The Baghdad coordinator of Iraqi LGBT has been assassinated, probably by one of the two religious militia .

Peter Tatchell of Outrage! issued the following statement at lunchtime:

This morning, I received news from Iraq that the coordinator of Iraqi LGBT in Baghdad, Bashar, aged 27, a university student, has been assassinated in a barber shop.

Militias burst in and sprayed his body with bullets at point blank range.

He was the organiser of the safe houses for gays and lesbians in Baghdad. His efforts saved the lives of dozens of people.

Bashar was a kind, generous and extremely brave young man – a true hero who put his life on the line to save the lives of others.

As Donald Rumsfeld put it so eloquently, “Freedom’s untidy. And free people are free to make mistakes and commit crimes.”

Don’t Blame Me, I Voted for Frank Moore
Posted on September 30th, 2008 at 10:18 am by dr.hoo

frank moore for president sign

Just met a local Berkeley write in candidate for president, performance artist Frank Moore at the “How Berkeley Can You Be Fest”. Frank’s running mate is Susan Block, a sex educator from LA. She promises to teach masturbation to the masses.Check out his platform and you might be inspired to cast your vote for him.

A few examples of his policy stances:

I will push for complete public funding for all political campaigns and the banning of political contributions and the use of personal wealth in political campaigns.

The President should have a line veto. But the Congress can over-turn this line veto by a simple majority. Also bills should be limited to 5 pages in length and/or limited to one subject.

An individual taxpayer will be able to direct her taxes to what functions she wants to support. But corporate taxpayers should not have this option.

Every corporation should come up for a renewal every 25 years, at which time it must prove that it has been operating in the public interest. If it fails to do this, it loses its right to exist. Corporations that have existed before this policy will have 10 years before they will have to prove they are worthy.

Government should leave marriage to churches. Instead, any two or more adults who have been living together for at least 2 years should be able to register as a “family.”

It’s a Gusher!
Posted on September 29th, 2008 at 4:55 pm by Steve

Oil well gusher

Joshua Holland has a nice piece up on AlterNet looking at the financial meltdown (it’s from a week ago, so some of it is already “inoperative,” but – as John McCain might say – the fundamentals are sound). He summarizes the so-called “bailout” plan like this:

We’re splitting an oil well with the Big Boys on Wall Street: They get the oil, we get the shaft.

He gives a good analysis, and it’s worth reading. I found this section to be particularly apt:

The proximate cause of the financial system’s meltdown is not all that hard to grasp. The decades-long supremacy of the ideology euphemistically called “free trade” resulted in capital being unmoored from national economies and freed to move around the world with few limitations (under the imperative of government not “intervening” in markets). Unconstrained by borders and investment rules, those dollars, yen, euros and what have you roamed the planet seeking a better rate of return. Investors moved in packs, rushing lemming-like to whatever hot up-and-coming market the Economist was writing about in a given month, and a series of bubbles resulted.

Those bubbles made some people incredibly rich, and hurt others badly.


Here in the United States, the trend of deregulation culminated in 1999 with the death of the Glass-Steagall Act, the New Deal-era legislation that had forced financial institutions to choose between investment banking and commercial lending.

Of course, if you read Artifacts (the collection I produced for Christmas of 1999), you would have learned all about this at the time, starting on Page 70 in “Senate Clears Financial-Services Overhal; Late Requests for Favors, Fixes Precede 90-8 Vote on Landmark Measure,” by Michael Schroeder, from the Wall Street Journal:

By stripping away restrictions in the Glass-Steagall financial-services law — which prohibited the mixing of banking, securities and insurance activities — the overhaul is a windfall for financial industries, paving the way for a new world of financial supermarkets offering one-stop shopping for services ranging from checking to credit cards, foreign exchange, insurance, mutual funds, mortgages and auto loans.

Of course, “no one could have predicted” that the house of cards would fall down, right? Hm.

Perhaps you’d have found further illumination from another selection in Artifacts, this one from Kurt Vonnegut’s Breakfast of Champions:

Here is how the pirates were able to take whatever they wanted from anybody else: they had the best boats in the world, and they were meaner than anybody else, and they had gunpowder, which was a mixture of potassium nitrate, charcoal, and sulphur. They touched this seemingly listless powder with fire, and it turned violently into gas. This gas blew projectiles out of metal tubes at terrific velocities. The projectiles cut through meat and bone very easily, so the pirates could wreck the wiring or the bellows or the plumbing of a stubborn human being, even when he was far, far away.

The chief weapon of the sea pirates, however, was their capacity to astonish. Nobody else could believe, until it was much too late, how heartless and greedy they were.

So it goes.

