Naked Capitalism

MyDD and others are commenting on a story from naked capitalism.

It's probably wise to show some restraint on this - but it appears that a US Treasury Dept. conference call involving Sec. Paulson and industry financial analysts has been leaked.

Yves Smith is reporting that the phone number was posted on Calculated Risk and members of the public were able to listen in.

Now, it's easy for folks who (like myself) know little about the financial markets to view every word uttered as evidence of a Machiavellian plan to screw the taxpayer - but if what they are saying is accurate, Sec. Paulson was laughing down his sleeve at the Dems trying to pass his bailout plan.

Smith's first point is perhaps his best:

...the report I got from one person who was on the call was the the questions came from financial services industry members. In other words, this was most assuredly not intended to be a call open to the public at large. If anyone from the media or other member of the great unwashed was listening in, it was by accident.

This is simply scandalous. To have a group of interested parties get a privileged briefing by government officials on a matter of keen public interest flies in the face of what a democracy is supposed to be about. The proper method would either be a published FAQ on the Treasury website or a briefing with the media included.

The notes suggest that Treasury was spelling out the bailout plan in the wee hours to industry insiders.

They also suggest that Treasury viewed the division of the bailout funds the same way I did - as meaningless posturing. (I was hopeful that some good might come of it - but I clearly fell for the same Bush stratagem: my plan is the only plan. The Dems occupied themselves with rearranging deck chairs - and I was looking at the patterns they made.)

Treasury viewed the executive salary limitations as equally meaningless.

That they would have these opinions isn't really news - that they would use them to assure the financial industry in a late night conference call is pretty tacky.

But here's my question - With all the talk of stopping Golden Parachutes - it would appear that Congressional leadership either missed (or chose to ignore) the fact that the entire bailout bill IS a golden parachute.

• Wall street buys up all the mortgage-backed securities they can get.
• When they run out - they demand more and tell mortgage brokers to lower their underwriting standards. i.e. "Make more crap so we can buy it."
• When they've bought up all good mortgages and all the crap mortgages they can - they turn them into CDOs and start selling them to anyone they can.
• Then the bad mortgages fail, the writedowns start, people stop buying MBS and CDOs, and banks start dying.

And a cry goes up from Wall Street "Help!! Somebody buy our crap!"

And Sec. Paulson and Congress rush to the rescue.

The plan stinks. And if it died because of the House Republicans - we owe them a great deal. My Democratic Rep. voted for the bill and I'd love to hear their rationale for the vote.

What would that sound like, exactly?

"At this time - with the economy in crisis, it is essential for the government to buy 700 billion dollars of crap."

Boehner is so obviously full of it

Here's a House Republican answering direct questions with direct answers:



I totally agree with this man.

Pelosi's speech was stupid - and Boehner's pointing fingers in hopes that people won't notice he couldn't deliver votes on a bill he pushed for.

Calling your bluster

Exhibit A on how to counter a poorly conceived soundbite:

Rep. Barney Frank confronts the notion that the bailout bill might have passed - were it not for the speech of Speaker Pelosi:



Memo to the Dems - THIS is how you go after the partisan BS talking points.

Also, it would help if the Dems weren't such mindless tools when it comes to legislating in crisis - but, one thing at a time.

Emergency Pasta

The other day I did something I haven't done in about two months.

I cooked dinner in the kitchen:

The kitchen... she is done!!    Ahhhhhhhh...

Wasn't even much of a meal - but weeks of deprivation made it taste a lot better. E and the boy were the first ones to use the kitchen for real. They made pumpkin muffins, something the boy has been jonesing for for awhile.

They were pretty solid, too. Our new oven is a double oven - so you can just heat up this small oven to bake things. Seems to heat up faster. Slick.

For the first dinner, I went with what's at hand. I call this recipie Emergency Pasta, because the ingredients last damn near forever - so you can always have it ready to go in case, well - in case you need dinner in a hurry.

It's also a rolling recipie - meaning very little needs to be prepared en masse. Most stuff goes in in a series. So you put something in the pan and while it's cooking - you prep the next ingredient.

Emergency Pasta - Puttanesca

2 tablespoons of olive oil (I just pour until I coat the bottom of the pan)

2 oz anchovies, chopped (You can skip chopping these, they will just take a bit longer to dissolve in the oil)

2-3 garlic cloves, chopped

28 oz can of imported tomatoes. (There may be a good domestic brand, but I'm not willing to spend the money to find it. Buy Italian)

Splash of dry red wine

6 black olives, pitted and sliced

6 Kalamata olives, pitted and sliced

1 lb pasta (spaghetti, spaghetti rigatti, or linguine)

1-2 tablespoons of capers

1 teaspoon dried oregano

1 cup grated Parmesan Reggiano cheese

1. Pour the olive oil into a saucepan on medium heat
2. Dump the anchovy oil into the pan and then chop up the anchovies and put them in as well.
3. After the anchovies have dissolved into the oil, add the garlic and be ready to add the tomatoes after 30 seconds.
4. Add the tomatoes, wine and let the pan simmer for at least 20 minutes (until the sauce reduces and thickens)
5. Salt and pepper the tomatoes (go easy on the salt, you put in some anchovies - remember?)
6. Chop the olives, measure out the capers and oregano and put them in a cup
7. Start the pasta water
8. Salt the water
9. About the time the pasta water's rolling, the sauce should be reducing nicely.
10. Boil the pasta, add the olives, capers and oregano to the saucepan
11. Grate the cheese
12. When the noodles are done, turn the sauce off.
13. Drain the pasta
14. Combine the pasta & sauce, mix well
15. Dump the Parmesan over the top 
16. Eat

No bells, no whistles - just a nice easy meal.

Ahhhhhh.

Late edit: I added garlic to the recipe. One of those things you throw in without thinking, but should probably write down.

In other news, the DOJ can't get it done

Remember the US Attorney scandal?

Emptywheel does

What are the odds?

Barron's online has a nice list of regulatory gaffes and non-calls that got us here.

This one kind of jumped off the page:

2004: The SEC waived its leverage rules. Previously, broker/dealer net-capital rules limited firms to a maximum debt-to-net-capital ratio of 12 to 1. This 2004 exemption allowed them to exceed this leverage rule. Only five firms -- Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley -- were granted this exemption; they promptly levered up 20, 30 and even 40 to 1. 

Seems I've heard those names in the news before.

That'd be:

• Goldman Sachs (stopped being an investment bank on Sept 20, 2008)
• Merrill Lynch (bought out Sept 15)
  
• Lehman Brothers (bankrupt Sept 15)
  
• Bear Stearns (bought out/bailed out March 25)
  
• Morgan Stanley (stopped being an investment bank on Sept 20, 2008)
  

If the Fed hadn't propped up AIG, Goldman would have died shortly after AIG did.

Interesting grouping there, no?

(H/t digby)

AIG, OMG

Thorn POD sent me this article about the AIG implosion.

Behind Insurer’s Crisis, Blind Eye to a Web of Risk 

The general flavor of the article can be summed up by the quote that kicks it off:

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.”
— Joseph J. Cassano, a former A.I.G. executive, August 2007

The same old story - a group of self assured, smart people getting blindsided by things they never bothered to worry about.

Unfortunately, their failings became our problem.

Late Edit: Had the wrong attribution. POD send this article. Sorry 'bout that.

The bailout as a hellbound snowball

Okay - so looking at the bailout deal (or the summary) it's looking like some good thought was put into it. The summary skirts a rather big item (IMO):

Section 112. Coordination With Foreign Authorities and Central Banks.
Requires the Secretary to coordinate with foreign authorities and central banks to establish programs similar to TARP.

