Monday, April 20, 2009

Oh Sure, Why Not?

Meanwhile, the bailout of the banking industry continues, this time with the government buying another $30 billion in AIG stock. Well, $29,835,000,000...had to take out $165 million for those bonuses!
In a filing with the U.S. Securities and Exchange Commission on Monday, AIG said it would issue and sell to the U.S. Treasury 300,000 preferred shares, including warrants to purchase common stock, in exchange for up to $29.835 billion.

The original amount agreed in early March was $30 billion, but officials subtracted $165 million in retention bonuses paid to employees of the AIG Financial Products unit last month.

And AIG will turn around and pay off the rest of the banks, who mysteriously will continue to post record earnings and of course not need bailouts of their own. Robbing the taxpayer to pay Peter off so he pays Paul when nobody's looking, that's the Obama way!

Only today's nearly 300 point drop in the Dow when Bank of America tried to pass off being solvent signifies the AIG bailout-by-proxy plan is no longer fooling Wall Street. Banks have far too many systemic problems for this to work for much longer. Banks took a bath today and a lot more red ink is coming.

And as CalcRisk points out, nobody believes the Obama administration anymore on banks.

And on the false Stress Test rumor this morning, from Bloomberg: Treasury Says ‘No Basis’ to Report on Bank Testing

A U.S. Treasury spokesman said there’s no basis to a blog posting that buffeted financial stocks by saying that most of the nation’s largest banks are insolvent.
Why are they even responding?
With all the smoke and heat in the room, somebody's going to eventually figure out a fire may in fact be involved.


TPM Muckracker has a timeline up of the Harman/AIPAC case if you're looking for some basics.

Not Buying It On Banks

As noted, Bank of America was the latest bank to have "significantly better than expected earnings" reported today. Too bad nobody's buying it. Dow down 225 here at lunchtime, BoA down nearly 20%.

Clearly, people have stopped buying these first quarter earnings reports.

Ten Questions

Many questions are raised by the Harman/AIPAC/Wiretapping story, and here's the rundown of the ten questions America should demand answers to, and related questions I've come up with:

1) Who wiretapped Harman's conversation and why? Was it Harman being investigated? Was she being tapped by an abusive Bush NSA, or was it the Israeli being tapped for the AIPAC spy case? Was there another reason?

2) How much influence does AIPAC have over Democrats in Congress? Harman believed that helping AIPAC could pay off with the House Intelligence Committee chair. Is this leak from somebody who wants to see AIPAC hurt?

3) How did Alberto Gonzales decide to use this tap against Harman to blackmail her to support Bush's wiretapping program? Did the NSA clue him in?

4) How many other members of Congress were tapped? How many still are being tapped?

5) Who decided to leak the story? Was it the intel community risking the knowledge that they were wiretapping Harman to gain retribution for Obama's torture memo leak, or did somebody in the Obama administration hang Harman out to dry to play hardball with AIPAC? Or, was it a third party doing their patriotic duty to shine sunlight on this whole rotten thing?

6) What will Obama do at this point if it's clear that Gonzo broke the law? Will he still refuse to prosecute Bush officials? Will Eric Holder call for an investigation?

7) What will Congress do? Will they hold hearings on this issue? Will they call for investigations of Gonzales?

8) What will Jane Harman do? Will she be pressured to resign? Will she be charged? Will the case be reopened by Eric Holder?

9) How will Israel react to this? Will anyone in the Holder DoJ dare risk investigating Israeli spying? Will Bibi Netanyahu start playing fair with Obama or will Israel play hardball back?

10) And finally, just how deep does this rabbit hole go?

Double G has more.

Me AIPAC, You Jane, This War

Congressional Quarterly is reporting something of a major bombshell today, news that California Democrat Jane Harman was heard on an NSA wiretap talking to an Israeli intel officer and offering to intervene on behalf of two AIPAC officials suspected of spying on the US for Israel in exchange for support for Harman to get the chair of the House Intelligence Committee.
In exchange for Harman’s help, the sources said, the suspected Israeli agent pledged to help lobby Nancy Pelosi , D-Calif., then-House minority leader, to appoint Harman chair of the Intelligence Committee after the 2006 elections, which the Democrats were heavily favored to win.

Seemingly wary of what she had just agreed to, according to an official who read the NSA transcript, Harman hung up after saying, “This conversation doesn’t exist.”

Harman declined to discuss the wiretap allegations, instead issuing an angry denial through a spokesman.

“These claims are an outrageous and recycled canard, and have no basis in fact,” Harman said in a prepared statement. “I never engaged in any such activity. Those who are peddling these false accusations should be ashamed of themselves.”

It’s true that allegations of pro-Israel lobbyists trying to help Harman get the chairmanship of the intelligence panel by lobbying and raising money for Pelosi aren’t new.

They were widely reported in 2006, along with allegations that the FBI launched an investigation of Harman that was eventually dropped for a “lack of evidence.”

And while that's bad enough, it gets even worse for Harman:
What is new is that Harman is said to have been picked up on a court-approved NSA tap directed at alleged Israel covert action operations in Washington.

And that, contrary to reports that the Harman investigation was dropped for “lack of evidence,” it was Alberto R. Gonzales, President Bush’s top counsel and then attorney general, who intervened to stop the Harman probe.

Why? Because, according to three top former national security officials, Gonzales wanted Harman to be able to help defend the administration’s warrantless wiretapping program, which was about break in The New York Times and engulf the White House.

Gonzo allegedly dunked the Israeli quid pro quo case against Harman in exchange for complete support for Bush's wiretapping program.

Of course, Harman didn't get the job anyway: she defended the program that apparently wiretapped her own self and trapped her, and on top of all that Pelosi appointed Texas's Silvestre Reyes as chair of the House Intelligence Committee. Still, if these allegations are true, Jane Harman is in a lot of trouble. As BooMan says, it's best to simply replace her in a 2010 primary.

Josh Marshall has more at TPM calling the CQ story "so radioactive it's hard to know which of fifty different directions to go with it" and asks the million-dollar question:

This raises lots and lots of questions -- not least of which is why this is coming out right now. Any particular reason people in the intel community would want to start talking to the press right now?
And the answer of course is Democrats (not Obama, but the Congressional Dems still calling for investigations) just got a message pitch from the intel community, and that message is "You hurt us with any more torture investigations or hearings, we will hurt you right back."

A whole hell of a lot of Democrats signed on to some scummy Bush-era manuevers. The CIA is betting Congress will run out of resolve for torture hearings long before the Bushie holdovers in the intel community run out of Democrats to burn.

It's war, and both sides have a lot to lose. Just how deep does this rabbit hole go? The intel community has just staked out one Dem in the sun to make a point that there will be a price to pay to go digging in the CIA's garden, because there's more than a few people willing to sell maps leading directly to the secrets the Democrats buried over the last eight years.

What will the Democrats do now?


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