carapace – Not your father's america

My Views On Regulations – George Soros

Tuesday, March 24, 2009

Dear Friends and Colleagues:

I wanted to share with you two of my recent essays. In yesterday’s Financial Times, I talk about the impact of the financial crisis on developing nations and the need for the G20 to take forceful and decisive action. I will elaborate on this idea on Wednesday 25 March when I testify before the Senate Foreign Relations Committee. In the second piece, published in this morning’s Wall Street Journal, I call for new financial market regulation, specifically that only those who own the underlying bonds should be permitted to purchase CDS.

Regards,
George Soros

FINANCIAL TIMES

“Peripheral care should be the central concern”

By George Soros
Monday, March 23, 2009

The forthcoming Group of 20 meeting is a make-or-break event. Unless it comes up with practical measures to support the less developed countries, which are even more vulnerable than the developed ones, markets are going to suffer another sinking spell just as they did last month when Tim Geithner, Treasury secretary, failed to produce practical measures to recapitalise the US banking system.

This crisis is different from all the others since the end of the second world war. Previously, the authorities got their act together and prevented the financial system from collapsing. This time, after the failure of Lehman Brothers last September, the system broke down and was put on artificial life support. Among other measures, both Europe and the US in effect guaranteed that no other important financial institution would be allowed to fail.

This necessary step had unintended adverse consequences: many other countries, from eastern Europe to Latin America, Africa and south-east Asia, could not offer similar guarantees. As a result, capital fled from the periphery to the centre. The flight was abetted by national financial authorities at the centre who encouraged banks to repatriate their capital. In the periphery countries, currencies fell, interest rates rose and credit default swap rates soared. When history is written, it will be recorded that – in contrast to the Great Depression – protectionism first prevailed in finance rather than trade.

Institutions such as the International Monetary Fund face a novel task: to protect the periphery countries from a storm created in the developed world. Global institutions are used to dealing with governments; now they must deal with the collapse of the private sector. If they fail to do so, the periphery economies will suffer even more than those at the centre, because they are poorer and more dependent on commodities than the developed world. They also face $1,440bn (€1,060bn, £994bn) of bank loans coming due in 2009. These loans cannot be rolled over without international aid.

Gordon Brown, the UK prime minister, recognised the problem and designated the G20 meeting to address it. Yet profound attitudinal differences have surfaced, particularly between the US and Germany. The US has recognised that the collapse of credit in the private sector can be reversed only by using the credit of the state to the full. Germany, traumatised by the memory of hyperinflation in the 1920s, is reluctant to sow the seeds of future inflation by incurring too much debt. Both positions are firmly held. The controversy threatens to disrupt the meeting.

Yet it should be possible to find common ground. Instead of setting a universal target of 2 per cent of gross domestic product for stimulus packages, it is enough to agree that the periphery countries need aid to protect their financial systems. This is in the common interest. If the periphery economies are allowed to collapse, the developed countries will also be hurt.

As things stand, the G20 meeting will produce some concrete results: the resources of the IMF are likely to be doubled, mainly by using the mechanism of the “new arrangements to borrow”, which can be activated without resolving the vexed question of reapportioning voting rights.

This will be sufficient to enable the IMF to help specific countries at risk but it will not provide a systemic solution for the less developed countries. Such a solution is readily available in the form of special drawing rights. SDRs are complex but they boil down to the international creation of money. Countries that can create their own money do not need them but periphery countries do. The rich countries should therefore lend their allocations to the nations in need.

Recipient countries would pay the IMF interest at a very low rate, equivalent to the composite average treasury bill rate of all convertible currencies. They would have free use of their own allocations but would be supervised in how the borrowed allocations were used to ensure they were well spent.

In addition to the one-time increase in the IMF’s resources, there ought to be a big annual issue of SDRs, of say $250bn, as long as the recession lasts. It is too late to use the April 2 G20 meeting to agree this, but if it were raised by President Barack Obama and endorsed by others, this would be sufficient to give heart to the markets and turn the meeting into a resounding success.

The writer is chairman of Soros Fund Management and author of the forthcoming The Crash of 2008 (PublicAffairs 2009)

http://tinyurl.com/ck2gwk (www.ft.com)

——————————————————————————–

WALL STREET JOURNAL

One Way to Stop Bear Raids

Credit default swaps need much stricter regulation.

By George Soros
Tuesday, March 24th, 2009

In all the uproar over AIG, the most important lesson has been ignored. AIG failed because it sold large amounts of credit default swaps (CDS) without properly offsetting or covering their positions. What we must take away from this is that CDS are toxic instruments whose use ought to be strictly regulated: Only those who own the underlying bonds ought to be allowed to buy them. Instituting this rule would tame a destructive force and cut the price of the swaps. It would also save the U.S. Treasury a lot of money by reducing the loss on AIG’s outstanding positions without abrogating any contracts.

CDS came into existence as a way of providing insurance on bonds against default. Since they are tradable instruments, they became bear-market warrants for speculating on deteriorating conditions in a company or country. What makes them toxic is that such speculation can be self-validating.
Up until the crash of 2008, the prevailing view — called the efficient market hypothesis — was that the prices of financial instruments accurately reflect all the available information (i.e. the underlying reality). But this is not true. Financial markets don’t deal with the current reality, but with the future — a matter of anticipation, not knowledge. Thus, we must understand financial markets through a new paradigm which recognizes that they always provide a biased view of the future, and that the distortion of prices in financial markets may affect the underlying reality that those prices are supposed to reflect. (I call this feedback mechanism “reflexivity.”)

With the help of this new paradigm, the poisonous nature of CDS can be demonstrated in a three-step argument. The first step is to acknowledge that being long and selling short in the stock market has an asymmetric risk/reward profile. Losing on a long position reduces one’s risk exposure, while losing on a short position increases it. As a result, one can be more patient being long and wrong than being short and wrong. This asymmetry discourages short-selling.
The second step is to recognize that the CDS market offers a convenient way of shorting bonds, but the risk/reward asymmetry works in the opposite way. Going short on bonds by buying a CDS contract carries limited risk but almost unlimited profit potential. By contrast, selling CDS offers limited profits but practically unlimited risks. This asymmetry encourages speculating on the short side, which in turn exerts a downward pressure on the underlying bonds. The negative effect is reinforced by the fact that CDS are tradable and therefore tend to be priced as warrants, which can be sold at anytime, not as options, which would require an actual default to be cashed in. People buy them not because they expect an eventual default, but because they expect the CDS to appreciate in response to adverse developments.

AIG thought it was selling insurance on bonds, and as such, they considered CDS outrageously overpriced. In fact, it was selling bear-market warrants and it severely underestimated the risk.
The third step is to recognize reflexivity, which means that the mispricing of financial instruments can affect the fundamentals that market prices are supposed to reflect. Nowhere is this phenomenon more pronounced than in the case of financial institutions, whose ability to do business is so dependent on trust. A decline in their share and bond prices can increase their financing costs. That means that bear raids on financial institutions can be self-validating.

Taking these three considerations together, it’s clear that AIG, Bear Stearns, Lehman Brothers and others were destroyed by bear raids in which the shorting of stocks and buying CDS mutually amplified and reinforced each other. The unlimited shorting of stocks was made possible by the abolition of the uptick rule, which would have hindered bear raids by allowing short selling only when prices were rising. The unlimited shorting of bonds was facilitated by the CDS market. The two made a lethal combination. And AIG failed to understand this.

Many argue now that CDS ought to be traded on regulated exchanges. I believe that they are toxic and should only be allowed to be used by those who own the bonds, not by others who want to speculate against countries or companies. Under this rule — which would require international agreement and federal legislation — the buying pressure on CDS would greatly diminish, and all outstanding CDS would drop in price. As a collateral benefit, the U.S. Treasury would save a great deal of money on its exposure to AIG.

Mr. Soros is chairman of Soros Fund Management and author of “The Crash of 2008″ (PublicAffairs, 2009).

http://tinyurl.com/cuxjzn (online.wsj.com)

==========

Rule by “Hedge Fund Democrats”

Tuesday, March 24, 2009

TIMOTHY CANOVA, canova@chapman.edu,
http://ssrn.com/author=405808

Canova is a professor of international economic law at the Chapman University School of Law in Orange, California. He is the author of numerous articles and book chapters forewarning of financial crisis, in addition to such short essays as “Greenspan’s Grip” and “Legacy of the Clinton Bubble.”

Canova said today: “The latest Treasury plan by Timothy Geithner is befitting an administration run by ‘hedge fund Democrats.’ Such is the nature of bankster capitalism, the zombie banks are propped up by public subsidies and their losses are socialized. Under the plan, the Federal Reserve and Treasury as the ‘public partners’ would provide enormous subsidies to the ‘private partners,’ the unregulated and unregistered hedge funds that have been overleveraged and facing mounting losses of their own. The subsidies would go to hedge funds for taking near worthless assets off the books of the ailing banks.

“There’s been much criticism of the American Insurance Group for paying out $165 million in excessive bonuses to executives in its financial products division, the now notorious AIG unit that sold more credit default swaps than the firm could cover. Lost in the outrage was news that AIG had paid out $40 billion in taxpayer bailout money to some of the world’s largest banks and hedge funds. Most of that went to ten U.S. and foreign banks, with Goldman Sachs leading the list. This is the same Goldman Sachs that has owned the Treasury Department for two decades. Its former CEOs, Robert Rubin and Henry Paulson, became Treasury secretary. Its chief lobbyist, Mark Patterson, recently became chief of staff to Geithner, one of the few vacancies filled in the department, and one that required an immediate waiver to Obama’s supposedly tough ethics rules.

“Within the academy, there’s a recognition that the sanctity of private contract requires striking down sham contracts. Bert Ely, a Cato Institute banking analyst, now argues that credit default swaps should be considered unenforceable contracts since the counterparties lack any insurable interest in the underlying assets. Lucian Bebchuk, a Harvard Law professor and centrist, now proposes Chapter 11 bankruptcy for AIG to stop the bleeding on its $1.2 trillion in credit default swaps. Paul Krugman, Nobel economist, argues for nationalizing the zombie banks to get them to shed their toxic assets and jump-start their lending activities for productive investment in real economic activity.

“The subsidies to Wall Street hedge funds and banks are not without enormous costs. Last week the Federal Reserve announced that it would double the size of its balance sheet to $3 trillion by doubling its purchases of asset-backed securities from its favored clientele, which now includes foreign banks and central banks. Three trillion dollars that could be spent on real needs, like jobs and education, the kinds of large public spending programs that raised the economy out of the Great Depression, created the last great middle class boom for the Greatest Generation, and left future generations with tangible assets instead of worthless paper.”

From: Institute for Public Accuracy

==========

Congressman Paul’s Texas Straight Talk: Bankruptcy is Economic Stimulus

Monday, March 23, 2009

Bankruptcy is Economic Stimulus

“The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received. The argument is over a relative drop in the bucket. The total amount of bonuses given out was $165 million. The government has put $170 billion into AIG so far. Many now are demanding we get this money back. We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket…”

Click here to read the full article:

http://www.house.gov/paul/index.shtml

==========

Dallas Fed International Economic Update: Difficult Times and Bold Response

Monday, March 23, 2009
International Economic Update
March 2009

Global and Monetary Policy Institute
Federal Reserve Bank of Dallas

http://tinyurl.com/df9lq2 (dallasfed.org)

The global outlook continues to deteriorate. The latest data from industrialized countries point toward further declines in growth. Plummeting trade and capital flight are driving emerging markets
towards recession. Policymakers worldwide are employing a myriad of tools to stimulate demand and revive credit markets. World output is expected to fall in 2009, the first time it has done so since
World War II.

==========

USGAO – Bank Secrecy Act: Federal Agencies Should Take Action to Further Improve Coordination and Information-Sharing Efforts.

GAO-09-227, February 12.

http://www.gao.gov/cgi-bin/getrpt?GAO-09-227

Highlights – http://www.gao.gov/highlights/d09227high.pdf

==========

If Financial Reporters Knew Arithmetic, Then They Should Have Seen This Crisis, End of Story

Richard Cohen is continuing the stream of excuses for the financial media’s failure to warn of the economic crisis. At the center of the cover-up for the media’s incompetence is an effort to imply that the issues involved were very complex.

As Cohen puts it:

“There was not much they [financial reporters] could do, anyway. They do not have subpoena power. They cannot barge into AIG and demand to see the books, and even if they could, they would not have known what they were looking at. The financial instruments that Wall Street firms were both peddling and buying are the functional equivalent of particle physics. To this day, no one knows their true worth.”

This is pathetic. Financial reporters did not need subpoena power, they did not need access to AIG’s books, they did not even need to know what a credit default swap was. They just needed to know arithmetic.

