They write letters

Monkeyfister:

Dear Senator Barack Obama,

The Gross GDP of the World— GWP— Is $65 Trillion.

There is no way in hell, even if every individual, company, institution, corporation and nation emptied their savings and piggy banks, that we can possibly make up the difference between the GWP and the real problem of $681 Trillion Worth Of Derivatives Based On Shitty Debts...

Of course, if you actually implemented policies that circumvented the collapse of the world economy, they might not be able to build the world's tallest skyscraper in Dubai.

Because all of might of the Petrodollar is based on the assumption that Amerikans and the Imperial thralls will have no choice but to pay, and pay, and pay, until every last drop of oil is gone from the world and most of those surviving live in a post-industrial feudal state.

Goldman $acks Amerika anyway: Bu$hie don' need no steenkin' bailout

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.

``Today's blast of term liquidity will settle the funding markets down, and allow trust to slowly be restored between borrowers and lenders,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. On the other hand, ``the Fed's balance sheet is about to explode.,,''

So they were going to give Goldman $acks Amerika the money anyway, and Paulson's original proposal is revealed for what it was: a naked grab for unlimited power and money.

This proposal was primarily aimed at getting Congress to surrender all its budgetary authority over the Treasury Department. Not that they didn't have enough power any way. After all, all the guns follow Bu$hCo's orders.

Slight of Hand

What's this puny $700 billion?

With All Eyes on the Bailout, House Passes Trillion-Dollar Defense Bill
By Joshua Holland, AlterNet

On Wednesday, the House passed a mammoth defense bill by a 392-39 vote. It's expected to clear the Senate with little difficulty next week.

It was part of a trillion-dollar stop-gap measure to keep programs running through next March, allowing lawmakers to skip town without passing a final budget. The Associated Press reports, "The legislation came together in a remarkably secret process that concentrated decision-making power in the hands of a few lawmakers."

In keeping with the tradition of recent years, Bush held a gun to his own head and threatened to pull the trigger if his demands weren't met. According to the AP, "To earn President Bush's signature rather than a veto, House and Senate negotiators dropped several provisions he opposed. They include a ban on private interrogators in U.S. military detention facilities and what would have amounted to congressional veto power over a security pact with Iraq."

In other words, Congress also maintained recent tradition, swearing not to give Bush a blank check and then whipping out their pens and signing a blank check.

The number that the House sent to the Senate for "defense" -- $612 billion for the coming year -- is eye-popping. Imagine a stack of 612,000 million-dollar bills. Quite a pile.

That number's a sham, however. The budget calls for $68.6 billion for the occupations of Iraq and Afghanistan in 2009. War costs this year totaled $182 billion, according to the Federation of American Scientists.

The House passed the Brobdingnagian spending measure 11 months after George W. Bush vetoed a bill -- one passed with a lot of bipartisan support -- that would have added $7 billion measly dollars per year to the State Children's Health Insurance Program, covering 4 million more uninsured children. You'd be hard-pressed to find a clearer sign of national psychosis.

Here's what "defense" spending looks like in the era of Bush's "War on Terror," according to official figures:



But that's just the cash to feed the gaping maw of the Department of Defense. Throw in a bit more than $50 billion for Homeland Security, around $20 billion for the nuclear arsenal in the Department of Energy's budget, about $10 billion for the Coast Guard, a similar number for foreign "security assistance" and maybe another $125 billion -- according to one estimate -- in other defense-related programs scattered throughout the federal budget.

Bush also requested $91 billion for the Department of Veterans Affairs in 2009, up from $72 billion just three years ago. A generation of damaged young men and women are going to cost more and more as the years go by -- many post-traumatic injuries, for example, don't manifest themselves for 10 or more years after people get out of combat. In 2000, nine years after the first Gulf War, 56 percent of those who had served in that conflict were receiving disability payments.

But wait, as they say on late-night infomercials, there's more!

All of this only finances our current military adventures. We're still paying for Korea and Vietnam and Grenada and Panama and the first Gulf War and Somalia and the Balkans and on and on. Estimates of just how much of our national debt payments are from past military spending vary wildly. Economist Robert Higgs calculated it like this:

I added up all past deficits (minus surpluses) since 1916 (when the debt was nearly zero), prorated according to each year's ratio of narrowly defined national security spending--military, veterans, and international affairs--to total federal spending, expressing everything in dollars of constant purchasing power. This sum is equal to 91.2 percent of the value of the national debt held by the public at the end of 2006. Therefore, I attribute that same percentage of the government's net interest outlays in that year to past debt-financed defense spending.

In 2006, he came up with a figure of $206.7 billion for interest payments on past militarism. Add it all up, and we're talking about at least a trillion dollars in military and homeland security spending. If there were a million-dollar bill, you'd have to stack a million of them to reach a trillion dollars.

Of course, very little of this is "defense." This is empire spending, pure and simple ...

[tip o'teh tinfoil to chlamor]

Of course, Chalmers Johnson agrees.

Fear and Loathing on Wall Street

The Bailout that wasn't the $windle the Reptilicans wanted:



Hence, they killed it.

Here's Ron Paul, leader of the Looney Bin. Somebody tell him free market capitalism is corporatism. Be sure to duck: this straw man shoots back, regardless of what you're packing.

It's important to bear in mind this wasn't Paulson's original $windle v.1: "You gimme da money and a blank checkbook".

The Republicans voted overwhelmingly against $windle v.2. You can be sure the real reason wasn't it gave Paulson too much. It didn't give them enough.

You can also be sure the $windle v.3 will be much worse. These guys don't lower stakes. They raise them, as the market tanks.

Of course, it's not the gorilla in the room no one's talking about, it's the King Kong on the roof no one wants to mention:



I've heard the global derivative market is valued at about half a quadrillion- a thousand trillion- dollars.

That's $1,000,000,000,000,000.

This devil would have wanted its due sooner or later. The Bailout at best would just put it off. But no, Ronnie boy, you aren't making it better by precipitating it now.

It looks like Paulson's initial subterfuge to enable Goldman $acking of Amerika may have just caused the Kongression Komedian Klan under Ron Paul's leadership to chip away the base of the derivatives pyramid.

Krugman's underestimating the problem. What we have here isn't a Banana Republic- it's likely the beginning of the Mad Max Market, and a heightened global economic war as the Powers get sucked in.

JoelsArmyGate

Go read what the dogemperor has to say.

Then go listen to her Preacher talk:

In a moment, I’ll be asking you that we pray for Sarah, and I’ll tell you the reason why. When we talk about transformation of a community, we are talking about God invading seven areas in our society. Let me repeat that one more time. When we talk about transformation of a society, a community, it’s where we see God’s Kingdom infiltrate, influence seven areas in our society.

. . .

So we go to the third area, it’s in the area of politics. Tell your neighbor, "politics." Do you know what I discovered? This is funny. The people who actually split churches, they have the gift of politics, but they are exercising it in the wrong place. That’s what I came to know. There are people who are wired to politics because God wants to take the political, you know, dimension of our societies. And those people should be prayed for. That’s why I was, you know, I was so glad to see Sarah here. We should pray for her, we should back her up. And, you know, come the day of voting, we should be there, not just praying, we should be there. And I’m saying this because that’s what I’m telling our church. I’m telling them that we need this in Parliament. In here is what you call Congressmen, you know, you know, the, the Governors, we need the bretheren right inside there. Is anybody hearing me?

You know, because who will change the laws of the lands? The problem is do we just pray, but we do nothing about it. If the believers had not done something in this country, your president would not be in office today. Yes or no? Am I right?

. . .

