Thursday, May 12, 2011

Last Call

Matt Taibbi's piece on Goldman Sachs and the financial crisis is your evening reading tonight.  A taste:

Goldman's chief financial officer then and now, a fellow named David Viniar, wrote a letter in February 2004, commending the SEC for its efforts to develop "a regulatory framework that will contribute to the safety and soundness of financial institutions and markets by aligning regulatory capital requirements more closely with well-developed internal risk-management practices." Translation: Thanks for letting us ignore all those pesky regulations while we turn the staid underwriting business into a Charlie Sheen house party.

Goldman and the other banks argued that they didn't need government supervision for a very simple reason: Rooting out corruption and fraud was in their own self-interest. In the event of financial wrongdoing, they insisted, they would do their civic duty and protect the markets. But in late 2006, well before many of the other players on Wall Street realized what was going on, the top dogs at Goldman — including the aforementioned Viniar — started to fear they were sitting on a time bomb of billions in toxic assets. Yet instead of sounding the alarm, the very first thing Goldman did was tell no one. And the second thing it did was figure out a way to make money on the knowledge by screwing its own clients. So not only did Goldman throw a full-blown "bite me" on its own self-righteous horseshit about "internal risk management," it more or less instantly sped way beyond inaction straight into craven manipulation.

"This is the dog that didn't bark," says Eliot Spitzer, who tangled with Goldman during his years as New York's attorney general. "Their whole political argument for a decade was 'Leave us alone, trust us to regulate ourselves.' They not only abdicated that responsibility, they affirmatively traded against the entire market."

They knew the financial crisis was coming, because their own actions assured it would happen.  And knowing it was coming, they then proceeded to bet massive amounts of money that the housing market would collapse into a massive depression.  For this, they were rewarded tens of billions of dollars, and given hundreds of billions more in government credit to make more bets to earn even more money to "pay back the Treasury department."  It was a win for GS.  It was a win for the Treasury department.  And when Obama saw what he had inherited, he realized he had no choice but to keep playing or watch the country snap back into depression.

But somebody's got to pay for all this mess.  Guess who?  Go look in the mirror if you want a hint.

Zandar's Thought Of The Day

Dear oil company PR firms:  You're doing it wrong.

A Democratic senator blasted oil giant ConocoPhillips for using the term "un-American" to describe his proposal to strip tax subsidies from the five largest oil companies in the U.S. and use the savings to pay down the deficit.

Sen. Robert Menendez, D-New Jersey, said it is "truly outrageous" for ConocoPhillips to use the term in a press release it issued Wednesday and said he expects the company's top executive to apologize when he appears at a Senate hearing Thursday examining the tax proposal.

"For ConocoPhillips to question the patriotism of those public officials who believe they do not deserve billions of dollars in wasteful subsidies is simply beyond the pale and I expect an apology from the CEO tomorrow at tomorrow's hearing, Menendez said at a news conference staged at an Exxon gas station on Capitol Hill to highlight the Democrats' proposal. "It is simply not acceptable."

A press release posted on the company's main web site page is headlined: "ConocoPhillips Highlights Solid Results and Raises Concerns Over Un-American Tax Proposals at Annual Meeting of Shareholders."

The controversial word doesn't appear in the body of the release but the statement does cite the company's concerns about the "challenging political environment facing the energy industry, in particular, the potential impacts of increased regulatory burdens and proposed tax increases."

"These unprecedented proposed taxes, targeted at only five companies, would have serious effects on our company," CEO James Mulva says in the release. 

Well yes, Mr. Mulva.  That's the entire goddamn point.   Meanwhile here in the NKY, gas prices jumped 25 cents a gallon from $3.89 to $4.15 this week, just a few cents away from all time highs.  And remember, those all time highs were when oil was $135 a barrel.  It's $98 a barrel right now.  In other words, gas is about to be more expensive here in the Cincy area than it was in 2008, and it's still not even summer yet, not to mention oil is significantly less expensive than three years ago.  But it's all about oil speculation, right?

Certainly can't be the oil companies having a hand in it, right?

Newt-onian Physics

It's official:  We'll have a few more years of Newt Gingrich to kick around.

Using social media tools that didn't exist when he last served in office, former House of Representatives Speaker Newt Gingrich formally launched his candidacy Wednesday for the Republican presidential nomination.

After months of hinting, Gingrich made it official with a Twitter message that said simply: "Today I am announcing my candidacy for President of the United States. You can watch my announcement here."

A link led to a YouTube video of a smiling Gingrich speaking over soft music.

"I believe we can return America to hope, and opportunity, full employment, real security, to an American energy program, to a balanced budget," Gingrich said.

He invoked Ronald Reagan and said that as House speaker he'd played a role in revamping welfare, balancing the federal budget and reducing unemployment. And in a nod to tea party supporters, Gingrich said he would be president over "a decentralized country under the 10th Amendment with power once again back with the American people and away from the Washington bureaucracy."

