In "Taliban resurgence pushes troops to change tack,"Al Jazeera's Josh Rushing joins U.S. troops on the frontline in Afghanistan. Watch this and then ask yourself: Why isn't this as freely available on your cable as CNN or Fox News? And yes, you've heard Rushing's name; he's the former Marine flack during the Iraq invasion who was featured in the documentary Control Room and then defied the Pentagon by talking about his experiences with Al Jazeera. Now he works for Al Jazeera.
Unlike Wall Street's short-sellers, I hate to burst anyone's bubble, but capitalism is not dead, despite the moaning and groaning from Davos to D.C.
Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.
That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.
While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.
On the other hand, you can say that capitalism is in trouble, judging by the surprisingly cynical, lively tone of Ben White's above story.
Yes, the fact that the bonuses sharply fell indicates trouble on Wall Street. But the main thing it indicates is that the bonuses in past years have been staggeringly unconscionable and are now falling back to being merely unconscionable.
In any case, Barack Obama, the nation's first Kenyan-Kansan president, has already used his bully pulpit to preach social responsibility and rail against greed. Looks as if he might have to summon these Wall Street gangsters to the basketball court and posterize them. You know, add them to his In-Your-Facebook.
And you can just ignore the caterwauling by Capitol Hill's Republicans about Obama's stimulus plan. Even the Wall Street Journalreports that corporate types look favorably on Obama's package.
For those of us accident victims bleeding after being run over on Wall Street or gasping for breath at the foot of Capitol Hill, that stimulus package can't come too soon. The depression is finally hitting home: I almost dropped my laptop when I heard that profits earned by my Sony baby daddy dropped by 95 percent. Poor little laptop overheats as it is.
If yours still works (and if you're reading this, it is), click on these items...
George Mitchell, President Barack Obama's special Middle East troubleshooter, was chairman of a law firm that was paid about $8 million representing Dubai's ruler in connection with a child-trafficking lawsuit.
...the bank suddenly began pulling its millions out of [funds that invested with Madoff] in early autumn, months before Mr. Madoff was arrested, according to accounts from Europe and New York that were subsequently confirmed by the bank. The bank did not notify investors of its move, and several of them are furious that it protected itself but left them holding notes that the bank itself now says are probably worthless.
Bernie Madoff is whining to anyone who'll listen that he's being held captive in his palatial penthouse and unable to traipse around the Big Apple as he did before being busted for running a $50 billion Ponzi scheme, a source familiar with the scam artist told the Post.
"I'm a prisoner in my own house!" Madoff fumed. "I can't go anywhere! I'm stuck here all day!"...
In recent days, The Post has learned, private contractors have been moving at the request of federal authorities to install wiretaps on Madoff's apartment phones and computers.
"If he surfs the Web or makes a call, it's going to be tracked," a source said.
Maybe our mayor can now make her a kind of special city envoy to Washington in these difficult times ahead.
She will still have a deep connection with our new President, one of whose daughters now sleeps in Caroline's old room at the White House.
Christ, at least make sure she votes a few times before we make her our "ambassador."
I'm not attacking the Kennedys or rich people. Ever since Chappaquidick, Teddy Kennedy has worked hard in the trenches as a senator. And Jackie O took on big cultural battles, leading the successful fight to save and restore Grand Central Station.
Now we have a huge crisis on our hands. Tens of thousands of New Yorkers are being fired, and basic social services are being slashed, feeding a downward spiral.
There are a million fires that need to be put out — and I don't mean the problems faced by Carnegie Hall, which is slashing its schedule and budget. Yes, that's a shame, but stay away from that "cause," Princess Caroline.
Do some public service before you're anointed as our ambassador. If you have celebrity capital (and you do), then start spending it to help goad other rich New Yorkers (and there are still plenty of them) into helping their increasingly desperate fellow residents.
Do something noblesse before we oblige you.
As for Daly, one of his readers, hjo4, said it best in a cranky 7 a.m. post:
Special Envoy give me a break there are thousands of New Yorkers without the Kennedy name or connections who commit themselves to New York and NewYorkers whether it be our children in education, mentoring or being a role model or be it our Senior citizens they do this from their heart, they are the "unsung heroes" perhaps if you want to appoint a "Special Envoy" I suggest you turn an eye to one of those citizens I'm sick of people making those whose family fortunes was made questionably and off the backs of others still receive special treatment. Turn to the average Joe who does good deeds from their heart Those are the special envoys we need.
