Playing To Lose

E-mails released yesterday by Congress shows Goldman Sachs was betting big time that their subprime investment schemes would fail...and that they were designed to fail from the beginning.  When they did so, Goldman made a mint.

The messages, released Saturday by the Senate Permanent Subcommittee on Investigations, appear to contradict statements by Goldman that left the impression that the firm lost money on mortgage-related investments.

In the messages, Lloyd C. Blankfein, the bank’s chief executive, acknowledged in November 2007 that the firm had lost money initially. But it later recovered by making negative bets, known as short positions, to profit as housing prices plummeted. “Of course we didn’t dodge the mortgage mess,” he wrote. “We lost money, then made more than we lost because of shorts.”

He added, “It’s not over, so who knows how it will turn out ultimately.”

In another message, dated July 25, 2007, David A. Viniar, Goldman’s chief financial officer, reacted to figures that said the company had made a $51 million profit from bets that housing securities would drop in value. “Tells you what might be happening to people who don’t have the big short,” he wrote to Gary D. Cohn, now Goldman’s president.

Actions taken by Wall Street firms during the housing collapse have become a major factor in the contentious debate over financial reform. In his weekly radio address on Saturday, President Obama said Wall Street had “hurt just about every sector of our economy” and again pressed the case for tighter regulation. On Monday, Senate Democrats will try to prevent a Republican filibuster in the first major test of the administration’s effort to push through legislation.

Goldman on Saturday denied it made a significant profit on mortgage-related products in 2007 and 2008. It said the subcommittee had “cherry-picked” e-mail messages from the nearly 20 million pages of documents it provided. This sets up a showdown between the Senate subcommittee and Goldman, which has aggressively defended itself since the Securities and Exchange Commission filed a security fraud complaint against it nine days ago. On Tuesday, seven current and former Goldman employees, including Mr. Blankfein, are expected to testify at a Congressional hearing.

Carl Levin, Democrat of Michigan and head of the Permanent Subcommittee on Investigations, said that the e-mail messages contrasted with Goldman’s public statements about its trading results. “The 2009 Goldman Sachs annual report stated that the firm ‘did not generate enormous net revenues by betting against residential related products,’ ” Senator Levin said in a statement Saturday. “These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market.”

The messages appear to connect some of the dots at a crucial moment of Goldman history. They show that in 2007, as most other banks hemorrhaged money from plummeting mortgage holdings, Goldman prospered. 

They bet on a meltdown, and the best way to ensure a meltdown was going to happen was to use Goldman's leadership position in the market to push these questionable subprime securities products to the consumer, while secretly betting those products would fail massively.  They did.  Everyone else lost money.  Goldman Sachs came out better than before.  They knew the bubble was going to explode.

When it did, they made a fortune.  The rest of the country?  Well, we lost 8 million or so jobs, had to pay trillions to bail out the banks, and basically wrecked our economy for the next decade or so.  But Goldman Sachs made money.  Illegal?  That's what the investigation is for.  Immoral?  Without a doubt.  They knew exactly what they were doing, and always had known.

They conned America and walked away laughing at how stupid we were.  And the GOP wants to back Goldman and prevent legislation from stopping cons like this happening again?

You do that, Republicans.

Graham's Game

GOP Sen. Lindsey Graham say if Democrats dare try to move ahead on immigration, then he will completely bail on his own climate change legislation, effectively killing the bill.

In a stunning move that could throw a major roadblock in front of two of President Obama's biggest legislative initiatives, Sen. Lindsey Graham abruptly declared Saturday he's abandoning talks on climate change legislation because he believes Democratic efforts to bring up a separate immigration reform package is undermining the legislative process.


"Moving forward on immigration - in this hurried, panicked manner - is nothing more than a cynical political ploy," the South Carolina Republican wrote in a sharply-worded letter obtained by CNN.

The letter was sent to business, religious, and conservation leaders that the senator has been working with on the climate change legislation. An aide to Graham told CNN the senator will no longer be attending a major news conference scheduled for Monday with Democratic Sen. John Kerry of Massachusetts and independent Sen. Joe Lieberman of Connecticut to unveil details of their "tri-partisan" climate change legislation.

Graham is the only leading Republican who has been working with the White House on the contentious issue.