And the last area is in the area of government. Hello? We need believers there. We need men and women of integrity. You know, as the Secretaries of State. We need them right there. People that are born again, spirit filled, people who know God, and people who are serious with God.

So in a moment if you do not mind, I’ll ask, you know, even before I go to do this thing, you know, I’ll ask Sarah, would you mind to come please? Would you mind? Come, please. Let’s all stand up, and let’s hold hands all over this house. Come, Pastor, come.

[Sarah Palin comes to the stage in front of the congregation. Sarah Palin bows her head stretches her forearms forward and places the palms of her hands upward. Thomas Muthee lays hands on Sarah Palin’s head. Pastor Ed Kalnin and unidentifed man lay hands on Sarah Palin’s shoulders.]

Thank you, Jesus. Let’s all pray. Let’s pray for Sarah. Hallelujah! Come on, hold your hands up and raise them. Hold them and raise them up here! Come on, talk to God about this woman! Come on, talk to God about this woman we declare favor from today. We say favor, favor, favor! We say praise my God! We say grace to be rained upon her in the name of Jesus. My God, you make your judgement, you make room. You make ways in the desert, and I’m asking you today, we are asking you as the body of Christ in this valley, make a way for Sarah, even in the [inaudible]. Make her way my God. Bring finances her way, even in the campaign in the name of Jesus, and above all give her the personnel, give her men and women that will back her up in the name of Jesus. We want righteousness in this state. We want righteousness in this nation. Because you say [inaudible] in the name of Jesus. Our Father, use her to turn this nation the other way around. Use her to turn the hearts of the fathers to the children and the hearts of the children to the fathers so that the curse that has been there long can be broken. In the name of Jesus. Father, we thank you today. We come in the hindrance of the enemy, standing in her way to there. In the name of Jesus, in the name of Jesus! Every form of witchcraft, it will be rebuked in the name of Jesus. Father, make her way now. In Jesus’ name, Amen.

You got it right there. She's an agent of Joel's Army.

Then go checkout this:

Please understand what you are looking at when you look at Sarah "Evita" Palin. You are looking at the designated muse of the coming American police state...

Naomi Wolfe is right: "I realized early on with horror what I was seeing in Governor Palin: the continuation of the Rove-Cheney cabal, but this time without restraints. I heard her echo Bush 2000 soundbites ("the heart of America is on display") and realized Bush's speechwriters were writing her -- not McCain's -- speeches...

Go read it all. Before you too become the victim of a witch hunt.

Gambling Problem

We Are Under Martial Law As Declared By The Speaker Last Night-Rep Burgess

Maybe it's like those Secret Laws Bu$hCo came up with after 9-11. You know, one of those you never know about until they make soylent green out of you.
[tip o'teh tinfoil to an interesting RI thread]

Maybe this has something to do with it:

On March 13th 2008, there was a secret closed door meeting of The United States House Of Representatives in Washington. In the history of The United States, this is only the fourth time a secret meeting was held by the House.

Here is what was allegedly revealed to the Reps:

* The imminent collapse of the U.S. Economy to occur sometime in late 2008

* The imminent collapse of the U.S. Government finances sometime in mid 2009

* The possibility of Civil War inside the United States as a result of the collapse

* The advance round-ups of 'insurgent U.S. Citizens' likely to move against the government

* The detention of those rounded up at The REX 84 Camps constructed throughout the United States

* The possibility of public retaliation against members of Congress for the collapses (especially Pelosi?)

* The location of safe facilities for members of Congress and their families to reside during massive civil unrest

* The necessary and unavoidable merger of The U.S. with Canada and Mexico establishing The North American Union

* The issuance of a new currency called the AMERO for all three nations as an economic solution.

And now, "off the table Pelosi" sponsors a "kangaroo impeachment" hearing.

We've got secret laws. We've had them apparently for years with a National Security related upswing in them after 9-11. So what is the point of a secret martial law declaration other than to protect those imposing it until the peasants can be herded into the cattle cars?

Shock and Awfully Cratered

Darth Paulson really is the economic version of Darth Rumsfeld.

[tip o'teh tinfoil to Crooks and Liars for this and the next one, too]

Well, the Reichstag may really be on fire, again, and this time there really might be a wolf out there among the sheep, but it's like Naomi Klein says

...I think that it’s important to stress that this is money that could be used for actively preventing foreclosures. They could be using this money - a fraction of it - to keep people in their homes. They could be stimulating and rebuilding the fundamentals of the economy by investing in infrastructure, public works projects, a green-style New Deal - all of the investments that are so desperately needed. New technology, investing in the real economy and getting away from this casino economy. And because they want to throw all this money at Wall Street, that is money that will not be available for those real investments...

...they all knew it. They all knew it and they were making money as fast as they could based on their belief that they would get bailed out. Because it is entirely consistent with the Bush administration over the past 7 years. One of the other big lies floating around is this is somehow a departure from the way the Bush administration usually does business. It’s not a departure; it’s just a change in the direction of the flow. This is what they have been doing for 7 years: transferring public money, public wealth, into the hands of private crony contractors. And now as their final act they are taking the bad debts of the corporate sector and transferring them to the taxpayer. There is no aberration here; there is no big surprise. This is entirely consistent with everything they’ve done...

...the Shock Doctrine is a political strategy that the Republican Right has been perfecting over the past 35 years to use for various different kinds of shocks. They could be wars, natural disasters, economic crises, anything that sends a society into a state of shock to push through what economists call “Economic Shock Therapy” - rapid-fire, pro-corporate policies that they couldn’t get through if people weren’t in a state of fear and panic. This is a move that the Bush administration is very fond of; they did it after 9/11, privatized the War on Terror. We are seeing the Shock Doctrine in action right now with the exploiting of people’s fear trying to deepen that fear (we saw that with Bush’s address) to ram through unprecedented corporate giveaways which will later be used to rationalize cuts to social programs and more privatization and deregulation in the name of getting the economy back on track after they’ve screwed it up...

...it’s really important for people to understand that this bailout is as bad tomorrow as it was today. The only thing that has changed is its bipartisanship. A couple of fig leaves have been put in front of it to make it a little more presentable, but the core of this deal is totally corrupt. It is a bad plan. The only people this plan is good for is Wall Street. There is no guarantee that it is going to fix the problem that it is supposedly going to fix, but one thing we do know is that it is a bomb that will explode on U.S. taxpayers because of this massive debt that has been incurred. I mean, this $700 billion is twice as large as the projected deficit for this year, so this is an incredible burden. These bad debts were described as sticks of dynamite in these companies that the government is taking out of their hands. Well, they’re not just taking them out of their hands because now the dynamite is now in Washington and it’s going to explode and then it will be used against whichever administration. If Obama wins, then this will be the dynamite to say that he can’t forward his health plan...

...the other thing I think we need to stress is the extraordinary level of responsibility in the Bush Administration in allowing this crisis to get to the point that it got to, which was not just predictable but predicted. Alan Greenspan was saying a year ago that there was a housing bubble, and what bubbles do is they burst because they are filled with hot air. Everyone knows it. This was entirely predicted, and they end up with a two and a half page - barely two and a half page - plan with one idea, which is to turn the U.S. government into the world’s biggest trash can. Take all of this trash and give it to the taxpayers. That is their only idea, their only preparation...