President Barack Obama, on a busy first full day in office, announced a wage freeze for top White House staff, waded into the Israeli-Palestinian conflict and prepared to issue executive orders Thursday -- including one to close the military prison at Guantanamo Bay within a year.
He also issued the strictest rules to date on lobbying activities for members of the administration and met with his national security team to begin the process of withdrawing troops from Iraq.
In an unusual moment that was not part of his team's extensive planning for day one, Mr. Obama also retook the oath of office. That came after Chief Justice John G. Roberts Jr., and then Mr. Obama, spoke one of the words out of order during the swearing in on Tuesday.
The U.S. led the global economy into its worst recession in at least a quarter century. Now the rest of the world is looking to Barack Obama to lead the way out. The trouble is, even the incoming commander-in-chief of the biggest economy can't do it alone.
...In my tests, even the beta version of Windows 7 was dramatically faster than Vista at such tasks as starting up the computer, waking it from sleep and launching programs.
And this speed boost wasn't only apparent in the preconfigured machine from Microsoft, but on my own Sony, which had been a dog using Vista, even after I tried to streamline its software. Of course, these speed gains may be compromised by the computer makers, if they add lots of junky software to the machines. Windows 7 is also likely to run well on much more modest hardware configurations than Vista needed....
Compatibility with hardware and software, which was a problem in Vista, seems far better in Windows 7 -- even in the beta. I tried a wide variety of hardware, including printers, Web cams, external hard disks and cameras, and nearly all worked fine.
I also successfully installed and used popular programs from Microsoft's rivals, such as Mozilla Firefox, Adobe Reader, Apple's iTunes, and Google's Picasa. All worked properly, even though none was designed for Windows 7.
In a provocative HuffPost piece, Larry Gellman writes:
...My fellow Jews love to write and talk about how horrible Madoff is and how much damage he has done to the Jewish people. Some have even compared him to Hitler which is scary because it means that money has become so important today that someone who steals money and swindles people is comparable to a person who engineered the murder of six million people....
Yes, the nation will have to endure several root canals, but for now, the public seems numb with delight about having a president who can speak our language and sounds like a grownup.
Considering that Obama will have to deliver more bad news to Americans than any other president in memory, we're fortunate that he's such a skilled and inspiring speaker.
It was already gratifying that we'll have a president who loves to play basketball. (As a former ballboy for the Phillips 66ers, I feel a special tug in the new president's direction.) But it's clear that no matter how much Obama likes to dribble, as a speaker he never drools.
One of the better analyses — up to a point — of Obama's inaugural address was Thomas DeFrank's piece in the Daily News:
Whatever triumph and travail lie ahead, Barack Obama has already delivered the most critical 2,401 words of his presidency.
It was part sermon, part tutorial, part call to arms, well-packaged and elegantly delivered.
Yet for all the inspiring, hopeful flourishes of his 18-minute inaugural address, Obama also served up a stark, tough-love message:
Grow up, guys. No more of the same old partisan, gridlocked, dog-eat-dog baloney or we're all doomed.
He declared war not just on global terrorists but on "the petty grievances and false promises, the recriminations and wornout dogmas, that for too long have strangled our politics."
Yes, Obama's speech was so stirring and well-delivered that it made even the most hardened cynics' knees buckle.
And DeFrank's analysis is smoothly written. But let's not get carried away about what DeFrank says about our having to "grow up."
We will not grow up — and by "we" I mean politicians and their "same old partisan, gridlocked, dog-eat-dog baloney." That will always be around, and every incoming president has to give us the same encouragement to pull together and forget the partisanship.
Yes, Obama had to say that, but partisanship is what democracies are made of, and other parts of Obama's speech were more memorable — like when he said:
"We are a nation of Christians and Muslims, Jews and Hindus, and non-believers."
You heard him. He actually included "non-believers" in there. What a refreshing change from the Bush regime, which tried to ram its evangelical nonsense down our throats.
Obama gave the obligatory shout-out to God, and I'm sure She's happy about that, but he actually directed a conciliatory phrase right at the Muslim world. Astonishing.