When you go to the actual bill, you don't get much more detail:

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS. The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.

That's the entire section of the bill dealing with Treasury's powers to buy "troubled assets" from foreign firms.

Meaning, the Secretary of the Treasury can prop up companies that are overseas. What he can do here, he can do anywhere.

That's comforting.

Much will be made of the scaled back numbers. "It's not $700 billion right off the bat."

No, it's $250 billion right off the bat. But if the President certifies that the Treasury needs it, another $100 billion is released immediately. If the President issues a written report that more money is needed - congress has 15 days to vote to disapprove his request or another $350 billion is released.

I'd like to believe congress could put the brakes on this president, but since they've utterly capitulated on every other issue of note - I'm not so sure this limitation is much to crow about.

$250 billion now, $100 billion on request, and $350 billion in 15 days.
Mind you, I'm not critiquing the size of the amount, only the value of a "compromise" that adds up to exactly the amount the administration asked for.

Even I can do that math.

For a dose of perspective, here's WaPo. They' do math, too - only better:

The goal is not to vacuum all the industry's troubled assets into a federal holding tank. Rather, the government wants to determine credible prices for the assets held by banks, through the mechanism of buying some of those assets. If the plan succeeds, the prices paid by the government will become a new market standard, bridging the current gap between the higher prices sought by banks and the lower prices offered by investors.

"We need confidence, and this is about confidence," Paulson said.

In a practical sense, the government is trying to revive the markets because buying up all the troubled assets would require far more than $700 billion.

Twenty of the nation's largest financial institutions owned a combined total of $2.3 trillion in mortgages as of June 30. They owned another $1.2 trillion of mortgage-backed securities. And they reported selling another $1.2 trillion in mortgage-related investments on which they retained hundreds of billions of dollars in potential liability, according to filings the firms made with regulatory agencies. The numbers do not include investments derived from mortgages in more complicated ways, such as collateralized debt obligations. 

Cross your fingers, folks - this is close to a trillion dollars acting as a diversion.

Let's hope this works. Or it's good money after bad.

The last goddamn inch

I've always believed that a huge part of customer service is managing customer expectation.

Take the following scenario:

The customer is eagerly awaiting delivery of a product, and the vendor knows the delivery date will be one of two days on the week of September 8th.

The vendor could tell their customer any number of things, but lets try just these two:

1) "Those items will arrive on September 10th or 11th. We will call you on the 8th to let you know."

2) "Those items will arrive the week of September 8th."

Which of these statements is more likely to tick off the customer?

I'll give you a hint - # 2 is what our vendor told us about our cabinet delivery.

Now, a statement like that - you know it's not going to be delivered on the 8th - but you've been waiting for this delivery for weeks. You're eager. That part of your brain that desperately wants your kitchen to be done is saying "The week of the 8th, could mean the 8th!"

The realist calls the vendor on the 6th and asks to know what's up. The realist is told "We won't have a firm date until the 8th." Logic kicks in and says well, if we won't know until the 8th - odds are it won't show up on the 8th.

Optimist pipes up again "Maybe the 9th!"

The 8th shows up and all of my numerous factions are pinging the vendor to find out when the hell our cabinets will show up.

"Well..." says the vendor, "the trucks run on Wednesday and Thursday" so the soonest it will be here is the 10th."

-----

Okay, stop right there. This is how you annoy a person like me. String me out with bare minimum information and then admit to me that you knew more than you'd let on.

Week of the 8th + Trucks run on Wednesday and Thursday = the 10th at the earliest.

So why not say that? Yes, it's a matter of 72 hours - but when your kitchen is missing in action, and your general contractor is headed to Florida on the 13th, every hour matters. Why make me wonder?

Fail.

(We did actually get our cabinets on the 10th - our general contractor installed them on the 11th and 12th and life went on. But I'm still ticked at the vendor for stringing me along.)

-----

A kitchen remodel goes in fits and starts. Our contractor (I'll just call him The Man) is a typhoon of action. Day one, he obliterated our old kitchen and we had new walls and plumbing in a week and a half. If we'd have had cabinets by then - he'd have been done in two weeks. The Man makes stuff happen.

Except that kitchens have parts that have to be ordered, or subbed out. The floor took a week and a half to set up, cabinets take four to five weeks to make.

At some point, The Man just has to wait until stuff shows up. We had weeks of a big empty room and little activity.

Then the appliances showed up - then the cabinets and suddenly, The Man is off on a tear again. Cabinets and appliances are in place in 48 hours.

Enter the next delay - the countertops.

Countertops need to be made to order, so once the cabinets are in - the Fabricators can show up, measure everything and then inform you of when they will be done. It'll be another week and a half.

Which sucks.

You have a kitchen that is practically done, but no countertops means no surfaces - and no surface means no sink - and not having a kitchen sink is perhaps the most annoying thing about a kitchen remodel.

I want my garbage disposal!!!

So you spend the next ten days walking through a room that is a kitchen in all but function. In your head, the kitchen remodel ends with one of those "reveals" from basic cable:

Wow! It's so great! Let's cook a meal and do dishes, hon!

Reality is - your microwave is the only working appliance - and there's no place to put anything.

For ten days.

Then the Fabricators show up and you're told that the day after they're done - the plumber will show up and connect everying.

Counters + working appliances = Done! At least in my head.

But it's like jumping forward by halves - you never really get to the destination. First, the Fabricators notify you late in the day that - Oops! - they've forgotten to fabricate part of your counter. It'll be another five days. The missing part is not something that will affect the plumber, so it's easy to shrug off. Function is the big deal and so long as the plumber can work, we're 24 hours from being able to cook and clean again.

Plumber day, yesterday. Heading out the door, I'm thinking there's any number of items that will go wrong, so I leave my cell number on the countertop right next to opening for the sink. i.e. call me if you need something.

Returning home from work - I'm eagerly looking forward to firing up the stove and doing some dishes.

Except - the plumber has put in the sink (with the disposal on the wrong side) and has done nothing else. He's read my note, because he's added his own note below it:

Had to leave, will be back in the morning to run gas line to stove. I called the electrician he will be here in the morning to wire the dishwasher, thanks.
     -Plumber

Okay - FAIL.

Not only did he not do all the items on the list - he didn't call to let us know. Customers who are given more time to believe things are fine are more irritated when they find out they're not.

True, it's all going to be sorted out tomorrow morning - but cripes! This close to the end, every delay is slow death.

--

It's tomorrow (today) I'm telecommuting, looking forward to talking with the plumber and electrician. I have a few questions and I need to talk with him about switching the disposal and running a gas line for our dryer.

I leave him a detailed note - in case he shows up while I'm dropping off the kids.

I get back to the house and he's not there. By 10am - I'm getting that familiar feeling of things going south.

I call the electrician - he's surprised I'm calling him. He clearly has no expectation of showing up today. "All I want," I say, "is somebody to hook up the dishwasher. I don't want another weekend of hand washing plates."

Electrician sounds like a person that's been caught stealing your newspaper. "Gosh, I don't know. I don't know if I can get anybody there today. I mean, we're going to have to get it inspected next week anyway..."

I'm like who cares about the inspection? I want a working dishwasher! Four days doesn't matter to you, but it sure does to me!

"Well, I'll call you back around 1 or 2, and let you know if I can get somebody there today. How's that sound?"


Truth? It sounds sh!tty. I get to wait in suspense all day for the possibility that you might help me?

