Month: June 2011

Now the New York Times is Calling it a Coverup

No Comments
Click for full size

Round up the Usual Suspects

Specifically, they note that in the matter of indicted trader Fabrice Tourre, it appears that he is being singled out as a scape goat, while the SEC is studiously ignoring the fact that he was acting in pretty much the same way as everyone else at Goldman Sachs:

Hundreds of employees worked closely in teams, devising mortgage-based securities — billions of dollars’ worth — that were examined by lawyers, approved by management, then sold to investors like hedge funds, commercial banks and insurance companies.

At one trading desk sat Fabrice Tourre, a midlevel 28-year-old Frenchman who was little known not just outside Goldman but even inside the firm. That changed three years later, in 2010, when he achieved the dubious distinction of becoming the only individual at Goldman and across Wall Street sued by the Securities and Exchange Commission for helping to sell a mortgage-securities investment, in one of the hundreds of mortgage deals created during the bubble years.

How Mr. Tourre alone came to be the face of mortgage-securities fraud has raised questions among former prosecutors and Congressional officials about how aggressive and thorough the government’s investigations have been into Wall Street’s role in the mortgage crisis.

The tell here is the fact that he was set up by Goldman, and the SEC, as a patsie is the fact that he was told that he had to use a Goldman Sachs lawyer to represent himself:

In April 2010, when the S.E.C. filed its case against the bank and Mr. Tourre, the young banker told friends that he believed Goldman had been chosen to be the commission’s “case study,” according to several who spoke on the condition that they not be identified. The friends also said they were concerned that Mr. Tourre’s dependence on Goldman for advice and legal counsel was not in his best interest.

In September 2009, for instance, Mr. Tourre told friends he thought he had to use a lawyer from a list of lawyers at three firms that Goldman gave him.

Robert Follie, a lawyer in Paris, said Mr. Tourre told him he was not authorized to use lawyers other than those Goldman selected. Mr. Follie said he cautioned Mr. Tourre that his interests might diverge from Goldman’s, so he should consider hiring his own counsel.

“As a practitioner, I mentioned to him that I felt the risk in the long run was that the lawyer who was acting for him might end up in a near conflict-of-interest situation,” Mr. Follie, whose daughter is friends with Mr. Tourre, said in an interview last December.

After the S.E.C. case was filed in summer 2010, Mr. Follie wondered how Mr. Tourre had wound up as the only defendant. “I felt that somewhere down the line, he must have done or not done the proper things to get out of this. I was personally wondering if he had sufficient representation disassociated from Goldman,” he said.

Mr. van Praag, the Goldman spokesman, said the bank did not impose lawyers on its workers and had not done so on Mr. Tourre. He said that “ultimately the decision is for the individual and counsel to determine whether they are right for each other.”

Well, Mr. van Praag, if that is in fact your real name, I am sure that Goldman management worked scrupulously to ensure that there was no paper trail of them instructing Tourre to take a lawyer who worked for them instead of him, but that is a far cry from what any honest employer would do.

Vampire Squid Subpoenaed

No Comments

It sounds like a big deal:

Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, was subpoenaed by the Manhattan District Attorney’s office for information on the firm’s activities leading into the credit crisis, two people familiar with the matter said.

The subpoena relates to the U.S. Senate’s Permanent Subcommittee on Investigations report on Wall Street’s role in the collapse of the financial markets, which accused New York- based Goldman Sachs of misleading buyers of mortgage-linked investments, the people said, speaking on condition of anonymity because the inquiry isn’t public.

But it isn’t, because even the most overzealous prosecutor out there, and Manhattan DA Cyrus Vance, Jr. is not one of those, would be told in no uncertain terms that any prosecution would destroy our economy, and so it would result in their own destruction (See Spitzer, Eliot) so it will just be a few bucks in fines, and no admission of wrong-doing.

Christie Blinks

No Comments

After claiming that there was no need to reimburse the state for taking a state helicopter to watch his son play baseball (see earlier post), because the pilots need the hours to maintain their current rating, New Jersey Governor Chris Christie has agreed to reimburse the state for the cost of the flight:

Reversing course, New Jersey Gov. Chris Christie reimbursed the state for personal and political travel on a state police helicopter, including a trip to meet with Republicans urging him to consider a presidential run.
Christie, a Republican, personally paid the state treasury $2,151.50 for his use of the chopper on two occasions in the last week to attend his son’s games in a state baseball tournament.