The new president, you might notice, pointedly did not portray the planet as the battleground of a comic-book-style "clash of civilizations." Instead, he actually tried to promote the idea that no matter what, we're all human.
Leave aside the lingering doubts that Dick Cheney is one of us. You have to hope that those words of Obama's will get under our skin and stay there.
Now, Obama, get to work on that New Great Depression.
And you out there: Start clicking on these items...unless you have to get back to work...if you still have a job...
Timothy Geithner will call for a comprehensive and aggressive approach to tackling the U.S. financial crisis when he appears Wednesday at hearings on his confirmation as Treasury secretary, while also trying to assure lawmakers that he simply erred by failing to pay some payroll taxes earlier this decade.
At the hearing, Mr. Geithner will likely be grilled over his tax missteps and his role in helping to craft the Bush administration's financial-sector rescue. But senators' seeming reluctance to derail his confirmation while the economy is sputtering and the lending freeze is worsening makes it likely he will be confirmed for the cabinet post....
Some lawmakers, including many Republicans, are also relieved to finally have someone to deal with other than [Hank] Paulson, whose handling of the financial rescue angered many on Capitol Hill.
"Republican leaders think that Mr. Geithner was one of President Obama's better cabinet selections. They believe they'll be able to work with Mr. Geithner and have honest conversations," said Sam Geduldig, a financial-services lobbyist and former aide to Rep. John Boehner of Ohio, the House Republican leader.
As a key lieutenant to money manager Bernard Madoff for more than 30 years, Frank DiPascali Jr. said he headed stock-options trading and was the point man for investment-advisory clients who were told he executed their trades.
Now, he is a potential point man in the investigation of a Ponzi scheme that Mr. Madoff has told prosecutors he carried out over decades, according to a criminal complaint and people familiar with the matter, potentially bilking investors out of $50 billion....
Mr. DiPascali hasn't been charged with wrongdoing. His lawyer, Marc Mukasey, declined to comment about Mr. DiPascali's role with Mr. Madoff except to say that he had frequent contact with investors.
As Chico Marxsaid, "Who you gonna believe, me or your own eyes?"
That's easy when it comes to Gaza. The Jewish state's brutal use of white phosphorus — alleged over the weekend by observers on the ground dispatched by NYC-based Human Rights Watch — is lighting up the landscape.
Relations between the Holy Land and the Holy See were tense Thursday night after a leading Vatican cardinal compared the besieged Gaza Strip to a concentration camp.
"Defenseless populations are always the ones who pay," Renato Cardinal Martino told the Italian daily Il Sussidiario. "Conditions in Gaza increasingly resemble a big concentration camp."
That drew a furious denunciation from Israeli officials, who said the comment was "based on Hamas propaganda."
Brooklyn Assemblyman Dov Hikind, the son of Holocaust survivors, called on the Pope to apologize to Israel.
Martino, head of the Pontifical Council for Justice and Peace, defended his comments.
"They can say what they want, but the situation in Gaza is horrible," he told the newspaper La Repubblica.
Confirming that is Human Rights Watch, whose observers belie Hikind's claim that the brutality in Gaza is propaganda.
In fact, it's even worse than the cardinal says, according to HRW.
You question the watchdog group's credibility? HRW broke several major stories of U.S. atrocities in Iraq — including the horrific tale of the American soldiers in Fallujah who proudly called themselves the "Murderous Maniacs" and admitted to kicking the shit out of Iraqis just for the fun of it. (See my September 2005 item "U.S. Soldiers Reveal New Torture Tales.")
Now, here's what HRW says about what's going on:
On January 9 and 10, 2009, Human Rights Watch researchers in Israel observed multiple air-bursts of artillery-fired white phosphorus over what appeared to be the Gaza City/Jabaliya area.
Israel appeared to be using white phosphorus as an "obscurant" (a chemical used to hide military operations), a permissible use in principle under international humanitarian law (the laws of war). However, white phosphorus has a significant, incidental, incendiary effect that can severely burn people and set structures, fields, and other civilian objects in the vicinity on fire. The potential for harm to civilians is magnified by Gaza's high population density, among the highest in the world.