The basic story is as simple as you can possibly have. Nationwide, house prices tracked inflation for 100 years from 1895 to 1995. In the decade from 1996 to 2006, they rose by more than 70 percent after adjusting for inflation, creating more than $8 trillion in housing bubble wealth.

There was no remotely plausible explanation for this increase in house prices on either the supply-side or the demand side. If there is a huge divergence from a 100-year long trend, with no explanation based on fundamentals, how could it be anything over than a bubble?

And, who could have thought that the country could lose $8 trillion in housing wealth ($110,000 for every homeowner) without enormous consequences for the economy?

Financial reporters did not need to do investigation (although exposing the corruption in the financial industry that supported the growth in the bubble– which some reporters did– would have been a great public service), they just needed to know arithmetic and have some commonsense.

For example, relying on David Lereah, the chief economist of the National Association of Realtors, as the main source for expertise on the housing market was not clever. Nor was it clever to rely on industry backed housing centers as a major source for news reports.

Also, running an occasional piece talking to Nouriel Roubini or one of the other bubble warners doesn’t cut it. The bubble was by far the biggest thing out there. It should have been in the news every single day.

The financial reporters blew it, bigtime. They should start by acknowledging this failure and then figure out how to avoid blowing it again in the future.

Yes, economists were far worse — how about a good news story explaining that even though nearly all economists completely failed to see the coming of the biggest economic disaster in their lifetime, none of them will suffer any consequences in their career? None will get fired and almost none of them will even miss a promotion. Reporting on the non-accountability of economists would be a very good story for financial reporters.

From: The ‘Beat the Press’ Weekly Roundup, 3/23/09

http://prospect.org/csnc/blogs/beat_the_press

==========

Jacob Heilbrunn on Alger Hiss

Posted on Mar 20, 2009
By Jacob Heilbrunn

In 1984 Ronald Reagan returned to his alma mater, Eureka College, where he had been a middling student who devoted himself to extracurricular activities such as the drama club rather than his studies. Now, the former B-movie star and pitchman for General Electric was returning in his latest role—as a popular, if unlikely, American president. He gave the students a dose of conservative political philosophy. He didn’t cite Barry Goldwater or economist Friedrich Hayek as his great heroes. Instead, Reagan focused on someone else, the former communist turned renegade, Whittaker Chambers, who created an uproar in the late 1940s by stating that his old friend, Alger Hiss, a State Department official and member of the Eastern establishment, was, in fact, a Soviet spy. Chambers, Reagan said, was a monumental figure in American history. He had single-handedly created a “counterrevolution of the intellectuals” by breaking with the communist movement. Chambers’ massive autobiography, “Witness,” had cured Reagan of a dangerous delusion that afflicted so many of his coevals. As Reagan put it, “For most of my adult life, the intelligentsia has been entranced and enamored with the idea of state power, the notion that enough centralized authority concentrated in the hands of the right-minded people can reform mankind and usher in a brave new world.”

Alger Hiss and the Battle for History
By Susan Jacoby
Yale University Press, 272 pages

Ever since he pulled microfilm of State Department documents from a hollowed-out pumpkin on his farm, Chambers has been a totemic figure for the modern conservative movement. In July 2001, I myself attended an event in the Old Executive Office Building held by the Bush White House to commemorate the 40th anniversary of Chambers’ death. As journalist Robert Novak spoke, I watched slack-jawed. It was as though time had been suspended for a moment and the McCarthy era had returned, as Novak lauded Richard M. Nixon and raged against the traitorous liberals who had sneered at Chambers for having the courage to expose a communist conspiracy at the heart of American government. Conservatives, Novak said, would be eternally grateful to Nixon for backing Chambers.

Indeed, for Reagan, William F. Buckley Jr. and other traditional conservatives, Chambers was a heroic prophet who alone had the moxie to endure the obloquy of the liberal-left in the service of truth. Obsessed with the notion that Yalta, where Hiss had been a minor figure, was a sell-out to the Soviets, a betrayal of Eastern Europe to Josef Stalin by a befuddled Franklin D. Roosevelt, conservatives flayed Hiss and other New Dealers as nefarious figures who had been working hand in glove with the KGB. And for generations of neoconservatives, Chambers’ searing experience in breaking ranks was one that they themselves tried to recapitulate, positioning themselves as former leftists who had seen the light and spurned the totalitarian American intelligentsia, no matter the cost to their careers, which somehow seemed to prosper, not despite but because of their supposed apostasy.

In “Alger Hiss and the Battle for History,” Susan Jacoby explores the anfractuosities of the Hiss-Chambers affair. Jacoby, a gifted writer who is the author of numerous books, including “The Age of American Unreason,” reports that her 86-year-old mother responded to the news that she was working on public perceptions of Hiss and Chambers by asking, “Who cares about that anymore?” It’s a fair question. The two men formed a sort of ideological fault line in American intellectual life for decades. On one side were the uncouth conservatives who lauded Chambers; on the other, the anxious liberals who sought to defend Hiss, or at least mitigate his espionage sins. Jacoby seeks to show that the dispute over the two men isn’t a musty affair from the past. Instead, it offers a revealing glimpse into American political history, whether it’s the Cold War or the war on terrorism. Her assessments of the positions of the two camps will probably meet with the approbation of neither, but she lucidly and expertly maps out the terrain upon which the Hiss-Chambers engagements have been fought over the decades.

As Jacoby reminds us—and it is a reminder that cannot come too often—the Hiss case offered for a vengeful postwar right a golden opportunity to tar the New Deal itself as a crypto-communist conspiracy. The stakes were never about Hiss himself, whose influence on Roosevelt was nugatory. Rather, he became a symbol for the iniquities of the New Deal, for the quislings such as Dean Acheson who had sold out America to the Reds. This exercise in historical revisionism allowed the right to efface its own history of having embraced isolationism during the 1930s and, sometimes, worse, having adulated Nazism and scorned the British Empire as trying to inveigle the U.S. into combat on the European continent, all of which is beautifully spelled out in Philip Roth’s indispensable “The Plot Against America.” As the Chicago Tribune, formerly the tribune of the isolationists and inveterate foe of FDR, proclaimed, “So we find this traitor hobnobbing through the years with the mightiest of the New Deal mighty. He advises the President. He is the favored protégé of two men who are kingmakers within the burocracy.” (The Tribune favored phonetic transliteration of some words.)

…

Complete article at:

http://tinyurl.com/cwuxuz (www.truthdig.com)

==========

Fox News Rides Obama Back to the Top

Source: National Public Radio, March 23, 2009

NPR notes that “times could hardly be better at the Fox News Channel, the cable channel liberals love to hate. … Ratings estimates from Nielsen Media Research indicate audience levels are up significantly — to extremely high levels for cable news — making Fox News among the highest rated of all basic cable channels. (MSNBC has had some of its best ratings in its existence since veering to the ideological left in primetime last year, but both it and CNN lag well behind.)” Driving the ratings are Fox’s “trio of pundits, Bill O’Reilly, Sean Hannity and Glenn Beck.” The Los Angeles Times noted, “After CNN scored key victories with its election coverage last year, Fox News has now regained its wide lead. … So much for the predictions that Fox News, reportedly the favorite channel of former Vice President Dick Cheney, wouldn’t fare well in an Obama administration.”

On Fox, Cavuto and Levin falsely claimed Obama administration wants to limit executive pay for all companies

Neil Cavuto and Mark Levin falsely claimed the Obama administration “want[s] to control executive pay” for companies that haven’t received bailouts. Earlier that day, Robert Gibbs said of such a proposal, “[T]here are not plans to do something broad like that.”

Read More

http://mediamatters.org/items/200903240032?lid=956858&rid=24612987

==========

March 2009 Southwest Climate Outlook

Tuesday, March 24, 2009

The March 2009 Southwest Climate Outlook is online. This month’s feature article is entitled, “Climate data: the ins and outs and where to find what.”

To view the Southwest Climate Outlook in html format or the printer-friendly PDF file visit:

http://www.climas.arizona.edu/forecasts/swoutlook.html

Highlights from the March 2009 Outlook

Drought– Above-average precipitation in December–February helped improve short-term drought conditions across northwestern Arizona. In New Mexico, drought conditions worsened with 55 percent of the state experiencing some level of drought.

Temperature– The past 30 days have brought warmer-than-average temperatures. Most of Arizona and nearly all of New Mexico have been 2–8 degrees F warmer than average.

Precipitation– In the past 30 days, most of Arizona and New Mexico has had less than 50 percent of average precipitation, with areas receiving less than 25 percent of average.

ENSO– The weak La Niña event that developed in December 2008 appears to be winding down.

Snow– Above-average temperatures and below-average precipitation over the past 30 days has led to a dramatic reduction in snowpack levels across much of Arizona and New Mexico.

Climate Forecasts– Long-lead temperature forecasts show increasing chances that spring and summer temperatures in the Southwest will be similar to the warmest 10 years of the 1971–2000 period. Summer precipitation has higher chances of being similar to the wettest 10 years.

The Bottom Line– A warm and dry February has led to a dramatic reduction in snowpack. Arizona has experienced above-average precipitation since December, helping to improve short-term drought conditions across the northwestern part of the state. In New Mexico, drought conditions are worsening. While snowpack in Arizona and New Mexico are well below average, most snow monitoring stations in Colorado measure near-average or slightly below-average snow water content.

Kristen E. NelsonAssociate Editor
Institute for the Study of Planet Earth
715 N. Park Ave., 2nd Floor
Tucson, AZ 85721

==========

And now for the important news ….

By Argus Hamilton

The FDA faced demands to improve food inspections Monday. Last week one banana shipment hid cocaine and another bunch had a spider whose bite causes male arousal. All these warnings that we’re becoming a banana republic didn’t tell us the good part.

http://www.JewishWorldReview.com

==========

three thousand words

(click here to view)

Mike Luckovich Atlanta Journal-Constitution Mar 25, 2009 EditorialCartoonists.com

BILL DAY: starve the beast

http://tinyurl.com/ctjo7b (media.washingtonpost.com)

Gary Markstein: … and the bad part?

http://img.slate.com/media/41/090324_ed.gif

One Way to Stop Bear Raids

Credit default swaps need much stricter regulation.

MARCH 23, 2009
By GEORGE SOROS

In all the uproar over AIG, the most important lesson has been ignored. AIG failed because it sold large amounts of credit default swaps (CDS) without properly offsetting or covering their positions. What we must take away from this is that CDS are toxic instruments whose use ought to be strictly regulated: Only those who own the underlying bonds ought to be allowed to buy them. Instituting this rule would tame a destructive force and cut the price of the swaps. It would also save the U.S. Treasury a lot of money by reducing the loss on AIG’s outstanding positions without abrogating any contracts.

CDS came into existence as a way of providing insurance on bonds against default. Since they are tradable instruments, they became bear-market warrants for speculating on deteriorating conditions in a company or country. What makes them toxic is that such speculation can be self-validating.

Up until the crash of 2008, the prevailing view — called the efficient market hypothesis — was that the prices of financial instruments accurately reflect all the available information (i.e. the underlying reality). But this is not true. Financial markets don’t deal with the current reality, but with the future — a matter of anticipation, not knowledge. Thus, we must understand financial markets through a new paradigm which recognizes that they always provide a biased view of the future, and that the distortion of prices in financial markets may affect the underlying reality that those prices are supposed to reflect. (I call this feedback mechanism “reflexivity.”)

With the help of this new paradigm, the poisonous nature of CDS can be demonstrated in a three-step argument. The first step is to acknowledge that being long and selling short in the stock market has an asymmetric risk/reward profile. Losing on a long position reduces one’s risk exposure, while losing on a short position increases it. As a result, one can be more patient being long and wrong than being short and wrong. This asymmetry discourages short-selling.

The second step is to recognize that the CDS market offers a convenient way of shorting bonds, but the risk/reward asymmetry works in the opposite way. Going short on bonds by buying a CDS contract carries limited risk but almost unlimited profit potential. By contrast, selling CDS offers limited profits but practically unlimited risks. This asymmetry encourages speculating on the short side, which in turn exerts a downward pressure on the underlying bonds. The negative effect is reinforced by the fact that CDS are tradable and therefore tend to be priced as warrants, which can be sold at anytime, not as options, which would require an actual default to be cashed in. People buy them not because they expect an eventual default, but because they expect the CDS to appreciate in response to adverse developments.

AIG thought it was selling insurance on bonds, and as such, they considered CDS outrageously overpriced. In fact, it was selling bear-market warrants and it severely underestimated the risk.