One thing I think is important is to resist this bipartisanship. At this point this is not a moment that the priority is bipartisanship; the priority is intelligence. The priority is in getting to the root of this problem. The financial sector has abused the trust of the American people. There’s a couple of other points I want to stress. This idea of John McCain scapegoating greedy CEOs is obviously a joke because he is flanked by some of the greediest CEOs in the world. But the real thing is you can’t be shocked by the fact that CEOs want to make as much money as they possibly can. That’s like being shocked that movie stars want to be famous and that politicians want power. This is what corporations are built to do, this is what CEOs are built to do and it’s the role of government to regulate them...

Mc$ame is the ideal shameless liar to lead this pack of pirates, too. Not only did he lie to Letterman, when he got to DC he never even went to the Capitol.

Mc$ame's political mentor was of course Sith Lord Nixon.

"I call it the Madman Theory, Bob. I want the North Vietnamese to believe I've reached the point where I might do anything to stop the war. We'll just slip the word to them that, 'for God's sake, you know Nixon is obsessed about Communism. We can't restrain him when he's angry -- and he has his hand on the nuclear button' -- and Ho Chi Minh himself will be in Paris in two days begging for peace."

-- H.R. Haldeman's 1978 The Ends of Power.

It didn't- and it doesn't- work out quite that way as long as there is a free and informed populace. But what's running Washington these days and acting as the opposition to the Republicans not free and informed. A more apt descriptor would be bought and paid for.

The Wall Street Bailout is the financial equivalent of 9-11.

Goldman $acks Amerika.

"...we live in the end times, so who the Hell cares?"

You have to
hear this to believe it:

Tip o'teh tinfoil to Oyster.

If I see any armed wolves in helicopters around this woman, I'll be sure to duck.

Recommendations

The Dark Wraith:

Now is a good time to recommend once again the movie Zeitgeist, which you can watch in its entirety on Google Video at the link. With a run time of two hours and twelve minutes, you'll be taken from the origins of religion through the events of September 11, 2001, and on into the history of financial crises here in the United States. By the end, you might be a full-blown conspiracy theorist; otherwise, you'll still be mystified by a whole lot of things that really aren't all that mystifying.

I looked into their eyes and saw two faces of Empire

One pandering to the Right, the other pandering to the Left.

With exactly the same foreign policies. With exactly the same policies towards Wall Street. With exactly the same attitude that they could lie about tax cuts.

Yes, their strategies and tactics differ. But hegemony is where they both are heading towards. The same oligarchs rule in both cases. The only difference is in how well the peasants are allowed to care for themselves.

Make no mistake: you will pay when Goldman-$achs your Treasury. And that's going to happen no matter who's driving. Whether they call it a tax or not.

Gaea Gas

Here's an indigestion along the same lines as that you get when you have an economy whose fundamentals are sound until $ecretary Paulson declares himself- and incidently, Goldman-$achs- leader of the new $upreme $oviet:

The methane time bomb

The first evidence that millions of tons of a greenhouse gas 20 times more potent than carbon dioxide is being released into the atmosphere from beneath the Arctic seabed has been discovered by scientists.

The Independent has been passed details of preliminary findings suggesting that massive deposits of sub-sea methane are bubbling to the surface as the Arctic region becomes warmer and its ice retreats.

Underground stores of methane are important because scientists believe their sudden release has in the past been responsible for rapid increases in global temperatures, dramatic changes to the climate, and even the mass extinction of species. Scientists aboard a research ship that has sailed the entire length of Russia's northern coast have discovered intense concentrations of methane – sometimes at up to 100 times background levels – over several areas covering thousands of square miles of the Siberian continental shelf.

In the past few days, the researchers have seen areas of sea foaming with gas bubbling up through "methane chimneys" rising from the sea floor. They believe that the sub-sea layer of permafrost, which has acted like a "lid" to prevent the gas from escaping, has melted away to allow methane to rise from underground deposits formed before the last ice age.

They have warned that this is likely to be linked with the rapid warming that the region has experienced in recent years.

Methane is about 20 times more powerful as a greenhouse gas than carbon dioxide and many scientists fear that its release could accelerate global warming in a giant positive feedback where more atmospheric methane causes higher temperatures, leading to further permafrost melting and the release of yet more methane.

The amount of methane stored beneath the Arctic is calculated to be greater than the total amount of carbon locked up in global coal reserves so there is intense interest in the stability of these deposits as the region warms at a faster rate than other places on earth...

And next, here's another note that's quickly been buried- lest you not give the $upreme $oviet its due:

From the plane flying over the Gulf Islands National Seashore, scientists from the United States Geological Survey were scanning the ocean, trying to find Ship Island. Their maps and G.P.S. system told them they were over its eastern end, but there was no sign of it.

“I don’t see Ship anywhere,” said Asbury H. Sallenger, a oceanographer at the Geological Survey who was sitting in the co-pilot’s seat and had the best view. "On the map we see it, but all I see is breakers. There is just zip left of this thing..."

By the way, Ike was a Category Two hurricane when it hit according to the NOAA. Also, according to Dear Leader's new and improved NOAA, the simultaneous opening of the Northeast and Northwest passages for the first time this summer were a simple artefact of interpretaation of the satellite photos, too.

Despite the British, Canadian, Russian, and oil company ships that reported going through both passages.

These aren't the 'droids you're looking for. Move along, move along...

$avin' it

So how long before the McCainiacs try to call off the $election because of the economic crisis too?

Too good an opportunity to waste. If you can't even get enough cronies to steal it, just call the whole damned thing off:

NEW YORK -- McCain senior adviser Steve Schmidt said the GOP presidential nominee had begun to take his television ads down unilaterally and said the Arizona senator is hoping that Sen. Barack Obama will do the same.

"Senator McCain made a decision today to suspend his campaign to return to Washington," Schmidt said. "He had a very good conversation with Senator Obama, who also understands the severity of the economic crisis."

Schmidt said that if an agreement is not reached by Monday, "there is potential for an economic calamity the likes of which has not been seen since, potentially, the Great Depression."

Sen. John McCain's aides said the Republican nominee had become convinced that Monday morning's opening of the markets represents a major deadline that, if breached without a deal from the Congress, could wreak worldwide havoc...

Cry havoc, and call down the martial dogs of war on all who won't hand over their money... maybe the $upremes will just hand it over, Treasury, $electoral College, and all to the grown-ups by default.


"What, me worry?"

The Goldman-Sachs Administration

Billmon speaks.

You listen.

If Billmon is too shrill:

Kevin Phillips.

And a short version.

You listen.

But really, Billmon is nothing like shrill. You want the Edge? Here's the other bubble of Reality in the multiverse: There Is No Fix.

Well, you can rest assured, the D.o"D. has a plan to deal with the problem. You might even say it's what the Pentacle Pentagon's planned for all along. Business is booming, after all.

John Titor might have been- may someday be- right after all.

Dead Man Walking

Check out Maggie Jochild's post.

There's a really good chance Mc$ame's melanoma will kill him sooner rather than later.

...If he is in fact a Dead Man Walking, then the choice of Sarah Palin as Vice President also becomes more than a Hail Mary pass intended to destroy any bounce from the wildly successful Democratic Convention. It becomes reckless in the extreme: Choosing an heir apparent who lies, engages in petty revenge, wants to know how to ban books, faithfully attends a church which believes dinosaurs were around 4000 years ago and Jews are punished by God for not believing in Jesus, has less foreign policy experience than a Delta flight attendant, doesn't know what the Bush Doctrine is, and has less than two years experience governing a state with a population less than that of Wichita, Kansas or Raleigh, North Carolina.

We know that the secret cabal, the Council for National Policy, who hopes to replace American democracy with religious rule (THEIR religion, not yours), are the people who investigated Sarah Palin and "chose" her for McCain as his VP. Since he accepted their decision, fundamentalist organizations have thrown themselves behind his campaign in a way they had not before. It raises the question of a deal. What would a dying man have to offer power brokers in order to have their backing for the U.S. Presidency?