Harry Reid and the White House are calling Graham's bluff...for now.

A senior White House official told CNN that in recent days Graham has been privately threatening that he would abandon the climate talks unless Senate Majority Leader Harry Reid, D-Nevada, backed off of plans to push forward with comprehensive immigration reform ahead of the environmental legislation.

Reid released a statement Saturday saying he’s still committed to tackling both issues and will not be deterred by Graham’s decision.

“I appreciate the work of Senator Graham on both of these issues and understand the tremendous pressure he is under from members of his own party not to work with us on either measure,” said Reid. “But I will not allow him to play one issue off of another, and neither will the American people. They expect us to do both, and they will not accept the notion that trying to act on one is an excuse for not acting on the other."

If anyone's surprised by this, please read the other some odd thousand GOP Stupidity entries on this blog.  Thanks.

In all seriousness it looks like the mysterious source in yesterday's CNN article that said both immigration reform and climate change were dead in the Senate was Lindsey Graham himself.  Also, let's keep in mind what's going on here:  a Senator from the minority party and not even a member of the minority party's Senate leadership is effectively telling the President and the majority party that they can't try to introduce anything other than the legislation he has his name on, or he'll completely abandon his own bill.

In other words, Lindsey Graham has declared himself the most important man in Washington, more powerful than both the President and the Senate majority leader, and that they will listen to his demands or else.  Suddenly the real meaning of his work on climate change legislation becomes crystal clear:  he wanted a hostage all along, not a law.

And keep in mind Lindsey Graham is considered a moderate at best and a heretic who must be purged at worst for the unforgivable crime of even working with the majority party in order to craft legislation.

This is the Republican party in 2010.  A party so filled with partisan rancor and unthinking anger that the simple idea of introducing other legislation that doesn't have to do with another bill is enough to make them abandon their own bipartisan legislation like petulant, sullen children throwing a tantrum because they are told they have to eat their vegetables before dessert.

You will only get what you want from them if they get 100% of what they want now, right now, or they will simply be the Party of No.  Party of l'enfant terribles is more like it.

Have we not learned that there is no Republican who will ever vote for a bill that's not 100% Republican?  Have we not learned that the Republicans have abdicated their duties as lawmakers and instead are simply there to say no to everything?  Have we not learned that the Republicans will never recognize this administration and this Congress as legitimate because they are not in charge of it?

What's it going to take, Dems?

Lives Up To Its Name

That's your basic review of Kick-Ass.  Best superhero flick I've seen since the terribly underrated Mystery Men.


For you comic nerds out there, it's proof that Mark Millar does his best work when he has a good partner, and John Romita Jr. turns out to be the moderating influence on this one.  The result is a surprisingly good film as well as a good comic story.  Definitely not for the kids, but if you liked 300 and Watchmen, this movie's  worth seeing on the big screen.

Also, in at least half of the final 20 minutes, the scene was stolen by...not the actors, but a bazooka (this IS Mark Millar we're talking about.)  Trust me on this.

4 out of 5.

Finally, I give it until next weekend before somebody in the Wingerverse says this movie is proof that the Tea Party is Kick-Ass, and Obama is the film's villain and it means even Hollywood is turning on him (even though the comic series the movie is based on is a couple years old now and written before the 2008 election.)

Do go see the film, however.

Zandar's Thought Of The Day

Conservative websites call for revolution with scary images and overheated rhetoric to make a point.

Lefty websites call for poultry as currency with cartoon chickens and plenty of snark.

You can make a point without implied violence.  Just saying.

Source Forged

It's telling to see how CNN is using "sources", not "Congressional sources" or "Democratic sources" or "White House sources" or even "Beltway sources" to shoot down immigration reform, just plain old "sources".

The push for immigration reform may be on the front burner for congressional Democrats, but sources say that ultimately, they believe the issue is unlikely to have enough votes to pass.


Democrats say the goal is to try to take it up in the Senate before discussing the Supreme Court nomination this summer and spend the rest of the session before the midterm election on the politically potent issue of jobs.

One big reason for the immigration reform push, sources say, is that Senate Majority Leader Harry Reid is in a brutal battle to win re-election in Nevada, where a quarter of the population is Hispanic and he has promised to try.