The third step is to recognize reflexivity, which means that the mispricing of financial instruments can affect the fundamentals that market prices are supposed to reflect. Nowhere is this phenomenon more pronounced than in the case of financial institutions, whose ability to do business is so dependent on trust. A decline in their share and bond prices can increase their financing costs. That means that bear raids on financial institutions can be self-validating.

Taking these three considerations together, it’s clear that AIG, Bear Stearns, Lehman Brothers and others were destroyed by bear raids in which the shorting of stocks and buying CDS mutually amplified and reinforced each other. The unlimited shorting of stocks was made possible by the abolition of the uptick rule, which would have hindered bear raids by allowing short selling only when prices were rising. The unlimited shorting of bonds was facilitated by the CDS market. The two made a lethal combination. And AIG failed to understand this.

Many argue now that CDS ought to be traded on regulated exchanges. I believe that they are toxic and should only be allowed to be used by those who own the bonds, not by others who want to speculate against countries or companies. Under this rule — which would require international agreement and federal legislation — the buying pressure on CDS would greatly diminish, and all outstanding CDS would drop in price. As a collateral benefit, the U.S. Treasury would save a great deal of money on its exposure to AIG.

Mr. Soros is chairman of Soros Fund Management and author of “The Crash of 2008″ (PublicAffairs, 2009).

http://tinyurl.com/dmpmlf (online.wsj.com)

==========

Rule by “Hedge Fund Democrats”

Tuesday, March 24, 2009

JOHN SAKOWICZ, thetruthaboutmoney@kzyx.org,

http://tinyurl.com/cfuq3w (www.altweeklies.com)

Sakowicz is a 30-year veteran of Wall Street. He is currently a general partner at Templar Advisors, an offshore investment advisory group. Sakowicz also hosts “The Truth About Money” at KZYX in Northern California and he writes for alternative weeklies as a contributing editor at the North Bay Bohemian.

He said today: “Bank stocks have soared, but their bonds haven’t budged. In some cases, they’ve actually fallen. When that happens, the market is telling us something. It’s telling us to come back to reality. It’s telling us these toxic assets may be more toxic than we think. … In Geithner’s plan, the leverage is about five or six federal dollars to every one dollar invested by the private sector. That’s like saying, ‘Let’s drive a truck full of money directly at a freight train full of money to prevent a train wreck.’”

From: Institute for Public Accuracy

==========

IRS Offers Unconvincing Explanation for Decline in Millionaire Audits

Monday, March 23, 2009

Given the opportunity to respond prior to the publication of a recent TRAC report, the IRS chose not to explain its policies in reducing the rate of millionaire audits by at least 19 percent this past year. However, according to an article in Newsday, IRS spokesperson Terry Lemons commented: “Audit rates were down slightly in 2008 due to a variety of factors, including implementing stimulus last year.”

This explanation is curious since the agency’s own figures show that the IRS managed to maintain or increase the number of correspondence audits for income groups other than millionaires, where the number of such audits fell by 12 percent last year. Those with total positive income less than $200,000 experienced no change in correspondence audit levels, while those between $200,000 and $1 million total positive income experienced a 15 percent increase in the number of such audits last year.

The logic of the decision of IRS managers to switch agency campus auditors from millionaire audits to processing stimulus checks seems even more questionable, as the audits of millionaires tend to uncover more misreporting dollars than other groups and constitute the fastest growing return class.

The full report with additional data relating to the IRS response can be found at:

http://trac.syr.edu/tracirs/latest/204/#response

David Burnham and Susan B. Long, co-directors
Transactional Records Access Clearinghouse
Syracuse University
Suite 360, Newhouse II
Syracuse, NY 13244-2100
315-443-3563
trac@syr.edu

==========

ECONOMIC DOUBLE STANDARD: AMERICA IS A KLEPTOCRACY, NOT A DEMOCRACY

By David Sirota, Open Left

What this moment is is a huge opportunity.

http://tinyurl.com/cb88uh (www.alternet.org)

==========

EIA, the Nation’s clearinghouse for energy statistics – Today’s Gasoline Prices

Monday, March 23, 2009

RETAIL GASOLINE: (Self Service Prices per Gallon, Including Taxes) This report contains price estimates for gasoline sold in ozone non-attainment areas which require the sale of reformulated gasoline (RFG) as designated by the Environmental Protection Agency, and Conventional areas which includes both attainment areas and carbon monoxide non-attainment areas.

Mogas web site url

http://www.eia.doe.gov/oil_gas/fwd/wrgp.html

Iraq Oil Report – ‘Iraq oil contract disputed in new report commissioned by Parliament energy committee’

Plus:

*Read the entire draft Technical Service Contract

*Oil Ministry gives more info on oil fields to companies

*Russia’s Lukoil, Italy’s Edison express interest in fields on Istanbul sidelines

*Missan Oil Co. preps for new well drilling

*Technip awarded new Karbala refinery

*Oil to Jordan slowed by technicalities

*Violence rocks powder keg Mosul, Shiite pilgrimage

*Ex-Women’s Affairs minister says male-dominated Iraq politics [...]

You may view the latest post at

http://tinyurl.com/c5vqw2 (www.iraqoilreport.com)

Iraq Oil Report has- ‘Security of Iraq oil expected to improve with Umm Qasr port revamp’

Plus:

*After the Istanbul meetings with international oil companies

*Now Prime Minister Maliki takes charge

*Electricity Ministry reaches out to Iran, Syria, Turkey counterparts

*Obama calls Turkish leaders, talks include Iraq

*Japan makes pre-loan visit to Basra

*U.S. says Western investment incoming

*Pres. Talabani’s party in limbo

*Much more

The Iraqi Navy is paying the U.S. Army Corps of Engineers to revamp part of
[...]

You may view the latest post at

http://tinyurl.com/dd9ntl (www.iraqoilreport.com)

Iraq Oil Report – ‘Baiji sees corruption cleanup, saving Iraq oil from smugglers’

Plus much more in this long-weekend edition of Iraq Oil Report, including updates on more going on in the oil and electricity sector, election results revealed, and the status of key security, societal and economic issues. A must read:

One might call them the Batman and Robin of the Bayji oil refinery.

Together Ali al-Obaidi, director-general of [...]

You may view the latest post at

http://tinyurl.com/ahr2pr (www.iraqoilreport.com)

Iraq Oil Report – ‘Few details emerge about strange South Korea-Iraq oil deal’

Plus:

*Ghadban: Iraq oil workers will bring back production

*Electricity Minister: France welcome to build nuclear plant

*Iraq Oil Ministry gets 38 applications for second round of oil and gas field bids

*Get your second round company list only at Iraq Oil Report

*Pipeline to Syria makes news, no construction yet

*Int’l Unions take Iraq Government, ministries to task for labor [...]

You may view the latest post at

http://tinyurl.com/bo2e45 (www.iraqoilreport.com)

Iraq Oil Report – ‘Iraq finalizes oil drilling joint venture with Mesopotamia Petroleum’

Thursday, February 26, 2009

A deal has been finalized creating a joint venture between the Iraq Drilling Co. and the British Mesopotamia Petroleum Co.

It’s the first such joint venture in post-Saddam Iraq, and will likely be a template for future projects to bring foreign oil companies into the world’s third largest oil reserves.

The Iraq Oil Service Co. will [...]

You may view the latest post at

http://tinyurl.com/c48prg (www.iraqoilreport.com)

Iraq Oil Report – ‘Obama outlines U.S. withdrawal from Iraq, war’

President Barack Obama said Iraqis will no longer see U.S. troops in their streets “by the end of 2011,” which he said was in line with the Status Of Forces Agreement signed between Iraq and the United States.

The troop drawdown has already been started and “by August 31, 2010, our combat mission in Iraq will [...]

You may view the latest post at

http://tinyurl.com/asgf5z (www.iraqoilreport.com)

Iraq Oil Report – ‘New Iraq oil strategy attempts to walk political fine line’

Plus:

*New budget approved after further cuts
*New Report: More than Shiites and Sunnis
*Iraq Teachers Union targeted by government
*Video-Alive in Baghdad: US Withdrawing as Media Retreat from Iraq

Iraqi Prime Minister Nouri al-Maliki has lent his support to a new two-pronged oil-development strategy in an attempt to appease those who have challenged the current strategy as relying too [...]

You may view the latest post at

http://tinyurl.com/c8wk4m (www.iraqoilreport.com)

Iraq Oil Report – ‘Iraq oil pipeline protection earns U.S. engineer honors’

Plus:
* Shahristani says low oil price warrants cut

* Exxon Mobil leaning on Iraq investment

* Women in Iraq

* Iran-Iraq border dispute remains

* Iraq’s Agent Orange

New physical barriers keeping would-be saboteurs from attacking Iraq’s northern pipeline have led to increased oil exports. It’s a major reason Elizabeth Burg, a U.S. Army civilian who volunteered for duty in [...]

You may view the latest post at

http://tinyurl.com/c3vhor (www.iraqoilreport.com)

Iraq Oil Report – ‘U.S. auditors return $13 million to Iraq, billions wasted’

The U.S. has returned $13 million to Iraq – found “improperly” in American reconstruction budgets – results of an increased workload for the top U.S. auditor of Iraq rebuilding efforts.

There’s a long way to go still: the head of the Special Inspector General for Iraq Reconstruction said Monday between 15 [...]

You may view the latest post at

http://tinyurl.com/9khfqj (www.iraqoilreport.com)

The Politics of Iraqi Oil

http://tinyurl.com/czcogk (www.iraqoilreport.com)

Oil prices sink, production slows, the economy recedes and Iraqi politics: the perfect storm for Iraq’s oil sector.

Nobody’s client: the reawakening of Iraqi sovereignty

http://tinyurl.com/dyxref (www.iraqoilreport.com)

Following Iraq Prime Minister Nouri al-Maliki’s success in provincial elections in January, there’s a new air of autonomy from the U.S. occupation.

Interview: Oil Minister Shahristani

http://tinyurl.com/ce9b4k (www.iraqoilreport.com)

Talks Barzani beef, production sharing contracts, and the need for investment with Business Week.

Security force plan on hold

http://tinyurl.com/cn7p9q (www.iraqoilreport.com)

Budget cuts due to oil price drop jeopardize plans to add 66,000 new security personnel.

Westerners take holiday in Iraq

http://tinyurl.com/cyq6fa (www.iraqoilreport.com)

==========

Iran’s View of Obama

March 23, 2009
By George Friedman

U.S. President Barack Obama released a video offering Iran congratulations on the occasion of Nowruz, the Persian New Year, on Friday. Israeli President Shimon Peres also offered his best wishes, referring to “the noble Iranian people.” The joint initiative was received coldly in Tehran, however. Iran’s supreme leader, Ayatollah Ali Khamenei, said the video did not show that the United States had shifted its hostile attitude toward Iran.

The video is obviously part of Obama’s broader strategy of demonstrating that his administration has shifted U.S. policy, at least to the extent that it is prepared to open discussions with other regimes (with Iran being the hardest and most controversial case). The U.S. strategy is fairly straightforward: Obama is trying to create a new global perception of the United States. Global opinion was that former U.S. President George W. Bush was unwilling to engage with, and listen to, allies or enemies. Obama’s view is that that perception in itself harmed U.S. foreign policy by increasing suspicion of the United States. For Obama, offering New Year’s greetings to Iran is therefore part of a strategy to change the tone of all aspects of U.S. foreign policy.

Getting Peres to offer parallel greetings was undoubtedly intended to demonstrate to the Iranians that the Israelis would not block U.S. initiatives toward Iran. The Israelis probably were willing to go along with the greetings because they don’t expect them to go very far. They also want to show that they were not responsible for their failure, something critical in their relations with the Obama administration.

The Iranian response is also understandable. The United States has made a series of specific demands on Iran, and has worked to impose economic sanctions on Iran when Tehran has not complied. But Iran also has some fairly specific demands of the United States. It might be useful, therefore, to look at the Iranian view of the United States and the world through its eyes.

From the Iranian point of view, the United States has made two fundamental demands of Iran. The first is that Iran halt its military nuclear program. The second, a much broader demand, is that Iran stop engaging in what the United States calls terrorism. This ranges from support for Hezbollah to support for Shiite factions in Iraq. In return, the United States is prepared to call for a suspension of sanctions against Iran.

For Tehran, however, the suspension of sanctions is much too small a price to pay for major strategic concessions. First, the sanctions don’t work very well. Sanctions only work when most powers are prepared to comply with them. Neither the Russians nor the Chinese are prepared to systematically comply with sanctions, so there is little that Iran can afford that it can’t get. Iran’s problem is that it cannot afford much. Its economy is in shambles due more to internal problems than to sanctions. Therefore, in the Iranian point of view, the United States is asking for strategic concessions, yet offering very little in return.