I bite it back. "Well, if that's all you can do - I'll wait for your call."

Click.

Next up is the plumber. I call and leave a message. An hour later (11am) he calls me back. He's on his way, and he's okay with switching the disposal.

Good. But I'm still ticked off. I was told I'd have a plumber and electrician this morning. I'm going to get a plumber around noon - and probably won't get an electrician at all.

Plumber shows up and I lay it out for him. "I just want to use my kitchen. Hook up my stove, and I'm happy. My sink works, you can do the tune ups next week. I want to cook."

He gives me a can-do smile and says, "I'll get your stove set up right now."

Solid.

I go back to work, and his pounding and hammering is a satisfying soundtrack for the next two hours. The hammering stops and about the time I look up, the plumber leans into my room and asks, "Say, do you have a connecting hose for the stove?"

All right, then. Now I know how the stove hookup will go south.

I bought a new stove that arrived without a power cord (it's dual fuel) and a gas hookup line. The plumber has run the gas right up to the stove, but the last foot of the gas connection is something he doesn't have (and didn't think to bring).

He's one foot out the door at that point, has to pick up his kid and he leaves me a roll of teflon tape and says "it's really simple." He recommends testing for gas leaks using a match - and then leaves.

Great. No hookup unless I do it. I know nothing about hooking up a gas line - but I'll be damned if I go through another weekend without a stove. I look at the gas pipe, then head for the hardware store.

On the way to the hardware store, I remember that it's after 2, and there's no word from the electrician. I call him and get his voicemail. Figures.

At the hardware store, I find there are two sizes of hoses for gas connections, small and big. The valve was big - so I buy the big one. On the way home, I call the electrician again - and get through.

"Uh, yeah - I don't think we're going to be able to make it today. How's Monday look?"

EPIC FAIL. Fine.

Click.


Back at the house, I tear open the bag, pour out the connectors and start checking the connections. The hose is too big.


Back to the hardware store. I get the small hose, and I find the old guy. I ask him about how I can hook up my dishwasher. He give me a cord and some wirenuts and turns me loose.

Back at the house again. I get the small hose down to the connectors - I'm missing an adapter.

Fine.

Back to the hardware store. I get the adapter, grab the old guy again. Is there anything else I should have to connect a gas range? He gives me some teflon tape - the yellow kind for gas connections, not the white stuff the plumber left me - and I check out. The cashier smiles at me "Is this the third time today?"

I give him the kind of look that says: I need space today.

There's now no time to actually connect anything - I have to pick up the kids. No way we cook our own dinner now. Arrgh!

So, pick up the kids and E, back to the house. Stepping out of the car, I find - in my driveway - the exact adapter I need for the hose. It's not the one I just bought, it must have been in the bag and - IRONICALLY - fell out as I went into the house.

Fine.

I get the yellow teflon going - hook up the connectors, screw stuff together and start testing the connections with soapy water. No movement - no leaks. Hooray.

I peel the tape of the top of the stove - the burners and bits aren't on, but I want to see if the stove lights up.

It doesn't. Plenty of sparks, no flame. In the back of my head - I'm thinking, did the plumber turn the gas back on? Eventually, it occurs to me that there's an easy way to see if the gas is flowing. I turn the burner know past the lite and just pump out some gas. I hear it, I smell it - the gas is there, it's just not lighting.

Burner covers. I put the burner covers on, and it lights up on the first shot. Who knew?

We have a stove.

Now, the dishwasher.


The dishwasher is bolted under the counter, and there's a stripped piece of romex running out from under the front. Old guy told me to splice a plug onto those ends and put on wirenuts.

It'll be ugly, but I'll be washing dishes until the electrician decides to grace me with his presence.

I splice and plug - switch the breaker and.... nothing. The plug tester shows no lights at all - but the outlet is sending electricity because the disposal is working.

????

If the plug works and no lights are on- that means there's an open hot connection.WTH?

And then it hits me: the romex isn't coming from the dishwasher, it's going to the dishwasher. All I have to do is connect the three ends to the volt box on the front of the dishwasher and I'm good.

Three hookups later, I power up the dishwasher.
We're still missing part of our countertop - but the big three stove/dishwasher/sink are all online.

We're not done - but here and now - I'm calling it done.

Despite the best efforts of our subcontractors - we can cook.

Huzzah!

Gonzalez: Oh! Now I remember!

(Via TPM and the Atlantic)

In March 2004, White House Counsel Alberto Gonzales made a now-famous late-night visit to the hospital room of Attorney General John Ashcroft, seeking to get Ashcroft to sign a certification stating that the Bush administration’s warrantless wiretapping program was legal. According to people familiar with statements recently made by Gonzales to federal investigators, Gonzales is now saying that George Bush personally directed him to make that hospital visit.

Nice timing, Gonzo. Pity your conscience couldn't have acted up back when Congress was asking you, eh?

Blink

McCain will debate tonight.

(H/t TPM)

This was such a strange thing to do - and the reaction was so negative, you wonder what kind of thinking went into this.

In some alternate universe - McCain might have had a vital role to play. If his party was in the majority, if he was on the Senate banking committee, if he was seen as a leader on - or had any credibility with - economic issues.

In that other reality - you could have created a situation where Sen. Obama would appear at a debate by himself and look foolish for not tending to the crisis at hand.

But in order for that to work, Sen. McCain has to be seen solving the crisis - and that just did not happen. All the discussions were led by other people. The house republicans revolted, and McCain did not or could not rein them in.

So McCain goes to Washington and does not save the day. No deal is in sight, and he's looking at a deadline for debating Sen. Obama. What the hell was he thinking? You stay in Washington, you are clearly a fifth wheel who doesn't want to debate.

McCain will slouch back to Mississippi like he's been repremanded for running off - and Obama looks like the responsible one.

Was this another hipshot, or did the McCain campaign actually think this was a good move?

So much for WaMu

(Via the NYT)

Government Seizes WaMu and Sells Some Assets

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution. 

JPMorgan is fast becoming the Government's cleaner (the Jean Reno one, not the lame, A&E one).
First they gobble up Bear Stearns with help from the Fed, now they're feasting on WaMu's corpse.

While I'm certainly not going to play the violin for WaMu - I have to wonder about something.

Is JPMorgan too big to fail now - or are do they need to wolf down a few more banks first? And once they're too big to fail - what happens when they do?

Take all your overgrown infants away

Banks imploding, a furious electorate, the President making a national appeal for action....

and we get this:

The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

[snip]

When Congressional leaders and Senators John McCain and Barack Obama, the two major party presidential candidates, trooped to the White House on Thursday afternoon, most signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was to have pumped billions of dollars into the financial system and transformed the way Wall Street was regulated.

“We’re in a serious economic crisis,” Mr. Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room, adding, “My hope is we can reach an agreement very shortly.”

But once the doors closed, the smooth-talking House Republican leader, John A. Boehner of Ohio, surprised many in the room by declaring that his caucus could not support the plan to allow the government to buy distressed mortgage assets from ailing financial companies.

Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand.

The talks broke up in angry recriminations, according to accounts provided by a participant and others who were briefed on the session, and were followed by dueling news conferences and interviews rife with partisan finger-pointing.

In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

(via the NYT)

Ye Gods. Who are these nincompoops?

Heisenberg - as applied to market bailouts

Ryan Chittum found another gem on Bloomberg: Jonathan Weil's article, Why Mark-to-Paulson Accounting Won't Save Banks.