More broadly, Democrats admit, they know that Latinos who voted in big numbers for President Obama are angry that Democratic leaders have not kept a promise to deal with immigration reform.

No bill has yet been through committee but it is believed it would be similar to an effort in 2007 -- improving border security and enforcement with a path to legal status for undocumented workers.

Even better, these same sources...well, "Democratic sources" now are saying climate change is dead too.

Two Senate Democratic sources say that despite a new bipartisan push on climate change, legislation is unlikely to make it to the floor this year.

That would be a blow to Sens. John Kerry, D-Massachusetts; Joe Lieberman, I-Connecticut; and Graham, who are slated to release legislation Monday that would, among other things, set a goal of 17 percent reduction in carbon emissions in the next 10 years.

An energy bill had been stalled in the Senate after the the House passed its version in June by a 219-212 vote, with almost no Republican support and opposition from some Democrats.

Dead.  You know, unlikely to even make it to the floor for a vote.  Like health care reform. It would be nice if the Village did their job once in a while instead of playing the "sources" game, but that apparently involves "work".

Crazy Like A Fawkes

The GOP has taken British revolutionary Guy Fawkes as their newest meme as they ratchet up the "it's an illegitimate government just because we lost" rhetoric against President Obama.  The tale of Fawkes was adapted for the comics by the brilliant Alan Moore in V for Vendetta, which later itself became a hit movie with Hugo Weaving and Natalie Portman.  But leave it to the Republicans to turn a failed terrorist plot to kill lawmakers into a rallying cry against Democrats.  Time's Michael Scherer:

Now, the Fawkes mythology has come full circle. The Republican Governors Association has embraced the symbolism of Fawkes, launching a rather striking website, RememberNovember.com, with a video that showcases far more Hollywood savvy than one can usually expect from Republicans. Again, the Fawkes tale has been twisted a bit. This time, President Obama plays the roll of King James, the Democratic leadership is Parliament, and the Republican Party represents the aggrieved Catholic mass.

The symbolism here is unmistakable, and neither is the call for revolution.  It's very slick and powerful stuff here.

The politics and substance aside, this strikes me as a remarkable bit of political messaging, not just for its cinematic quality. The RGA, under the control of Mississippi Gov. Haley Barbour, is clearly stepping out of the stodgy, safe territory it normally inhabits. It is aiming to tap into the vast well of anti-government fury now coursing through the nation. Who would have guessed that Barbour would embrace the symbolic value of the same would-be mass murderer as the Wachowski brothers?

It's also an impressive bit of theater that suggests that maybe the Obama administration should be brought down because of the unconscionable sin of his approval numbers being less than 50%, and by "brought down" I mean "by any means necessary."

In all seriousness, this whole Republican tactic of "Obama's administration is illegitimate because he's not doing the will of the 46% of the people who voted against him" is dangerous, stupid, and misguided.  That's how democracy works:  Like Democrats did in 2006 and 2008, you change things at the ballot box.  You then live with those results, and that's why exercising your vote is the most important responsibility and duty you have as a United States citizen.

But just because you lost the election, it does not mean the government is illegitimate.  Bush had plenty of help on that front with Iraq, torture, wiretapping, indefinite detainment, and intelligence manipulation.  But he won the election.  Twice.  For eight years, Republicans said elections had consequences.  Now it's an open call for revolution based on honoring a terrorist.

When I say the GOP is trying to incite rage, fury, and anger, this is what I mean.  And at some point this will lead to unforgivable violence.  America has a long and bloody history of that.  Their entire platform is nothing but Obama Derangement Syndrome and absolution from the guilt of unthinking furious anger.

And in a democracy, those votes count exactly as much as any other vote cast.

StupidiNews, Weekend Edition!

• Doctors in Spain have performed the world's first full face transplant.
• Some truckers are planning a boycott of Arizona after the state's new immigration bill was signed into law yesterday.
• The International Whaling Commission is proposing a new plan to deal with Japan, Norway and Iceland's whaling.
• The G-20 nations are split on the idea of taxing banks for bailouts and want the IMF to study the notion further.
• The only buyer left for ailing PDA-maker Palm may be Chinese computer giant Lenovo.