I don’t think that Christie, and his fans amongst the press and the Washington, DC crowd, realize just damaging this will be for him.

First, of course, is the whole “tight with a dollar, unless it applies to him” bit, but the second, and possibly more important, thing is that this lets the air out of his political personae as a “tough guy”, and reveals him to be a just another bully who has no guts when push comes to shove.

If the voters of New Jersey did not get that before, perhaps they do so now.

It’s Jobless Thursday

No Comments

And the initial claims numbers show no signs of recovery in the job market, with initial claims remaining excessively high, at 422,000, though the 4-week moving average did fall by 14K to 425,500, and continuing and emergency/extended claims were basically flat.

So, the employment numbers are crap, and stuck in a no-recovery “sweet spot,” and it looks like the real estate market is still crashing, a rebound in manufacturing would take years for the capital to be assembled and constructed, and we still have Wall Street sitting athwart our economy, extracting its unearned vigorish that saps both resources and intellect from productive activity.

Another Obama Cave

No Comments

And this time it’s the for profit colleges, who pretend to educate, or at least credential, people:

The Department of Education on Wednesday tightened its regulation of for-profit colleges and other vocational programs that get billions of dollars in federal aid but leave many students with crushing debt and credentials worth little on the job market.

Under the new rules, programs would lose their eligibility to dispense federal student aid — and as a practical matter, be shut down — if, over the next four years, their graduates fail to meet new benchmarks for loan repayment and ratio of debt to income. But amid intense lobbying by the for-profit college industry and pressure from Republican lawmakers, the department significantly eased the rules from an earlier draft: officials said, for example, that no program would lose eligibility until 2015.

“We believe that very few programs will be forcibly closed by our standards,” Secretary of Education Arne Duncan said. “We want to give people a chance to reform. As a country, we need this sector to succeed. This is not about ‘gotcha.’ ”

These rules, which try to define how such programs prepare students for “gainful employment,” have been the hardest-fought issue in the debate over exploitive and fraudulent practices in the industry. The colleges and their allies spent $12 million lobbying against the rules since the start of 2010, and this spring, the House passed a budget amendment that would have blocked the department’s work on them. The rules were supposed to be issued last summer, but were delayed after the Education Department received a record 90,000 comments on its draft proposal.

What does this mean? Let’s see what the market thinks:

For-profit colleges rallied as the U.S. Education Department gave the industry more time to comply with rules that will cut off federal aid to institutions whose students struggle the most to repay their government loans.

ITT Educational Services Inc. (ESI) soared 21 percent to $85.67. Career Education Corp. (CECO) rose 5.4 percent to $24.10. Strayer Education Inc. (STRA) gained 19 percent to $144.95. Apollo Group Inc. (APOL) advanced 11 percent to $46.90. DeVry Inc. (DV) rose 15 percent to $61.86.

Corinthian Colleges Inc. (COCO) jumped 27 percent to $5.06. Education Management Corp. (EDMC) increased 22 percent to $24.76. Grand Canyon Education Inc. (LOPE) advanced 9 percent to $13.97. Bridgepoint Education Inc. (BPI) rose 3.4 percent to $24.48. Capella Education Co. (CPLA) climbed 3.3 percent to $49.58.

Washington Post Co. (WPO) , owner of the Kaplan for- profit education business, advanced 5 percent to $426.42.

It’s pretty clear that they took meaningful rules, and gutted them, probably because they figure that a good way to get a bit closer to their $1 billion goal for campaign donations in 2012.

So real reform is replaced with phony reform.  How Hopey Changey.

Recall Elections Against 6 Wisconsin State Senators a Go

No Comments

So the final three recall drives against Republicans have been approved, but the Government Accountability Board (GAB) is asking for an extension to rule on the drives against 3 Democratic senators:

GAB announced on Friday that it would need to delay consideration of petitions against Democratic Sens. Robert Wirch of Pleasant Prairie, Jim Holperin of Conover and Dave Hansen of Green Bay because election staff needed more time to review the Democratic challenges to the petitions. Staff Counsel Shane Falk said staff worked significant overtime during the holiday weekend to complete their review of the Darling petition before focusing on the petitions targeting Democrats, which had more complex legal issues.

