Year: 2010

Damn, When Goldman Gets an Update Post……

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True Dat!

You know that the Vampire Squid* is “living in interesting times.”

It now appears that governments in both the UK and Germany are calling for investigations of the firm’s dealings.

Additionally, in a splendid piece of electioneering, the Tory opposition is calling for a ban on government contracts for the firm until the investigations are concluded.

Finally, in what might be the ultimate indignity, AIG is looking at suing Goldman Sachs on the insurance policies that it provided, on the theory that they were under no obligation to pay the arsonist who burnt down his own house.

It will be interesting to see where things goes from here.

Even with all the the opprobrium directed at the firm (see the Taibbi quote below), the consensus was that they would skate, because they were “too powerful” for any meaningful action to be taken against them.

If this case cracks that shell, I think that we will see many more rocks overturned to see what lurks beneath.

My guess is that this will all end with a token fine and no admission of wrong-doing, but I would be happy to be wrong.

*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

We See the Beginnings of Competence

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About bloody time!

So, after the disastrous negotiations on healthcare with the Republicans, Barack Obama and His Stupid Minions™ begin to get a clue.

On financial reform, Organizing for America, the Obama campaign political arm, is running ads using Republican opposition to financial reform to Wall Street as a club to beat them with.

Certainly, this is better than their strategy on healthcare reform, which was to let Senator Olympia Snowe (R-ME) sandbag them by engaging in extensive negotiations when she had not the slightest intention of voting for cloture.

H/t FT Alphaville.

No, This is Not a Joke

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The lead SEC attorney in the civil fraud case against Goldman Sachs, aka, “The great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,”* is one Andrew Matthew Calamari.

I actually went and confirmed it with a Google, and Mr. Calamari is actually the associate regional director for the SEC’s New York office.

No really, click the link, it’s from the SEC.

As Dave Barry would say, “I’m not making this up.”

*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a vampire squid. This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

Whiskey Tango Foxtrot?!?!?!? The Lib-Dems?

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So, following the first televised debate between candidates for Prime Minister in UK history, a confrontation where Liberal-Democrat candidate is generally conceded to have come off best, the party is leading in a number of polls.

Part of the allure of the Lib-Dems is that their policies are objectively, and quite justifiably, punitive towards the banks that created this mess, and they are explicit about the need to downsize the banking sector.

I don’t think that the Lib-Dems will win, there is 100 years of their predecessor of losing elections, and I think that the nature of the constituencies, which are elected in “first past the post” as in the US, make their capturing even 2nd place in the number of seats unlikely.

Still, with 3 weeks to go before the election, it is a surprising development.

Righteous Rant!!!

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It’s worth the 9 minutes and 53 seconds

Peter Schiff on Alan Greenspan:

He’s not just the worst Fed chairman we’ve ever had, he’s the worst American we’ve ever had.

And it only goes up from there.

I would note that Schiff comes an extreme political philosophy, he is a wing-nut Randroid Libertarian,* but this does not mean that this does not bear watching.

It’s amusing, easily understood, and generally in accordance with the facts as we know them.

*He was an economic adviser to Ron Paul’s 2008 presidential campaign.

Heads Up to My Reader(s)

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A few weeks ago, a reader told me that my site was crashing their browser.

I checked it out, and found no problems, and so I concluded that it was something that Google™ Adsense™ was serving.

Well, it appears that, on occasion, Google™ Adsense™ serving a bit more than just ads, as Avast has discovered that the large ad networks have occasionally served up malware:

Malware that exploits holes in popular applications is being delivered by big ad delivery platforms including those run by Yahoo, Fox, and Google, according to Prague-based antivirus firm Avast.

Viruses and other malware were found to be lurking in ads last year on high-profile sites like The New York Times and conservative news aggregator Drudge Report.com, and this year on Drudge, TechCrunch and WhitePages.com. The practice has been dubbed “malvertising.”