Last Call

This is Alabama.  We speak Wingnut here.

That's Republican Tim James, who if elected as Governor, will stop giving state driver's license tests in languages other than English to save money.

What, you thought Arizona was alone out there with the overt immigrant hate?  Hey guess what?  If you're not Caucasian, you don't count for jack in Wingnut territory.  They're taking their country back, dammit.

Right back to 1861.

This Week's Busted Banks

Seven more banks went under today in the Chicago area, including one that's tied in with current Senate Democratic candidate Alexi Giannoulias.

Broadway Bank, the family-run lender that helped launch U.S. Senate candidate Alexi Giannoulias' political career, was one of seven Chicago-area institutions seized by the U.S. government Friday and sold to healthier companies.

The failure of Broadway, which was unable to raise the $85 million it needed to remain independent, will cost the Federal Deposit Insurance Corp. $394.3 million.

Giannoulias worked for his father at Chicago-based Broadway before entering politics, and the bank's struggles in recent years with real estate loans gone bad have weighed on Giannoulias' Democratic bid for Barack Obama's old Senate seat.

During Giannoulias' successful run for state treasurer in 2006, he used his banking experience as one of his chief qualifications. But in the Senate race, he has tried to distance himself from the bank's troubles.

"This is a difficult day for bank employees, for my family, for this community and for all those who built businesses and protected their savings with the help of this bank," Chief Executive Demetris Giannoulias said in a statement. "We fought to carry out the vision my father had when he founded Broadway Bank 30 years ago, but our bank -- like many businesses -- has struggled during these challenging times."

That brings 2010's total to 57 banks in 4 months.  There will be a lot more in the coming months and probably years.  Meanwhile, this is not really good for the Dems in Illinois.  Republican Mark Kirk will have a field day with this, and he deserves to.


Hell I'm not sure I would vote for a Democrat from a busted bank like that, not when I know how banks get busted.

Governor General Shatner?

Hey, why not.

Mr. Spock says it's about time Capt. Kirk got off his “butt” and got a real job.

Leonard Nimoy, who played the pointy-eared Vulcan in the original “Star Trek” series, is backing a bid to have his Canadian co-star William Shatner picked as Canada's next governor general.

A Facebook group touting the original James T. Kirk for the post has nearly 20,000 members.

Nimoy, who was in Alberta for a comic convention, says the job would be perfect because Shatner has just been “sitting around twiddling his thumbs” recently.

He says the job would give Shatner a sense of “self worth” and allow him to “get out and do something.”

Michaelle Jean's five-year mission as governor general will soon expire and Prime Minister Stephen Harper will pick her replacement.

Other names being bandied about as possible candidates include wheelchair athlete Rick Hansen, former top soldier John de Chastelain and Reform party founder Preston Manning.

Apparently GG is a ceremonial post with great prestige that happens every five years, much like being one of Liz Taylor's husbands here in the States. Hey, why not?  I bet Shatner will get a neat hat.

Your Papers, Please, Phoenix and Flagstaff, Part 4

Gov. Jan Brewer has indeed signed Arizona's crazy immigration bill into law.

Gov. Janice Brewer (R-AZ) this afternoon signed the controversial immigration bill passed by the state legislature.

"For weeks this legislation has been subject of vigorous debate and intense criticism, and my decision to sign was by no means made lightly," she said after signing.

"Though many people disagree, I firmly believe it represents what's best for Arizona," she added. "There's no higher priority than protecting the citizens of Arizona. We cannot sacrifice our safety to the murderous greed of drug cartels."

The legislation requires law enforcement to demand immigration papers from anyone who they have a "reasonable suspicion" is in the country illegally.

She said she will not tolerate racial discrimination or profiling. Brewer also said she had worked with legislators to make sure the bill protects civil rights.

"We must enforce the law evenly and without regard to skin color, accent or social status," she said, adding that the bill's opponents are "over-reacting." 

The overwhelming number of arrests from this law won't be Latinos.  Nope.  That's a total coincidence.

Another solution to this. You know what?  Arizona has a pretty good tourism industry.  There are franchises from all four major professional sports in Phoenix, the Suns, the Diamondbacks, the Coyotes and the Cardinals.   If I'm a player heading to a game in Phoenix, I boycott, especially if I'm Latino or black. I don't get on the team bus/plane.  If I'm a fan, I don't go to home games.  Hey, what if I forgot my papers?