"White phosphorous can burn down houses and cause horrific burns when it touches the skin," said Marc Garlasco, senior military analyst at Human Rights Watch.
If the Nazis had had white phosphorus — the 21st century version of napalm — they would have used it against the Jews.
Drivers rattled by the worst U.S. labor market since World War II are hanging on to old autos longer instead of buying new models, threatening to crimp sales again in 2009 after demand plummeted to a 16-year low.
Henry Paulson's bank bailouts, done under "great stress" during the worst financial crisis since the Great Depression, failed to win for U.S. taxpayers what Warren Buffett received for his shareholders by investing in Goldman Sachs Group Inc.
The Treasury secretary made 174 purchases of banks' preferred shares that include warrants to buy stock at a later date. While he invested $10 billion in Goldman Sachs in October, twice as much as Buffett did the month before, Paulson gained certificates worth one-fourth as much as the billionaire, according to data compiled by Bloomberg. The Goldman Sachs terms were repeated in most of the other bank bailouts.
Tel Aviv-based journalist Lisa Goldman takes the Israeli press to task over its coverage of the Gaza campaign. "For the most part, Gaza as a place inhabited by human beings has been ignored," she writes of Israeli media coverage.
Hasidic singing sensation Lipa Schmeltzer was set to perform last March before a crowd of thousands at Madison Square Garden's WaMu Theater in New York. The concert, a charity fundraiser, was billed as "The Big Event."
Then, less than three weeks before the concert date, 33 ultra-Orthodox rabbis — including some of the community's most prominent figures — issued an edict banning attendance. The event, they warned, was likely to cause "ribaldry and lightheadedness."
Deferring to the rabbis, organizers promptly canceled the concert. The ban, however, roiled the ultra-Orthodox, or Haredi, world, sparking an unusual public outcry in a community known for its scrupulous obedience to rabbinic authority.
Caroline Kennedy would like to be a senator. I don't blame her. So would I!
Especially if Governor Paterson could just waft me into office, and I didn't have to, um, you know, campaign. I'll bet some parts of the job are really fun, and it's public service, which is so uplifting. You think I'm joking, but every argument that has been advanced for Kennedy is just as true for me. She's a mother, a writer, a person with no electoral experience or, so far as we know, longstanding interest in acquiring any--me too! She has more kids; I've written more books--I'd say it averages out.
From Fox News: "Hundreds and maybe thousands of investors in Madoff's funds have been withdrawing money from their accounts for many years. In many cases, those investors have withdrawn far more than their principal investment." And more:
"I had a call yesterday from a guy who said, 'I've taken out more money then I originally put in, but I still had $1 million left with Madoff. Should I file a $1 million claim?'" said Steven Caruso, a New York attorney specializing in securities and investment fraud.
Federal prosecutors bought more time to focus on their investigation of Bernard Madoff's alleged $50 billion fraud scheme after they reached a deal with Mr. Madoff's lawyers to delay the deadline to bring an indictment in the criminal case against him.
Prosecutors from the U.S. attorney's office in Manhattan had faced a deadline Monday to convince a grand jury to indict the New York money manager on fraud charges or show at a public court hearing that there was "probable cause" to arrest him, but Mr. Madoff's lawyers agreed Friday to give the government until mid-February to do so.
Delaying any indictment gives prosecutors time to investigate Mr. Madoff and others without having to prepare for trial, or negotiate a deal in which he agrees to plead guilty to certain charges in exchange for a lower prison sentence, says Anthony Barkow, a former federal prosecutor.
The Commodity Futures Trading Commission and the Securities and Exchange Commission brought civil charges against a Pennsylvania man accused of running a $50 million Ponzi scheme since at least February 1995.
The Daily News list is clever and not as predictable as you'd think, because it includes Detroit disasters from all eras, including the Aveo and the Prowler.
But here's the problem: The Pinto and Chevette, for example, were clunky, and the Corvair was stylish but dangerous, but the Edsel was only stupid. Compared with today's bland vehicles, the Edsel was not clunky. In fact, let me get behind the wheel of the '58 model pictured above.
Ford may go bankrupt, but the Edsel must live on. In fact, if Ford does go under, its relics will only get more valuable. For the first time, even the Pinto would appreciate in value.
You might want to shop around for one of these lemons. When they foreclose on your house, at least you'll have a car to sleep in.
