Women & children Bankers & Traders first!

What's up with health care?

(Via CJR's Trudy Lieberman)

The most cogent assessment, however, came from Susan Dentzer, former health correspondent for The NewsHour with Jim Lehrer and current editor-in-chief of the policy journal Health Affairs.

So what’s actually being put forward here is a plan to spend some money, starting a couple of years from now, to begin to cover some of the uninsured. And that’s really the reality that has been created by the current fiscal situation we’re in.

In other words, the uninsured may have to wait.

Save the world

Cracked.com pokes a stick in the eye of all things save-the-planet related.

5 Ways People Are Trying to Save the World (That Don't Work)
(Some NSFW text and ads)

#5. Buying Organically Grown Food
#4. Rejecting Vaccinations
#3. Recycling
#2. Using Antibacterial Soap
#1. Buying Carbon Offsets

I'd go so far as say I'd share their skepticism of most of them.

Anti-Vaccinatio, Anti-bac soap? - totally with that. Recycling and carbon offsets, I'd say the jury's still out. There are countless specific examples of how both are done now that are inefficient and just plain wasteful.

(I'm reminded of a community in the UK, where the local recycle program ended up dumping everything they collected into the landfill.)

My dad was big on kicking such programs when they were down - but the current state of them isn't the ultimate state of them. What is labor intensive now may not be so with a few years of innovation.

Organic food? That's a tough one. I'm all for eating food that isn't bathed in chemical baths and flown from around the world. The organic movement has its charlatans and hucksters, but it not as if agribusiness is without sin. I really do question if we can feed everybody with organic produce - but I simiarly doubt that our current faith in speciallized, chemically-dependent high-yield crops isn't due for a catostrophic realization.

Cracked's just trying to tick people off - but I wonder where the current state of the science is on these.

(H/t to Bad Astronomy)

Foggo's dossier

Now that ex-number-three-at-CIA Dusty Foggo's is getting three years in prison, a number of fascinating details about him are coming to light.

The killer was the quote at the end of this piece. It's mid 2004, and the CIA is considering Foggo for the CIA exec job. Foggo's long list of misdeeds were known to the CIA. Questionable conduct, security risks, and outright lies are overlooked - and why?

[CIA DIrector Porter Goss'] team also thought it wouldn't matter much whom they picked, since Sen. John Kerry, D-Mass., the Democrats' presidential candidate, was "certain" to win the election and they would all soon be gone. 

Oh, if only, man... if only.

Apparently, the CIA's tea leaves are as effective at predicting elections as they are for finding WMD.

(H/t Danger Room)

Obama's tax policy

I so totally love this post on FiveThirtyEight.com:

Shorter version: Yes, overpaid mouthpieces of the White House Press Corps: your taxes will be going up. Exactly as promised. Stop your pouting. No one likes you.

Sh!tiGroup

Barry asks the question I'm dying to know the answer to:

To review: Former Treasury Secretary Hank Paulson made a terrible investment on behalf of the taxpayers by purchasing a 7.8% stake in Citigroup (C) for an initial $25 billion dollars. He further put the US on the hook by guaranteeing against 90% of future losses on $301 billion in assets. Subsequently, we (the taxpayers) injected another $20 billion dollars.

At the time, Citigroup had a market cap of about ~$50 billion dollars. Today, its worth ~$13 billion.
So for about 100% of the market value of Citi, plus insurance guarantees worth of as much as 500% of its value (~$275 billion), we got less than 1/10 of a company that in total was worth 1/5 of our investment.

Pretty good deal, eh?

That $45 billion dollar stake now has a market value of just over a billion.

And, its about to get even worse.

Can somebody explain to me why this option is the best choice?

ARRRGH!

Bloomberg's Mark Pittman: Ignorance was bliss, prepare to be horrified

CJR's The Audit talks to Mark Pittman and there's just no end of good info.

Pittman goes after his own industry, the business press:

MP: ...Most reporters, it’s shocking how few of them actually understand the difference between price and yield. Hardly any business journalist actually covers the financing. If you cover a company and all of a sudden their borrowing costs go from 100 (basis points) over to 250 or 300 over [meaning investors believe the risk has increased substantially], and no one asks a question. There’s a problem there when that happens and nobody asks a question. I think we have training issues in a huge way in our profession. We brought a knife to a gunfight.

And then he shows you what you've been missing.

Bloomberg is currently suing the Fed to reveal the details of the collateral the Fed got in exchange for loans made to AIG and others:

MP: But a lot of [the assets] have gone to the Fed, though, as collateral for loans. They’re still on their balance sheet, but you borrowed against them. We don’t know if those are cracked CDO’s or prime RMBS…

TA: That’s what you guys are suing (the Federal Reserve) for—to find out what the collateral is.

MP: Yeah, and that’s the secret part of the story that nobody wants to let you know.

TA: Because it’s worth pennies on the dollar or dimes on the dollar.