Sounds like a Twilight Zone episode to me. But then, pretty much everything has since November 2000.

Funny Guy

Ben Stein tries to make a yuk of the $windle:

...The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of subprime mortgages are not paid off and go into default.

The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)

These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America...

[tip o'teh tinfoil to Nordic]

Follow the money and you will find who needs to do the time. I suspect they have some kind of ties to the Last Bank Standing, Goldman-Sachs- and Secretary Paulson, among others.

And now a message from your Dear Leader

Act of the Godless

Chris Dodd:

...This isn’t a natural disaster like the Gustav hurricane. This is a man-made, avoidable, preventable problem — and a lack of oversight and accountability was one of the problems...

This isn't the retribution of the Hairy Thunderer agin a pack o'sinners and evolutionists? Who'd'a thunk it?

Although, pretty much everyone who pushed this kleptocratic koup komedy is more than happy to have you believe it is your moral duty to give them all your money.

Welcome to the Church of P.T. Barnum.

On the Church of Global Warming

One of my anonymous commentors is accusing me of being a zealot again.

I grew up reading those marvelous Golden Nature Guides. I still have a few of them- books are a passion of mine, just as nature is. One of my favorites was simply entitled "Trees," by Herbert Zim and Alexander Martin.

It had lovely detailed paintings of trees, decribing their growth, leaves, and flowers. Each specimen also had a map of North America, showing its natural range, and where you could cultivate it outside of its natural range.

For example, the River Birch, a tree Zim showed as a Southern native to the lower Mississippi Valley, riparian, heat and drought resistant, requiring the direct sun.

That was 45 years ago.

The city of Ann Arbor is planting them all over here in Michigan to replace the Ash destroyed by the emerald borer. They're doing fine.

Or there's the Bald Cypress. The original range was along the Gulf of Mexico, along the Delta country. By Dr. Zim's time, they had expanded outside their range as far north as Tennessee.

I know of three 20 year old specimens here in Ann Arbor. In Livonia, the Parks commission plants them along drain ditches- lovely, sturdy trees, long-lived, tough enough for the long wet Michigan winters and the recent hot Michigan summers.

It's a good thing, too, as they're having a harder time of it in the Delta country these days: tropical rot, tropical rodents and insects are taking their toll on thousand year old trees. But we still have winter in Michigan. Bald cypress does well.

Metasequoia, are doing nicely here, too, a Chinese semitropical relative of the Bald Cypress and the Coastal Redwood. Although the native pine species are having a hard go of it lately. Acid rain, temperate invasive pests.

One of the nice things about having a scientific background is that I understand the facts. I understand what the yearly increase in PCO₂ does. I don't have to take it on Faith.

I'm a scientist. The Conservation of Matter and Energy, Gravity, Evolution, none of these are things I take on Faith. I observe them invariant, daily, in the world around me.

Just like global warming.

Checkmate

Posted here again, because I am pretty sure the Feds- or the Company- will make HuffPo take it down:

Welcome to the final stages of the coup...

Larisa Alexandrovna
Posted September 20, 2008 | 08:11 PM (EST)

In 2000, the long fought for and long admired democracy of the United States of America began a slow and steady decline toward fascism - a Bush family tradition - with the installment of a president - a man the citizens overwhelmingly rejected (although the funny math told a still believed myth) - by a few corrupt judges on the US Supreme Court. That coup is now nearly complete and checkmate is all but unavoidable.

Let me first point you to the Bush administration's so-called Wall Street bailout bill, here, so that you can see for yourself that this treachery is being conducted in the light of day. Fascism is finally and formally out of the right-wing closet even if the F word is not yet openly being used (although it should be, and often).

Now, if you do not yet understand that the Wall Street crisis is a man-made disaster done through intentional deregulation and corruption, I have a bridge in Alaska to sell to you (or Sara Palin does anyway). This manufactured crisis is now to be remedied, if the fiscal fascists get their way, with the total transfer of Congressional powers (the few that still remain) to the Executive Branch and the total transfer of public funds into corporate (via government as intermediary) hands.

Adam Davidson of NPR blogs about the so-called bailout bill as follows:

I would guess that this has to be one of the biggest peacetime transfers of power from Congress to the Administration in history. (Anyone know?). Certainly one of the most concise.

The Treasury Secretary can buy broadly defined assets, on any terms he wants, he can hire anyone he wants to do it and can appoint private sector companies as financial deputies of the US government. And he can write whatever regulation he thinks are needed.

Most importantly, Davidson points to this passage in the bill:

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.

The Bush family, in the form of Prescott Bush, has tried a more aggressive coup before in order to install fascism in this country. This treasonous plot was called "the Business Plot," because the high-level plotters - including Prescott Bush - were Wall Street men who openly supported fascism.

It seems this time around, the Bush family is trying the more subtle approach to open bloodshed: first create a crisis, then under the guise of addressing that crisis, overthrow democracy. Yes, it does sound terribly conspiracy-theory-esque when explained just this way. But what else does one call a criminal conspiracy to destroy Congressional powers permanently, alter Judicial powers permanently, and steal public funds?

As I see it now, we have but two options and I have long alluded to hoping against hope that one of these options would not be the only one left to a peaceful people. The first and frankly most preferable option is for Congress to immediately begin impeachment proceedings against the members of this latest Business Plot.

No time needs to be wasted on hearings as we already now have in writing, formally as presented to Congress, the intentions of this administration to nullify Congressional powers permanently, to alter Judicial powers permanently, and to openly steal public funds using as blackmail the total collapse of the US economy if these powers are not handed over. You do see how this is blackmail, do you not? You do see how this is a manufactured crisis precisely designed to be used as blackmail, do you not?

The other option, the one I have long prayed we would never need to even consider, is a total revolution. But, If Congress won't act in its own self-defense, in the defense of democracy, in defense of us - the people who have elected them to protect us from this very danger - then what is left for us to do? I don't want to see it come down to this, but I fear that it will. Put your party politics aside right now. We are in a crisis so dangerous that should these people succeed in their coup, your party affiliation will no longer matter, your American flag will be a nice collectible item of something that once was, and your version of God will be worshiped in secrecy because your freedoms will be owned by the few.

You are no longer Republicans, Democrats, or any shade of voter. You do not live in a swing state or a solid colored state. You are simply this: an American. That is the only side that matters. So call your members of Congress and demand, no, declare that unless they do their duty to the Constitution and to us, we will move to the streets - not because we want to, but because our founding fathers demanded this duty of each and every citizen in the face of such a domestic enemy. Demand - as is your right - that this bill be voted against and demand - as is your right - that the people plotting this treachery be held to account. We are either a nation of laws or we are no longer a democracy. Pick a side, because there won't be another time, another moment, another chance to be a patriot.

Oh, I dunno, if they steal this $election after pulling off the $windle, I suspect there will be all kinds of patriotic opportunities coming soon. Just like their were in the 1860s.

Shorter Counter Proposal

Newberry's tome of a suggestion is shortened by Ian Welsh here:

a) FDIC (FDIC takes over funds in addition to banks)
b) HOLC (home ownership loan corporation)
c) declare a state of emergency so you can do oversight and release reserves from the oil reserve, because bailouts will increase liquidity, and that liquidity will go into oil/gas prices
d) give aid to ordinary Americans - food stamps, ei extension, welfare, etc…

With slightly longer elaboration here and Newberry's original analysis here.

