Monthly Archives: May 2010

Waiver Granted for Well Twice the Depth of Deepwater Horizon

08 Saturday May 2010

Posted by in Energy, Environment, Gulf Oil Spill, Obama, Politics

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As if this isn’t bad enough:

“Since the Deepwater Horizon oil drilling rig exploded on April 20, the Obama administration has granted oil and gas companies at least 27 exemptions from doing in-depth environmental studies of oil exploration and production in the Gulf of Mexico.”

Given the uncertainties and unknowns about attempting to place a containment dome over the well at 5,000 feet, how is this even being considered?:

“The exemptions, known as “categorical exclusions,” were granted by the Interior Department’s Minerals Management Service (MMS) and included waiving detailed environmental studies for a BP exploration plan to be conducted at a depth of more than 4,000 feet and an Anadarko Petroleum Corp. exploration plan at more than 9,000 feet.”

Six Senators “Abstain” on Brown–Kaufman Amendment

08 Saturday May 2010

Posted by in Congress, financial reform, financial regulation, Politics

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The gutlessness of our elected representatives never ceases to amaze. In Thursday night’s vote on the Brown–Kaufman amendment to limit the size of the big banks, 6 Senators voted “abstain”:

* Sen. Robert Bennett [R, UT]
* Sen. Jim Bunning [R, KY]
* Sen. Robert Byrd [D, WV]
* Sen. Jim DeMint [R, SC]
* Sen. Richard Lugar [R, IN]
* Sen. David Vitter [R, LA]

Profiles in cowardice.

The Geithner Solution to Regulatory Failure: More Authority for Regulators

08 Saturday May 2010

Posted by in bailout, economy, Financial Crisis, Politics, too big to fail, Uncategorized, Wall Street

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Sure, federal regulators (like the former head of the New York Federal Reserve pictured at left) were inept, incompetent, and inadequate when it came to their ability to first foresee and then to take proper pre-emptive action based on all the red flags that were waving leading up to the financial crisis.

Sure, they may have overlooked the dangers of subprime mortgages, of major financial institutions being leveraged 30 to 1, and of those financial institutions becoming so interconnected through the packaging, re-packaging, and re-re-packaging of toxic securities and selling them back and forth that the failure of one could lead to the failure of all.

Hey, just minor oversights. No need to think they don’t deserve to keep their jobs, or better yet, be given more authority. Treasury Secretary Geithner seems to think so:

“During an appearance on Capitol Hill, Geithner acknowledged failures in the Federal Reserve Bank of New York’s supervision of Citigroup and other large banks, said regulators were “not conservative enough” when it came to overseeing banks’ leverage ratios and criticized capital requirements as not having done a “good enough job” as a buffer against risk.

He also said that regulators like himself could have done more to prevent the worst financial crisis since the Great Depression…To ensure these kinds of failures are avoided in the future…Geithner wants to leave it up to federal regulators — the same ones that presided over the housing bubble, oversaw extreme risk-taking by banks and other financial firms, and tried (yet failed) to contain a subprime crisis from mushrooming into a financial meltdown.

[…]

In short, Geithner said he wants to give regulators more authority, leaving it up to them to exercise their best judgment.”

No thanks, Tim. We’ve seen what leaving crucial decisions up to the “best judgment” of federal regulators leads to, from Wall Street to the Gulf of Mexico.

Quote of the Day: Taibbi’s Goldman–Roethlisberger Analogy

06 Thursday May 2010

Posted by in bailout, economy, Financial Crisis, Goldman Sachs, Politics, too big to fail, Wall Street

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From Matt Taibbi’s latest at Rolling Stone, The Feds vs. Goldman:

“The bank will try and – who knows – might even succeed in defending itself in a court of law against these charges. But in the court of public opinion it was doomed the instant the SEC decided to put this ghastly black comedy of a fraud case on the street for everyone to see. Just as Pittsburgh Steeler Ben Roethlisberger will never recover from the image of him (allegedly) waving his dick at a scared 20-year-old coed in the darkened hallway of a Georgia nightclub, Goldman may never bounce back from the SEC’s brutal blow-by-blow account of how the bank conspired with a hedge-fund magnate to bend one gullible business partner after another over the edge of the subprime housing market.

Priceless.

Alan Grayson on Geithner’s Conflict of Interest

06 Thursday May 2010

Posted by in Congress, economy, financial reform, financial regulation, Politics, Progressives, too big to fail, Uncategorized, Wall Street

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I’ve been considering relocating from Texas to the Sunshine State, since it looks like we may be in for another 4 years of Secessionist Rick here. Alan Grayson’s latest shot across the bow of the U.S.S Turbo Timmy might be enough to tip the scales. From Zero Hedge:

“In today’s ABC Top Line, Alan noted, “when Tim Geithner says that he doesn’t want to see the Fed audited, what he’s really saying is he doesn’t want to see Tim Geithner audited…”

“He was the head of the New York Fed for years and years. This audit would apply to him. And the actions he took — which he can now take in secret and, when this bill passes, will no longer be secret — we’ll be able to see and understand the decisions that he made that among other things put huge amounts of bailout money into the hands of private interests.” Grayson added: “It’s one of the biggest conflicts of interest I’ve ever seen.”