Rep. Raul Grivalja says boycott the state?  Not sure if that's the smart thing to do, the first people who are going to get fired are going to be Latinos and blacks in Arizona doing the "jobs Americans won't do" as Bush put it or whatever.

Better to do this the Obama way:  now Democrats have every reason to push comprehensive immigration reform.  But congrats again, Grand Canyon State.  Make that the Racial Profiling State.

Your papers, please...

In Which Zandar Answers Your Burning Questions

Marc Ambinder asks:

Have Conservatives Gone Mad?

Short answer?  Yes.   Long answer, well, let's look at Ambinder's argument:

I want to find Republicans to take seriously, but it is hard. Not because they don't exist -- serious Republicans -- but because, as Sanchez and others seem to recognize, they are marginalized, even self-marginalizing, and the base itself seems to have developed a notion that bromides are equivalent to policy-thinking, and that therapy is a substitute for thinking.

It is absolutely a condition of the age of the triumph of conservative personality politics, where entertainers shouting slogans are taken seriously as political actors, and where the incentive structures exist to stomp on dissent and nuance, causing experimental voices to retrench and allowing a lot of people to pretend that the world around them is not changing. The obsession with ACORN, Climategate, death panels, the militarization of rhetoric, Saul Alinsky, Chicago-style politics,   that TAXPAYERS will fund the bailout of banks -- these aren't meaningful or interesting or even relevant things to focus on. (The banks will fund their own bailouts.)

And the answer to that is simple:  as long as the rest of the Village and Washington continue to take this idiotic arguments seriously, then they will continue to dominate our politics.  They dominate our politics because we allow them to. As I have said over and over again, we need a better pundit class to get better discussions.  And until the right's answer to the arguments that Maddow, Greenwald, and Olbermann bring up is something other than "Glenn Beck is killing all three in the ratings combined!  We win!" then we'll never improve.

Conservatives don't want a better argument.  They just want to win and control the country.  The end justifies the means every single time when you think like that.  Sun Tzu:  if you bind yourself with rules and codes when your enemy is unfettered by them, then you will be defeated.

Your Papers, Please, Phoenix and Flagstaff, Part 3

President Obama is stepping in on Arizona's racial profiling immigration law.  Greg Sargent:

This is pretty big: Obama just now sharply condemned the controversial anti-illegal immigration effort in Arizona, calling it “misguided” and “irresponsible” — and even said his administration could insert itself into the fight if civil rights are found to be violated.

This could cause the issue to heat up to full boil on the national level, with untold consequences for the midterm elections.

The effort in Arizona would require anyone suspected of being in the country illegally to produce “an alien registration document” or other proof of citizenship. The Governor of Arizona is expected to decide within days how to act on the legislation — and Obama today pushed the issue hard.

“Our failure to act responsibly at the Federal level will only open the door to irresponsiblity by others,” Obama said. “That includes for example the recent efforts in Arizona, which threaten to undermine basic notions of fairness that we cherish as Americans, as well as the trust between police and their communities that is so crucial to keeping us safe.”

Obama added that his administration could join the fight. “I’ve instructed members of my admininstration to closely monitor the situation and examine the civil rights and other implications of this legislation,” he said, adding that it was “misguided.”

This is a very, very shrewd play by Obama and well timed to boot:  Arizona Gov. Jan Brewer has until tomorrow evening to sign the bill, veto it, or do nothing (in which case it becomes law anyway).  This puts tremendous pressure on Brewer to veto this, or else she becomes the national face of GOP racial profiling efforts.

And the keyword here is "national".  Obama is clearly setting the bar of a federal response to state bills like this as a priority in his administration, and that means Democrats can then turn this into a pressing reason to lead an effort to pass immigration reform at the federal level.  As I've said before, this is a massive wedge issue that will split the Chamber of Commerce Republicans from the Tea Party...and it risks painting all the GOP as anti-immigrant and even racist.