While I go out to beg spare change for gas money for these ancient Detroit guzzlers, stick to your keyboard and click ...
Fewer than one in 50 Windows PCs are fully patched, according to stats from users of Secunia's new patching tool, which suggest surfers are becoming even more slipshod with applying patches over the last year.
Terrorist organisations would succeed in using weapons of mass destruction within five years unless the world community "acts decisively", according to a congressionally mandated commission set up to scrutinise WMD after the September 11 attacks.
"It is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013," according to the report, released yesterday by the commission on the Prevention of WMD Proliferation and Terrorism.
Barack Obama's incoming administration has begun to draw on the high-tech organizational tools that helped get him elected to lay the groundwork for an attempt to restructure the U.S. health-care system.
Former senator Thomas A. Daschle, Obama's point person on health care, launched an effort to create political momentum yesterday in a conference call with 1,000 invited supporters culled from 10,000 who had expressed interest in health issues, promising it would be the first of many opportunities for Americans to weigh in.
The health-care mobilization taking shape before Obama even takes office will include online videos, blogs and e-mail alerts as well as traditional public forums. Already, several thousand people have posted comments on health on the Obama transition Web site.
When a man sounding remarkably like President-elect Barack Obama called a Florida congresswoman Wednesday, she assumed it was a crank call.
So Republican Rep. Ileana Ros-Lehtinen hung up. But, the Miami Herald reports, this was no prank.
"I thought it was one of the radio stations in South Florida playing an incredible, elaborate, terrific prank on me," Ros-Lehtinen told the newspaper. "They got Fidel Castro to go along. They've gotten Hugo Chavez and others to fall for their tricks. I said, 'Oh, no, I won't be punked.'"
At least Obama and McCain were funnier than John Kerry was at the 2004 dinner. Actually, Kerry didn't even get a chance to display his humorless personality because Egan didn't invite the candidates. That was because of the Catholic Kerry's stance on abortion.
And in 1996, the candidates weren't invited because Cardinal O'Connor was pissed off at Bill Clinton over abortion.
Good thing 2001 wasn't a presidential election year, Wall Street being bombed and all.
This year, Wall Street's bombing itself, and more (but slower) deaths can only result from the resulting depression into which we're sinking.
The only things we have to sneer at are candidates themselves. In a move even more desperate than the unprecedented, frantic steps federal officials are taking to stanch a hemorrhaging economy, John McCain promised last night a new era of GOP-style socialism for Americans.
When the forensics are finally done on last night's "town hall" debate, when we have time to step back and look at this campaign, we'll just have to snicker in disbelief.
Sure, we might have to do it while sitting curbside in front of our foreclosed homes.
The Wall Street Journal's Laura Meckler and Christopher Cooper recorded the instant history this way:
Republican Sen. John McCain used the second presidential debate to call for a $300 billion effort to help financially troubled homeowners stay in their homes, an attempt to counter an economic crisis that has largely benefited his rival, Democratic Sen. Barack Obama.
Under the Arizona lawmaker's plan, the government would buy the mortgages of homeowners who cannot afford their monthly payments to help prop up the troubled U.S. housing market. The campaign said it would be implemented using authority granted in the $700 billion rescue plan just passed by Congress.
The plan would represent a large new federal expenditure from a candidate who has typically railed against big government.
We're accustomed to corporate welfare — for the latest example, see Helen Kennedy's item in this morning's Daily News:
Just six days after sticking taxpayers with an $85 billion bailout, AIG's top executives dropped $500,000 whooping it up at a swanky California beach resort.
But welfare for people, not executives?
No matter what McCain vowed, promised, pledged last night, one thing is certain: There would no way in hell that any GOP administration would ever actually implement a bailout for average Joes and Janes. (That doesn't mean that the Democrats will do it.)
You can take that to the bank — if you can find one standing.
At least you still have a computer, so start clicking . . .
The Senate grabbed hold of the Cash for Crash bill and finally came up with a workable version — one that may work for the Wall Street crapshooters but likely not for the rest of us, who are simply loaded dice in the palms of their hands.
Part of the complex maneuverings supposedly aimed at keeping the country from sliding into Great Depression II revolves around "mark-to-market accounting" of the assets that Wall Streeters have played with to the point of, literally, no return.