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“The Fed doesn’t want to be audited. Who does? Do you want to be audited? I don’t want to be audited, but sometimes it’s necessary,” he said. “When you’re handing out a trillion dollars at a time — a trillion dollars at a time, which works out to $3,000 for every man woman and child in this country — don’t we have a right to know what happened to it?”

“It’s central to the bill. We’ve had secret bailouts from the Fed to private interests now for the past two years without any exposure whatsoever. … We need to know what happened to our money, because when the Fed hands out our money, every dollar in your pocket, every dollar in your checking account, every dollar in your 401(k) becomes that much cheaper and less in value.”

Dialing 1-800-MOVERS.

Senate Passes Two Meaningless Amendments on Financial Regulation

06 Thursday May 2010

Posted by in Congress, economy, financial reform, financial regulation, Politics, too big to fail, Wall Street

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Any time I see that the Senate has passed something by a vote of 93–5 or 96–1 I can be sure of one thing—it’s meaningless. It’s the equivalent of a proclamation naming Sunday as the official first day of the week. Such was the case yesterday with 2 amendments to the financial regulatory bill:

“The Senate on Wednesday approved two amendments to the financial regulatory bill that both Democrats and Republicans claimed would end the prospect of taxpayer-financed bailouts for companies deemed “too big to fail.”

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By a vote of 93 to 5, the Senate approved an amendment by Senator Richard C. Shelby of Alabama, the ranking Republican on the Banking Committee [which] eliminated a $50 billion fund that was designed to help bridge financial shortfalls while a failing company was undergoing liquidation. Mr. Shelby said the fund was “a honey pot” that would facilitate “backdoor bailouts.” (Somewhere Frank Luntz is smiling).

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The Shelby amendment also requires the Federal Deposit Insurance Corporation to oversee the liquidation of a systemically important financial company that is failing, using money provided by a special line of credit with the Treasury.”

And where does the Treasury get its money again?

“The Senate also approved, by a vote of 96 to 1, an amendment by Senator Barbara Boxer, Democrat of California, saying that no taxpayer money may be used to keep a ailing financial company alive.”

Wow, earthshaking stuff there too. Wake me up when (or should that be if) they get around to the Brown–Kaufman amendment.

The Unintended Consequences of Lieberman’s Law

06 Thursday May 2010

Posted by in Politics, Republicans, terrorism, war on terror

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In the ‘Be Careful What You Ask For You Just Might Get It’ Department comes this from Steve M. at No More Mister Nice Blog concerning Joe Lieberman’s proposal to strip citizenship from Americans affiliated with foreign terrorist organizations:

“Lieberman’s law would amend an earlier statute that details other things that can cost you citizenship: Serving in the army of a foreign state, pledging allegiance to a foreign state, and so on. In those cases the State Department decides whether your disloyalty merits loss of citizen status. Lieberman’s law would add involvement with a foreign terror organization — as opposed to a foreign state — to this list….

Who would determine whether you’re involved with a foreign terror group? The State Department. It already decides what is and isn’t designated as a terror organization. Lieberman’s law would also empower State to determine whether you are in league with one of these groups.”

Three of the organizations on the State Department list of Foreign Terrorist Organizations (FTO) are Hamas, Hezbollah, and Mujahedin-e Khalq (MEK). Would any of these relationships count as “affiliation” with a terrorist organization?

“[Grover] Norquist is a founding director of the Islamic Institute, a socially conservative Muslim think tank that eschews international issues in favor of domestic issues such as tax cuts and faith-based initiatives. In addition, Norquist’s lobbying firm…was officially registered as a lobbyist for the Islamic Institute as well as for Abdurahman Alamoudi, the founder and former executive director of the American Muslim Council.

[At] an anti-Israel protest outside the White House on October 28, 2000. Alamoudi revved up the crowd, saying: ” I have been labeled by the media in New York as being a supporter of Hamas. Anybody supporters of Hamas here? ” The crowd cheered. ” Hear that, Bill Clinton? We are all supporters of Hamas … I wish they added that I am also a supporter of Hezbollah. “

How about this interview of Tom Tancredo by John Hawkins of Right Wing News?:

John Hawkins: Let me ask you another question, it’s Iran related. I heard that you support the National Council of Resistance (NCR), a political arm of the Mujahedin-e Kalq (MEK)…

Tom Tancredo: Yes, I do.

Another MEK friend in high places:

“In June 2004 Defense Secretary Donald Rumsfeld “designated MEK members as civilian ‘protected persons’ under the terms of the Fourth Geneva Convention,”… Rumfeld’s “decision controverted [Department of State], International Committee of the Red Cross (IRC), and Office of the United Nations High Commission for Refugees (UNHCR) recommendations…”

One more name on the State Department FTO list is the Real IRA:

“…during the 1980s and 90s, the NSA and CIA collected intelligence on financial transactions between the United States and Ireland and Northern Ireland involving Irish terrorist groups supported by Peter King. The group Irish Northern Aid (NORAID) funneled money to the Irish Republican Army (IRA) that was used to buy weapons used to blow up civilians and members of the British government, military, and police.