Weil's saying that haggling over the details of Paulson's bailout is beside the point:

There's one glaring weakness in Treasury Secretary Hank Paulson's plan to save the U.S. financial system: We know what the plan is. Any other problems with it are mere details.

[snip]

The plan goes like this: Treasury will pay financial institutions above-market prices for garbage assets nobody else wants. Then, through the magic of mark-to-Paulson accounting, everybody else that owns similar stuff will use those same prices, or marks, to value the trash on their own balance sheets.

Shazam! Banks and insurance companies write up the asset values on their books. They post big profits. Their capital goes up. Everyone gets fooled. And nobody knows the difference.

Except, we do. And that's why the plan probably won't work.

[snip]

Under Paulson's plan, Treasury would hold so-called reverse auctions for financial institutions' troubled assets. Whoever submits the lowest bid gets to sell its junky assets to Treasury for cash.

While that might look like a competitive, free-market mechanism, it's not. Once the first bid in the first auction is submitted, it may not go much lower, and it probably will be much higher than the true market value.

That's because the real incentive for the banks isn't to sell their rubbish to Treasury and get cash. It's to watch the Treasury pay grossly inflated prices to others. That way, they can use those transactions for accounting purposes to mark their books to the Treasury's farcical market prices.

Weil goes on to point out that the point of all this was to get the idea of a bailout in the zeitgeist - so Wall Street can start breathing again - so it's not all a bunch of stupid - but it does raise the question that Congress might be rushing to re-arrange chairs on a certain iceberg bound vessel.

Ugh.

The one unpardonable sin in America

...is to be bad on television. (At least, according to Dennis Miller).

By that measure - Gov. Sarah Palin is rocketing towards damnation:


(H/t to Glen Greenwald and CBS)

It would be unfair to say this means that Palin is a bubblehead. Plenty of smart people look foolish on television.

But off the cuff brilliance is clearly not her strong suit. If the past two interviews are the measure of her PR value to the McCain campaign - I'd imagine there are some long faces at McCain headquarters.

Too big to fail

I've been waiting for CJR's Ryan Chittum to weigh in on the latest mess - and he's re-emerged with a list of questions for the press.

My favorite of the bunch:

4. Why have politicians and regulators let institutions get “too big to fail, and why not put such firms on a diet?

The press should ask why companies whose collapse would threaten economic apocalypse aren’t being slimmed down and split up until they’re not so scary. Instead, we have Bank of America, the nation’s biggest commercial bank, swallowing Merrill Lynch, the second biggest investment bank with nary a peep from the press about whether this is a good idea. B of A was already too big to fail. Now it’s something worse.

Why isn’t anyone writing about slimming these companies down? Bigger is not better here.

Exactly. The government has had to step in to save institutions that have grown to sizes where their every sniff and cough is a matter of (inter)national concern. I would think the government has an interest in ensuring a certain amount of redundancy exists on Wall Street.

We want to get to a point where we say "Oh, your investment bank just imploded? - too bad for you - but another one will spring up to take over your office space tomorrow."

Bank of America getting huger may make Merrill feel better, but I don't see why you and I should feel relieved.

Read the whole list.

Welsh on the bailout

The Big Picture has a marvelous quote by Jim Welsh.

Huddle?

Okay, I'm just going to rattle off a few items and ask a question.

McCain's suspending his campaign to go to Washington to deal with the economic crisis.
(This is a crisis where the key issues are being discussed in committees he's not on. McCain is not a chairman of any committee. While he wields more influence than a rank and file Senator, his essential role in addressing this crisis will be to cast a vote.)

Much has been made of Gov. Palin being shielded from all questions in her recent press appearances.

And then there's this.

Now, my question is.Where is McCain going to spend the next few days? and Where is Gov. Palin going to spend the next few days?

If there's some high level campaign huddle going on... Enquiring minds want to know.

The road to the White House goes through Letterman

Owch.



(H/t HuffPo)

The Geisel file

(H/t to E and mental_floss)

Stacy Conradt digs up 10 odd facts about the works of Dr. Seuss.

My favorite bits:

1. The Lorax. In case you haven’t read The Lorax, it’s widely recognized as Dr. Seuss’ take on environmentalism and how humans are destroying nature. The logging industry was so upset about the book that some groups within the industry sponsored The Truax, a similar book but from the logging point of view. Another interesting fact: the book used to contain the line, “I hear things are just as bad up in Lake Erie,” but 14 years after the book was published, the Ohio Sea Grant Program wrote to Seuss and told him how much the conditions had improved and implored him to take the line out. Dr. Seuss agreed and said that it wouldn’t be in future editions.

and

3. If I Ran the Zoo, published in 1950, is the first recorded instance of the word “nerd”.

So, that's who started it...

Read more.

Quite a troika

First, you have McCain making noises like he's bailing out of the debate for the good of the country.

If Wall Street was bathed in blood, perhaps - but I have a hard time seeing the McCain-on-a-white-horse scenario.

Next you have Palin's interview on CBS:

COURIC: You've said, quote, "John McCain will reform the way Wall Street does business." Other than supporting stricter regulations of Fannie Mae and Freddie Mac two years ago, can you give us any more example of his leading the charge for more oversight?

PALIN: I think that the example that you just cited, with his warnings two years ago about Fannie and Freddie--that, that's paramount. That's more than a heck of a lot of other senators and representatives did for us.

COURIC: But he's been in Congress for 26 years. He's been chairman of the powerful Commerce Committee. And he has almost always sided with less regulation, not more.

PALIN: He's also known as the maverick though. Taking shots from his own party, and certainly taking shots from the other party. Trying to get people to understand what he's been talking about--the need to reform government.

COURIC: I'm just going to ask you one more time, not to belabor the point. Specific examples in his 26 years of pushing for more regulation?

PALIN: I'll try to find you some and I'll bring them to you.

I'll try to find you some and I'll bring them to you.

This person is running for VP of the United States and not only can't they defend their running mate's record, but they offer to "try to find" some talking points and then deliver them personally?

Weak.

Lastly - the Lame Duck in Chief giving perhaps the strangest speech of his career. First, he gives a sanitized primer on the credit crisis - laboriously explaining what mortgage backed securities are and why they are hurting the economy.

Then he dials up the fear: (via IHT)

(emphasis mine)

The government's top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.

And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.

Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And, ultimately, our country could experience a long and painful recession.

Okay - I get that the M.O. of this administration has been:

1. Identify problem
2. Propose solution that expands your powers and may or may not fix the problem
3. Assert that the only alternative to your solution is to do nothing
   
4. Demand immediate action
5. If questioned or criticized - refer to the immediacy of the problem
   

But really, since when do presidents try to stop a banking crisis by scaring the nation's investors?

---

Bizarro world.

It's hard to know where to begin with this crew.

Scandal mix and match

CJR has posted a nice quiz on the current mess - see how well you do.

Match the allegation with the financial institution:

Allegation
1. Handed out copies of the movie Boiler Room as a training tape
2. Partnered to sell its “PayOption Arms” with a brokerage owned by a five-time felon, whose convictions included gun-related charges
3. Forbade loan officers to check borrower income on certain loans
4. Ran an “art department” in its Tampa office, where documents were altered
5. Settled allegations of institutionalized marketing deception that covered two million customers
6. Developed “FastQual,” a program designed to approve borrowers in twelve seconds
7. Incentivized brokers and loan officers through “yield spread premiums” and other compensation schemes to put borrowers into more expensive loans
8. Tapped two kegs of beer at weekly staff meetings

Institution
A. Citigroup
B. Countrywide
C. Ameriquest
D. IndyMac
E. Merit Financial
F. New Century
G. All of the above

Oh, and Psst! the answers can be found in their excellent article on the current mess.