Not a Financial Crisis, a Constitutional Crisis

Stirling Newberry gets it:

...As Paulson's little demand for dictatorial powers makes clear, this is not really a financial crisis. Instead, it is a political and constitutional crisis. Paulson told Barney Frank that putting in an amendment to cap executive pay would be a "poison pill." If this were really a catastrophe in the making, one where the American public's money was needed right now, or else, then Paulson would have accepted almost any conditions, even if he intended to renege on them in practice. After all, with 700 billion to spend, it would have been trivial to make sure that a few billion sloshed to the people whose golden parachutes he took away. The defense department loses track vast sums of money. It would not have been hard to do that here. Clearly we are not in the moment of true catastrophic financial failure. Hence there is no reason to not make this as hard a bargaining process as possible...

And:

Obama announces opposition to the principles of the Paulson Plan


"Even if the Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects some basic principles.

1. No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.

2. Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.

3. Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.

4. Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.

5. A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.

6. Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families – a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.

7. Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.

Write your Congresspeople to support Obama. Or suffer the consequences of the fix being in- on you.

Bu$h brought down the Market

Leah has some talking points you should consider in any correspondence to your Congresscritter about Paulson's Swindle.

...1. No blank checks without oversight, close intense oversight.

2. Absolute limits on executive compensation.

3. Absolute transparency, in particular in regards what is being purchased and at what price and who and how the price has been determined.

4. A quick hearing inviting Economists to testify about other options, like buying shares of banking entities.

5. Any authorization must be time-limited to the next four months, by which time there will no a new administration and a new congress who will have to reauthorize based on what has happened during those four months...

Plus she provides some good links:

Ian Welsh:

...If Obama does not tell Reid and Pelosi to stop this bill, he will be reduced not just to clean-up duty for the Bush administration, which was always going to part of his job, but he will do that cleanup on Bush's and Paulson's terms. If Obama would prefer that ordinary Americans should also get some help, too bad. If Obama would prefer that bank CEOs who ran their companies into the ground should lose their jobs, too bad. If Obama thinks that reforming the financial system is necessary as a condition of bailing it out, too bad...

Numerian writes letters to his Senator:

...What Sec. Paulson wants you to believe is that catastrophe is approaching, but it can be averted if only Congress acts urgently to give him the extraordinary authority he is requesting. The implication is if you don't give him $700 billion in borrowing authority within a week, markets will collapse and it will be all your fault.

We've seen this drill before, with the Patriot Act and with the Iraq War authorization. The scare tactics, the urgency, the implied threat of blame for any failure - this is what the Bush administration does. Some of you in the Senate were able to stand up to this pressure, and that type of strength is desperately needed now.

If insolvency is here now for the big banks, the last thing you want to do is throw $700 billion of money that is not yours at bailing out the banks who created this disaster. You'll need every bit of that money to protect the taxpayers and their deposits in these banks when these financial companies are thrown into the bankruptcy courts. You'll need that money to make sure consumer deposits are protected with insurance, and you'll need it to keep the healthy parts of these banks that deal with consumers and businesses functioning until they come out of bankruptcy.

And forget about comparing Paulson's plan to the RTC. These L3 assets aren't homes, condos, or commercial real estate that can be easily sold at the right price. They are bits of paper giving the bond holder the right to some small portion of thousands of mortgages, a right that is shared with all the other investors, who are required to agree on what is done with foreclosed properties in the pool. This is one of the reasons no one wants to buy this stuff, and no one will for many years until it is crystal clear what the final losses will be.

Once you give Paulson the authority he seeks, he will buy these securities at 65 cents/dollar, then quietly auction them off at a nickel each. It will be "unfortunate but necessary" to revitalize the banking industry, even though you will discover the banks won't be lending after this is all over to any but the finest credits. You will have rewarded the banks for their calamitous decisions, stuffed the taxpayers with huge losses, squandered your remaining ability to shore up the FDIC, not prevented the big banks from collapsing anyway, done nothing to help the community banks that will constitute the new banking system in this country when these problems are solved, and in the end made the situation much worse.

If you want to do something practical, require the SEC to go into these banks, open up their L3 holdings to public scrutiny, auction off a sampling of these securities, and apply those prices to the L3 portfolios of all the banks. In this way we will know which banks are insolvent. You won't need to go through this charade of having the Treasury take ownership of these assets, because the core of the problem is not that these assets are clogging up bank balance sheets, as Paulson says (which is tantamount to saying, by the way, that no one will buy them). The core of the problem is that there is no transparency about these portfolios and their real worth. Congress doesn't need $700 billion of our money to create that transparency, and if it shows as I suspect that many of these banks are insolvent, that's why we have bankruptcy courts. You can certainly protect the banks from bank runs while they are in bankruptcy.

Paulson is basically rolling you and the rest of Congress into giving him unprecedented power to protect his friends on Wall Street...

That was part of the plan to begin with.

Scaring the Main$tream

Not a good idea, DeRegulator.

SilentPatriot:

...It’s a cold day in hell when the entire “This Week” panel rails against John McCain and his utter confusion when it comes to the economy. Cokie Roberts raises the specter of Herbert Hoover, Donaldson rightfully pins the deregulation racket on McCain and Republicans, calling McCain’s promise to champion regulation a “hard pill to swallow,” and George Will says McCain acted “unpresidential” and that the issue of age should re-enter the debate over whether McCain is fit for the job.

Quote of the segment, from George Will of all people:

'John McCain showed his personality this week and made some of us fearful.'

To put it mildly.

The Golden Fleece

Paulson Bailout Plan a Historic Swindle
By William Greider
September 19, 2008

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks..."

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed...

Go read it all.

I would advocate also a plan to help the homeowners, a plan to freeze interest rates to the consumer on all credit (cards, loans, and mortgages) at about 5%.

Yes, Virginia, 5%. Christmas is coming, and believe it, if people didn't think they were going to loose their shirt (and their car and the roof over their head) it would be a lot jollier for everyone and the American business community.

The awful fact is that the way things are now, the only people who continue to profit are the people on top, not the American business community.

The average American business, despite their reflexive investment in the republican free market, isn't on top.

Storm Troopers for the Empire

The Dark Wraith has a digression from his economic schtick:

... it seems that John McCain's running mate, Sarah Palin, has been associated with not one, but possibly three or four churches deeply involved in the so-called Third Wave movement. Quite ominously, the producer of a YouTube video detailing the frightening bizarreness of this fast-growing cult reports that YouTube (read that, Google) has pulled the video for "inappropriate content." You can read the report and see the video in the article, "YouTube Censors Documentary on Palin's Churches."

If you haven't done so, read about the New Apostolic Reformation. (No, these aren't "Dominionists," per se; they're something else.) When you've become thoroughly familiar with these maniacs, you should then read about Sarah Palin, who is part of this army that has no intention of merely sitting around waiting for the end time, but instead believes it must be brought about by God's chosen Christian soldiers.

By the time you're finished reading about this movement, you might be afraid, but that's just plain silly.

You should, in fact, be terrified.

Particularly if you're Jewish. You should realize these people are no friends of Israel, despite their use of words the Israeli NeoCons use. Their goal is the complete obliteration of every person who doesn't accept their vision of the Warrior Jesus.

They are poised to steal the election for a sick old man who will be quickly replaced by a young, fanatic, ambitious, venal, and vapid woman who subscribes to their edicts.

You think 8 years of Bu$hCo was bad? You don't know what bad is, yet.

Really good advice, Obama

Maureen Dowd:

...GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence. While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry. Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library. It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too? It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!

They have an army of relgious fanatics and they're going to steal this election again.