The Nuclear Question

Meanwhile, merely working on a nuclear device — regardless of how close or far Iran really is from having one — provides Iran with a dramatically important strategic lever. The Iranians learned from the North Korean experience that the United States has a nuclear fetish. Having a nuclear program alone was more important to Pyongyang than actually having nuclear weapons. U.S. fears that North Korea might someday have a nuclear device resulted in significant concessions from the United States, Japan and South Korea.

The danger of having such a program is that the United States — or some other country — might attack and destroy the associated facilities. Therefore, the North Koreans created a high level of uncertainty as to just how far along they were on the road to having a nuclear device and as to how urgent the situation was, raising and lowering alarms like a conductor in a symphony. The Iranians are following the same strategy. They are constantly shifting from a conciliatory tone to an aggressive one, keeping the United States and Israel under perpetual psychological pressure. The Iranians are trying to avoid an attack by keeping the intelligence ambiguous. Tehran’s ideal strategy is maintaining maximum ambiguity and anxiety in the West while minimizing the need to strike immedi ately. Actually obtaining a bomb would increase the danger of an attack in the period between a successful test and the deployment of a deliverable device.

What the Iranians get out of this is exactly what the North Koreans got: disproportionate international attention and a lever on other topics, along with something that could be sacrificed in negotiations. They also have a chance of actually developing a deliverable device in the confusion surrounding its progress. If so, Iran would become invasion- and even harassment-proof thanks to its apparent instability and ideology. From Tehran’s perspective, abandoning its nuclear program without substantial concessions, none of which have materialized as yet, would be irrational. And the Iranians expect a large payoff from all this.

Radical Islamists, Iraq and Afghanistan

This brings us to the Hezbollah/Iraq question, which in fact represents two very different issues. Iraq constitutes the greatest potential strategic threat to Iran. This is as ancient as Babylon and Persia, as modern as the Iran-Iraq war of the 1980s. Iran wants guarantees that Iraq will never threaten it, and that U.S. forces in Iraq will never pose a threat to Iran. Tehran does not want promises alone; it wants a recognized degree of control over the Iraqi government, or at least negative control that would allow it to stop Baghdad from doing things Iran doesn’t want. To achieve this, Iran systematically has built its influence among factions i n Iraq, permitting it to block Iraqi policies that Iran regards as dangerous.

The American demand that Iran stop meddling in Iraqi policies strikes the Iranians as if the United States is planning to use the new Baghdad regime to restore the regional balance of power. In fact, that is very much on Washington’s mind. This is completely unacceptable to Iran, although it might benefit the United States and the region. From the Iranian point of view, a fully neutral Iraq — with its neutrality guaranteed by Iranian influence — is the only acceptable outcome. The Iranians regard the American demand that Iran not meddle in Iraq as directly threatening Iranian national security.

There is then the issue of Iranian support for Hezbollah, Hamas and other radical Islamist groups. Between 1979 and 2001, Iran represented the background of the Islamic challenge to the West: The Shia represented radical Islam. When al Qaeda struck, Iran and the Shia lost this place of honor. Now, al Qaeda has faded and Iran wants to reclaim its place. It can do that by supporting Hezbollah, a radical Shiite group that directly challenges Israel, as well as Hamas — a radical Sunni group — thus showing that Iran speaks for all of Islam, a powerful position in an arena that matters a great deal to Iran and the region. Iran’s support for these groups help s it achieve a very important goal at little risk. Meanwhile, the U.S. demand that Iran end this support is not matched by any meaningful counteroffer or by a significant threat.

Moreover, Tehran dislikes the Obama-Petraeus strategy in Afghanistan. That strategy involves talking with the Taliban, a group that Iran has been hostile toward historically. The chance that the United States might install a Taliban-linked government in Afghanistan represents a threat to Iran second only to the threat posed to it by Iraq.

The Iranians see themselves as having been quite helpful to the United States in both Iraq and Afghanistan, as they helped Washington topple both the Taliban and Saddam Hussein. In 2001, they offered to let U.S. aircraft land in Iran, and assured Washington of the cooperation of pro-Iranian factions in Afghanistan. In Iraq, they provided intelligence and helped keep the Shiite population relatively passive after the invasion in 2003. But Iranians see Washington as having betrayed implicit understandings that in return for these services, the Iranians would enjoy a degree of influence in both countries. And the U.S. opening to the Taliban is the last straw.

Obama’s Greetings in Context

Iran views Obama’s New Year greetings within this context. To them, Obama has not addressed the core issues between the two countries. In fact, apart from videos, Obama’s position on Iran does not appear different from the Bush position. The Iranian leadership does not see why it should respond more favorably to the Obama administration than it did to the Bush administration. Tehran wants to be very sure that Obama understands that the willingness alone to talk is insufficient; some indications of what is to be discussed and what might be offered are necessary.

Many in the U.S. administration believe that the weak Iranian economy might shape the upcoming Iranian presidential election. Undoubtedly, the U.S. greetings were timed to influence the election. Washington has tried to influence internal Iranian politics for decades, constantly searching for reformist elements. The U.S. hope is that someone might be elected in Iran who is so obsessed with the economy that he would trade away strategic and geopolitical interests in return for some sort of economic aid. There are undoubtedly candidates who would be interested in economic aid, but none who are prepared to trade away strategic interests. Nor could they even if they wanted to. The Iran-Iraq war is burned into the popular Iranian consciousness; any candidate who appeared willing to see a strong Iraq would lose the election. American analysts are constantly confusing an Iranian interest in economic aid with a willingness to abandon core interests. But this hasn’t happened, and isn’t happening now.

This is not to say that the Iranians won’t bargain. Beneath the rhetoric, they are practical to the extreme. Indeed, the rhetoric is part of the bargaining. What is not clear is whether Obama is prepared to bargain. What will he give for the things he wants? Economic aid is not enough for Iran, and in any event, the idea of U.S. economic aid for Iran during a time of recession is a non-starter. Is Obama prepared to offer Iran a dominant voice in Iraq and Afghanistan? How insistent is Obama on the Hezbollah and Hamas issue? What will he give if Iran shuts down its nuclear program? It is not clear that Obama has answers to these questions.

Rebuilding the U.S. public image is a reasonable goal for the first 100 days of a presidency. But soon it will be summer, and the openings Obama has made will have to be walked through, with tough bargaining. In the case of Iran — one of the toughest cases of all — it is hard to see how Washington can give Tehran the things it wants because that would make Iran a major regional power. And it is hard to see how Iran could give away the things the Americans are demanding.

Obama indicated that it would take time for his message to generate a positive response from the Iranians. It is more likely that unless the message starts to take on more substance that pleases the Iranians, the response will remain unchanged. The problem wasn’t Bush or Clinton or Reagan, the problem was the reality of Iran and the United States. Only if a third power frightened the Iranians sufficiently — a third power that also threatened the United States — would U.S.-Iranian interests be brought together. But Russia, at least for now, is working very hard to be friendly with Iran.

This report may be forwarded or republished on your website with attribution to www.stratfor.com

Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com .

==========

The Forever War – Dexter Filkins

From the front lines of the battle against Islamic fundamentalism, a searing, unforgettable book that captures the human essence of the greatest conflict of our time.

Through the eyes of Dexter Filkins, the prizewinning New York Times correspondent whose work was hailed by David Halberstam as “reporting of the highest quality imaginable,” we witness the remarkable chain of events that began with the rise of the Taliban in the 1990s, continued with the attacks of 9/11, and moved on to the wars in Afghanistan and Iraq.

Filkins’s narrative moves across a vast and various landscape of amazing characters and astonishing scenes: deserts, mountains, and streets of carnage; a public amputation performed by Taliban; children frolicking in minefields; skies streaked white by the contrails of B-52s; a night’s sleep in the rubble of Ground Zero.

We embark on a foot patrol through the shadowy streets of Ramadi, venture into a torture chamber run by Saddam Hussein. We go into the homes of suicide bombers and into street-to-street fighting with a battalion of marines. We meet Iraqi insurgents, an American captain who loses a quarter of his men in eight days, and a young soldier from Georgia on a rooftop at midnight reminiscing about his girlfriend back home. A car bomb explodes, bullets fly, and a mother cradles her blinded son.

Like no other book, The Forever War allows us a visceral understanding of today’s battlefields and of the experiences of the people on the ground, warriors and innocents alike. It is a brilliant, fearless work, not just about America’s wars after 9/11, but ultimately about the nature of war itself.

http://www.dexterfilkins.net/book.html

==========

FOX NEWS EXECUTIVE: FOX OPPOSES PRESIDENT OBAMA

By Matt Corley, Think Progress

Fox News’ Senior Vice President for Programming admitted that the network is consciously aiming to be “the voice of opposition” to the Obama.

http://tinyurl.com/ctnr2p (www.alternet.org)

Perpetuating falsehood, Wall Street Journal’s Fund claimed “AIG bonuses … were in the stimulus bill”

On Fox & Friends, John Fund advanced the Republican falsehood that Democrats created the right for AIG to pay bonuses by passing the economic recovery bill. In fact, the recovery bill did not create the right for AIG — or any company — to pay bonuses. Rather, AIG reportedly disclosed that it had entered into agreements to pay these bonuses more than a year ago, the Bush Treasury Department approved of the AIG bailout with this agreement in place, and the relevant provision in the recovery act actually restricted the ability of companies receiving money from TARP to award bonuses in the future.

Read More

http://mediamatters.org/items/200903230002?lid=955727&rid=24570982

==========

Heinous Investment Advice

Mar 24, 2009
by Andy Borowitz

Writer and comedian Andy Borowitz’s work has appeared in Condé Nast Portfolio, the New Yorker and The New York Times. His Web site is BorowitzReport.com .

Some foolproof rules for the savvy investor: Hiding money in mattresses is too risky. Mothers can’t be trusted. And the average dog can beat the S&P 500.

If you’re one of those people who’d rather hide their money under a mattress than give it to an investment adviser, you’re ignoring a basic economic fact: Mattresses are expensive. Let’s say you want to hide $500 under a mattress. A queen mattress capable of hiding such a sum could run you as much as, say, $500. Do the math: By the time you’ve paid for the mattress, you’ll have no money left to hide under it. Smart move, asshole.

While gold coins may retain their value in a turbulent market, they will be worth nothing if they fall out of your pocket and roll down a grate.

Okay, let’s say you have thousands of dollars to hide. That problem can be solved by buying a bigger mattress, like a California King, right? Guess again, dim-bulb. A larger mattress may indeed conceal your money, but it’s also an inviting place for a thief to hide inside. Try this scenario on for size: A thief breaks into your home, hides inside your mattress, and when you’re not looking cuts his way out of said mattress and robs you blind. Not only are you out all your dough, you’ve just lost a perfectly good mattress. Ever try to repair a mattress that a thief has been hiding inside and then cut his way out of? Well, guess what: You can’t. Now, you’re probably saying to yourself, “Hey, wait a minute — a thief has never hidden inside someone’s mattress.” Well, there’s a first time for everything, and why would you want to take such a risk? We’ve already established that you don’t know what the hell you’re doing.

If you’re still averse to hiring an investment adviser, you may opt for a “do it yourself” approach, putting all your money in gold coins or cash. While gold coins may retain their value in a turbulent market, they will be worth nothing if they fall out of your pocket and roll down a grate. Equally risky is cash, especially if you keep it in white cloth moneybags with big dollar signs printed on the sides. If a thief gets a load of said bags, he’ll pop right out of your mattress and purloin them. Hey, that’s the same thief who stole your money before! Now how dumb do you feel? An old saying comes to mind: “Fool me once, shame on you; fool me twice, it’s time to hire an investment adviser.” So stop your bellyaching and let’s choose one, shall we? I’ll go extra slowly so even you can understand.

Investment advisers come in all shapes and sizes. Fat ones, skinny ones, shifty-eyed ones with pencil moustaches and electronic ankle bracelets. From the list I just mentioned, do not, I repeat, do not hire the fat ones. If they’re so well fed, it’s probably because they’ve been paying for three-lobster lunches with money skimmed from their clients’ 401(k)s. Similarly, do not hire your mother. She may seem trustworthy, but think of all the times she’s lied to you in the past, like in middle school when kids started calling you a dickwad and she said it’s just because they’re jealous. I’ve got a name for your mother and it rhymes with “pants on fire.” With her history of fibbing, you might as well cut a slit in your mattress and hand your cash directly to the thief who lives in there.

What’s in a name? Plenty, when it comes to choosing an investment adviser. Much gallows humor has been devoted to the fact that Bernie Madoff literally “made off” with his clients’ money. Why his suspicious-sounding pun name didn’t set off alarm bells is anybody’s guess, but lesson learned. Investment advisers to avoid: Herbie Embezzlesteal, Charlie Takeyourdollars and Jake Pickpocketovich.