More of Hank Paulson’s Brilliant Insights
Posted on September 29th, 2008 at 2:53 pm by Steve

Hank Paulson Can See the Future!

From Hank’s Wikipedia entry:

In Spring 2007, Secretaty Paulson told an audience at the Shanghai Futures Exchange that “An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention.” [Bloomberg News]

In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades. [Boston Globe]

On July 20, 2008, after the failure of Indymac Bank, Paulson reassured the public by saying, “it’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” [CBS News]

On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac.[Bloomberg News] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.

Ask an Actual Expert
Posted on September 29th, 2008 at 2:30 pm by Steve

Hank Paulson says, 3x6=6!

So, we’re supposed to trust Hank Pauslon with $700,000,000,000 because he’s a smart guy, right? I mean, as the former head of Goldman Sachs, with a net personal worth of over $700,000,000, he can certainly handle these big sums!

But… I wonder… isn’t this the same Hank Paulson who helped get us into this mess? The same Hank Paulson who’s been declaring all through the spring that “our economy is sound” and that we’ve “reached the bottom of the housing market?” He was the head of the Investment Banking unit at Goldman before he became the chief executive!

He knows exactly what he’s doing: bailing out his buddies and partners from the mess they themselves created, with OUR money.

How about asking an actual expert, one who wasn’t compensated to the tune of $30,000,000 per year by the very company he’s now proposing, as a “public servant,” to “help” with taxpayer funds?

Nourel Roubini – unlike Hank Paulson, Ben Bernanke, George Bush, Nancy Pelosi, Chris Dodd, Barney Frank, John McCain, or Barack Obama – has been accurately predicting the contours of our current financial crisis going back several years. In February, he predicted that a major US investment bank would collapse; after Bear Stearns went down, he predicted that there would be no independent investment banks in the US (and this has already come to pass). He’s been right as often as Paulson, Bernanke, et al. have been wrong.

Here’s what Dr. Roubini has to say about the “bailout” plan that went down to defeat in the House today:

Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer – the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.

So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.

It’s worth reading his other essays, wherein he lays out, in great detail, exactly what sort of plan he believes would most benefit the US and the world economy at large. He relies for support not just on his gut instinct, or on what his golfing buddies told him, but on actual historical data from more than thirty other credit crisis in large economies over the last fifty years. He shows that the course currently being proposed by the wonder twins of Bernanke and Paulson is, in fact, the most expensive and least likely to achieve its stated aims.

It will, however, line the pockets of Goldman Hank’s buddies on Wall Street, and it will ensure that the Federal treasury is completely empty, so that – regardless of what he’s ready to do on Day One – the next President will find himself searching in vain for a dollar to spend.

Maybe that’s why Barack Obama keeps asking for “change”!

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Slo-Mo Punches
Posted on September 28th, 2008 at 11:44 pm by dr.hoo

Nothing like getting punched in the head in slo-mo….

AQ_PUNCHES from John Wiseman on Vimeo.

Invisible Cities
Posted on September 28th, 2008 at 7:36 pm by Steve

Illustration of two stories from Invisible Cities

Marco Polo describes a bridge, stone by stone.

“But which is the stone that supports the bridge?” Kublai Khan asks.

“The bridge is not supported by one stone or another,” Marco answers, “but by the line of the arch that they form.”

Kublai Kahn remains silent, reflecting. Then he adds: “Why do you speak to me of the stones? It is only the arch that matters to me.”

Polo answers: “Without stones there is no arch.”

Invisible Cities, by Italo Calvino, 1972. Translated from the Italian by William Weaver, 1974.

“Voluntary Supervision”?
Posted on September 27th, 2008 at 11:04 am by dr.hoo

happy money guy
NYTimes today posted an article on how chairman Christopher Cox just suspended the SEC’s “Voluntary Supervision” program for Wall St. investment banks. Apparently letting gigantic financial institutions decide if they want to be supervised can lead to some kind of major problems.

“The last six months have made it abundantly clear that voluntary regulation does not work,” he said in a statement. The program “was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily. The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate” of the program, and “weakened its effectiveness,” he added.

Who would have guessed letting the fox run the hen house might lead to some bloody feathers? I heard on NPR last week that Cox actually declined to accept additional funds to help with regulation by congress and that he was unavailable for comment last weekend becuase he was on a “family vacation”. What a dousche bag!

Thank god they finally handed over the regulatory reigns to the Fed Chief, Henry Paulson. He doesn’t have any ties to the investment banking industry does he?

Get Your War On: Bailout
Posted on September 26th, 2008 at 7:05 pm by necco

I love this stuff:

Get Your War On: Bailout

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