MP: Yeah, and then everybody’s going to go “Oh my God, we’re lending ninety cents on something that’s worth twenty or thirty?”

TA: They say they don’t want to disclose it because it would interfere with the markets, is that right?

MP: Their basic argument is this would cause chaos, and they’re probably right. But that doesn’t mean that the American taxpayer ought to be on the hook for this.

TA: Why would it cause chaos?

MP: Because people would realize that we’re lending eighty cents on the dollar for something that’s worth twenty cents.

TA: So political chaos?

MP: And maybe market chaos, too.

Very illuminating

Seven deadly URLs, Vol. I

Envy - LEGO employees get the best business cards

Gluttony - Pizza vending machines. Seriously.

Greed - Government's convertible stock plan another name for giveaway

Lust - Sen. Vitter may face porn star in Lousiana primary.

Pride - George Will stands behind his laughable column on climate change

Sloth - Baconnaise, For people who want to get heart disease but [are], you know, too lazy to actually make bacon

Wrath - Online tee-shirt vendor offered a discount to anyone who could prove they were convicted of wife beating.

Do not press an enemy that is cornered

This from Market Movers:

Dave Wrixon has the simplest explanation yet of the latest iteration of the Treasury's bank bailout plan:

It is just a poison pill for debt that is not repaid on time. Basically, you borrow money at fixed interest rate but with a redemption period. If you fail to redeem the debt on time you get nationalized. Simple really.

To me, that sounds good. But I don't have a Ph.d. like this guy, Felix Salmon:

It's clear why the plan is a bad idea: it gives banks' executives every incentive to take massive risks to avoid nationalization. When the last thing we need, obviously, is a bunch of trillion-dollar Hail Mary passes.

That's a good point. Focusing on the punative angle at this point risks ignoring the fact that desperate people are likely to do stupid things.

So, the question is - what do you do to the banks to keep them from burning down their own houses out of desperation?

Or do you just seize them before they start being stupid?

Bloomberg: AIG Rescue May Include Credit-Default Swap Backstop

The government is going to shore up AIG's inability to pay on Credit Default Swaps.

To the tune of.....?

AIG provided protection on more than $300 billion of assets through credit derivatives as of Sept. 30. Credit-default swaps pay the buyer face value on their debt holdings in exchange for the underlying securities if the borrower fails to meet its obligations. It wasn’t immediately clear how many of the swaps would be backed by the U.S., and talks are continuing, the person said.

(H/t Calculated Risk)

Bad Math, or "A gaussian copula function ate my economy"

Take a look at this:

Pr[T_A<1, T_B<1] = Φ₂(Φ ^-1(F_A(1)), Φ^-1(F_B(1),γ)

That little formula is a big part of why your 401K is in the toilet right now.

Wired tells us why in, Recipe for Disaster: The Formula That Killed Wall Street

A spectacularly informative read.

The boiled down version is this:

A guy named David Li came up with this formula to model the risks of bonds. He ignores all the complex risk factors that have stymied analysts for decades and just focuses on the cost of insuring the bonds. The price of the bond insurance (Credit Default Swaps) goes up, the bond is risky. The CDS price goes down, the bond is safe.

Li intended this as a limited tool for limited use - but it was so easy to misunderstand, this equation becomes almost ubiquitous in rating the risk of investments like CDOs.

By way of analogy, Li's saying use CDS's as a sort of Intrade for bond investments.

You can see the obvious risks there, but Wall Street chose not to care. After all, they were making money.

Read the article, it's just brilliant.

A whole bunch of smart people using a tool they don't understand to sell crap investments to the world.

(H/t CJR)

Late edit: By way of equal time, here's a thundering counterpoint to the article via Falkenblog.

Winter, like I remember

Begobug sent along this article - which reminds me of growing up on the frigid shores of the Great Lakes. Back when winter was winter, not this mamby-pamby, global-warmed period of cool breezes we know today.

When snowmobiles drove over houses, and shifting snowdrifts tore fences out of the ground.

Garrison Keillor remembers, too:

Winter gave us a sense of purpose, to persevere, to go to school no matter what and to keep shoveling the walk and throw the snow up on the snowbank 15 feet overhead, clearing the narrow canyon of sidewalk with clothesline tied to our belts so that in case of avalanche, they could pull us out in time, watching for incoming icicles that dropped like artillery shells, and also for coyotes that grew daring by late February and would take on a boy, especially one who was immobilized by heavy clothing.

Ahh, those were the days...

Pelosi shows some spine

Trust Dr. Maddow to get to the bottom of things. According to early interview transcripts obtained by Glenn Greenwald, Nancy Pelosi told Rachel Maddow that she "absolutely" would support a criminal investigation of NSA wiretapping.

Color me suspicious - but that would be the first good news on the wiretapping issue for quite some time.