Now, researchers at Avast are pointing fingers at some large ad delivery platforms including Yahoo’s Yield Manager and Fox Audience Network’s Fimserve.com, which together cover more than 50 percent of online ads, and to a much smaller degree Google’s DoubleClick. In addition, some of the malicious ads ended up on Yahoo and Google sites, Avast claims.

Google™ Adsense™ is not mentioned, just DoubleClick, though there are ties between the two, since Google™ owns Double Click, and the worst offenders honors go to Yahoo and Fox.

In any case, please keep your spyware and virus filters up to date.

Please note: once again, that I do not vet, nor do I endorse any ad that appears on my site, and I reserve the right to mock both the ads that appear on my site, as well as the advertisers.

Also, please note, this should be in no way construed as an inducement or a request for my reader(s) to click on any ad that they would not otherwise be inclined to investigate further. This would be a violation of the terms of service for Google™ Adsense™.

True Dat

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I don’t know why it takes a comedian to tell the truth

Following the passage of (admittedly tepid) healthcare reform, the Republicans are now saying that they won’t cooperate with the Democrats.

Of course, there was exactly 0% cooperation before, so we should not worry.

In any case, Bill Maher (at about 2:55 on the vid) says it with his characteristic aplomb:

New Rule: You can’t use the statement “there will be no cooperation for the rest of the year” as a threat if there was no cooperation in the first half of the year. Here’s a word the president should take out of his teleprompter: bipartisanship. People only care about that in theory, not in practice. The best thing that’s happened this year is when President Obama finally realized this and said, “Kiss my black ass, we’re going it alone, George W. Bush style.”

Two months ago, conservative Fred Barnes wrote, “The health care bill is dead with not the slightest prospect of resurrection.” Well, if it’s dead, you just got your ass kicked by a zombie named Nancy Pelosi. Seriously, the last time a Democrat showed balls like that John Edwards’ girlfriend was filming it. Make all the botox jokes and she-shops-too-much jokes you want, but this is the biggest political victory a woman has ever achieved in America. Yes, Nancy Pelosi likes nice clothes. So does Sarah Palin. The difference is Nancy Pelosi pays for hers.

This should be the policy on financial reform too.

The Democrats should break out the parts that they can demagogue, and dare the Republicans to vote against. Make the Republicans vote against the sound bites, just like the Republicans did to the Democrats.

15:50 on What Goldman Sachs Did

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If the articles you have come across are confusing, Dylan Ratigan has a segment that makes it very clear.

It also makes it clear just how unethical, and possibly illegal, these actions were.

Goldman Sachs deliberately crippled products that they created, and then took out insurance policies against them, “naked” Credit Default Swaps (CDS), even though they did not own what they were insuring, and made lots of money when the US government bailed out AIG, so that AIG could pay off the policies.

And Timothy “Eddie Haskell” Geithner, our Treasury Secretary, still has not backed down from his position that the “naked” CDS is essential for “price discovery.”

I Call Bullsh%$ on Benyamin Netanyahu

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It appears that Israel is claiming that Syria transferred Scud missiles to Hezbollah.

This would not make sense. While the Scud is mobile, and hard to detect when it is deployed, it is a liquid fueled missile that uses caustic fuels and oxidizers (Kerosene or UDMH as fuel and RFNA as an oxidizer) that requires a significant amount of infrastructure to maintain and keep at ready status.

Having something like this, as opposed to smaller solid fueled rockets that can be stored and maintained without a fixed base and fueling location, is akin to painting a big target on whatever facilities are used to maintain the missiles.

Honestly, I think that this something ginned up by Netanyahyu for either domestic political consumption, or as a way to push back against Obama on the housing units in Jerusalem.

Of course, I could be wrong, as I was on the Syrian nuclear facility.

I would note that the entire Jerusalem problem is one of Netanyahu’s own making. He has a history of doing this to Democratic presidents, so I do not buy that the timing of the construction permit announcement was just a “bureaucratic oversight” either.