If Obama doesn't have anger to project, he's not paying attention. Or being paid off.

Time to Write Blank Check #2

Not only for Endless War, for Endless Happy Wall Street:

WASHINGTON — The Bush administration on Saturday formally proposed to Congress what could become the largest financial bailout in United States history, requesting unfettered authority for the Treasury Department to buy up to $700 billion in mortgage-related assets.

The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt...

Or Wall Street- Bu$hie's Ba$e- will be very unhappy.



Just give them all your money. Short, simple, and at least as pricey as the Iraqi war. Are you stunned enough to buy it?

Web of Deceit

Now, that's an intelligence network.

There are some rather important differences between FDR's New Deal and Bu$hCo's Crude Deal. Think of FDR's rescue as bottom up. The little people came first. The government created Fannie Mae and Freddie Mac to make sure lower income people had a chance at a home.

The Bu$hCo Crude Deal is Top Down. The guys at the top get the golden rescue from the Treasury, and you have to deal with the collection agency.

The Dark Wraith again groks the essence:

Tell the Truth

Just sayin'... he also "broke" the U.S. economy and most likely just as "accidently" as he allowed 9-11 to happen.

High Stakes Jokers

Why does this feel like another 9-11?

Stunning:

WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”

As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that...”

Stunning. Hard to think, isn't it? Massive government rescue of all the credit markets, including mortgage, or else...

Aside for the fact that Bu$hie's Ba$e will end up with hundreds of billions of petrodollars from the U.S. Treasury, the Feds- or whatever the Company is that controls them- will end up with control of virtually the entire credit industry of the United States. They will possibly own your mortgage. They will certainly set the interest rates on your credit cards.

For your protection, of course.

Arthur Silber notices this too:

...The ruling class wins. The ruling class always wins.

Suckers. Yes. Me, too.

The ruling class are bastards. Whenever you think they've hit a major snag, consider the problem again. Then once more. You probably missed something...

It feels like another 9-11. Another dose of the Shock Doctrine. For security, for $ecurities, we surrender our freedom, or have it surrendered for us by our legal Representatives, who might just make a buck or two off of this too.

But Al Qaeda's been defeated!

Behind the U.S. Embassy Bombing in Yemen
By Andrew Lee Butters / Beirut Wednesday, Sep. 17, 2008

...Wednesday's attack on the U.S. embassy in Sanaa, Yemen's capital, is the latest sign of a growing al-Qaeda-inspired Islamic insurgency against the Washington-allied regime on the strategic southern tip of the Arabian peninsula.

The attack, which included an assault by heavily armed fighters and a car bomb, and left 16 people dead (including six of the attackers) is part of a long-standing pattern of incidents targeting the West and its allies, although no Americans were among Wednesday's dead...

Meanwhile, the crickets are singing in the Homeland, as Jeb does to Lehman like Neil did to Silverado.

Garbage In, Garbage Out, and the Hucksters who want to trash you

What good are sophisticated models of the economy or anything else run on computers if the input is smoke and mirrors?

...most Wall Street computer models radically underestimated the risk of the complex mortgage securities, they said. That is partly because the level of financial distress is “the equivalent of the 100-year flood,” in the words of Leslie Rahl, the president of Capital Market Risk Advisors, a consulting firm.

...The people who ran the financial firms chose to program their risk-management systems with overly optimistic assumptions and to feed them oversimplified data. This kept them from sounding the alarm early enough.

Top bankers couldn’t simply ignore the computer models, because after the last round of big financial losses, regulators now require them to monitor their risk positions. Indeed, if the models say a firm’s risk has increased, the firm must either reduce its bets or set aside more capital as a cushion in case things go wrong.

In other words, the computer is supposed to monitor the temperature of the party and drain the punch bowl as things get hot. And just as drunken revelers may want to put the thermostat in the freezer, Wall Street executives had lots of incentives to make sure their risk systems didn’t see much risk.

“There was a willful designing of the systems to measure the risks in a certain way that would not necessarily pick up all the right risks,” said Gregg Berman, the co-head of the risk-management group at RiskMetrics, a software company spun out of JPMorgan. “They wanted to keep their capital base as stable as possible so that the limits they imposed on their trading desks and portfolio managers would be stable.”

Well, it's obviously good enough to earn an ex-CEO $17,000 an hour while the geting was good...

If they throw a pot-smoking 18 year old in prison, why doesn't a CEO who reprogrammed the Fed-mandated watchdog hardware see some prison time?

If punishment's proportional to the damage to society, the Masters of the Universe would be exiled to the Netherworld for an eon or so. Or Jotunheim. Or somewhere without a modem.

Meanwhile, be glad you've got that third rail that stopped Bu$hCo and its Wall Street Ba$e a couple of years ago. Jack Cafferty, via Crooks and Liars:

“Luckily we have the safety net of Social Security to fall back on…for now.

You may remember just four years ago President Bush made a big push to partially privatize Social Security… You know so we could individually invest our future with the great minds on Wall Street. It failed back then, but that concept could still become a reality. See John McCain also supports supplementing Social Security with private investment accounts. His opponent Barack Obama does not.”

Free Market takeover of the D.o'D.

Some economic problems not only seem intractable. They actually shoot back at you.

Frida Berrigan:

...Once upon a time, soldiers did more than pick up a gun. They picked up trash. They cut hair and delivered mail. They fixed airplanes and inflated truck tires.

Not anymore. All of those tasks are now the responsibility of private military corporations. In the service of the Pentagon, their employees also man computers, write software code, create integrating systems, train technicians, manufacture and service high-tech weapons, market munitions, and interpret satellite images.

People in ties or heels, not berets or fatigues, today translate documents, collect intelligence, interpret for soldiers and interrogators, approve contracts, draft reports to Congress, and provide oversight for other private contractors. They also fill prescriptions, fit prosthetics, and arrange for physical therapy and psychiatric care. Top to bottom, the Pentagon's war machine is no longer just driven by, but staffed by, corporations.

Consider the following: In fiscal year 2005 (the last year for which full data is available), the Pentagon spent more contracting for services with private companies than on supplies and equipment -- including major weapons systems. This figure has been steadily rising over the past 10 years. According to a recent Government Accountability Office report, in the last decade the amount the Pentagon has paid out to private companies for services has increased by 78% in real terms. In fiscal year 2006, those services contracts totaled more than $151 billion.

Ever more frequently, we hear generals and politicians alike bemoan the state of the military. Their conclusion: The wear and tear of the President's Global War on Terror has pushed the military to the breaking point. But private contractors are playing a different tune. Think of it this way: While the military cannot stay properly supplied, its suppliers are racking up contracts in the multi-billions. For them, it's a matter of letting the good times roll.

As we prepare to close the book on the Bush presidency, it is worth exploring just how, in the last seven-plus years, the long War on Terror has actually helped build a new, privatized version of the Pentagon. Call it Military Industrial Complex 2.0.

Consider fiscal year 2001, which conveniently ended in September of that year. It serves as a good, pre-War on Terror baseline for grasping just how the Pentagon expanded ever since -- and how much more it is paying out to private contractors today.

Back then, the Pentagon's top 10 suppliers shared $58.7 billion in Department of Defense (DoD) contracts, out of a total of $144 billion that went to the top 100 Pentagon contractors. Number 100 on the list was The Carlyle Group with $145 million in contracts. Keep in mind, of course, that this was the price of "defense" for a nation with no superpower rival.

Fast forward to 2007 and the top 10 companies on the Pentagon's list of private contractors were sharing $125 billion in DoD contracts, out of a total of $239 billion being shared among the top 100 contractors. The smallest contract among those 100 was awarded to ARINC and came in at $495 million...