The Foggo war

Propublica's got a nice article on the misdeeds of former CIA heavy, Kyle Dusty Foggo:

One remarkable affidavit came from a leader of SAD, a branch of the CIA's National Clandestine Service, which handles covert actions. It indicates that Foggo forced SAD to use a shell company set up by defense contractor Brent R. Wilkes to handle its sensitive air operations, even though Wilkes and his company had no experience in clandestine aviation operations.

Wilkes... where did I hear that name before...?

Wilkes was Foggo's boyhood friend and a co-conspirator in the bribery scandal that erupted around former Rep. Randy "Duke" Cunningham, who is serving more than eight years in federal prison.

Oh yeah.

The really priceless part of the article is the graphic it starts with: a photo of the wine locker in the Capitol Club shared by Wilkes and Foggo - with both their names printed on it.

Owch.

Foggo's pled to get 37 months and is hoping the judge gives him even less.

Here's hoping the judge gives him just what he agreed to.

Late edit: Bonus: read Foggo's version of chivalry (at least for his mistress)

AT&T: wasting your time, for no good reason

(A spin off of the AT&T saga, I, II, & III)

The other day, I'm filling in a spreadsheet of our monthly expenses - something I always start, but never seem to finish to my satisfaction.

You start with the things that break down easily into months (mortgage, utilities, burritos...) and gradually work towards the squishier aspects of the budget (groceries, gasoline, car repair).

But it's not rocket science. I'm banging through the utility portion when I get to my cell bill.

I have AT&T.

In the normal run of things - I'd look at my last bill and take the monthly amount and punch it in. I don't have a paper bill anymore, so the next step is the website.

In the ideal world, this is a three step process.

1. Go to vendor's website
2. Log in
3. View last bill

Done.

The AT&T universe has many fault lines and so has multiple log ins. I've had as many as 5. AT&T is trying to simplify things, but it's clear they're not there yet.

Welcome to AT&T, please select an arbitrary partition.

AT&T offered me the option to combine my phone/internet and wireless bills last year. About the third time I tried, they let me. This process took two months. Apparently, billing happens in cycles - and nothing is immediate.

Whatever. I'll log in, view the wireless portion of my bill and be done.

Except the wireless bill is $104.14.

This is not right. That has never been my monthly rate. I go into the detail on the bill and (over the course of scanning a seven page document) discover that my current wireless bill is a combination of the prior billing period and the current one.

This takes some doing.

By asking to combine my bills, I have created a break between the old way of doing things and the new way.

AT&T's process deals with that by rolling a pro-rated bill for December (as of when I decided to combine bills) and my January bill.

If a normal company wanted to show you your bill, they might do it like this:

December (pro-rated) -     $47.03 [Show detail]
January            $57.11 [Show detail]

But this is AT&T, I get $104.14 as a single, linked line item.

Clicking on that, I get:

        Combined Billing took effect on Dec 19, 2008.          

        To align the Wireless Billing Cycle more closely          

        With other Combined services, the next Wireless          

        Billing Cycle Will begin on Dec 29, 2008.          

       

        Wireless Summary - [ACCOUNT #]

   

        Cycle Dates: Nov 29, 2008 - Dec 28, 2008          

               

                   

             Promotions and Discounts                     $3.20CR          

             Monthly Service                             $39.99          

             Credits, Adjustments and Other Charges       $3.97          

             Data Usage                                   $6.27          

             Total Wireless Charges                      $47.03          

       

        Mobile Charges Summary

   

        [Phone # 1] Group: 1          

             [USER 1]         

             Promotions and Discounts                     $0.53CR          

             Monthly Service                              $6.66          

             Credits, Adjustments and Other Charges       $0.78          

             Data Usage                                   $0.80          

             Charges for this mobile                      $7.71          

        [Phone # 2] Group: 1          

             [USER 2]          

             Promotions and Discounts                     $2.67CR          

             Monthly Service                             $33.33          

             Credits, Adjustments and Other Charges       $3.19          

             Data Usage                                   $5.47          

             Charges for this mobile                     $39.32          

       

        Group Usage Summary - Group: 1

   

        Voice          

        Rollover Summary          

             Previous Balance                             3,433          

             Unused Minutes Added                           411          

             Minutes Expired (*)                           -304          

             Current Rollover Balance                     3,540          

             (*) Unused Plan Minutes Expired          

             After 12 Billing Periods          

        [MYSTERIOUS NUMBER]          

                    211 Minutes Used by              [Phone # 1]          

                    118 Minutes Used by              [Phone # 2]          

                    329 Minutes Used by This Group          

                    550 Minutes Included          

       

        [Phone # 1] - [USER 1]

   

        Promotions and Discounts          

             National Account Discount     .53     CR

        Total Promotions and Discounts     .53     CR

       

        Monthly Service          

             New Bill Cycle 12/29-01/18          

             [MYSTERIOUS NUMBER]     6.66    

                   

             Proration Calculation          

                Monthly Service Charge                    $9.99          

                Divided by Avg days in Month         /       30          

                Times Days On New Cycle              X       20          

                Equals New Cycle Prorated Charge     =    $6.66          

             Part of this month was spent on the New Bill Cycle          

             Charges apply for those days.          