Which leads me to one final question: Should your dog be your investment adviser? Let me put it this way: Mine is. Last September I gave my Jack Russell terrier, Daisy, all of my money to invest. She promptly dug a hole in my backyard and buried my entire nest egg. Since then, I’ve beaten the S & P 500 by more than 50 percent. Now, you’re probably wondering, what if your dog isn’t as smart as Daisy? No worries. He’s probably still smarter than you.

Writer and comedian Andy Borowitz’s work has appeared in Conde Nast Portfolio, the New Yorker and The New York Times.

His Web site is BorowitzReport.com.

http://tinyurl.com/dejvk5 (www.thedailybeast.com)

==========

three thousand words

(click here to view)

Elena Steier Center for American Blogress Mar 24, 2009 EditorialCartoonists.com

Terrence Nowicki,: The Evil Dead

http://tinyurl.com/chtyte (thisishistorictimes.com)

Tom Tomorrow: The genius of capitalism, with your host, the Invisible Hand.

http://tinyurl.com/d64bzz (www.salon.com)

The Corporate Sociopath

Special to the Star-Telegram
Posted on Fri, Mar. 20, 2009
Ed Wallace

Think for a moment: Who exactly is claiming that publishing and manufacturing are “old line” industries not worthy of our investment? That’s right — the same folks who gave us the world’s financial meltdown.

Contrary to popular belief, the nation’s success cannot be determined by following the Dow Jones. Two weeks ago this coming Tuesday, Citigroup CEO Vikram Pandit proclaimed Citi profitable in January and February, and moments later the stock market took its biggest one-day jump this year. What the story overlooked was a Fed report released that same morning, revealing that derivative liabilities for some of our major banks had ballooned to a potential $587 billion in new losses. Citigroup was on that list.

Personally, the Dow Jones could jump by over 1,000 points, as it did ending November, and that would say nothing about the direction this country’s economy is really going. But when three months go by in which car sales improve each and every month, then everyone will know our economy is returning to growth and consumers are regaining confidence.

Me, I kept my Ford stock and sold the rest more than two years ago, solely because the public statements made by Wall Street executives and analysts rang so false. These masters of the universe and the financial media that covers them have long acted as cheerleaders for disaster rather than the cool-headed analysts and CEOs they should be.

What is dangerously insane now is that, even though the major factors involved in the financial meltdown still haven’t been fixed, network news and financial programs are back, hawking “the brilliance of the market” as proof that the system is working again.

Why? “The wisdom of the market” just cost the world $45 trillion in wealth. That financial body isn’t even cold, and yet the carnival barkers are back and trying to take us for more.

And That Explains So Much

That may sound harsh, but the individuals who have taken us down this path fit the profile of sociopaths. Doubt that? Let’s look at the clinical description of people with that personality disorder.

Manipulative, Cunning and Conning: Never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming yet are covertly hostile, seeing their victim as merely an instrument to be used.

Grandiose Sense of Self: Feel entitled to certain things as “their right.”

Pathological Liar: Have no problem lying coolly, and it is almost impossible for them to be consistently truthful. Can create, and get caught up in, a complex and exaggerated fantasy about their own powers and abilities.

Shallow Emotions: When they show what seems to be warmth and compassion, it is more feigned than experienced and serves an ulterior motive. Since they are not genuine, neither are their promises.

Need for Stimulation: Living on the edge (with your money).

Callousness/Lack of Empathy: Can’t feel and doesn’t really care about their victims’ pain.

Sound like the wizards we’ve seen on TV lately? After all, how else can one explain the fact that we invested $160 billion in AIG because of their complete financial failure — yet they turned around and paid out bonuses well in excess of $160 million? AIG feels these bonuses are “their right,” and they demonstrate no sense of the pain they have caused the American taxpayer.

So enabling corporate sociopaths is off the table — but every trend that affects the nation’s health can be followed and forecast if you track closely what’s happened inside the automotive industry.

Consider the Source First!

Over the past eight years we knew the economy was weak because of the automobile market. After all, just as Wall Street endlessly pans the “old media” as no longer a viable and important part of our society, it also considers automobile production “old line manufacturing” and another drain on our vibrant financial society. But think for a moment: Who exactly is claiming that publishing and manufacturing are “old line” industries not worthy of our investment? That’s right — the same folks who gave us the world’s financial meltdown.

Doesn’t anyone besides me think that it’s strange that AIG was so easily given $160 billion to save their failed company, but there is a massive public debate on whether or not we should bail out Detroit for one-quarter of that amount? The auto industry employs almost 500,000 people directly, and industries that directly supply their parts and raw materials pay almost that many workers.

Indirectly, the loss of advertising from the automobile industry today is the No. 1 reason the media outlets, from newspapers to radio and TV, are in trouble. In fact, the recent downsizings of the nation’s communication outlets and the failure of some newspapers stems directly from the downturn in automobile sales.

Biased Perception, Treatment

The second largest drop in advertising revenue has been real estate. Sure enough, the mortgage bust was Wall Street’s most recent gift to Americans.

Now, if you think that it was just foolish individuals who signed mortgages for far more than they could possibly repay, you need to rethink that position. Because Wall Street bankers, hedge funds and leveraged buyout groups — now called private equity because it sounds better — also put together huge buyouts of well-established and profitable corporations over the past decade. This is identical to the mortgage fiasco, only these corporate deals are in the billions of dollars. Still, like the overpriced house with the unsustainably large mortgage, these massively overpriced corporate buyouts carry similarly unsustainable “mortgage” payments.

Much like the family whose adults both have good paying jobs but can’t afford their house payment when the mortgage resets higher, these companies’ individual units still make money. But the collective group cannot make enough money to pay the massive loans they took out to buy the corporation. Again, the media focuses on the bailout debate for troubled homeowners — but the bigger and unreported story is the corporations that owe far too much on the properties they purchased and are now renegotiating their loans because they can’t service their debt.

Moreover, many lending institutions are quietly restructuring that debt so that the company doesn’t go into default. Apparently, restructuring a bad billion-dollar loan on a profitable company that can’t meet their debt obligations is easier than restructuring the mortgage that a California homeowner can no longer afford.

Biggest Threat: Wage Destruction

The non-stop job losses of the last 150 days are ominous. More troubling is that many corporations have cut the wages of any remaining workers; they get down to minimal staffing requirements to operate, but they still need more cash flow to repay their loan obligations. This marks the first time since the Depression that companies are cutting wages for employees they badly need to keep.

That’s the difference between this downturn and other recessions. For in most recessions all excess workers get cut, and then when the recovery starts in earnest workers are rehired for expansion. When the recovery takes place this time around, it is highly doubtful that those whose incomes got cut will find them fully restored. This also means that those hired back will not get paid what they used to.

Wage destruction to repay loans is likely the biggest threat that remains for our future. Because if you can’t backstop the wage slide, you can’t stop the slowdown. Fewer workers, making less money, means a much smaller economy.

And where did we learn this lesson? From Detroit.

With a Little Government Help

For the past eight years if Detroit hadn’t constantly driven their vehicles’ prices down with cheap interest or super-sized incentives, they would not have sold much of anything. That should have been our first clue that the real economy was in bad shape. But because of the downward price pressures on automobiles, manufacturers had to slash their cost of labor. That’s meant waves of termination notices, followed by wage cuts for remaining workers.

The businesses that catered to the terminated workers/consumers must follow the same path: The cycle continues in an ever-downward spiral, and nothing gets better.

America needs to become a world class manufacturing nation again. Innovative, value-laden products lusted after by the rest of the world: Think Boeing, IBM. Because when we were a manufacturing giant, our products shipped around the world and capital flowed to America to purchase them; we used those large currency reserves to lend to other nations, and so on. That’s how we were once the world’s sole financial superpower and a creditor nation.

Today we have been taught it’s brilliantly smart to send our manufacturing overseas — so our capital flows out instead of in, and we have to borrow massive amounts to sustain our lifestyle. That’s why we are now a debtor nation: America has doubled our deficit in the past eight years, while China is now sitting on $2 trillion in currency reserves.

China doesn’t think manufacturing is an “old line” industry.

Remember who talked America out of our manufacturing superiority and our status as the world’s greatest creditor nation? The same Wall Street geniuses that claimed the best future is in service jobs and financial innovation — the same guys that just lost the world $45 trillion in wealth but kept their seven-figure bonuses.

They didn’t do it alone. The dysfunctional needs enabling partners to convince the public that this was the best way to go, and they found those enablers in our financial media … and Washington.

*Thanks to R. Preston McAfee of the California Institute of Technology for his easy-to-understand description of a sociopath.

Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Society. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, contributes articles to BusinessWeek Online and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF.

E-mail: wheels570@sbcglobal.net and read all of Ed’s work at www.insideautomotive.com.

http://tinyurl.com/ca4lqt (www.star-telegram.com)

==========

Wasting Away in Hooverville

Jonathan Chait, The New Republic
Wednesday, March 18, 2009

The Forgotten Man: A New History of the Great Depression
By Amity Shlaes
(HarperCollins, 464 pp.)

Herbert Hoover
By William E. Leuchtenburg
(Times Books, 208 pp.)

Nothing to Fear: FDR’s Inner Circle and the Hundred Days that Created Modern America
By Adam Cohen
(Penguin Press, 372 pp.)

A generation ago, the total dismissal of the New Deal remained a marginal sentiment in American politics. Ronald Reagan boasted of having voted for Franklin Roosevelt. Neoconservatives long maintained that American liberalism had gone wrong only in the 1960s. Now, decades after Democrats grew tired of accusing Republicans of emulating Herbert Hoover, Republicans have begun sounding … well, exactly like Herbert Hoover. When President Obama recently met with House Republicans, the eighty-two-year-old Roscoe G. Bartlett told him that “I was there” during the New Deal, and, according to one account, “assert[ed] that government intervention did not work then, either.” George F. Will, speaking on the Sunday talk show “This Week,” declared not long ago, “Before we go into a new New Deal, can we just acknowledge that the first New Deal didn’t work?”

When Republicans announce that the New Deal failed–as they now do, over and over again, without any reproach from their own side–they usually say that the case has been proven by the conservative columnist Amity Shlaes in her book The Forgotten Man. Though Shlaes’s revisionist history of the New Deal came out a year and a half ago, to wild acclaim on the right, its popularity seems to be peaking now. Fred Barnes of The Weekly Standard recently called Shlaes one of the Republican party’s major assets. “Amity Shlaes’s book on the failure of the New Deal to revive the economy, The Forgotten Man, was widely read by Republicans in Washington,” he reported. “So were her compelling articles on that subject in mainstream newspapers.”

This is no exaggeration. The Forgotten Man has been publicly touted by such Republican luminaries as Newt Gingrich, Rudolph Giuliani, Mark Sanford, Jon Kyl, and Mike Pence. Senator John Barrasso was so eager to tout The Forgotten Man that last month he waved around a copy and announced, “in these economic times, a number of members of the Senate are reading a book called The Forgotten Man, about the history of the Great Depression, as we compare and look for solutions, as we look at a stimulus package.” Barrasso offered this unsolicited testimonial, apropos of nothing whatsoever, during the confirmation hearing for Energy Secretary Steven Chu. Chu politely ignored the rave, thus giving no sign as to whether he had heard the Good News. Whether or not The Forgotten Man actually persuaded conservatives that the New Deal failed, in the time of their political exile, which is also a time of grave economic crisis, it has become the scripture to which they have flocked.

When they say that the New Deal “didn’t work,” conservatives almost always mean New Deal fiscal stimulus. (Other policies, such as Social Security or clearing the way for unions, clearly succeeded on their own terms, whatever their ideological merits.) And then, in turn, they confuse New Deal fiscal stimulus with Keynesian economics, which is also not exactly the same thing. So let me step back and briefly explain for the uninitiated what Keynesian economics means. We may not all be Keynesians now, but we would all benefit from knowing what a Keynesian actually is.

Prior to Keynes, the economy was held to be self-correcting. The only cure for a recession was to let wages and prices fall to their natural level. The prevailing attitude, as Paul Krugman writes in his recently re-issued book The Return of Depression Economics, was “a sort of moralistic fatalism.” Keynes upended the orthodoxy in a way that was every bit as dramatic as Galileo challenging geocentrism. He insisted that recessions are not a natural process, or the invisible hand’s righteous judgment against our sins, but a simple failure of consumer demand.