Yeah, like you, I have only a hazy understanding of this. Those who are financially alliterate are welcome to read this morning's New York Post story "PIGGY POLS IN HOG HEAVEN WITH PORK-PACKED PACT." Daphne Retter's funny, funky take brings a little light to an otherwise dark day of journalism:
Here, little piggies!
Congressional deal-brokers yesterday slopped a mess of pork into the $700 billion financial rescue bill passed by the Senate last night — including a tax break for makers of kids' wooden arrows — in a bid to lure reluctant lawmakers into voting for the package
Stuffed into the 451-page bill are more than $1.7 billion worth of targeted tax breaks to be doled out for a sty full of eyebrow-raising purposes over the next decade.
More to the point of your financial future and such no-longer-arcane topics as mark-to-market accounting, lower your eyebrows, peer through this morning's financial fog and try to grab for this guidepost: Bankers and conservative Republicans (including former anti-populace populist Newt Gingrich) favor the abandonment of mark-to-market accounting rules. To which auditors, big investors, and consumer groups reply, "Are you out of your friggin' minds?"
In the present case, these little piggies went to mark-to-market, and now they want to remove that accounting rule so they can instantly wipe out their losses on the books and resume playing their Neverland gambling games with our money.
In essence, the new Senate version of the bailout bill would let Wall Streeters lie even more about the value of the assets they're trading and set us up for a rerun of the Enron scandal.
That should help things.
Or maybe the financial system is so fouled up and so wedded to its inherently corrupt trading instruments and practices that abandoning mark-to-market accounting really would help restart the credit markets and protect you from foreclosure.
The banking industry and a band of lawmakers have used the scramble to salvage the financial-markets rescue plan to give new life to an industry push to avoid billions in further write-downs with the stroke of a regulatory pen.
It would just further cloud matters for me to try to paraphrase this, so here's how Williamson and Scannell lay it out:
A proposal contained in the revised financial-rescue bill the Senate considered Wednesday reaffirms the Securities and Exchange Commission's existing authority to suspend "mark-to-market" accounting. The language was meant to send a message to the agency to re-evaluate the issue.
The practice, adopted in the aftermath of the savings-and-loan collapse in the 1980s, pegs the value of assets to their current market price, rather than the price paid for them. Banks have complained the strict application of mark-to-market rules has forced them to write down billions of dollars worth of mortgage-related securities, intensifying the squeeze in the credit markets.
Critics of the proposed changes to the "mark to market" rules say gains created by easing the rules would be illusory and would delay resolving genuine doubts about the value of mortgage assets that has caused the recent crisis in confidence.
As Bloomberg's Jesse Westbrookreported Tuesday, conservative Republicans might very well have supported the House version of the bailout bill if the SEC had suspended mark-market accounting rules.
U.S. accounting firms, which had been silent on the $700 billion financial-rescue package rejected by the U.S. House of Representatives on Monday, are opposing congressional efforts to scrap mark-to-market accounting rules. . . .
Some House members advocate scrapping mark-to-market accounting altogether as a way to help lenders holding mortgage loans and securities whose value have fallen sharply. Consumer groups have balked at the idea, and accounting firms are about to jump in as well, fearing such a change could deceive investors about the value of troubled loans and mortgage-backed assets.
Let the staggeringly diverse gaggle of opponents of abandoning mark-to-market accounting speak for themselves. This is what they told the WSJ's Burns and Bloomberg's Westbrook:
"It's just bad for investors," said Beth Brooke, global vice chair at Ernst & Young LLP, in Washington, D.C. "Suspending mark-to-market accounting, in essence, suspends reality."
"It's absolute idiocy," said Barbara Roper, director of investor protection for the Consumer Federation of America. "Allowing companies to lie to investors and lie to themselves is not the solution to the problem, it is the problem."
"Suspending the mark-to-market prices is the most irresponsible thing to do," said Diane Garnick, who helps oversee more than $500 billion as an investment strategist at Invesco Ltd. in New York. "Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the
transparency of volatility in earnings."
Although senators approved the bailout plan, lawmakers aren't out of the woods yet. Conservative Republican members of the House are still calling for some sort of mandatory insurance program that financial firms would be required to buy, but it is unclear how the program would work.