             Dollars are rounded to the next whole cent.          

                   

        Total Monthly Service     6.66    

       

                   

        Credits, Adjustments and Other Charges          

             Regulatory Cost Recovery Charge     .20    

             County Sales Surcharge     .03    

             Federal Universal Service Charge     .19    

             [State] State Sales Surcharge     .36    

        Total Credits, Adjustments and Other Charges     .78    

       

                   

        Voice Usage Summary          

        Unlimited Expd M2M          

                     23 Minutes Used          

        Rollover FM 550          

                     89 Minutes Used          

        Unlimited N&W          

                     99 Minutes Used          

        Total Voice Usage Summary     .00    

       

        Data Usage Summary          

        Text Msg Pay Per Use          

                      4 Text Messages Used          

                      4 Billed at  $0.20/Msg     .80    

        Total Text Msg Pay Per Use     .80    

       

        Total Data Usage Summary     .80    

       

        Total for  [Phone # 1]     7.71    

       

        [Phone # 2] - [USER 2]

   

        Promotions and Discounts          

             National Account Discount     2.67     CR

        Total Promotions and Discounts     2.67     CR

       

        Monthly Service          

             New Bill Cycle 12/29-01/18          

             [MYSTERIOUS NUMBER]     33.33    

                   

             Proration Calculation          

                Monthly Service Charge                   $50.00          

                Divided by Avg days in Month         /       30          

                Times Days On New Cycle              X       20          

                Equals New Cycle Prorated Charge     =   $33.33          

             Part of this month was spent on the New Bill Cycle          

             Charges apply for those days.          

             Dollars are rounded to the next whole cent.          

                   

        Total Monthly Service     33.33    

       

                   

        Credits, Adjustments and Other Charges          

             Regulatory Cost Recovery Charge     .20    

             County Sales Surcharge     .19    

             Federal Universal Service Charge     .94    

             [State] State Sales Surcharge     1.86    

        Total Credits, Adjustments and Other Charges     3.19    

       

                   

        Voice Usage Summary          

        Unlimited Expd M2M          

                     36 Minutes Used          

        Rollover FM 550          

                     50 Minutes Used          

        Unlimited N&W          

                     32 Minutes Used          

        Total Voice Usage Summary     .00    

       

        Data Usage Summary          

        Text Msg Pay Per Use          

                     26 Text Messages Used          

                     26 Billed at  $0.20/Msg     5.20    

        Total Text Msg Pay Per Use     5.20    

       

        InternetPayPerUse          

                     27 Kilobytes Used          

                     27 Billed at  $0.01/KB     .27    

        Total InternetPayPerUse     .27    

       

        Total Data Usage Summary     5.47    

       

        Total for  [Phone # 2]     39.32    

       

       

        Total Invoice Charges     47.03    

       

        Wireless Summary - [ACCOUNT #]

[Mis-aligned dollar values are in the orignal]

I asked for a sip of water, AT&T passes me a fire hose.

Okay - I've actually made that a LOT clearer than the document AT&T shows you.

The actual document starts with a legalese preamble, and I've only shown you the detail for the prorated December blob. There's an even longer blob for January.

It takes an interminable amount of scanning to recognize this, because each giant data blob is separated by a single line of dates.

Giant blob #1 is a partial bill, so I skip to giant blob #2.

GB# 2 starts with this mis-aligned summary:

             Promotions and Discounts                    $10.80CR          

             Monthly Service                             $59.99          

             Credits, Adjustments and Other Charges       $4.72          

             Data Usage                                   $3.20          

             Total Wireless Charges                      $57.11      

Okay. I'll read that as my monthly bill is $59.99 and I'm getting some discount. I know there's a discount for combining bills, so I'm wondering if that discount is it. In the detail that follows the discount is helpfully referred to as "Promotions and Discounts."

As long as I'm budgeting, I want to know if this is a recurring discount that I can count on ($10.80 per month is a big enough deal) or if this is yet another of AT&T's byzantine account modifications. I do a CTRL-F to find 10.80 elsewhere in the giant blob and strike out.

No more detail.

I log into my AT&T Wireless account to see what my bills have been in the past. The wireless site shows amounts that vary between $47 and $153. Clicking on detail, I see more giant blobs of gobbledygook.

Deep breath.

I opt to call.

I know - this is stupid - but again, I have this expectation that this will be simple.

1. Call
2. Identify self & authenticate
3. Ask for monthly bill, receive same.
4. Hang up

I click on the contact us link and (miracle of miracles) I am directed to a single phone number in less than five clicks. Progress!

I dial.

Your expected hold time is four minutes.

Okay, this sucks - but it's my lunch hour, I've got some time - and I can work as I wait.

Six minutes later, I get a rep.

I self-identify, prove it, and ask for my monthly bill amount.

The rep gives it to me.

(There, you see? this was easy!)

I then ask about the discount.

Is that a discount I'm getting for moving my bill?