Phil Gramm: McCain's albatros

CJR has a nice distillation of articles about how Phil Gramm can be thanked for much of what is going horribly wrong these days.

He can run, but he can't hide.

All your banks are belong to us

While Sec. Paulson is laying out the reasons why he should be empowered to buy crap securities with our money (with no oversight), it is instructive to realize how we got here.

E has been asking me to listen to the story on This American Life, The Giant Pool of Money

I should have listened to it earlier.

Alex Blumberg: The thing that got me interested in all this was something called a NINA loan. Back when the housing crisis was still a housing bubble. A guy on the phone told me that a NINA loan stands for No Income, No Asset, as in, someone will lend you a bunch of money without first checking if you have any income or any assets. And it was an official, loan product. Like, you could walk into a mortgage broker’s office and they would say, well, we can give you a 30 year fixed rate, or we could put you in a NINA. He said there were lots of loans like this, where the bank didn’t actually check your income, which I found confusing. It turns out even the people who got them found them confusing.

For example, a guy I met named Clarence Nathan. He worked 3 part time, not very steady jobs, and made a total of roughly 45 thousand dollars a year roughly. He got himself into trouble and needed money, so he took out a loan against his house. A big one.

Clarence Nathan: Call it 540 for round figures

Alex Blumberg: And you basically borrowed that from the bank and they didn’t check your income?

Clarence Nathan: Right. It’s a no-income verification loan. They don't do that. It's almost like you pass a guy in the street and say: lend me 540,000 dollars?

[snip]

Alex Blumberg: This imprudent partnership is new, and is at the heart the current housing crisis. For most of the history of banking, bankers wouldn’t have loaned Clarence their money either. They didn’t let people like Clarence near their money, in fact, people with part-time employment, and unpaid debts in their past. And then, suddenly, in the early 2000’s, everything changed, banking turned on its head and went out looking for partnerships with people like Clarence...loaning him half a million dollars without even checking to see if he had a job.

What happened?

If you want to understand the mess - do yourself a favor and spend an hour with the podcast.

Shout out for Sen. Dodd

Via the NYT:

Senator Chris Dodd (D - Conn) speaking at today's hearings on the Wall Street bailout:

The witnesses have spent most of the day trying to convince the panel to set aside punitive measures for executives until after the bailout. But Senator Dodd heard enough of that by 1:24 p.m., and decided to draw a line in the sand. Any bailout would “include executive compensation,” he said. “Count on it.”

Nice.

Dodd's got the right hammer - let's see if his colleagues let him swing it.

Laughing with tears in my eyes

This, from the Big Picture:

SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

Quatloos, eat your heart out.

Who is blogging and why?

Technorati released the first part of their report on the state of the blogosphere.

Fairly interesting stuff - although it's sad to think how my efforts compare to their averages.

Ah well, it's still *ahem* good grok.

The Maverick veneer

With the financial world imploding around us, McCain's history of opposing financial regulation looms as a dire threat to his political existence.

Sen. McCain is overly fond of telling us all how he's going to shake up Washington. As his campaign is stocked with veterans of the Bush administration, and Washington lobbyists, color me unconvinced.

Last month, Mitt Romney told us all how McCain would "take a Weedwacker to excessive regulation." This wasn't off the cuff remark - it was in his speech at the GOP Convention. 

This is what he was running on. Now it is what he is running from.

Good luck with that, Senator.

Paulson is no Cincinnatus

Glenn Greenwald spells out the three central tenets of the financial bailout. Even if I hadn't read his splenetic lead in - it would make my hair stand on end:

The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [Sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [Sec. 10]; and (3) best of all: "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" [Sec. 8]. 

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.

Go on, read the draft yourself.

Yet again, we have a national crisis under this administration. Yet again - congress is ushered into a briefing where they are told "this solution is the only solution. We have to work together to save the country."

And again - the Democrats march out to provide a veneer of respectability to another power grab.

Sec. Paulson (and therefore, the executive) will get sweeping new powers that cannot be reviewed by the court. They cannot even be reviewed by an executive agency - (which begs the question. Can Paulson's successor reverse his decisions?)

This is ridiculous. Yes, drastic action is needed - but handing new and unchecked powers to any administration is stupid. Giving them to one with a track record as bad as this one is beyond dangerous.

Understand something about AIG

I was listening to something on the radio yesterday, one of those talking heads rabbit on about how the situation with the Fed rescuing AIG was so bizarre.

I'm thinking - not so bizarre... big financial firm, lots of assets, domino effect, too big to fail-

-blah, blah blah.

The guy went on to point out that AIG does insurance, but they do a kind of insurance you and I can't get. They insure securities against loss - for big clients, like China.

Somebody like China goes to AIG and says "Hey, I'm buying a metric @ssload of mortgage-backed securities. On the off chance that the companies who issued these mortgages weren't following their stated practices, AND that the rating agencies were using three year old data to evaluate their appreciation potential - will you insure me against loss?"

AIG says "No problem. I mean, we all know that's not gonna happen, right?"

And AIG insures China against loss by undisclosed risk.

With me?

[Late Edit: This kind of insurance is called a Credit Default Swap. It was 1am, my brain wasn't functioning. Sue me.]

Okay. People like you and me don't get this insurance - and there's a reason (I'm not really starting a little guy/big guy kind of thing here) - big money cannot afford to take Wall Street at its word. You and I lose everything in the market, we're ruined - but life around us goes on. If China rolled the dice with 10% of their GDP and came up a loser, well.. life would change for a sixth of the world's population - for starters.

Scale that scenario down a bit. Let's say you're a Government Sponsored Entity that recently took 50% of their total losses on 10% of their mortgages (in subprime, naturally). You're big enough to merit insurance from AIG.

Happy dance, right? Except two things have to work out. You gotta live long enough to put in the claim - and your insurer has to pay it.

Well, the Fed taking over Freddie Mac and Fannie Mae spared those GSEs any chance of a quick death, but AIG going in the tank endangered any claim their securities had to being good investments for buyers like China.

No AIG, no securities insurance, no security for big money buyers.

Talking head man explained that the Fed, now the proud administrators of Freddie/Fannie's assets to save them from ruin - is now loaning money to the insurer who will write checks to big investors in case of big losses.

Pretend you're big money for a second. Does this fill you with confidence?

Yeah. CJR's Ryan Chittum agrees with you. What's more, he's not alone:

Forget about AIG. This [WSJ article] is the most important story of the day. Banks have essentially stopped lending to each other, threatening to bring the financial system, and thus the economy, to a standstill. This despite the Fed shoveling money into markets.

 That.... is downright creepy.

Don't look at the AIG bailout, look at what it was trying to prevent - and whether or not it is working.

The stupidest hackers in the world

By now the news is out that Gov. Palin's Yahoo account was hacked.

You have to believe that any hacker would have done better than this Anonymous group did. I suspect they have no idea what kind of a hornet's nest they've stirred up.

(Yes, yes, the government can read your email- but NOBODY else!!)

Lest you go trolling for good dish - relax, the only posted emails are ho hum messages (a thank you from a loyal supporter, and a "hang in there" message from Palin to her Lt. Governor).

[Late edit: it would be fair to say the big reveal is Palin's use of this yahoo account for gov't business. While neither of the messages whose contents are shown establish this, the subject lines of messages referenced by WikiLeaks would support that theory.