When people worry about losing their jobs, they sensibly cut back on their spending. But that decision, in turn, reduces demand for goods and services, which results in reduced income or lost jobs for other workers. Keynes called this phenomenon “the paradox of thrift”: what makes sense for individuals turns into a disaster for society as a whole. The recession was therefore a failure of collective action that required government action. Government needed to encourage spending by reducing interest rates or, failing that, to inject spending into the economy directly by deliberately running temporary budget deficits.

At the time, orthodox economists deemed this diagnosis heretical and dangerous, but, in the decades that followed, it became a consensus view. Today economists disagree sharply about how to apply Keynes’s insights, with many conservative economists questioning the practicality of large-scale government spending to combat recessions; but the essential framework constructed by Keynes–that recessions are caused by a failure of demand, and that at the very least government should not respond to an economic slowdown by paring back its largesse–is no longer in dispute. Even a right-wing Republican economist such as Gregory Mankiw, a former Bush advisor, writes that “if you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes.”

But everywhere you look, conservative pundits and elected officials have embraced the pre-Keynesian nostrums. Citing The Forgotten Man, they insist that efforts to stimulate the economy are not just insufficient but also counter-productive. Pence has insisted that The Forgotten Man proves “that it was the spending and taxing policies of 1932 and 1936 that exacerbated the situation.” Sanford, for his part, offered this fiscal diagnosis: “When times go south you cut spending. That’s what families do, that’s what businesses do, and I don’t think the government should be exempt from that process.” That is, of course, a perfect description of the paradox of thrift, only put forward as the solution rather than the problem. Governor Tim Pawlenty of Minnesota insisted that “we can’t solve a crisis caused by the reckless issuance of debt by then recklessly issuing even more debt,” and called for a balanced-budget amendment to the Constitution, which would of course massively exacerbate the present crisis. It is 1932 again in the Republican Party.

Now here is the extremely strange thing about The Forgotten Man: it does not really argue that the New Deal failed. In fact, Shlaes does not make any actual argument at all, though she does venture some bold claims, which she both fails to substantiate and contradicts elsewhere. Reviewing her book in The New York Times, David Leonhardt noted that Shlaes makes her arguments “mostly by implication.” This is putting it kindly. Shlaes introduces the book by asserting her thesis, but she barely even tries to demonstrate it. Instead she chooses to fill nearly four hundred pages with stories that mostly go nowhere. The experience of reading The Forgotten Man is more like talking to an old person who lived through the Depression than it is like reading an actual history of the Depression. Major events get cursory treatment while minor characters, such as an idiosyncratic black preacher or the founder of Alcoholics Anonymous, receive lengthy portraits. Having been prepared for a revisionist argument against the New Deal, I kept wondering if I had picked up the wrong book.

Many of Shlaes’s stories do have an ideological point, but the point is usually made in a novelistic way rather than a scholarly one. She tends to depict the New Dealers as vain, confused, or otherwise unsympathetic. She depicts business owners as heroic and noble. It is a kind of revival of the old de haut en bas sort of social history, except this time the tycoons from whose perspective the events are narrated appear as the underappreciated victims, the giants at the bottom of the heap.

Mostly Shlaes employs wild anecdotal selectivity. At one point she calls the pro-labor Wagner Act “coercive,” and elsewhere she alludes to the subtle anti-Semitism of a newspaper column criticizing opponents of the National Recovery Administration. Shlaes ignores the vastly greater use of violent coercion on behalf of employers, or the immensely more common use of anti-Semitic tropes against the New Deal. Does Shlaes think that workers were more coercive than capitalists, or that liberals were more anti-Semitic than conservatives? The book does not say, but clearly she wants her readers to come away with this impression.

Shlaes begins every chapter with a date (say, December 1936), an unemployment percentage (15.3) and a Dow Jones Industrial Average. The tick-tick-tick of statistics is meant to show that conditions did not improve throughout the course of Roosevelt’s presidency. Yet her statistics are highly selective. As those of us who get our economic information from sources other than the CNBC ticker know, the stock market is not a broad representative of living standards. Meanwhile, as the historian Eric Rauchway has pointed out, her unemployment figures exclude those employed by the Works Progress Administration and other workrelief agencies. Shlaes has explained in an op-ed piece that she did this because “to count a short-term, make-work project as a real job was to mask the anxiety of one who really didn’t have regular work with long-term prospects.” So, if you worked twelve hours per day in a coal mine hoping not to contract black lung or suffer an injury that would render you useless, you were employed. But if you constructed the Lincoln Tunnel, you had an anxiety-inducing make-work job.

In response to this criticism, Shlaes has retreated to the defense that unemployment was still high anyway. “Even if you add in all the work relief jobs, as some economists do,” she has contended, “Roosevelt-era unemployment averages well above 10 percent. That’s a level Obama has referred to once or twice–as a nightmare.” But Roosevelt inherited unemployment that was over 20 percent! Sure, the level to which it fell was high by absolute standards, but it is certainly pertinent that he cut that level by more than half. By Shlaes’s method of reckoning, Thomas Jefferson rates poorly on the scale of territorial acquisition, because on his watch the United States had less than half the square mileage it has today.

…

Complete article at:

http://tinyurl.com/cuh7zu (www.tnr.com)

Jonathan Chait is a senior editor at The New Republic.

==========

THE BIG TAKEOVER: HOW WALL STREET INSIDERS ARE USING THE BAILOUT TO STAGE A REVOLUTION

By Matt Taibbi, RollingStone.com

The global economic crisis isn’t about money — it’s about power.

http://tinyurl.com/crx7wo (www.alternet.org)

==========

The Dogfight over Economic Stimulus

Why economists can’t decide whether massive spending will be helpful or drive America further down

Business Week

http://tinyurl.com/copvkm (www.businessweek.com)

By Peter Coy

March 23, 2009

Is the economy in a dangerous downward spiral, or is this a painful but ultimately healthy adjustment leading to a sustainable growth path?…

The dispute over spiral vs. stability goes back 75 years to the Great Depression and British economist John Maynard Keynes….

Keynesian views held sway well into the 1960s. But academia’s fear of economic instability began to ebb in the 1970s as a new wave of economists argued that consumers and businesses are rational and farseeing, and not likely to be stampeded into recession. What’s more, the argument went, government can’t spend its way out of a recession because consumers realize that extra government spending now will necessitate higher taxes in the future. They’ll save more to prepare for that day, offsetting the stimulus.

The current crisis has revived the debate, in intense form. Economists who advocate active government intervention to break a downward spiral have become much louder. GEORGE A. AKERLOF OF THE UNIVERSITY OF CALIFORNIA AT BERKELEY (Nobel 2001) and Irrational Exuberance author Robert J. Shiller of Yale University call for “truly aggressive measures” to deal with the current crisis in Animal Spirits, their new book reviewed in this issue….

==========

THE SECRET WAR AGAINST AMERICAN WORKERS

By Robert S. Eshelman, Tomdispatch.com

Bosses are using minor transgressions of work-place rules as the trigger for firings — putting the fear of god into those who remain.

http://tinyurl.com/cb9xjj (www.alternet.org)

==========

Mass Layoffs Up Again

The Bureau of Labor Statistics has released the latest figures for mass layoffs — meaning at least 50 people from a single company opening unemployment claims in a five-week period. Last month, there were 2,796 mass layoffs up 542 from…

Read full post »

http://tinyurl.com/cvghga (www.npr.org)

==========

How False News Spreads

Posted: 20 Mar 2009

An excerpt from Marc Bloch’s classic 1921 paper in Revue de synthèse historique on how false news propagates during wartime:

A false news item is always born from collective representations that predate its birth; it only seems fortuitous, or (more precisely) the only fortuitous thing in it is the initial incident, which can be absolutely any old thing that starts imaginations going — but this setting in motion only works because imaginations are already prepared and secretly percolating. An event, a misperception that did not tend in the direction all minds were already leaning could at most form the origin of an individual error, but not a popular, widespread bit of false news. If I may make my own use of a term to which sociologists give a definition too metaphysical for me, but which is convenient and after all rich in meaning, the false news is the mirror where “the collective conscience” contemplates its own features.

Wonderfully well put, and something that could hardly be more apropos in our current truthy times.

More here.

http://tinyurl.com/ctdspr (edgeofthewest.wordpress.com)

From: The Latest from Paul Kedrosky’s Infectious Greed http://paul.kedrosky.com/

Wash. Post still reporting GOP attacks over bonuses while ignoring IG testimony implicating Bush administration

A Washington Post article reported that “Republicans have seized on the AIG issue in the belief that it has the potential to link Obama more closely to the widely unpopular $700 billion bailout legislation for the financial sector — legislation that was crafted in the Bush administration.” But the article did not note that a Bush-appointed special inspector general for TARP stated in congressional testimony that the Bush administration Treasury Department knew about the AIG bonus contracts and did not insist on their abrogation as a condition of AIG’s receiving bailout money.

Read More

http://mediamatters.org/items/200903220005?lid=952977&rid=24517682

==========

Satire: Yankees Ask Congress To Tax A-Rod’s Bonus

By R J Shulman

22 Mar 2009

Taking a cue from the recent tax imposed by Congress on AIG executive bonuses, the New York Yankees are asking Washington to impose a 90 percent tax on the bonus the Yankees paid its star third baseman, Alex Rodriguez. “It’s not fair to America’s pastime to reward such a large bonus when his numbers just haven’t come up to expectations,” said Yankees general manager Brian Cashman. New York Democratic Senator Chuck Schumer, an early supporter of the A-Rod tax, told Congress that “it must come to the aid of the New York Yankees because they are too big to fail.” (Satire)

At:

http://tinyurl.com/c3hxt9 (www.legitgov.org)

From: CLG News

==========

Borowitz Report – Breaking News

March 23, 2009

Madoff to Help U.S. Sell Bad Assets
Legendary Swindler Pressed into Service

The Obama administration, hoping to find investors to buy $1 trillion worth of so-called “toxic” assets from U.S. financial institutions, has turned to confessed swindler Bernie Madoff to mastermind the sales campaign.

While White House officials acknowledged that joining forces with the jail-bound scam artist was likely to raise some eyebrows, privately they are hoping that when it comes to selling bad assets to investors, the “Madoff magic” will carry the day.

“Desperate times call for desperate measures,” White House chief of staff Rahm Emanuel said on CNN last night. “If anyone can convince investors to buy a worthless piece of paper, it’s Bernie Madoff.”

Under the unusual arrangement, Mr. Madoff will be temporarily sprung from his prison cell and permitted to have meetings with prospective investors to sell them on American financial institutions’ $1 trillion worth of bad assets, accompanied by a phalanx of armed guards.

“The guards wanted to bring dogs along to chase Madoff if he tries to make a run for it, but we felt that would undercut his credibility with investors,” Mr. Emanuel said.

The chief of staff added that having Mr. Madoff spearhead the sale of toxic assets would free up Mr. Obama for more pressing matters, “like appearing on Jimmy Kimmel Live.”

In other economic news, Treasury Secretary Timothy Geithner said he would raise much-needed capital for the U.S. Treasury by accepting billboard advertising on his forehead.

Upcoming Events

April 16, 2009 at 8:00PM

Andy at Hamilton College
For one night only, Andy performs in upstate NY, free and open to the public! At the Fillius Events Barn, Hamilton College, 198 College Hill Road

Location:
Hamilton College, Clinton, NY 13323
For tickets go to Hamilton College

April 30, 2009 at 8:00PM

Andy’s Only NY Show!
Andy reviews Obama’s first 100 days with special guests Hendrik Hertzberg (The New Yorker), Jonathan Alter (Newsweek, MSNBC) and comedian Judy Gold

Location:
The 92nd Street Y, Lexington and 92nd Street
For tickets go to 92y.org

http://www.borowitzreport.com/

==========

three thousand words

(click here to view)

Mikhaela Reid Metro Times (Detroit) Mar 23, 2009 EditorialCartoonists.com

Matt Davies: The Populist

http://tinyurl.com/cj9q4x (davies.lohudblogs.com)

xkcd: honest dishonest

http://xkcd.com/558/

Congress Strikes Out

Volume XIV No. 12 – March 20, 2009

The recent contortions Congress and the Administration are going through over lucrative bonuses to executives at American International Group (AIG) are a predictable result of the failure of Congress and the Department of Treasury to be clear about what taxpayers deserve in return for their investments. And unless lawmakers and the Administration step up to the plate it won’t be the last of the outrages.

If there is any recipient of bailout funds with whom Treasury should have laid down clear, unambiguous standards, it’s AIG. After a $182.5 billion investment taxpayers own roughly eighty percent of the company. Further, AIG just reported a $61 billion loss for its most recent financial quarter.