No, that's a corporate discount.

Oh. I get a discount because I work for a large company.

Great, so that is a recurring discount?

Well, sir. When you transfer your account, that discount may be replaced by the combined bill discount.

Uh?

You can only have one discount.

-Right about now - I'm getting that familiar sinking feeling. So... THIS is how this call will go horribly wrong.

How much is the combined discount?

I don't have that information. You'll have to contact Land Line.

Can't you?

Please hold.

Time passes...

Sir? Can you give me your Land Line number?

Okay - two things: 1) they should know this. I gave them my SSN, for crying out loud. 2) If you needed it, couldn't you have asked for it BEFORE I had to sit on hold?

I give the rep my number, and they apologize profusely.

So profusely, it turns out, that they are dropped from Land Line's hold queue. They have to call Land Line again and wait.

Again.

Time passes...

Sir?

Yes?

Land Line could not find a combined discount on your account.

What does that mean?

It means they cannot find a discount on your combined account. It might show up on the next billing cycle...

You mean I've lost my corporate discount?

I don't think so, sir. I think you should keep that one.

I'll get to keep my discount, going forward?

I'm pretty sure.

At this point - it's clear that the rep is just telling me what she hopes is true.

I hope she's right, but I'm out of lunch time - so there's no time to iron this out. I'll need to watch for the next bill to make sure.

I hang up.

Elapsed time?

27 minutes and 28 seconds.
(plus about 10 minutes with the website)

Net result: I know what my plan costs (but I knew that) but I have no idea if AT&T will carry forward my current $10.80 discount.

And I lost 37 minutes of my life.

Earth to Santelli: Shut the hell up

God, but this guy is a tin-eared demagogue.

CJR's Ryan Chittum takes Santelli to task for this latest attempt at self-inflation: appearing with G. Gordon Liddy to claim the White House has threatened him.

Santelli's a bonehead - and while I'll refer you to Chittum's takedown of his recent stupidity, I'd just like to revisit the original bag of stupid that started this mess:

Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the loser’s mortgages...?

How many of you want to pay for your neighbors mortgage that hasan extra bathroom and can't pay their bills? raise their hands!
...President Obama, are you listening?”

Now with a little typographic judo - we can redirect this back at Santelli:

Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the loser’s mortgages Wall Street's stupidity...?

How many of you want to pay for your neighbors mortgage that has an extra bathroom idiot bankers that have million-dollar bathrooms and can't pay their bills? raise their hands!

...President Obama Mr. Santelli, are you listening?”

I'd love to see Santelli's answer.

Common Stock vs Preferred Stock

CitiGroup wants the gov't to convert its preferred stock to common stock

ProPublica's saying that the Treasury Department has announced they will allow banks to convert the existing government shares into common stock.

What the hell is up with common stock? and why the sudden movement away from preferred stock?

Thankfully, The Baseline Scenario is here to answer that question.

Spoiler: the government is being stupid.

Corn IS trying to kill us...

Although it seems that Snapple is trying to fight back:

Snapple replaces corn syrup with real sugar


The old ingredient list for Lemon Snapple Iced Tea: “water, high fructose corn syrup, citric acid, tea, natural flavors.” Calories: 200. The new ingredient list: “filtered water, sugar, citric acid, tea, natural flavors.” Calories: 160.

(H/t Cool blog)

A bad year for the anti-vaccine movement

...and thank God.

David Gorski is a surgical oncologist, and also a well-known though bepseudonymed blogger for Science Blogs. His anti-antivaccination stance is legendary, for good reason: he is incredibly well-spoken and his posts railing against the pro-measles (haha) crowd routinely eviscerates them.

But none of his posts has ever done so in such a remarkably thorough fashion as in this lengthy post in which he destroys the movement from top to bottom.

 (H/t Bad Astronomy)

The strength of the post, in my opinion - is to hold the heroes of the anti-vaccine movement up to the light and watch them wither.

I have no problem with scientific questions about the safety of vaccines - but this "I know in my heart" nonsense has got to stop. Make with the science, or shut the hell up.

AIG OMFG II

Here we go again,

AIG, already propped up to the tune of 150 billion dollars, is passing the hat again.

That'd be three bailouts for AIG, three for CitiGroup (assuming the latest common stock nonsense goes through). Poor old BoA only has two.

Who will step forward to claim the title of biggest corporate welfare queen??

(H/t to TPM)

By the way, if you have any curiosity about the "Swedish model" of bank nationalization everyone keeps talking about, you could do worse than to listen to Planet Money's summary.

They didn't nationalize all the banks, they nationalized two. The first bank because it was 80% government-owned when it became insolvent - the second because the bankers who owned it gave the keys to the government and essentially walked off.

Interesting stuff.