King was an active supporter of NORAID, a tax-exempt front for the IRA. Martin Galvin, King’s friend and former NORAID chief, rejected the Northern Ireland Good Friday agreement and supports the agenda of the terrorist “Real IRA.”

Let the citizenship-stripping begin.

The End is Near: Glenn Beck is the Voice of Reason

05 Wednesday May 2010

Posted by in Bill of Rights, Congress, Politics, Republicans, terrorism

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OK, it’s official, we are through the looking glass on the treatment of suspected terrorists. Glenn Beck is the voice of reason and sanity. Yes, you read that right, Glenn Beck, reason, and sanity all in the same sentence. On Fox and Friends yesterday, Beck said of Faisal Shahzad, the Pakistani-born American citizen arrested in the attempted Times Square bombing:

“He is a citizen of the United States, so I say we uphold the laws and the Constitution on citizens. If you are a citizen, you obey the law and follow the Constitution. He has all the rights under the  Constitution. We don’t shred the Constitution when it’s popular. We do the right thing.”

Vodpod videos no longer available.The award for the most extreme, knee-jerk (emphasis on jerk) reaction comes from Joe Lieberman. He proposes taking away the citizenship of those who are “affiliated” (whatever that means) with foreign terrorist organizations when they are “apprehended and charged.” 

My own Senator finds that “interesting”:

Sen. John Cornyn (R-Texas), the head of of the GOP’s Senate campaign arm, is open to Lieberman’s idea. “I’m interested in Senator Lieberman’s approach. He is one of our leading members when it comes to national security issues and I would be interested in exploring that. I think at some point an act of war is a treasonous act, which could be a basis for relinquishing one’s citizenship,” he said.

I propose that we take away the citizenship of those who advocate that we take away the citizenship of others. I think that might solve the problem.

McCain: Miranda Rights for U.S. Citizens a “Serious Mistake”

04 Tuesday May 2010

Posted by in Bill of Rights, Dick Cheney, McCain, Politics, Republicans, war on terror

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John McCain has taken the baton from Dick Cheney as drum major in the crazy parade. McCain said today it would have been a “serious mistake” to read the suspect arrested in connection with the May 1 attempted Times Square bombing his Miranda rights.

“Obviously that would be a serious mistake…at least until we find out as much information we have,” McCain said during an appearance on “Imus in the Morning” when asked whether the suspect, 30-year-old Faisal Shahzad, a naturalized American citizen from Pakistan.

“Don’t give this guy his Miranda rights until we find out what it’s all about,” McCain added.”

Sen. McCain, I know the suspect doesn’t have a good old ‘Murrican name like John, or Cindy…or even Sarah, but he is a United States citizen and he is entitled to Constitutional rights.

Scott Lemieux at Lawyers, Guns, and Money asks this:

“Did John McCain strenuously object when Scott Roeder was read his Miranda rights?   If not, I wonder what criteria McCain is using to determine which American terrorists are entitled to their constitutional rights and which aren’t?”

But the Arizona Senator didn’t stop there. He’s already assessed the death penalty—despite not knowing the charges:

“There’s probably about 350 different charges he’s guilty off — attempted acts of terror against the united States, attempted murder,” said McCain, cautioning that he’s not privy to the charges with which Shahzad might be charged. “I’m sure there’s a significant number to warrant the death penalty.”

And not to be outdone, New York Rep. Peter King also questioned the Justice Department with this:

“Did they Mirandize him? I know he’s an American citizen but still,” King said.”

I’ll leave it to your imagination what Rep. King was thinking but left unsaid.

“Toxic Magnification” of Subprime Mortgage Securities

04 Tuesday May 2010

Posted by in economy, Financial Crisis, Goldman Sachs, Politics, Wall Street

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How “investment” instruments that were allegedly designed to spread the risk ended up spreading the poison. From the Wall Street Journal via BooRadley at The Seminal:

“Even at its peak, subprime lending accounted for a relatively small portion of overall mortgage lending. Yet losses from these mortgages caused deep damage to the financial system.

Now, documents released by Senate investigators last week provide clues in understanding why the losses were so severe. The documents show how Wall Street banks packaged and repackaged the same risky bonds into securities that ultimately helped magnify the impact of defaulting subprime mortgages on the financial system.

In one case, a $38 million subprime-mortgage bond created in June 2006 ended up in more than 30 debt pools and ultimately caused roughly $280 million in losses to investors by the time the bond’s principal was wiped out in 2008, according to data reviewed by The Wall Street Journal….

In effect, the documents said, Wall Street was “copying and pasting” what turned out to be the worst-performing securities of the mortgage boom. Such activity helped multiply opportunities for hedge funds and traders who wanted to short the housing market, but magnified the losses of those on the other side of the trades.”

In graph form:


“God’s work,” no doubt.