For the last week we have heard a litany about how the $165 million in bonus payouts were contractually obligated. But contracts can be renegotiated, revised and rewritten, particularly when there is a major change in circumstances. Say … for example … the federal government provides a significant cash injection into a company. Hmm, sounds kinda like AIG. But Treasury did not suggest AIG alter bonus contracts as a condition of their receiving a massive public investment. Strike one.

Not only did Treasury fail to demand the renegotiation of these contracts, but Congress may have added an extra hurdle to making changes. A last-minute addition to the stimulus bill purported to limit future bonus payments but may have actually added legal protection to those already paid. Strike two.

Now there are efforts to create a special tax scheme to claw back some of the bonus payments. Politically seductive as that may be, micro-targeting the tax code to punish specific contracts is the wrong way to make tax policy. Strike three.

Congress and the Administration screwed up and they need to take their lumps and learn from their mistakes. The “Good Cop” routine has failed.

Instead of pleading with executives to do what is in the national interest, those executives need to be given a dose of tough medicine. If you want our money, you’ll have to become a good citizen. Otherwise, you are not going have a job. Every step of the way, Congress and the administration have given the financial industries flexibility to respond to this crisis. The failure to set clear, tough standards has left us with little ability to hold banks accountable.

As Bob Dylan sings, “steal a little and they throw you in jail, steal a lot and they make you king.” The kings of AIG and other Wall Street titans are working hard to abscond with as much taxpayer money as possible, while refusing to take any responsibility for the financial mess that is bringing the U.S. and world economy to its knees. AIG is the most glaring and stupefying example of questionable spending. But hundreds of other financial institutions and a couple of major car companies have also received billions from taxpayers. The outrage of AIG bonuses – small potatoes in dollar terms – should reinvigorate Congress and the Administration to do their constitutionally appointed duties and hold recipients of taxpayer dollars accountable.
Let us know what you think.

Going on at Taxpayer.net This Week

F-22: No More Second Helpings

UPDATE — $7.7 Billion In Earmarks In 2009 Omnibus Spending Bill (updated 3/13/09)

Senior Policy Analyst Laura Peterson on the F-22 and National Security (video)

Bailout Bank Bios

TCS Staff are compiling profiles of all financial institutions receiving funds under the 2008 Emergency Economic Stabilization Act. See all completed bios here.

TCS in the News

TCS was cited in dozens of stories this past week Check them all out in the Headlines About TCS section of our redesigned website.

Notable Quote

“Just as with the extravagant bonus pay at AIG, it’s important to make sure that taxpayer support isn’t enabling unreasonable compensation arrangements that would never have been possible without taxpayer assistance.”

–Sen. Chuck Grassley (R-IA) speaking about the retention bonus programs at Fannie Mae and Freddie Mac.

weekly wastebasket at www.taxpayer.net

==========

Books: Irrational Exuberance Writ Large

George Akerlof and Robert Shiller on how psychological factors led to the bust and may impede a turnaround

Business Week

http://tinyurl.com/dxw2f8 (www.businessweek.com)

By Michael Mandel

March 23, 2009

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
By George A. Akerlof and Robert J. Shiller
Princeton; 230 pp.; $24.95

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism is a book with a blue ribbon pedigree. It was written by two of the top economists in the world, GEORGE A. AKERLOF OF THE UNIVERSITY OF CALIFORNIA AT BERKELEY and Robert J. Shiller of Yale University. Akerlof won the Nobel prize in Economics in 2001; Shiller is famous for his research into stock and housing prices as well as for having predicted both the tech bust and the housing crisis.

The two superstars have produced a truly innovative and bold work that attempts to show how psychological factors explain the origins of the current mess and offer clues for possible solutions. At a time when plummeting confidence is dragging down the market and the economy, the authors’ focus on the psychological aspect of economics is incredibly important…..

Their main thesis is simple. Akerlof and Shiller argue that conventional macroeconomics is wedded to the idea that people and businesses are rational actors. But this model falters during booms and busts. Instead, the authors say, the only way to understand today’s crisis is to focus on noneconomic motivations and irrational behavior, or what they call “animal spirits.”….

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism ~ George A. Akerlof

==========

OCC News Release: Senior Supervisors Group Issues Report on Management of Recent Credit Default Swap Credit Events

Monday, March 9, 2009

Senior Supervisors Group Issues Report on Management of Recent Credit Default Swap Credit Events

WASHINGTON — Senior financial supervisors from seven countries (collectively, the “Senior Supervisors Group”) today issued a report that assesses how firms manage their credit default swap activities related to the settlement of credit derivatives transactions terminated by the occurrence of a credit event.

http://www.occ.gov/ftp/release/2009-19a.pdf

This report – Observations on Management of Recent Credit Default Swap Credit Events – summarizes a review that the Senior Supervisors Group initiated in December 2008. The observations in the report are based on discussions with senior members of selected institutions, comprising major dealers, buy-side firms, service providers, and an industry association.

Surveyed participants reported that recent credit events were managed in an orderly manner, with high participation rates and no major operational disruptions or liquidity problems.

This review was conducted to support the priorities established by the Financial Stability Forum, including enhancing the infrastructure for over-the-counter derivatives markets and encouraging market participants to act promptly to ensure that the settlement, legal, and operational infrastructure underlying these markets is sound.

The key observations are summarized in the report that is attached below.

Related Link:

Observations on Management of Recent Credit Default Swap Credit Events
(http://www.occ.gov/ftp/release/2009-19a.pdf)

==========

FRB Richmond – National Economic Indicators: Updated 03/09/2009

Tuesday, March 10, 2009

National Economic Indicators

The latest data on the national economy, updated twice a month by the Richmond Fed.

http://tinyurl.com/cta9j5 (www.richmondfed.org)

==========

Investigative Reporting Workshop’s BankTracker

“The unprecedented bet that many banks made on mortgages, real estate development and other real estate related lending during the middle part of this decade has produced a payoff no one imagined just a few years ago — a huge increase in loan defaults, a soaring number of foreclosures and a plunge in bank profits. And now, a new analysis of bank financial statements by the Investigative Reporting Workshop [American University School of Communication],

http://banktracker.investigativereportingworkshop.org/

sheds new light on just how dangerous conditions have become in many banks across the nation. We also created a search tool that permits you to check the financial health of any bank in the nation. And we have provided detailed information about the banks that have received bailout money from the federal government. This project was done in cooperation with msnbc.com. See the full story.” [thanks Peggy Garvin]

http://www.msnbc.msn.com/id/29616181/

Search for a Bank

http://banktracker.investigativereportingworkshop.org/banks/

Search TARP Recipients or find TARP recipients by state

http://banktracker.investigativereportingworkshop.org/tarp/

==========

Counterterrorism Funding: Old Fears and Cyclical Lulls

March 18, 2009
By Fred Burton and Scott Stewart

Two years ago, we wrote an article discussing the historical pattern of the boom and bust in counterterrorism spending. In that article we discussed the phenomenon whereby a successful terrorist attack creates a profound shock that is quite often followed by an extended lull. We noted how this dynamic tends to create a pendulum effect in public perception and how public opinion is ultimately translated into public policy that produces security and counterterrorism funding.

In other words, the shock of a successful terrorist attack creates a crisis environment in which the public demands action from the government and Washington responds by earmarking vast amounts of funds to address the problem. Then the lull sets in, and some of the programs created during the crisis are scrapped entirely or are killed by a series of budget cuts as the public’s perception of the threat changes and its demands for government action focus elsewhere. The lull eventually is shattered by another attack — and another infusion of money goes to address the now-neglected problem.

On March 13, The Washington Post carried a story entitled “Hardened U.S. Embassies Symbolic of Old Fears, Critics Say.” The story discussed the new generation of U.S. Embassy buildings, which are often referred to as “Inman buildings” by State Department insiders. This name refers to buildings constructed in accordance with the physical security standards set by the Secretary of State’s Advisory Panel on Overseas Security, a panel chaired by former Deputy CIA Director Adm. Bobby Inman following the 1983 attacks against the U.S. embassies in Beirut and Kuwait City. The 1985 Inman report, which established these security requirements and contributed to one of the historical security spending booms, was also responsible for beefing up the State Department’s Office of Security and transforming it into the Diplomatic Security Service (DSS).

It has been 11 years since a U.S. Embassy has been reduced to a smoking hole in the ground, and the public’s perception of the threat appears to be changing once again. In The Washington Post article, Stephen Schlesinger, an adjunct fellow at the Century Foundation, faults the new Inman building that serves as the U.S. Mission to the United Nations in New York for being unattractive and uninviting. Schlesinger is quoted as saying: “Rather than being an approachable, beckoning embassy — emphasizing America’s desire to open up to the rest of the globe and convey our historically optimistic and progressive values — it sits across from the U.N. headquarters like a dark, forbidding fortress, saying, ‘Go away.’” When opinion leaders begin to express such sentiments in The Washington Post, it is an indication that we are now in the lull period of the counterterrorism cycle.

Tensions Over Security

There has always been a tension between security and diplomacy in the U.S. State Department. There are some diplomats who consider security to be antithetical to diplomacy and, like Mr. Schlesinger, believe that U.S. diplomatic facilities need to be open and accessible rather than secure. These foreign service officers (FSOs) also believe that regional security officers are too risk averse and that they place too many restrictions on diplomats to allow them to practice effective diplomacy. (Regional security officer — RSO — is the title given to a DSS special agent in charge of security at an embassy.) To quote one FSO, DSS special agents are “cop-like morons.” People who carry guns instead of demarches and who go out and arrest people for passport and visa fraud are simply not considered “diplomatic.” There is also the thorny issue that in their counterintelligence role, DSS agents are often forced to confront FSOs over personal behavio r (such as sexual proclivities or even crimes) that could be considered grounds for blackmail by a hostile intelligence service.

On the other side of the coin, DSS agents feel the animosity emanating from those in the foreign service establishment who are hostile to security and who oppose the DSS efforts to improve security at diplomatic missions overseas. DSS agents refer to these FSOs as “black dragons” — a phrase commonly uttered in conjunction with a curse. DSS agents see themselves as the ones left holding the bag when an FSO disregards security guidelines, does something reckless, and is robbed, raped or murdered. It is most often the RSO and his staff who are responsible for going out and picking up the pieces when something turns bad. It is also the RSO who is called before a U.S. government accountability review board when an embassy is attacked and destroyed. In the eyes of a DSS special agent, then, a strong, well-protected building conveys a far better representation of American values and strength than does a smoldering hole in the ground, where an “accessible&# 8221; embassy once stood. In the mind of a DSS agent, dead diplomats can conduct no diplomacy.

This internal tension has also played a role in the funding boom and bust for diplomatic security overseas. Indeed, DSS agents are convinced that the black dragons consistently attempt to cut security budgets during the lull periods. When career foreign service officers like Sheldon Krys and Anthony Quainton were appointed to serve as assistant secretaries for diplomatic security — and presided over large cuts in budgets and manpower — many DSS agents were convinced that Krys and Quainton had been placed in that position specifically to sabotage the agency.

DSS agents were suspicious of Quainton, in particular, because of his history. In February 1992, while Quainton was serving as the U.S. ambassador to Peru, the ambassador’s residence in Lima was attacked by Shining Path guerrillas who detonated a large vehicular-borne improvised explosive device in the street next to it. A team sent by the DSS counterterrorism investigations division to investigate the attack concluded in its report that Quainton’s refusal to follow the RSO’s recommendation to alter his schedule was partially responsible for the attack. The report angered Quainton, who became the assistant secretary for diplomatic security seven months later. Shortly after assuming his post, Quainton proclaimed to his staff that “terrorism is dead” and ordered the abolishment of the DSS counterterrorism investigations division.

Using a little bureaucratic sleight of hand, then-DSS Director Clark Dittmer renamed the office the Protective Intelligence Investigations Division (PII) and allowed it to maintain its staff and function. Although Quainton had declared terrorism dead, special agents assigned to the PII office would be involved in the investigation of the first known al Qaeda attacks against U.S. interests in Aden and Sanaa,Yemen, in December 1992. They also played a significant role in the investigation of the World Trade Center bombing in February 1993, the investigation of the 1993 New York Landmarks Plot and many subsequent terrorism cases.

Boom-and-Bust Funding

One of the problems problem created by the feast-or-famine cycle of security funding is that during the boom times, when there is a sudden (and often huge) influx of cash, agencies sometimes have difficulty spending all the money allotted to them in a logical and productive manner. Congress, acting on strong public opinion, often will give an agency even more than it initially requested for a particular program — and then expect an immediate solution to the problem. Rather than risk losing these funds, the agencies scramble to find ways to spend them. Then, quite often, by the time the agency is able to get its act together and develop a system effectively to use the funds, the lull has set in and funding is cut. These cuts frequently are accompanied by criticism of how the agency spent the initial glut of funding.