At least we're not Mexico

Yes, the gov'ts talking about owning more CitiGroup, and the banks are zombified, but look on the bright side - we're not in Monterrey

That week in Monterrey, newspapers reported, Mexico clocked 167 drug-related murders. When I lived there, they didn’t have to measure murder by the week. There were only about a thousand drug-related killings annually. The Mexico I returned to in 2008 would end that year with a body count of more than 5,300 dead. That’s almost double the death toll from the year before—and more than all the U.S. troops killed in Iraq since that war began.

But it wasn’t just the amount of killing that shocked me. When I lived in Mexico, the occasional gang member would turn up executed, maybe with duct-taped hands, rolled in a carpet, and dropped in an alley. But Mexico’s newspapers itemized a different kind of slaughter last August: Twenty-four of the week’s 167 dead were cops, 21 were decapitated, and 30 showed signs of torture. Campesinos found a pile of 12 more headless bodies in the Yucatán. Four more decapitated corpses were found in Tijuana, the same city where barrels of acid containing human remains were later placed in front of a seafood restaurant. A couple of weeks later, someone threw two hand grenades into an Independence Day celebration in Morelia, killing eight and injuring dozens more.

Yikes.

(H/t Emptywheel)

Paying for the military, twice

Thomas Barnett giving a speech in 2005 about the culture of war and the future of the military.

It is alternately funny and terrifying.

Here's a sample bit:

We use the doctrine of imminent threat-

We haven't faced an imminent threat since the Cuban missile crisis, 1962, but we whip ourselves into a frenzy because we're a democracy and that's what it takes.

If that doesn't work, we shout out "he's got a gun!" just as we rush in. Then we look over the body and find an old cigarette lighter and say "Well Jesus, it was dark"

His opinion on the Transportation Safety Administration:

TSA? Thousands Standing Around

He wails on the most sacred cows with a curiously Machiavellian outlook. Look, you want this? This is what needs to happen...

The net result of this would be a dramatic shift to a new force that is in charge of winning the peace - after a smaller version of our current military is through kicking butt.

Nary a whisper of nationalization

Planet Money's Adam Davidson meets with a non-source and asks what he can leak about the nationalization issue.

The non-source's answer: bupkis.

The government official told me that if word leaked out in any way that the government was even considering nationalization, it could spook the stock markets so badly that all those troubled banks would, instantly, become dead banks.

Which makes sense.

So, if there were reports that a certain bank's future was being discussed by the Treasury Department, there would instantly be nothing to discuss.

The bank would fail, and the Treasury would have to move - simply because they discussed it.

Well, here's hoping those discussions are happening anyway.

(H/t Cool blog)

We have not found Bin Laden

I don't know who to be more annoyed with - The professors who published the paper Finding Bin Laden - or the media synchophants who ran to them like rabid hyenas to a dead cow.

One of the most important political questions of our time is: Where is Osama bin Laden? We use biogeographic theories associated with the distribution of life and extinction (distance-decay theory, island biogeography theory, and life history characteristics) and remote sensing data (Landsat ETM+, Shuttle Radar Topography Mission, Defense Meteorological Satellite, QuickBird) over three spatial scales (global, regional, local) to identify where bin Laden is most probably currently located. We believe that our work involves the first scientific approach to establishing his current location. The methods are repeatable and can be updated with new information obtained from the US intelligence community.

Oh fer crying out sideways - is there any limit to the gullibility of the American press? I mean these Professors are on a lark - making a point that their methods are scientific as opposed to humint based studies.

Danger Room lays down a hard dose of reality.

...the geographers' paper suffers from a classic data-crunching problem: garbage in, garbage out. In this paper's case, the trash includes some hoary urban myths about Osama.

Will the editors of America rise up and punish the idiots who brought this story to our attention?

Arrgh!

The nationaliztion question that demands an answer

...is We already own the banks -- shouldn't we run them?

(Via CJR)

…it’s obvious that nationalization of the banks is a done deal. We bought them. We own them.

The only problem is that we’ve failed to exercise our right to control them…

The cash injections alone are almost enough to buy up all of BofA’s outstanding common stock twice over and Citi’s stock three times over. Yet the government has failed to demand any specific performance in return. There have been no sackings of management and no mandate that the money be applied to support loans in credit-strapped sectors, like small and medium-size businesses.

The author, Michael Hilzik, takes everybody to task and just spells out where we're at and what needs to be done.

Here's my favorite bit:

Step One should be dumping current management, he says. The banks' CEOs argue that their executive caste needs to stay put because they know best how to run the place. This is the sort of argument my mother used to characterize as, "I like me, who do you like?"

Even if one agrees that a core of professional management should be left intact, what's the rationale for not firing the boards? Bank directors presided over a disaster in a collective stupor, yet unaccountably continue to hold on to their seats with what George Orwell called "prehensile bottoms."

Pure gold, start to finish.

Prove it

Okay, this made me laugh.

Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

And just like that, the foreclosure proceedings came to a standstill.

Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

"I'm going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."

It shouldn't have - but it did.

Why I love Rachel Maddow

Dr. Maddow had Zbigniew Brzezinski on her show talking about our future in Afghanistan.