The translation here is that the allegations of fraud made by the Republicans about the volunteer recall petitions targeting them were laughable, but the allegations made against the mostly-out-of-state for profit signature collectors are credible.

Additionally, the margins for the drives are different, which makes the impact of any irregularities less significant, because, after all, a for profit firm won’t collect a single more signature than is necessary.

What this means is that, absent a court ruling, the Republican and the Democratic (if any) recall elections, at least the 1st round, would be on different dates if the GAB gets permission from the judges.

Of course, the final ruling may very well be from the Wisconsin Supreme Court, which has a Republican majority, so all bets are off.

JoAnne Kloppenberg Concedes Wisconsin Supreme Court Race

No Comments

She made some noises about electoral reforms in the unspecified future, but absent an adversarial proceeding with full discovery, i.e. a full legal challenge which she eschewed, it’s not gonna happen.

If the election were just about a difference in philosophy, as opposed to the explicit statements by David Prosser that he would specifically support Scott Walker’s agenda, perhaps there could be an excuse for playing nice, but in this case there is no such excuse.

There were clearly extensive and pervasive irregularities, particularly in Waukesha County, and even in a losing effort, exposing the corruption and incompetence of that county clerk is an independent good that any officer of the court should pursue.

Feh on her.

And Still, They Blather About the Deficit

No Comments

ADP’s private payroll report showed an increase of only 38,000 in May, which, when you consider the obvious cuts in state and local payrolls, and lord knows what in the non-profit sector, means that we are looking about a decline in the workforce if the federal numbers come close to matching this report.

Additionally, the Conference Board’s consumer confidence report fell, and auto sales fell for all the major auto manufacturers.

And still the Democrats are buying into the Republican meme that our problem is the deficit.

To quote Robin Williams, “Shazbat!”

What is it With ‘Phants Governors and Helos?

No Comments
Click for full size

Not Just a Helo, but a Big MoFo Helo

First, it was Jane Swift, and now everyone’s Republican asshole “it” girl Chris Christie, who took a state police medevac helicopter to his son’s baseball game, so that he could get back in time to talk with some wealthy Iowa donors:

A brand-new State Police helicopter was Gov. Chris Christie’s ride of choice yesterday as he traveled to and from his son’s baseball game in Bergen County.

His office won’t say where he came from or where he went afterward. But about an hour and 10 minutes after leaving the game, Christie arrived, by car, at the governor’s mansion in Princeton to meet with a group of Iowa businessmen trying to recruit him for a presidential run.

The use of state helicopters has opened New Jersey governors to criticism for decades, especially when it did not involve official state business.

“It is a means of transportation that is occasionally used as the schedule demands. This has historically been the case in prior administrations as well, and we continue to be judicious in limiting its use,” said Christie’s spokesman Michael Drewniak in an e-mail. He declined to answer additional questions.

(emphasis mine)

Yeah, right, “Judiciious in limiting its use.”

It gets better though, that fat f%$# couldn’t even be bothered to walk from where he landed to the ball park:

As the game at St. Joseph Regional High School in Montvale was about to begin, a noise from above distracted the spectators who watched the 55-foot-long helicopter buzz over the trees in left field, circle the outfield and land in an adjacent football field. Christie left the helicopter and got into a black car with tinted windows that drove him about 100 yards to the baseball field. The governor watched from the bleachers as his eldest son, Andrew, played starting catcher for Delbarton School. Christie played the position of catcher in high school as well.

He’s governor after all, you cannot let his foot touch the ground.

The thing here is that Christie has a long history of this sort of crap, 4 star hotels, buying off people that he’s run down going the wrong way on a one way street, etc.

Of course, while he was running for governor, the press ignored this, so one wonders whether he’s going to finally lose the undeserved man crush that they have on him.

I Got Nothing, Roll Jon Stewart

No Comments

Over the past few days, it appears that Congressman Anthony Weiner has been fingered* as having sent a picture of his package (underwear clad) on Twitter.

The evidence, as near as I can tell is that someone, with the active aid of right wing Rat F%$#er Andrew Breitbart, is Rat F%$#ing, because that is what Rat F%$#ers do.

Basically, I have nothing to add beyond what Jon Stewart, who actually swam with Weiner in his Younger days, and notes that his recollection is that, “This cat had a lot more Anthony and a lot less weiner.”

Just watch it.

I so envy The Daily Show writing staff.
*Pun not intended.