Yes, full employment as Wal-Mart greeters making (less than because it will be abolished) minimum wage.  
Newtie of course wants as little government regulation as possible and even less corporate taxes.  But if we cut corporate taxes, they'll use that money to hire new workers, right?  Well, look at what Xerox plans to do with its planned 2012 cash windfall from having an excellent year (and go allllll the way to the last paragraph!)

Xerox expects to generate $2.6 billion to $2.9 billion in cash from operations in 2012 and free cash flow between $2 billion and $2.3 billion. The company is committed to returning cash flow to shareholders, planning to use 70% to 80% on its share repurchase plan, 15% to 25% on acquisitions and a small percentage on dividends.
The amount that Xerox plans to invest its newly freed cash flow back into creating additional American jobs:  zero.  But let's cut their taxes because they're smothering under having to pay Uncle Sam!  They'll create more jobs if we do!  That's the Newt Gingrich 2012 message!

Coming soon to a Republican platform near you.

12 Monkeys...No This Time It's A Good Thing

(Sent in by Bon, she's still having issues. --Z)

A new vaccine can protect macaques against the monkey equivalent of HIV and could provide a fresh approach to an HIV vaccine, a study suggests. 

US researchers say the vaccine offered protection to 13 of 24 rhesus macaques treated in the experiment. 

In 12 of the monkeys, the vaccine was still effective 12 months later.

The article addresses some serious safety concerns, but if this is refined and controlled we may actually see a real victory in preventative medicine.  There will likely never be a true single cure for AIDS, at least not in the way we expect, but when combined with some other successes millions can be spared.  It's always good to celebrate a milestone like this.

(I agree. - Z)

StupidiNews, Celebrity Early Christmas Edition!

(Sent in by Bon, who's having PC problems...)
Tightwad Tindle that I am, I l like to start Christmas shopping early.  I have a couple of ideas for two of my favorite ladies.

Angelina Jolie is a walking map.  Apparently, in a misguided attempt to turn her body into a family roadmap, she has added yet another coordinate to her bod.  This sparked rumors of another adoption in the works.

The world-famous mom of six has her arm stamped with map coordinates that correspond with the birthplaces of her six kids: Maddox, 9 (Cambodia), Pax, 7 (Vietnam), Zahara, 6 (Ethiopia), Shiloh, 4 (Namibia), and twins Vivinne and Knox, 2 (France). During a humanitarian visit to Tunisia in early April, a tank-top-clad Jolie, 35, showed off a seventh, blurry set of coordinates.

"It doesn't take much investigation to figure that one out. [The coordinates are] Shawnee, Oklahoma."

Brad was indeed born there,  but as any local here will quickly tell you, Springfield is his home town. Jolie says more adoptions are "not possible" at this time.  I wonder if they are finally satisfied, or if she's running out of real-estate to record family events.
Christmas gift: a journal to record life events.  A smart phone with Google Maps.

Bethenny Frankel, known mainly for being a Real Housewife of New York, is being sued for $100 million.  She apparently fired her management company days before selling her Skinnygirl margaritas for a smooth $120 million.  I am not great at math, but I think she deserves a percentage in the double digits, at least.  The company estimates their cut at $12 million, the ONE HUNDRED MILLION DOLLARS is for punitive damages.  Speaking of skinny girls, I think she looks sickly.  She's proof that you can be too thin.

Christmas gift: BOGO coupon for Auntie Anne's and an audition to play Maria Shriver.

Any Portugal In A Storm, Part 3

The unquenchable Greek Fire has now fully engulfed Ireland's economy.  Portugal is next, as I warned last month that the country's steep austerity plans would almost certainly lead to a Greek-style economic meltdown.  Now the 1Q 2011 economic data on Portugal is in and Portugal is already in recession...even before the austerity measures annihilate the economy there.

Data to be released tomorrow may show the economy shrank 0.3 percent in the first quarter, economists surveyed by Bloomberg forecast, matching the contraction of the previous three months. The slump may deepen as the government starts executing the spending cuts and tax increases it agreed to in return for its 78 billion-euro ($111 billion) aid package.

“With the adjustment measures, the outlook for Portugal in the next few months isn’t good, particularly in terms of consumption,” said Francisco Vidal, an economist at Intermoney Valores SV SA in Madrid. Portugal, Ireland and Greece will make up the lagging group of European nations from an economic standpoint, he said.

As borrowing costs surged to record levels last month, Portugal became the third euro-area country to seek aid, following the bailouts of Greece and Ireland in 2010. The steps the government says will tame the euro region’s fourth-biggest budget deficit will lead the economy to contract 2 percent this year, twice the previous forecast, Finance Minister Fernando Teixeira dos Santos said on May 5.

The country’s two-year bonds now yield 11.6 percent, more than the 9.4 percent for 10-year debt. The spread means there is more perceived risk in lending to Portugal for two years than for a decade. 

Throw in the UK's austerity-created recession and Spain's austerity-created massive unemployment and at this point the only real European engine of growth left is Germany.  Watch out for conservatives lying to you and saying that these recessions were caused by "socialism".  These recessions were caused by implementing the same exact austerity policies that American conservatives are demanding here.

If you want to know what John Boenher's demand for trillions of dollars in spending cuts will do to our economy, look no further than austere Europe.


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