Smart question, smarter answer:

Maddow: It seems like the emerging, um I guess the emerging debate about what to do in the whole Afghanistan/Pakistan region - it comes down to this idea of about whether or not the problem can be out-governed instead of out-gunned. Whether this is something the US can be part of a constructive political solution, whether it really is a military issue. When I look at the evidently corrupt government - and, and a goverment of a limited reach of Hamid Karzai - and I look at the government in Pakistan which is only one year old and is bankrupt. It's hard for me to believe that we're, we've got enough- there's enough governance there to really solve this big problem.

Brzezinski: I can't help smiling because you used two words which we like to use when we become uncomfortable with those who are dependent on us - or who are, who are to some extent our allies. If we are uncomfortable with them we begin to say they are corrupt. Or now we're say that the Pakistanis are bankrupt.  What about us? We're close to being bankrupt, and you know Washington and I know Washington. What we have in this city is well-organized, legalized corruption.

Brzezinski was not done - he went on to point out that 160,000 Soviet troops lost in Afghanistan, and that (at first) the US won rapidly using 300 troops because the Afghanis were with us. He was less sanguine about our future prospects:

Brzezinski: We have wasted seven years, pursuing policies which were ill-defined - not seeing any realistic objective - and now we have to re-think this whole engagement very seriously and taking into account Pakistani and European views.

Good stuff.

The best food-safety enforcement tool

...is what we have now.

At least according to the WSJ editorial page (emphasis added)

Since the peanut butter-salmonella scandal was traced to PCA last month, the company and CEO Stewart Parnell have taken a very public path to corporate oblivion. Within weeks of linking the salmonella outbreak to contamination at its facilities, PCA's plants have shut down, its customers have fled, and the company has filed for bankruptcy protection. Civil lawsuits have been filed across the country.

[snip]


Regulators share some of the blame here, since the Washington Post reports they didn't even know the company's Plainview, Texas, plant existed until this outbreak. To hear consumer groups tell it, however, the answer to regulatory failure is -- more regulation! The Center for Science in the Public Interest is among those supporting a bill pushed by Representative Rosa DeLauro that would take food safety away from the Food and Drug Administration to create another, presumably more activist agency.

Other proposals would aim to trace food on every step of its journey of growing, sorting, processing, distributing and mixing on the way to grocery stores and pantries. But it's nuts to think any kind of reasonable inspection regime can make the food supply safer than it already is. Taxpayers can't afford to hire enough inspectors to guarantee the safety of the entire food chain. Meanwhile, such a regime will raise costs for law-abiding companies and consumers.

The best food-safety enforcement tool is the one now being wielded against PCA and Mr. Parnell in the form of corporate self-destruction. Their fate should be chastening to any company inclined to play fast and loose -- and will do more to enforce food safety standards than any army of inspectors.

Tell that to the nine people who died. Or the hundreds of people who got sick while the CDC scrambled to find out how widespread this problem was - or where it orignated.

We may not need an army of inspectors, but an improved audit trail for food products that affect vast swaths of the country would speed any future investigation AND increase the certainty that future offenders will meet the corporate oblivion that the WSJ embraces.

Comrade Greenspan

I can only share in the complete shock of others:

Here's the FT article

Late edit:

It just keeps getting stranger (emphasis mine):

“We should be focusing on what works,” Lindsey Graham, a Republican senator from South Carolina, told the FT. “We cannot keep pouring good money after bad.” He added, “If nationalisation is what works, then we should do it.”

(H/t to CJR, natch)

Gone in 20 seconds

Here's CJR's Ryan Chittum, on a WSJ piece:

The Journal has a superb A1 story today about a foreclosure “rocket docket” in Florida that gives homeowners fifteen or twenty seconds to “present” their cases.

Reporter Michael Corkery (disclosure: a friend and former colleague of mine) traveled down to Fort Myers to find judges there are hearing some thousand foreclosure cases a day in a frantic bid to cut down a backlog.

    Hoping to save her house, Saundra Hill Scott arrived at the county courthouse clutching dog-eared mortgage bills and letters from her lender.

    She need not have bothered. The foreclosure hearing lasted less than 20 seconds, with Judge John Carlin asking her two questions: Are you current on your mortgage and are you living in the home? She answered no and yes and then offered to show him her paperwork.

    “I don’t need to see that. That’s between you and the bank,” he said as he gave Ms. Hill Scott, her husband and three grandchildren 60 days to work out a deal with their lender or vacate their three-bedroom house.

Read the whole thing. 24,000 foreclosures at 20 seconds a pop - that's only three business weeks going flat out.

Nice.

Science as a diversion to the current economy

TED Blog has another fun talk that pokes fun at the current mess, and also discusses some coming science as well.

Juan Enriquez on The Ultimate Reboot:



It's a good time, although I don't know how uplifting his economic stuff is (or accurate) the science bit (about 7 min in) is pretty interesting.

Ack Ack

As in:
 
Ack!