They have also asked for the Securities and Exchange Commission to suspend mark-to-market accounting rules and instead require bank regulators to assess the real value of troubled assets.
Mark-to-market accounting essentially allows Wall Street firms to value (or "mark") the assets in their portfolio based on current market prices. The problem, critics say, is that under that accounting rule, sliding home prices affect not just the value of mortgages that are defaulting but of all mortgages — and therefore, of all mortgage-backed securities.
That, in turn, affects how much capital firms are required to have on hand to cover their debt exposure. And to raise that capital, firms end up having to sell other assets — which drives the price of those assets down, too. In other words, they say, mark-to-market accounting can lead to a downward spiral.
House Democrats have been opposed to both a change in mark-to-market accounting rules and to the insurance provision. It is unclear how they will work out those differences or how much the House will tinker with the bill when they get it. That said, the sense on the Hill is that everyone wants to get the vote behind them, key lawmakers say.
That's reassuring that our lawmakers — like pro athletes and philandering pols — want to pull out the hackneyed reasoning to say that all they want to do is get their past mistakes "behind them." In real time, however, the train is still hurtling down the track toward us.
Face it: Capitol Hill's bailout schemes are Marxist. The only question is which Marx: Groucho or Karl?
House Finance Committee Chairman Barney Frank opts for the former.
His tragicomic analysis last weekend came in a Wall Street Journal story that is one of the finest pieces of journalism yet on the bailout maneuverings. Read the September 29 story for free on The Australian site; here's the key passage, which you may have seen but bears repeating:
Democrat Senator Max Baucus of Montana, chairman of the Finance Committee, became frustrated that Mr Paulson appeared to be arguing for softer language on the executive-pay rules, arguing that executives at these companies shouldn't be handsomely paid.
"Let's not get emotional," Mr Paulson responded, according to someone in the room.
Mr Paulson also objected to language that would give a new oversight board power to control how the new program would be run. "All we're talking about is having Groucho, Harpo, and Chico watching over Zeppo," said Rep. Frank, before Democrats backed off.
By the time the meeting ended around 5.30pm in Washington, lawmakers were breaking up into smaller working groups. Sandwiches and pizza were delivered later in the evening. Many lawmakers continued grazing on a big bowl of pistachios in Speaker Pelosi's office.
Nuts to them.
The best bailout plan so far may be the one pushed by Dennis Kucinich, whose House floor speech calling for a real bailout for the doomed majority of Americans was cut off by the Democratic leadership.
Kucinich's clever plan is aimed at protecting millions of Americans after — no matter what manner of bailout Congress approves — the shit inevitably rolls downhill from Wall Street.
See "Kucinich: Bailout Must Protect Home Ownership" — on his own site because even the press belittles Kucinich and other little guys — for his letter to Nancy Pelosi and Barney Frank and backup material from an Emory University prof. And see his full September 30 statement, reproduced in the tiny Cleveland Leader.
Kucinich is this century'sH. Ross Perot — but unlike Perot, Kucinich has a social conscience.
Speaking of those who don't: What the "free-market" advocates won't face is that their 21st century corporate-welfare plan is also straight from Karl Marx.
In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the "centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly."
If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.
Indeed, analysts at the Heritage and Cato Institute, and commentators in the Wall Street Journal . . . have made declarations in favour of the massive "injection of liquidities" engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.
But that jingoistic pledge of allegiance to the "Land of the Spree, and the Home of the Knave" that Groucho ran into the ground in the Depression-era Duck Soup (1933) won't help the average American hang onto the commune he or she bought with an adjustable-rate mortgage.
Now the market has staged a revival and a revised bill faces a vote later today in the Senate, but the pols — only a few weeks from the election — wised up, refusing to reveal its details until shortly before the vote.
We no doubt will eventually be trampled by Wall Street's raging bulls — once the bailout bill restores their dominion over the bears — but things could always be worse. As the Times reports this morning in "Stampede in India Kills at Least 147":
A religious festival in northern India turned into a horrific deadly crush on Tuesday as thousands of Hindu pilgrims stampeded at a temple shrine, piling into one another on a treacherous walkway slick with spilled coconut milk. Officials said at least 147 people, mostly men, suffocated.