For example, this one from her chief of staff:

Fri, 8/22/08    42KB Read
Nizich, Michael A (GOV)
RE: Using Royalty Oil to Lower the Cost of Fuel for Alaskans

Or this one from her press secretary: 

Sat, 8/30/08    1169KB Read  
Meghan Stapleton
Attachments
FW: Motor Fuel Tax Suspension

To the extent that what has been disclosed is genuine - it would suggest that any blanket refusal to hand over "personal email" from this account is less than accurate.]

Gawker is now claiming that the account is now gone - which would raise interesting issues if gov't business was conducted on this account.

As I see it, the relevant questions are

1) What bunch of miscreants did this? and
2) Is there such thing as a "but I had to delete my account!" defense when charged with destroying government records?
3) What kind of data recovery is possible for a deleted Yahoo account?

This Anonymous group had better enjoy the next few days, because the next few years are seriously going to suck.

Late Edit:
WaPo's The Trail is reporting that WikiLeaks has more email messages posted. WikiLeaks is (understandably) not responding well to the new internet load.

Later Edit:
I neglected to H/t to Fox News for the original reference. My bad.

Still later Edit:
It will be interesting to see how this will spiral out of control.

• GOP Congressmen (who shamelessly voted to allow the government to scan everyone's email) will suddenly become outraged defenders of the right to privacy.
• The McCain camp will denounce this as the dirtiest of political dirty tricks - demanding the media focus on their candidate as victim and capturing those responsible. Never mind about what this says about the honesty of our VP nominee, thank you very much.
• The Obama campaign will denounce this act, promise that no member of their organization was involved (and secretly pray that enough good dish trickles out to ruin Palin).
  
• The hackers will enjoy their moments of fame - and pray that their attempts to conceal themselves keep them safe.

Time will tell - but my money is on the hackers getting pummeled.

Release the hounds!!!

Rubbing elbows

Rachel Maddow commenting on Sen. McCain's visit to a yacht owned by an Italian con man in 2006.



Frankly, the cultural angle doesn't seem as strong as the ethics angle.

Why is a reformer hanging out on a con man's yacht?

McCain's presence on the yacht is confirmed by his campaign.
The con man is exactly that - he's pled guilty.

Late Edit: corrected the title. Sheesh.

I'm stupid, and I vote

Salon's Walter Shapiro scours the political landscape of Ohio and comes across some sparkling examples of the American voter:

"Obama doesn't have an American birth certificate or one that you can believe. The one from Hawaii is a fake."

or

"Usually about a month before the election, I start to read up on the candidates. But it's been a crazy summer, so I really haven't checked anything out."

or my personal favorite:

"I don't know much about McCain. I hear a lot about his vice president. What's her name? The one from Canada"

Heaven help the republic.

Aloha, Siva?

Siva Vaidhyanathan is calling it quits.

Downer.

To the chest-thumpers of America

Don't look now, but Ben Stein (on CBS Sunday Morning) has done a masterful job of letting the air out of this tough talk on Russia and Georgia (emphasis in orignal)

Here's a cool idea: while we're in a difficult war in Iraq, while the war in Afhanistan is turning distinctly ugly, while we have major economic and energy problems - let's get into a war with Russia!

What? You don't think that's a good idea?

Neither do I.

But that seems to be exactly where we are heading. We already made the boneheaded move of getting nation of Georgia to think we would back them when they confronted Russia over Issues that have zero to do with us.

Russia warned us over and over to back off. We didn't back off. Then when Russia called our bluff, invaded Georgia and thumbed their noses at us - we did nothing. This was a nearly fatal blow to Georgia, a sovereign state and made us look like liars and punks.

Now we've made an agreement that places interceptor missiles in Poland, even as Russia has told us over and over again not to do it. We've promised the Poles we'll defend them if Russia attacks.

This is dangerous foolishness.

We're not gonna fight the Russians over Poland, which is right next to Russia and about 5,000 miles from us.

1. We don't have the means to do it; and
2. The nation doesn't want to do it.

So if Russia invades, which they've strongly hinted that they may do - we'll do nothing, and look weak again.

Why are we getting into all these messes so far from home? Why are we provoking the Russians needlessly? They are obviously ready to fight on their borders, and we're not ready to fight on their borders. And neither is anyone in Western Europe - all of whom are totally dependent on Russia for natural gas at this point. Plus, the Western Europeans have almost no armies at this point.

Look, we have enough on our plate. Let's not get other people killed and ourselves humiliated in Russia's backyard.

If we're not gonna fight - and we're not - let's just butt out and stay out.

Ben's dead-on on this issue. Only blind nationalists and simpletons could think picking a fight with Russia has any upside. We are not invincible - even if nations like Georgia and Poland think we are.

Russia is doing what they are doing because they understand that we cannot back up our words. We may not like it - but it doesn't change things. Leaders who suggest otherwise are either  shameless demagogues or fools. Either way, they are dangerously irresponsible.

Wired, Part III

Read Part II

The other night, amid a flurry of hammering that woke up my little girl – I was at last fully networked in my house.

*Who cares?*

Yeah, yeah, okay. It's a pretty small thing. But small things have a way of turning into flowing cascades of increasing complexity. This should have been a small thing – but it wasn't.

And now its done.

*Except for the 2nd floor-*

Shut up, you! Just shut your subconscious little mouth!! Do you have any idea how long it's taken to…

Ahem.

Okay, perhaps you missed part I and part II of this saga. If you shorthand doing battle with AT&T, the narrative can be shortened to:

• I move to a new house.
• I transfer phone and internet to the new address.
• My house has no phone jacks, thus I enlist the aid of NG & MG to run wires to hook up my PC and DVR.
• After fruitlessly testing the new wires, I discover AT&T has not set up my internet.
• I spend hours on the phone in exchange for two separate promises of when my service will be set up.
• Both of these promises are broken.

---

On the date of the second promise – I had no ETA during the day, so I checked all day and into the night before calling AT&T to scream at them.

After being put on hold and passed around – I was referred to an account specialist.

In contrast to everything I'd experienced with AT&T so far, this person was courteous, and sympathetic. They apologize for what has happened, and – I remember this specifically – tell me they don't blame me at all if I wanted to cancel my order.

They advised me to let them continue to process the order, that it should be done by 3/14, and that I should shop around for other providers. If I changed my mind, I could easily cancel the in progress order at no cost. If I ultimately chose to stay, my order would have continued in the meantime - and  (the kicker) they'd give me two months of free internet service for the inconvenience.

The account specialist promised to call me before March 14th to either verify my order or cancel it.

Huzzah! Empathy! Apology! Free stuff!

Full of satisfaction for having wrested some concessions from AT&T. I vowed to price all options and make them earn my loyalty.

When the account specialist called me back, I was going to have all of the competitors rates in front of me. I would be ruthless.

[The discerning reader will have guessed the next part of the story: I would never hear from the account specialist again.]

Unaware of this fact (and frankly, determined to get a better deal just for spite) I hunt down internet prices for all ISPs in my area.

As anyone who's priced internet knows – this is not easy.
Bundling, initial teaser rates and connection speeds throw all manner of obstacles in front of consumers who simply want to compare apples to apples.

My personal favorite: My cable company was willing to offer me an introductory rate that bumped up after six months and resulted in a higher yearly bill than the regular rate. 

Nice.

Since no communications company will spit in your direction without locking you into a contract – I ended up having to compare the average yearly rate over two years for internet alone, internet with cable, and internet with phone and cable.