Unsurprising Data Point of the Day

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The US Military ranks last in the world on the metric of equipment purchased per dollar spent:

In a study due out March 15, consulting firm McKinsey & Co. examined how efficiently 33 nations that account for 90 percent of worldwide defense expenditures perform a range of functions. The study looked at how these militaries go about doing certain tasks in three key areas: personnel, maintenance and weapon buying.

…………

“The United States and Australia are the lowest performing countries with regard to equipment output for every dollar spent,” McKinsey concludes.

Brazil had the greatest efficiency of the countries surveyed.

The Soviet Union spent themselves to destruction on huge amounts of military hardware, and it appears that the good old USA is spending itself to destruction on tiny amounts of military hardware.

Credit Where Credit is Due

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General Stanley McChrystal is now saying that Dick Cheney’s model for the army,* with contractors galore, simply does not work:

The U.S. commander in Afghanistan said April 16 that the military is wasting money by employing too many private contractors to do jobs better done by soldiers or local Afghans.

“We have created in ourselves a dependency on contractors that is greater than it ought to be,” General Stanley McChrystal told an audience of French officers and military experts at France’s defense university in Paris.
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“I think we’ve gone too far. I think that the use of contractors was done with good intentions so that we could limit the number of military. I think in some cases we thought it would save money. I think it doesn’t save money.”

This is the right thing to say, but it’s a tough thing to say, since lucrative consulting gigs follow general officers who play the game, and now McChrystal will have to work for a living after retiring.

Of course, it’s going to take years to rebuild the capabilities that Bush I, Clinton, and Bush II privatized and moved out of the Pentagon.

*In one of his worst miscalculations in a lifetime of abject failure, Cheney did this as Secretary of Defense under Bush I, where he decided to privatize everything in sight that was not a “primary military function.”

Economics Update

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Beyond L’affaire Goldman, it’s a slow news day

We have the Reuters/University of Michigan consumer confidence survey falling, and applications for building permits up sharply in March.

The oil and currency numbers are really about the Goldman Sachs enforcement action by the SEC, which raised concerns about the economy, and this uncertainty has pushed oil down, and the dollar up, on a concern about demand and demands for safe havens respectively.

It’s Bank Failure Friday!!!!

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And here they are, ordered, and numbered for the year so far, and these are, of course, in addition to the rather unusual Thursday closing yesterday.

  1. Lakeside Community Bank, Sterling Heights, MI
  2. First Federal Bank of North Florida, Palatka, FL
  3. AmericanFirst Bank, Clermont, FL
  4. Riverside National Bank of Florida, Fort Pierce, FL
  5. Butler Bank, Lowell, MA
  6. Innovative Bank, Oakland, CA
  7. Tamalpais Bank, San Rafael, CA
  8. City Bank, Lynnwood, WA

Full FDIC list

8 banks is a busy week, the most closings so far this year.

So, here is the graph pr0n with trendline:

Looks to me that we are heading towards 150-175 failures in 2010.

Breaking: Former Blackwater Executives Indicted

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Gary Jackson, the former president of the mercenary firm Blackwater*, the former general counsel, executive vice-president, and two other formerly employees on for crimes related to gun-running.

Here’s hoping that someone in this group sings to the prosecutors, and maybe takes Eric Prince down, and maybe he’ll sing to prosecutors.

Of course, if he has dirt, it will be on Bush/Cheney/Rumsfeld, and nothing will happen, because Obama and Holder don’t want to look back.

*Now Xe

A Correction:

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In the story of the SEC filing charges against Goldman Sachs, I said that Magnetar was likely the firm that was lobbying for crappy CDOs.

This is not true. It was Paulson & Co. Inc., run by John Paulson, the protagonist of the book The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History, about his fabulously successful shorting of the subprime market.

My guess is that he’s going to seem a Paulson, no relation to the former Treasury Secretary, will find his star dimmed a bit, particularly since the SEC has made it clear that he is under investigation as well.

I guess he sounds a bit less like a brave hero now.