Television showed dead pilgrims strewn on the narrow walkway near the Chamunda Devi temple, at the southern edge of the 15th-century Mehrangarh fort in Jodhpur, in the western state of Rajasthan. It was the second deadly religious tragedy in the past few months in India, where pilgrim stampedes are not uncommon. The victims were suffocated as they rushed down a narrow path from the temple 150 yards above, officials said.
Tuesday was the first day of a nine-day festival called Navratra that celebrates nine incarnations of the Hindu mother goddess Durga. Between 2,000 and 3,000 pilgrims were present when the stampede began about 6 a.m.
Don't cry over spilled coconut milk; today's another day. While you try to steer clear of Wall Street's latest incarnation of a corporate-welfare bill, have another triple-shot espresso and take a break for some browsing . . .
Please recall what Mr. Dooley said a century ago: "Trust everybody, but cut the cards." Especially when people like Treasury Secretary Henry Paulson are wheeling and dealing.
Under the bailout, we won't need to appoint Mike Bloomberg our economic czar. (He'll be free to change NYC's law and remain our mayor.)
Paulson would no longer be just another Cabinet member. He would become King Henry.
That's not hyperbole if you believe that bullshit walks while money talks. Your money. Which he would use, at his discretion (not yours or your elected officials') to bail out his Wall Street pals. As the N.Y. Post puts it: "YOUR $700 BIL TO THE RESCUE."
Rarely if ever has one man had such broad authority to spend government money as he sees fit, with no rules requiring him to seek out the lowest possible price for assets being purchased.
You become the Belgian Congo, and he becomes your King Leopold, controlling your financial resources. Instead of keeping the loot, he'll hand it off to bankers; hopefully he won't cut off your hands.
Who elected this guy? Under the bill, the former CEO of Goldman Sachs can auction off assets, or he can just simply set prices. Every pension fund, bank, broker, pol will have to kiss his butt. Weak "oversight" panels would supposedly keep an eye on him, but that wouldn't amount to much control over Paulson's power. Norris adds:
Mr. Paulson can choose to buy from any financial institution that does business in the United States, or from pension funds, with wide discretion over what he will buy and how much he will pay. Under most circumstances, banks owned by foreign governments are not eligible for the money, but under some conditions, the secretary can choose to bail out foreign central banks.
Leave aside regime frontman George W. Bush's brief public P.R. appearance early this morning on the White House lawn. It was supposed to soothe bankers and traders and big investors, but it didn't calm any of them, based on early action in the markets this morning.
What will matter to them is what Paulson says and will do. He's about to become the most powerful man in America. No exaggeration. Just follow the money — and the guy who will control it.
What really went on in the private meetings that resulted in a bailout plan that would give the unelected Paulson more direct power over the nation's money than FDR had during Depression I?
Which leads to this question: Are Dick Cheney and Bush as paranoid and vain as Richard Nixon? Please say yes.
Then we'd have videotape of at least some of those private meetings Paulson conducted to hammer out the Cash for Crash bill. Maybe we'd even have video of Paulson going down onNancy Pelosi in the White House to plead for a bailout of his Wall Street pals.
It probably wouldn't be the first time that Hank Paulson has been secretly taped in the White House. Before launching his career as an investment banker, Paulson was an aide to John Ehrlichman during Watergate. He's certainly familiar with private meetings in the White House about how to bail out an administration. Maybe he even sat in on some of those famous meetings of the coverup conspirators more than 30 years ago.
To refresh your memory, here's a snippet from the momentous July 16, 1973, Watergate hearing:
SAMUEL DASH, Watergate Committee Chief Counsel: If either Mr. Dean, Mr. Haldeman, Mr. Ehrlichman, Mr. Colson had particular meetings in the Oval Office with the president on any particular dates that have been testified before this committee, there would be a tape recording with the president of that full conversation, would there not?
ALEXANDER BUTTERFIELD, former Nixon aide: Yes, sir.
Mr. DASH: So if one were, therefore, to reconstruct the conversations at any particular date, what would be the best way to reconstruct those conversations, Mr. Butterfield, in the President's Oval Office?
Mr. BUTTERFIELD: Well, in the obvious manner, Mr. Dash — to obtain the tape and play it.