The maddening result: For the connection speed I wanted, AT&T was the cheapest.

Since I was getting two months free – I figured there wasn't much sense in paying more for spite. When AT&T's account specialist called me back [HAH!] I'd tell them I'd take the deal.

Now, those of you with freakish memories will recall that checking your order status on AT&T's website requires an online registration number – which you can only get via phone or snail mail.

I'd told them to call my house with the number, and they had. In classic AT&T fashion: A computer calls my house and rattles off a nine digit number – once – and then hangs up.

If I'd actually been at home when the call came, there's a good chance I'd have missed a digit trying to get a pen. Since they didn't repeat it, I'd have been stuck repeating this workflow:

1)    leave house again
2)    access the internet,
3)    go to AT&T's webform
4)    Request an online registration number
5)    Go home (to receive number via phone)
6)    Retrieve number from answering machine
7)    Leave home (to get internet access)
8)    access the internet,
9)    go to AT&T's webform
10)    Use online registration code
11)    Check order status.

See how easy that is! ARRrrrrrgh!

Needless to say, I didn't do this with any speed. Over the course of three days, I managed to write down the number, remember to bring it to work, and remember to visit AT&Ts website.

The first time I got in – I wasn't even planning on checking my order status. I wanted to check on my bill. It was the 12th and my order wasn't supposed to go through until the 14th.

I saw my bill was late – but hell if I was going to pay before I got service. On a whim, I saw check order status and clicked on it.

It said:

Residential/Internet: 
Scheduled: 2/27/2008
Completed: 3/10/2008

I'm like: 

!!!!

So I call E and ask her to check the computer. We're online!

What the freaking…???

I've had internet for days and AT&T didn't so much as send me an email!

Those b@stards!!!

Still...I have internet.

E can check email – I can back in touch with folks.

Then I go home and fire up the browser. And it's so slow, google takes ages to load.

I call AT&T tech support and download speed checks confirm that there's something really wrong with my connection.

I'm connected – but I can't use it.

ARRRRRRRGGGH!!

Days later - AT&T agrees to send a tech, at the last minute we change the day, since E's home with sick kids we figure we might as well have their tech show up when we won't have to take additional time off.

The tech shows up, has to install a whole house filter, reset our modem password and (in a delicious bit of irony) has to sit on hold with AT&T in order to do it.

It works! Huzzah!

The next day, I end up being home anyway and I watch another AT&T truck show up at our house (presumably, this was our originally scheduled appointment). I tell the person that we have internet now, than you.

They say something like, "I need to check Roger's work. I'll just take a look at the box out back."

I didn't have the heart to tell them we have no phone box – in the back, or anywhere else.

Done?

No.

Yes, I have internet, but there's still one thing in AT&T's hands that they can screw up: my two free months of service.

Being AT&T - they do.

I start getting hassled about my bill. Being me, I refuse to pay until I see a bill that reflects what I should pay. Being AT&T they tell me my credit won't appear for 1 to 2 months.

I ask you: why the hell would that be? We live in a world of instant communication. The thought that a message like "Credit account X with $50.00" would take two months to show up on my bill is just too stupid to contemplate.

I call AT&T to explain my point of view to them and they assure me that the credit will come – its in the system and that should show up on my May bill. They understand that I want to pay an accurate bill, so they quote me a single month and ask for that amount. I'm like, Okay. One month is no big deal – I don't really want to pile up three months of bills before sorting this out. Hell, knowing AT&T they'd probably disconnect me and I'd have to start over.

I'll pay a month – wait a month – and by then my credit will show up and we'll be square.

I pay a month's bill online.

The next day, I get a disconnect notice from AT&T.

Furious, I call them and am assured that I will not be disconnected. Ignore the incredibly threatening notice we sent you about collection and your credit history, no this was all a misunderstanding.

Fine.

May comes – and with it my AT&T bill. Happy to put this all behind me, I open it up to find…a month and a half of credit applied to my bill. Plus late fees.

Now, at this point my narrative has to go off the track a bit. I went to AT&T's website and scoured the site for any line of contact that I hadn't used before. I ended up finding a webform that I can no longer locate (or I'd post it here).

I sent the following on May 15th:

To: ATT_1ME@att.com
Customer Name: [withheld]
Email Address: [withheld]

Email Tracking Number: 8121[withheld]

Question/Comment:
Credit for late installation not appearing on my bill

Additional Information:
Re: Account Number [withheld]
I'd placed an order for phone and internet on 2/25 and was told it would be installed on 2/27.

It was not.

I was then told it would be installed on 3/7.

It was not.

So, I called your advanced DSL Customer Support number 866-583-2494 on 3/7 to find out what was going on. Over the course of a 53 minute phone call - I was told that it would be installed on 3/14 and that because things went so wrong I would receive two months of DSL for free.

Looking at my bill - it doesn't look like this has happened, either.

I am now getting late charges for billed amounts that are in error.

What needs to happen now to get this situation resolved?

Expecting nothing, I get it:
an email advising me of the impending credit within 1-2 billing cycles.

So I reply to the email and snark at them.

The next day, at lunch – I get a phone call from a nice rep called Mamie.

I explain that from my perspective AT&T owes me two weeks of free internet. They promised me two months, and they gave me six weeks.

Mamie was not impressed. "You transferred your service on 2/27, so the billing for your new internet began as of that date."

I'm laughing too hard to scream at her.

You didn't transfer my service on 2/27!

Mamie can't find this in her script. "On a good day it would have been-"

I'm outside, in a parking lot, surrounded by people. Despite this, I scream into the phone:

IT WASN'T A GOOD DAY! My service wasn't transferred! You promised me two months worth of internet and then you have the nerve to bill me for two weeks of service you never provided!

With this, Mamie gives up the ship. If I pay my second months bill, she'll apply a credit for the remaining two weeks while I'm on the phone.

I pay, she credits my account for the missing weeks and my struggle with AT&T ends.

She even sends me an email on May 30:

Good Afternoon [murph],

Per our conversation today, I am responding to your email regarding an adjustment. My name is Mamie, and I will be happy to assist you with your request.  I regret any frustration you have encountered because of the billing error.

After reviewing your account, a credit in the amount of $13.75 has been given for AT&T High Speed Internet . This credit should appear on your statement within 1-2 bill cycles.

My User Id is MM69[withheld]

[murph], if I can be of any further assistance, please reply directly to this email.

Thank you for using AT&T. We appreciate your business and continued loyalty.

Regards,
Mamie
Your AT&T Customer Service Representative

Scoreline:
Me: Four hours on the phone, internet two weeks late, and billing unsnarled after three and a half months.
AT&T: Two on site visits, -$50.00, and one more sucker, contractually obligated for two years.

Next up - wiring, the final insult.

Cat 2, my @ss

Mom's telling me that Hwy 90's sewer grates have seawater jetting out of them.

CNN's showing the Beau Rivage casino is taking on water.

I know storm surges vary according to local geography, but she's in Mississippi.

If Ike's pushing gulf water into casinos that far east, the Texas coast is really going to get creamed.

How cool is the Large Hadron Collider?

(Via Neatorama)

The Large Hadron Collider is not only a cool particle physics gizmo, it's also a very, very cold one. Indeed, it is the largest cryogenic system in the world and is one of the coldest places on Earth.

To keep them at superconducting temperature, scientists have to cool the LHC's magnets down to 1.9 K (-271.3°C), which is lower than the temperature of outer space (-270.5°C). First, the magnets are cooled to -193.2°C using 10,000 tons of liquid nitrogen. Then 90 tons of liquid helium is used to lower the temperature down to -271.3°C. The whole cooling process takes a few weeks.