Chalmers Johnson has a take on how this effects the current financial crisis Amerika faces:

... There are three broad aspects to the U.S. debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relation to the national security of the U.S. We are also keeping the income tax burdens on the richest segment of the population at strikingly low levels.

Second, we continue to believe that we can compensate for the accelerating erosion of our base and our loss of jobs to foreign countries through massive military expenditures -- "military Keynesianism" (which I discuss in detail in my book Nemesis: The Last Days of the American Republic). By that, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.

Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of the U.S. These are what economists call opportunity costs, things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing...

So when the CEOs run the Do'D into the ground like they do everything else, who does the buyout?

When there are bullets and bombs involved, retirement and layoff get entirely different meanings.

Atrios on "The Absurdity of CNBC"

What Duncan sez:

The entire financial system is practically collapsing and they're lamenting the possibility of more regulation. I don't think the sports/referee metaphor is perfect, but it's probably good enough. People who prattle on about "the free market" are usually too stupid to have a clue how complicated and pervasive the "rules" had to be to to get a well-functioning modern market system: sophisticated concepts of contracts and enforcement, property rights, legal entities, proper accounting, bankruptcy, limited liability, etc... etc..., did not descend from the heavens but were, in fact, created.

Keep that up and you'll be telling us everything on the Market, from the price of oil to the interest you're paying on your credit cards to the Dow Jones Industrial average isn't an act of God.

Who knew?

The real issue: Barbies for War

The editors of The New York Pravda write it in big letters on the sidewalk in case McCain can't read it:

John McCain spent Monday claiming as he had countless times before — that the economy was fundamentally sound. Had he missed the collapse of Lehman Brothers or the sale of Merrill Lynch, which were announced the day before? Did he not notice the agonies of the American Insurance Group? Was he unaware of the impending layoffs of tens of thousands of Wall Street employees on top of the growing numbers of unemployed workers throughout the United States?

On Tuesday, he clarified his remarks. The clarification was far more worrisome than his initial comments.

He said that by calling the economy fundamentally sound, what he really meant was that American workers are the best in the world. In the best Karl Rovian fashion, he implied that if you dispute his statement about the economy’s firm foundation, you are, in effect, insulting American workers. “I believe in American workers, and someone who disagrees with that — it’s fine,” he told NBC’s Matt Lauer.

Let’s get a few things straight. First, no one who is currently running for president does not “believe in American workers.”

More to the point, the economy is stressed to the breaking point by fundamental problems — in housing, finance, credit, employment, health care and the federal budget — that have been at best neglected, at worst exacerbated during the Bush years. And as a result, American workers have taken a beating.

In clarifying his comments, Mr. McCain lavished praise on workers, but ignored their problems. That is the real insult.

For decades, typical Americans have not been rewarded for their increasing productivity with comparably higher pay or better benefits. The disconnect between work and reward has been especially acute during the Bush years, as workers’ incomes fell while corporate profits, which flow to investors and company executives, ballooned. For workers, that is a fundamental flaw in today’s economy. It is grounded in policies like a chronically inadequate minimum wage and an increasingly unprogressive tax system, for which Mr. McCain offers no alternatives.

As for Wall Street, Mr. McCain blamed the meltdown on “unbridled corruption and greed.” He called for a commission to find out what happened and propose solutions. His diagnosis and his cure are misguided. The crisis on Wall Street is fundamentally a failure to do the things that temper, detect and punish corruption and greed. It was a failure to police the markets, to enforce rules, to heed and sound warnings and expose questionable products and practices.

The regulatory failure is rooted in a markets-are-good-government-is-bad ideology that has been ascendant as long as Mr. McCain has been in Washington and championed by his own party. If Mr. McCain adheres to some other belief system, we would like to hear about it.

McPain believes in Barbies for War:

... I sautéed myself in Sarahville last week.

I wandered through the Wal-Mart, which seemed almost as large as Wasilla, a town that is a soulless strip mall without sidewalks set beside a soulful mountain and lake.

Wal-Mart has all the doodads that Sarah must need in her career as a sportsman — Remingtons and “torture tested” riflescopes, game bags for caribou, machines that imitate rabbits and young deer and coyotes to draw your quarry in so you can shoot it, and machines to squish cows into beef jerky.

I talked to a Wal-Mart mom, Betty Necas, 39, wearing sweatpants and tattoos on her wrists.

She said she’s never voted, and was a teenage mom “like Bristol.” She likes Sarah because she’s “down home” but said Obama “gives me the creeps. Nothing to do with the fact that he’s black. He just seems snotty, and he looks weaselly.”

Ten Obama supporters in Wasilla braved taunts and drizzle to stand on a corner between McDonald’s and Pizza Hut. They complained that Sarah runs government like a vengeful fiefdom and held up signs. A guy with a bullhorn yelled out of a passing red car: “Go back to the city, you liberal Communists!”

At gatherings in The Last Frontier, pastors pray for reporters, drilling evokes cheers and Todd Palin is hailed as a guy who likes to burn fossil fuels.

I had many “Sarahs,” as her favorite skinny white mocha is now called, at the Mocha Moose. “I’ve seen her at 4 a.m. with no makeup,” said manager Karena Forster, “and she’s just as beautiful.”

I stopped by Sarah’s old Pentecostal church, the Wasilla Assembly of God, and perused some books: “The Bait of Satan,” “Deliverance from PMS,” and “Kissed the Girls and Made them Cry: Why Women Lose When They Give In.” (Author Lisa Bevere advises: “Run to the arms of your prince and enter your dream.”)

In Anchorage Saturday, I went by a conference conducted by James Dobson’s Focus on the Family and supported by Sarah’s current church, the Wasilla Bible Church, about how to help gays and lesbians “journey out” of same-sex attraction.

(As The Times reported recently, in 1995, Palin, then a city councilwoman, told colleagues she had seen “Daddy’s Roommate” on the shelf of the library and did not approve. The Wasilla Assembly of God tried to ban “Pastor, I Am Gay” by Howard Bess, a liberal Christian preacher in nearby Palmer.)

Anne Heche’s mother, Nancy, talked about her distress when her daughter told her she was involved with Ellen. Jeff Johnston told me he had “a struggle” with homosexuality “for a season,” but is now “happily married with three boys.” (Books for sale there included “Mommy, Why Are They Holding Hands?” and “You Don’t Have to Be Gay.”)

I covered a boisterous women against Palin rally in Anchorage, where women toted placards such as “Fess up about troopergate,” “Keep your vows off my body,” “Barbies for war!” “Sarah, please don’t put me on your enemies list,” and “McCain and Palin = McPain.”

A local conservative radio personality, Eddie Burke, who had lambasted the organizers as “a bunch of socialist, baby-killing maggots,” was on hand with a sign reading “Alaska is not Frisco.”

“We are one Supreme Court justice away from overturning Roe v. Wade,” he excitedly told me.

R. D. Levno, a retired school principal, flew in from Fairbanks. “She’s a child, inexperienced and simplistic,” she said of Sarah. “It’s taking us back to junior high school. She’s one of the popular girls, but one of the mean girls. She is seductive, but she is invented.”

It's the same old Peter Pan story. If you close your eyes and clap loud enough, Tinkerbelle will be just fine.

Kapitalist Klowns from Cyberspace

Prest-o! Now we want the guvmint off our backs! Change-o! Now we want to climb on guvmint's back! And, of course, the bankroll of the Amerikan taxpayer!