Whether or not it was a conscious effort on the part of people like Quainton, funding for diplomatic security programs was greatly reduced during the lull period of the 1990s. In addition to a reduction in the funding provided to build new embassies or bring existing buildings up to Inman standards, RSOs were forced to make repeated cuts in budgets for items such as local guard forces, residential security and the maintenance of security equipment such as closed-circuit TV cameras and vehicular barriers.

These budget cuts were identified as a contributing factor in the 1998 bombings of the U.S. Embassies in Nairobi and Dar es Salaam. The final report of the Crowe Commission, which was established to investigate the attacks, notes that its accountability review board members “were especially disturbed by the collective failure of the U.S. government over the past decade to provide adequate resources to reduce the vulnerability of U.S. diplomatic missions to terrorist attacks in most countries around the world.”

The U.S. Embassy in Nairobi was known to be vulnerable. Following the August 1997 raid on the Nairobi residence of Wadih el-Hage, U.S. officials learned that el-Hage and his confederates had conducted extensive pre-operational surveillance against the U.S. Embassy in Nairobi, indicating that they planned to attack the facility. The U.S. ambassador in Nairobi, citing the embassy’s vulnerability to car bomb attacks, asked the state department in December 1997 to authorize a relocation of the embassy to a safer place. In its January 1998 denial of the request, the state department said that, in spite of the threat and vulnerability, the post’s “medium” terrorism threat level did not warrant the expenditure.

Old Fears

The 1998 East Africa embassy bombings highlighted the consequences of the security budget cuts that came during the lull years. Clearly, terrorism was not dead then, nor is it dead today, in spite of the implications in the March 13 Washington Post article. Indeed, the current threat of attacks directed against U.S. diplomatic facilities is very real. Since January 2008, we have seen attacks against U.S. diplomatic facilities in Sanaa, Yemen; Istanbul, Turkey; Kabul, Afghanistan; Belgrade, Serbia; and Monterrey, Mexico (as well as attacks against Ameri can diplomats in Pakistan, Sudan and Lebanon). Since 2001, there have also been serious attacks against U.S. diplomatic facilities in Jeddah, Saudi Arabia; Karachi, Pakistan; Damascus, Syria; Athens, Greece; and Baghdad, Iraq.

Even if one believes, as we do, that al Qaeda’s abilities have been severely degraded since 9/11, it must be recognized that the group and its regional franchises still retain the ability to conduct tactical strikes. In fact, due to the increased level of security at U.S. diplomatic missions, most of the attacks conducted by jihadists have been directed against softer targets such as hotels or the embassies of other foreign countries. Indeed, attacks that were intended to be substantial strikes against U.S. diplomatic facilities in places like Sanaa, Jeddah and Istanbul have been thwarted by the security measures in place at those facilities. Even in Damascus, where the embassy was an older facility that did not meet Inman standards, adequate security measures (aided by poor planning and execution on the part of the attackers) helpe d thwart a potentially disastrous attack.

However, in spite of the phrase “war on terrorism,” terrorism is a tactic and not an entity. One cannot kill or destroy a tactic. Historically, terrorism has been used by a wide array of actors ranging from neo-Nazis to anarchists and from Maoists to jihadists. Even when the Cold War ended and many of the state-sponsored terrorist groups lost their funding, the tactic of terrorism endured. Even if the core al Qaeda leaders were killed or captured tomorrow and the jihadist threat were neutralized next week, terrorism would not go away. As we have previously pointed out, ideologies are far harder to kill than individuals. There will always be actors with various ideologies who will embrace terrorism as a tactic to strike a stronger enemy, and as the sole global superpower, the U.S. and its diplomatic missions will be target ed for terrorist attacks for the foreseeable future — or at least the next 100 years.

During this time, the booms and busts of counterterrorism and security spending will continue in response to successful attacks and in the lulls between spectacular terrorist strikes like 9/11. During the lulls in this cycle, it will be easy for complacency to slip in — especially when there are competing financial needs. But terrorism is not going to go away any time soon, and when emotion is removed from the cycle, a logical and compelling argument emerges for consistently supplying enough money to protect U.S. embassies and other essential facilities.

This report may be forwarded or republished on your website with attribution to www.stratfor.com

Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com .

==========

The New American Militarism: How Americans Are Seduced by War (Paperback)

by Andrew J. Bacevich (Author)

preface

Today, I still situate myself culturally on the right. And I continue to view the remedies proffered by mainstream liberalism with skepticism. But my disenchantment with what passes for mainstream conservatism, embodied in the present Bush administration and its groupies, is just about absolute. Fiscal irresponsibility, a buccaneering foreign policy, a disregard for the Constitution, the barest lip service as a response to profound moral controversies: these do not qualify as authentically conservative values.

On this score my views have come to coincide with the critique long offered by the radical left: it is the mainstream itself, the professional liberals as well as the professional conservatives, who define the problem. Two parties monopolize and, as if by prior agreement, trivialize national politics. Each panders to the worst instincts of its core constituents. Each is seemingly obsessed with power for its own sake. The historian Walter Karp’s acerbic assessment of early twentieth-century politics strikes me as equally applicable to the early twenty-first century: “Behind the hoopla of partisanship, the leaders of the two parties worked together in collusive harmony.” The Republican and Democratic parties may not be identical, but they produce nearly identical results. Money buys access and influence, the rich and famous get served, and those lacking wealth or celebrity status get screwed–truths not at all unrelated to the rise of militarism in America.

I have no doubt that the world of politics is not without men and women of honor. But the system itself is fundamentally corrupt and functions in ways inconsistent with the spirit of genuine democracy. This anyone with eyes to see recognizes.

…

New York: Oxford University Press, 2005.

The New American Militarism: How Americans Are Seduced by War ~ Andrew J. Bacevich

==========

US Army Field Manual FM 3-36 ELECTRONIC WARFARE IN OPERATIONS

February 2009 …

FM 3-36 provides Army doctrine for electronic warfare (EW) planning, preparation, execution, and assessment in support of full spectrum operations.

http://www.fas.org/irp/doddir/army/fm3-36.pdf

==========

And now for the important news ….

By Argus Hamilton

Advertising Age said Tuesday that the NCAA tournament will draw a half billion dollars in advertising. It’s money well spent. Polls say basketball is the world’s second-favorite indoor sport, but the other one’s got more spectators on the Internet.

http://www.JewishWorldReview.com

==========

three thousand words

(click here to view)

Mike Keefe Denver Post Mar 22, 2009 EditorialCartoonists.com

Tom Toles: trap door

http://tinyurl.com/cxdqsn (images.theweek.com)

Matt Davies: Perception is Everything

http://tinyurl.com/cq3qzh (davies.lohudblogs.com)

“Catch-22″ by Joseph Heller –

” ‘Haven’t you got anything humorous that stays away from waters and valleys and God? I’d like to keep away from the subject of religion altogether if we can.’ The chaplain was apologetic. ‘I’m sorry, sir, but I’m afraid all the prayers I know are rather somber in tone and make at least some passing reference to God.’ ‘Then let’s get some new ones.’ ”

==========

THIS WEEK IN GOD: LOSING RELIGION, CATHOLIC MISTAKES, AND THE BAHA’I FAITH

By Steve Benen, Washington Monthly

A look at what went down in religious circles this week.

http://tinyurl.com/bktxfv (www.alternet.org)

==========

Antievolution bill dead in Iowa

March 16th, 2009

House File 183, the so-called Evolution Academic Freedom Act, died in committee in the Iowa House of Representatives on March 13, 2009.

http://tinyurl.com/ccggee (ncseweb.org)

Evolution: What the Fossils Say and Why It Matters by Donald R. Prothero

==========

AMERICA, ONE NATION UNDER NO GOD?

By Michelle Goldberg, The Guardian

Mobilized by the theocratic bombast of Bush-era Republicans, America’s growing number of atheists are pushing for greater recognition.

http://tinyurl.com/cuhc7c (www.alternet.org)

==========

THE COMING EVANGELICAL COLLAPSE

By Michael Spencer, Christian Science Monitor

A “postevangelical” predicts the coming of an anti-Christian era that will fundamentally alter the religious and cultural environment.

http://tinyurl.com/d6hlr6 (www.alternet.org)

==========

FINAL vote on TX science standards soon Take action NOW!

Wednesday, March 18, 2009

Texas Alert

forward this message

http://tinyurl.com/cqu59k (www.au.org)

Final vote on TX science standards soon – Take action NOW!

You’ve been with us through every step of the process to ensure that all public school students in Texas receive a sound, scientifically accurate education in their schools. The battle over science in Texas will soon come to an end – the State Board of Education (SBOE) is set to give final approval to the Science Texas Essential Knowledge and Skills (TEKS) curriculum standards next week.

In anticipation of the vote, SBOE members have been barraged by e-mails and phone calls by creationists who wish to undermine science education in Texas. We need YOU to speak out on behalf of all those who support sound science. There is no place for any version of creationism in our public schools. The SBOE must approve the original draft of the TEKS written by teacher working groups and released last December without any anti-science amendments.

Please contact the SBOE NOW to lend your voice to the many teachers, parents, students, scientists, and experts throughout the State of Texas who know that science, not religious ideology, is what will be prepare the state’s students for the competitive 21st century job market. This is your last chance, so please don’t hesitate to speak up!

Tell the SBOE you support sound science!

http://tinyurl.com/cvfk4k (capwiz.com)

Americans United for Separation of Church and State www.au.org

==========

Let’s Get Ideology out of Medicine!

Good Day,

You may recall the hard work that we did in 2008 on the “provider refusal” rule. The rule requires health care institutions receiving federal funds to certify in writing that they will permit health care providers to refuse their services on religious and ideological grounds. It’s been in force since January 20th, but now we have a chance to undo it!

The Department of Health and Human Services (HHS) has issued a proposed rule rescinding the “provider refusal” rule — it’s a rule to overrule a rule — and they’ve opened another comment period to solicit public opinion about the policy. This is our chance and we are hopeful.

We are grateful for the help you’ve given us in the past and we know we can count on you to help again. Your comments were among the 200,000 sent to the Department of Health and Human Services last year imploring the Secretary NOT to implement the rule. Now we will need an equal or greater number of comments urging HHS to undo it.

Action needs to be taken before April 9th!

It will only take a few minutes of your time to make an impact. To send your comments to HHS, simply click on the “Take Action” buttons below or follow the link in the side bar to the right. You can use the letter that we have prepared or you can modify and personalize it with your own comments, but the comment period closes April 9th, so please act now.

http://tinyurl.com/ckbg56 (ga1.org)

Of course our work is not finished on the “provider refusal” issue, or on equal pay for equal work, or reproductive freedom, or global warming, or sustainable energy, or keeping public policy free from the influence of religious dogma, or ensuring that women and minorities are welcomed into science and engineering professions.

There is still much to be done…

But we cannot continue this vital work without your financial support. We know that you are as invested as we are in seeing public policy based on science and reason. To help us survive in this economically challenging time, we need you to show your support for the Office of Public Policy by making a donation today. We are dependent on support from donors like you to keep our operations running.

CFI Office of Public Policy centerforinquiry.net

==========

AP News Calendar

The Associated Press
Possible start of preliminary hearing for Brandon McInerney, charged with murder in killing of 15-year-old gay student.

Dallas — The World Affairs Council …

http://tinyurl.com/cb8pa8 (www.google.com)

DA: Minister assaulted 16-year-old parishioner

Los Angeles Times – CA,USA

Horning, 28, is charged with four felony counts of oral copulation with a minor and one felony count of distributing lewd material to a minor. …

http://tinyurl.com/cc5kpx (latimesblogs.latimes.com)

==========

Great minds think alike

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.”
–Albert Einstein

“The surest sign that intelligent life exists elsewhere in the universe is that it has never tried to contact us.” –Calvin and Hobbes (Bill Watterson)

==========

three thousand words

(click here to view)

Mike Luckovich Atlanta Journal-Constitution Mar 19, 2009 EditorialCartoonists.com

YES I COULD MAKE FIVE THOUSAND OF THOSE, BUT A FEW FISH AND SOME BREAD MIGHT BE A BETTER OPTION

http://www.reverendfun.com/2009/03/20090313_pda.gif

God Hates Figs

http://tinyurl.com/ce6mq2 (www.flickr.com)

THE BLUE NOTE 7 MOSAIC: A CELEBRATION OF BLUE NOTE RECORDS Mosaic: A Celebration of Blue Note Records (2 CDs) [AMAZON EXCLUSIVE] ~ The Blue Note 7

Tierney Sutton Desire ~ Tierney Sutton