It's looking like Obama is taking the advice to follow up health care reform with two winning issues for Dems:  financial reform and immigration reform.  There are Republicans who want to be on the right side of both of those issues, especially in an election year.  There are also a lot of factors here:  the GOP treatment of Sonia Sotomayor last year and the treatment of Latinos in general being just a few of them.

We'll see how this shakes out.

I Got Your Death Panels Right Here

Via Balloon Juice, this Murray Waas piece is today's must-read.

One after another, shortly after a diagnosis of breast cancer, each of the women learned that her health insurance had been canceled. First there was Yenny Hsu, who lived and worked in Los Angeles. Later, Robin Beaton, a registered nurse from Texas. And then, most recently, there was Patricia Relling, a successful art gallery owner and interior designer from Louisville, Kentucky.

None of the women knew about the others. But besides their similar narratives, they had something else in common: Their health insurance carriers were subsidiaries of WellPoint, which has 33.7 million policyholders — more than any other health insurance company in the United States.

The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.

They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.

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Rescission by computer.  You don't get more "death panel" then that, folks.  A computer flagged their insurance as soon as they were diagnosed with breast cancer and then canceled their insurance automatically.  That practice is supposed to end with the new health care reform law.

Don't count on it.

"People have this idea that someone is going to flip a switch and rescission and other bad insurance practices are going to end," says Peter Harbage, a former health care adviser to the Clinton administration. "Insurers will find ways to undermine the protections in the new law, just as they did with the old law. Enforcement is the key."

And it's that enforcement that will be neutered whenever possible, especially if the Republicans get back in charge.  After all, they want to repeal the whole thing, including the parts that stop insurance companies from immediately targeting your wife or your daughter or your mother and canceling their insurance as soon as they are diagnosed with breast cancer.

Repeal is going to be a big loser for the Republicans, but only if Democrats enforce the new laws instead of writing in loopholes big enough to kill thousands of people with rescission each year.

Money For Justice

Los Angeles County literally cannot afford to keep open its courtrooms open much longer because California's tax laws are broken.

The Los Angeles court system has already closed 17 courtrooms and another 50 will be shut down come September unless something is done to find more money. The closures have disrupted everything from divorce and custody proceedings to traffic ticket disputes.

The judicial council scheduled a meeting Friday to deal with the request from presiding Superior Court Judge Charles W. McCoy Jr. to divert $47 million in funds from the courthouse construction budget to help stave off more courtroom closings and staff layoffs.

McCoy predicts chaos and a logjam of civil and family law cases if additional funds are not found.
He said the Los Angeles court's budgetary shortfall is $133 million which will be permanent each year unless there is an influx of funds from somewhere.

The Los Angeles system has already laid off 329 workers – about 6 percent of its 5,400-person work force. About 500 more jobs are at risk later this year. McCoy raised the prospect of a cumulative cut of 1,800 people from the 5,400-member work force over two and a half years.

With resulting cutbacks in services, he said, "confidence in the courts would be lost."

"It's unprecedented," said McCoy. "Even during the Great Depression we did not close down court operations. We kept the courts open."

The crisis results from the financially troubled state's decision to slash $393 million from state trial courts in the budget this year. The state also has been closing all California courthouses on the third Wednesday of every month, with employees unpaid for those days.

And that $393 million budget cut from the state is directly because it is impossible to raise a dime in taxes in California.  The state's budget at this point has been cut so dramatically that basic government functions are starting to fail.

Sometimes you have to raise taxes if you want a government, people.  That's how it works in a democracy.  But California is literally unable to do it because of their 2/3rds majority in both the state Assembly and the Senate in order to raise a single extra tax dollar for anything.  That means all they can do is cut, cut, cut.  And you can only cut so much before you start suffering from blood loss.

California's literally coming apart, but that's exactly what the Club For Growth people want.  The solution they will want is of course a private sector one.  But how do you privatize a court system and still expect justice?

But that's the rub:  cripple government until it cannot work, and then say we need free market solutions to take over government functions.  You may not be able to raise taxes to fund the courts in California, but you can certainly charge anyone in the courts a hefty and profitable fee for their use and raise that fee as necessary.

Same goes with every other piece of government infrastructure that corporations are salivating over profiting from:  water, power, roads, public safety, and now courts.  The slow death of one-seventh of America's state government continues unabated.