...When Lehman Brothers filed for bankruptcy on Monday, it became the latest but surely not the last victim of the subprime mortgage collapse. Lehman owned more than $600 billion in assets. Financial institutions around the world have already reported more than half a trillion dollars of mortgage-related losses and that figure will most likely double or triple before the crisis exhausts itself.

But there is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds.

Late Monday, A.I.G. was downgraded by the major credit rating agencies (which inexplicably still retain an enormous amount of power in the marketplace despite having gutted their credibility with unreliable ratings for mortgage-backed securities during the housing boom). This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts.

Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.

A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size.

Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss. The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.

As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized. But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets.

If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.

Regulators knew that if Lehman went down, the world wouldn’t end. But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed...

The Fed cannot afford to stand on principle. The myth of free markets ended with the takeover of Fannie Mae and Freddie Mac. Actually, it ended with their creation.

Ah, yes,that's a nice final dig there, you killer kapitalist. Actually, it wasn't the creation of a government-sponsored mortgage industry for lower to middle income people that did Fannie Mae and Freddie Mac in. That was a New Deal invention that worked quite well.

What did 'em- and us- in, it was the Reptilican-minded turnover of Fannie Mae and Freddie Mac to private entrepreneurs and the deregulated Free Market that did it, and us, in lambchops.

Insurance Big Top

It's the introduction of the Free Market into health care. You know, the Fundamentals are strong, a rising tide drowns all boaters.

Bob Herbert:

...A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan.

There is nothing secret about Senator McCain’s far-reaching proposals, but they haven’t gotten much attention because the chatter in this campaign has mostly been about nonsense — lipstick, celebrities and “Drill, baby, drill!”

For starters, the McCain health plan would treat employer-paid health benefits as income that employees would have to pay taxes on.

“It means your employer is going to have to make an estimate on how much the employer is paying for health insurance on your behalf, and you are going to have to pay taxes on that money,” said Sherry Glied, an economist who chairs the Department of Health Policy and Management at Columbia University’s Mailman School of Public Health.

Ms. Glied is one of the four scholars who have just completed an independent joint study of the plan. Their findings are being published on the Web site of the policy journal, Health Affairs.

According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

The net effect of the plan, the study said, “almost certainly will be to increase family costs for medical care.”

Under the McCain plan (now the McCain-Palin plan) employees who continue to receive employer-paid health benefits would look at their pay stubs each week or each month and find that additional money had been withheld to cover the taxes on the value of their benefits...

Taxing employer-paid health benefits is the first step in this transition, the equivalent of injecting poison into the system. It’s the beginning of the end.

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all...

What could possibly be the point of this? Ah, read on, it gets better:

...Yet another radical element of McCain’s plan is his proposal to undermine state health insurance regulations by allowing consumers to buy insurance from sellers anywhere in the country. So a requirement in one state that insurers cover, for example, vaccinations, or annual physicals, or breast examinations, would essentially be meaningless.

In a refrain we’ve heard many times in recent years, Mr. McCain said he is committed to ridding the market of these “needless and costly” insurance regulations.

This entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible alone.

You would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health care system.

But we’re not even paying much attention.



It's the P.T. Barnum School of Government. There's a sucker born every minute, and a con man born to relieve him or her of their money.

"The Fundamentals are Sound"

Treasury Secretary Henry M. Paulson Jr. trying out his new comedy routine at a press conference today.

Would You Buy a Used War from This Man?

When this guy talks, he makes "The Fundamentals of the Economy are Strong" into a statement fit for Bela Lugosi.

[tip o'teh tinfoil to BagNewsNotes]

I've seen this scene in horror movies many times just before the feeding starts...

Lipstick on a Barracuda

Frank Rich:

... if we’ve learned anything from the G.O.P. convention and its aftermath, it’s that the 2008 edition of John McCain is too weak to serve as America’s chief executive. This unmentionable truth, more than race, is now the real elephant in the room of this election.

No longer able to remember his principles any better than he can distinguish between Sunnis and Shia, McCain stands revealed as a guy who can be easily rolled by anyone who sells him a plan for “victory,” whether in Iraq or in Michigan. A McCain victory on Election Day will usher in a Palin presidency, with McCain serving as a transitional front man, an even weaker Bush to her Cheney.

The ambitious Palin and the ruthless forces she represents know it, too. You can almost see them smacking their lips in anticipation, whether they’re wearing lipstick or not...

Rick Davis, the McCain campaign manager, said that the Palin-sparked convention created “a whole new Republican Party,” but what it actually did was exhume an old one from its crypt.

The specifics have changed in our new century, but the vitriolic animus of right-wing populism preached by Pegler and McCarthy and revived by the 1990s culture wars remains the same. The game is always to pit the good, patriotic real Americans against those subversive, probably gay “cosmopolitan” urbanites (as the sometime cross-dresser Rudy Giuliani has it) who threaten to take away everything that small-town folk hold dear.

The racial component to this brand of politics was undisguised in St. Paul. Americans saw a virtually all-white audience yuk it up when Giuliani ridiculed Barack Obama’s “only in America” success as an affirmative-action fairy tale — and when he and Palin mocked Obama’s history as a community organizer in Chicago. Neither party has had so few black delegates (1.5 percent) in the 40 years since the Joint Center for Political and Economic Studies started keeping a record.

But race is just one manifestation of the emotion that defined the Palin rollout. That dominant emotion is fear — an abject fear of change. Fear of a demographical revolution that will put whites in the American minority by 2042. Fear of the technological revolution and globalization that have gutted those small towns and factories Palin apotheosized.

And, last but hardly least, fear of illegal immigrants who do the low-paying jobs that Americans don’t want to do and of legal immigrants who do the high-paying jobs that poorly educated Americans are not qualified to do. No less revealing than Palin’s convention invocation of Pegler was the pointed omission of any mention of immigration, once the hottest Republican issue, by either her or McCain...

But the ultimate hypocrisy is that these woebegone, frightened opponents of change, sworn enemies of race-based college-admission initiatives, are now demanding their own affirmative action program for white folks applying to the electoral college. They want the bar for admission to the White House to be placed so low that legitimate scrutiny and criticism of Palin’s qualifications, record and family values can all be placed off limits. Byron York of National Review, a rare conservative who acknowledges the double standard, captured it best: “If the Obamas had a 17-year-old daughter who was unmarried and pregnant by a tough-talking black kid, my guess is if they all appeared onstage at a Democratic convention and the delegates were cheering wildly, a number of conservatives might be discussing the issue of dysfunctional black families.”

The cunning of the Palin choice as a political strategy is that a candidate who embodies fear of change can be sold as a “maverick” simply because she looks the part. Her marketers have a lot to work with. Palin is not only the first woman on a Republican presidential ticket, but she is young, vibrant and a Washington outsider with no explicit connection to Bush or the war in Iraq. That package looks like change even if what’s inside is anything but...

Obama’s most important tactic is still the one he has the most trouble executing. He must convey a roll-up-your-sleeves Bobby Kennedy passion for the economic crises that are at the heart of the fears that Palin is trying to exploit. The Republican ticket offers no answers to those anxieties. Drilling isn’t going to lower gas prices or speed energy independence. An increase in corporate tax breaks isn’t going to end income inequality, provide health care or save American jobs in a Palin presidency any more than they did in a Bush presidency.

This election is still about the fierce urgency of change before it’s too late. But in framing this debate, it isn’t enough for Obama to keep presenting McCain as simply a third Bush term. Any invocation of the despised president — like Iraq — invites voters to stop listening. Meanwhile, before our eyes, McCain is turning over the keys to his administration to ideologues and a running mate to Bush’s right...