I'm sorry, but that's just freaking awesome.

It's 17 miles in diameter, gets stretched by the moon's gravity, and smashes opposed streams of protons into each other at a collision velocity greater than the speed of light.

Geek out!

My new favorite windows error

Got this error message on my [st]inkPad:

Well....OK, then!

Michigan GOP: Papercut? Well, let me get my lemons....

How evil is the Michigan GOP?

See for yourself:

“We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,” party chairman James Carabelli told Michigan Messenger in a telephone interview earlier this week. He said the local party wanted to make sure that proper electoral procedures were followed.

Ohio's GOP is apparently following suit.

(H/t CJR)

If you can't win their hearts, block their votes.

Nice.

Freddie and Fannie: Open the barn door wider

CJR has two posts on the GOPs new talking point (That Freddie Mac and Fannie Mae are examples of social programs gone amuck):

The always excellent Ryan Chittum asks - Mae We Correct the Record?
     and
Dean Starkman points out that Wall Street Sank Freddie and Fannie

The Bush era conservatives are fond of claiming that government is the problem. In this instance, its fairly clear that Freddie and Fannie's problems are due to a free market run amok.

That the modern GOP would look at the current situation and proscribe a bigger dose of the current disease is pretty appalling.

He tried to warn us

Niemanwatchdog profiles a true independent military expert, Lt. Gen. William E. Odom.

Gen. Odom was buried in Arlington this past Monday.

As an overver of the Iraq situation, few have been as prescient:

The issue is not whether the Iraqi people will greet U.S. soldiers as their liberators, but what will they do six months after that," he said. "I find it naive and disingenuous to claim that you can create democracy in Iraq anytime soon. There is no historical record of constitutionalism in Iraq. The administration has already assured us that the U.S. will not stay there for very long, and, if that is the case, then the goal of establishing a constitutional system in Iraq is a joke

and this

...the idea that we could create a constitutional regime that would be pro-U.S. in a short period of time there struck me as pure fantasy. I must say, I found it hard to believe that the administration internally could make that argument convincingly to themselves. And I've just sort of been quiet since. But it seems now there is enough evidence where I can at least say not that I told you so, but that it really doesn't pay -- I would like very much to be wrong on this, but I don't see how it pays the United States to continue to go down this path...

and this

If I were a journalist, I would list all the arguments that you hear against pulling U.S. troops out of Iraq, the horrible things that people say would happen, and then ask: Aren’t they happening already? Would a pullout really make things worse? Maybe it would make things better.

and this

We should have learned a number of things from the Vietnam War, but most of all that unintended consequences are often the most significant outcomes. Our well-intended policies in Vietnam soon rendered the United States incapable of accomplishing anything positive in the region. Massive use of American combat power justified all of the extremism that North Vietnam used in pursuing its course, and most important, it removed all doubt about who could claim the banner of "national liberation" in Vietnam. The Saigon government was soon seen as no more than America's lackey. Thus withdrawal from Vietnam actually improved America's strategic position for turning the tide against the Soviet Union, beginning during the Carter administration and accelerating during the Reagan administration.

In the succinct language of military strategy, strategic withdrawals often involve tactical defeats but open the way to counteroffensives and "strategic success." The domino theory, invoked to avoid "tactical defeats," can easily obscure the wisdom of a strategic withdrawal and instead pave the way to "strategic defeat."

and especially this:

Because no act of terrorism has yet destroyed a liberal democracy but acts of parliament have closed a few, Americans should ask if the new U.S. policies, laws, and practices in reaction to the attacks of 9/11 are more threatening to their liberties than Osama bin Laden's al Qaeda.

[snip]

It is high time that leaders in Congress, opinion makers, candidates for public office nationwide and the press unmask the so-called "Global War on Terrorism" for what it is: a slogan and a campaign that make al Qaeda and other such organizations far more effective than they would be if publicly ignored and quietly attacked by methods entirely within the limits of our constitutional rights.

This barely scratches the surface.

Read more.

Distilled to its essence

Paul Begala tells you what's wrong with political coverage in America.

(H/t CJR)

They way they do one thing...is the way they do everything...

Finally! CJR hits on presidential campaign analysis that geeks can get behind:

What do the presidential candidates respective websites say about them?

(via IdolHands by way of CJR)

Document Types

Despite his carefully cultivated “maverick” image, McCain is playing it traditional and conservative by using HTML 4.01, the W3C spec from 1999.

[snip]

Obama shows himself to be much more progressive, adopting the 21st century XHTML 1.0 transitional standard: 

And so on...

Wrestling with a pig

The latest manufactured outrage to hit the campaign is out there - and CNN's headline ensures that McCain's meme is going to make the rounds:

'Lipstick on a pig': Attack on Palin or common line?

The article actually contains the context to show that Obama's remark was about McCain's policies:

 "John McCain says he's about change too, and so I guess his whole angle is, 'Watch out George Bush -- except for economic policy, health care policy, tax policy, education policy, foreign policy and Karl Rove-style politics -- we're really going to shake things up in Washington,'" he said.

"That's not change. That's just calling something the same thing something different. You know you can put lipstick on a pig, but it's still a pig. You know you can wrap an old fish in a piece of paper called change, it's still going to stink after eight years. We've had enough of the same old thing."

Anybody see a reference to Gov. Palin in there? Are all references to lipstick now tied to the GOP's VP nominee?

McCain's campaign is so desperate to change the subject they might as well change their campaign slogan to  "look over there!"

I saw a McCain ad last night that (honest to god) denounced balooning budget deficits and placed the blame on Obama.

Are you kidding me? What party's been passing these budgets for the last 7 years? Under the GOP we've added 4 trillion dollars to the national debt. If voters wanna rein in crazy @ss spending, the last thing they should do is pull the lever for the GOP.

Get it into your skull America: McCain and Palin are asking you to forget who they work for - the party that brought you Iraq, recession, big government, reckless spending, and above all corruption.

They used brass knuckle politics across the board to advance their right wing agenda.
They have alternately threatened voters with trumped up dangers and equated their policies with 9/11 and "the troops" to quash criticism and debate.

Gov. Palin isn't some breath of fresh air - she's just the latest smokescreen from the GOP.
 (via The American Prospect)

What the nation learned about Sarah Palin last Wednesday, and what she has reinforced in all her public appearances since then, is that she is a master of the sarcastic, contemptuous sneer. It is extremely powerful to tell people that they are being ridiculed by someone else, that distant elite who live in cities sipping Chardonnay and eating brie as they look down their suspiciously long noses at you. And if you think that someone is looking down on you, the quickest way to feel better is to start looking down on them, which is just what Palin tells voters they must do.

And oh, did those Republican delegates swoon at their new tribune of down-home all-American virtue, their Hockey Mom from heaven. Meanwhile, up in the skyboxes ringing the arena, the people John McCain's hero Teddy Roosevelt called the "malefactors of great wealth" nodded approvingly at the scene below. The party's patrons could rest easy knowing that once again, corporate and upper-income tax cuts are at the top of the Republican nominee's agenda. The troops on the floor had no more than a passing concern about that, though. They had been appropriately prodded with talk of values and God and the flag and the virtues of small towns -- but most of all, talk of those despicable liberals. Those liberals hate you, they were told, and they hate everything you stand for. So work your little hearts out.

The GOP has managed to wriggle out of eight years of accountability.

It's high time they get nailed right to the wall.