Reuters - U.S. charges Stanford Financial with "massive" fraud
In a complaint filed in federal court in Dallas, the U.S. Securities and Exchange Commission accused the cricket-loving Stanford and two other top executives at Stanford Financial Group of fraudulently selling $8 billion in high-yield certificates of deposit.

and

Ack!

NYT - Adding Up the Government’s Total Bailout Tab

Beyond the $700 billion bailout known as TARP, which has been used to prop up banks and car companies, the government has created an array of other programs to provide support to the struggling financial system. Through Feb. 10, the government has made commitments of nearly $8.8 trillion and spent $2 trillion.
(H/t The Big Picture)

To which I would add...

Ulmp!

Down goes Kansas?

Okay, this is not the end of Kansas, but it's pretty frickin' bad:

(Via Calculated Risk)

Kansas suspends income tax refunds, may miss payroll

Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem.

Payments to Medicaid providers and schools also could be delayed.

"We are out of cash, in essence," state budget director Duane Goossen said.

Missing payroll is one of those unthinkables - suspending tax refunds doubly so.

And Medicare and schools...?

Let's hope this is just posturing by the political types (who can then get destroyed) - because if this is the real situation - gonna be a lot of pissed people in Kansas.

A bonus by any other name

...is just as undeserved.

Bonuses are bad, therefore according to Morgan Stanley, they've become awards

[Morgan Stanley's] JAMES GORMAN: I’m going to turn to a topic that I suspect is near and dear to everybody’s hearts, which is retention. There will be a retention award. Please do not call it a bonus, it is not a bonus it is an award. The award will be based on ‘08 full year production. Clearly it would have been cheaper to do it off ‘09 but we think it’s the right thing to do and we’ve made that decision.

Not bonuses, awards. Got that?

Let's see - an award based on 2008 production for Morgan Stanley, that would be, what? Well, you lost billions - so I'd say the production was zero. Unless you want to pitch in - I'd say you should be happy to still be working.

As in, You have a job - Bonus!

But what if the payments weren't based on performance?

Is there an angle there?

Call them Retention payments.

(via GOOD blog and Reuters)

Morgan Stanley and Citigroup Inc are preparing to pay $3 billion of retention awards to brokers to keep them from fleeing a brokerage joint venture, the Wall Street Journal said on Friday, citing people familiar with the matter.

I'm picturing banks throwing taxpayer money at employees who are about to jump out of a sinking ship. Doesn't really sound laissez faire to me.

They put the kaibosh on this - we can look forward to yet another new term for giving money to the well-heeled and undeserving.

Late edit: CJR points out a Bloomberg article that hits this topic, hard.

AP vs Simon Johnson on executive pay

Here's the AP:

Congress strengthens executive pay limits

Sen. Christopher Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, inserted strict rules into the $787 billion economic stimulus package over the White House's objections. Dodd's limits on bankers' bonuses are significantly more aggressive than those sought by Obama or Geithner in recent days, with much fanfare.

Dodd, D-Conn., said the restrictions — an executive making $1 million a year in salary could receive only $500,000 in bonus money, for example — are necessary if Obama plans to ask Congress for more money to save the financial sector.

[snip]

The stimulus bill, however, sets executive bonus limits on all banks that receive infusions from the government's $700 billion financial rescue fund. The number of executives affected depends on the amount of government assistance they receive. But as a rule, top executives will be prohibited from getting bonuses or incentives except as restricted stock that vests only after bailout funds are repaid and that is no greater than one-third of the executive's annual compensation.

The prohibition would not apply to bonuses that are spelled out in an executive's contract signed before Feb. 11, 2009.

Sounds pretty impressive eh?

Now here's Simon Johnson's take (from his interview with Bill Moyers, via The Big Picture):

SIMON JOHNSON: ...And [Treasury Sec. Tim Geithner] said, “The compensation caps we’ve put in place, for the executives of these banks, are strong.” And at that point I just fell out of my chair. That is not true. That is factually inaccurate, in my opinion.

BILL MOYERS: That?

SIMON JOHNSON: That this $500,000 limit, and deferred stock, is some kind of restriction on what they do? It’s deferred stock, Bill. It’s not restricted. You can get as much stock as you want, as soon as you pay back the government, you can cash out of that. That’s one.

Second, you can, sorry to get technical, but reset the strike price. This is something you and your and your viewers, you need to hear this one out. Just look for these words, okay, follow them through the press. When you get into trouble, when your company goes down, and you have massive amounts of stock options that aren’t worth much anymore, because the stock price has gone down, you say, “Oh, well, we’re going to reset our option prices.”

And, basically, it means that, at the end of the day, these people are going to walk away with tens if not hundreds of millions of dollars paid for by basically, insurance policy that you and I are providing.

Think of it like this, our taxpayer money is ensuring their bonuses. We’re making sure that companies, that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That’s not fair. It’s not acceptable. It’s not even good economics.

Late edit: Forgot to link to TBP for the Moyers transcript. Whoops.