January 2011 archive

Rachel Maddow describes several political operatives who have squandered their political clout by representing nefarious overseas actors like Romanian dictator Nicolae Ceausescu, Jean-Paul “Baby Doc” Duvalier, dictators in places like the Ivory Coast and Equatorial Guinea and the governments of Indonesia and Saudi Arabia that fund organizations that plot terrorist attacks against the United States and its citizens.

Both Bob Barr and Rudy Guiliani have indicated that they are interested in running for president in 2012.

In a lame defense of Mark Penn, the PR firm, Burson Marsteller, said it was unfair “to tie the company’s current leader to former clients that predated him. Penn joined Burson Marsteller in 2005, years after the junta, Indonesia and Saudia Arabian clients contacted the firm.”

Shortly after the Tuscon shootings, Mr. Penn let loose with this little “bomb” on November 4, 2010 when he told Chris Matthews that what Obama really needs to reconnect to the American electorate is an “Oklahoma City moment”. Both sides are guilty of this kind of political rhetoric but at least the left acknowledges that it has to stop and there is a need for a change in tone.  

Evening Edition is an Open Thread

1 Interpol issues arrest alert for Tunisia’s ex-ruler

by Kaouther Larbi and Mohamed Hasni, AFP

1 hr 58 mins ago

From Politico:

The House passed a GOP-sponsored bill to end public financing for presidential campaigns Wednesday. Ten Democrats, most of them Blue Dogs, joined Republicans in the vote.

The bill suspends a 35-year-old program that lets taxpayers direct $3 to a general fund in the Treasury when they file their taxes, without reducing their refund. Republicans say ending the option would save $617 million over 10 years without preventing individuals from making personal donations to any candidate or party.

Democrats say there’s a bigger issue at stake. In eliminating the public option, big donors will gain more influence in elections. They drew a comparison between the bill and the Supreme Court’s Citizen’s United v. Federal Election Commission, which eased restrictions on corporate contributions to campaigns.

These are the Blue Dog Democrats who voted for this bill:

Reps. Ben Chandler (Ky.)

Jim Matheson (Utah)

Heath Shuler (N.C.)

Jason Altmire (Penn.)

Dan Boren (Okla.)

Henry Cuellar (Texas)

Joe Donnelly (Ind.)

Nick Rahall (W.V.)

Ross (Ark.)

Adam Schiff (Calif.).

Time to start primarying these corporate owned sell outs of the American voters.

This bill now moves to the Senate where hopefully it will never get out of committee but I have my doubts about them, too.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

John Nichols: Obama’s ‘One Nation’ Speech: A Little FDR, A Little Reagan, A Lot Like Ike

President Obama used his second State of the Union Address to deliver a muscular defense of Social Security, the crown jewel program of the New Deal that progressives had feared was under threat as the president triangulated to the right following November, 2010, election setbacks for Democrats.

Explicitly acknowledging his disagreement with key recommendations made by his own bipartisan Fiscal Commission, Obama told the assembled members of Congress that it was necessary to “find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.”

Obama’s defense of Social Security – along his willingness to outline plans for at least some new stimulus spending —  represents a victory of sorts for progressives who campaigned ardently in recent weeks to avert a sharp turn to the right by a president who was shaken by November, 2010, election setbacks for Democrats.

Dana Milbank: Michele Bachmann’s alternate universe

The president was lofty.

“We will move forward together, or not at all – for the challenges we face are bigger than party, and bigger than politics,” he said in his State of the Union address.

The official Republican response, too, aimed high.

“Americans are skeptical of both political parties, and that skepticism is justified – especially when it comes to spending,” said Rep. Paul Ryan of Wisconsin. “So hold all of us accountable.”

And then there was Michele Bachmann.

As the leader of the Tea Party Caucus in the House, the Minnesota Republican gave her own, unauthorized response to the State of the Union, live from the National Press Club, filmed by Fox News, broadcast live on CNN and telecast by the Tea Party Express. It had all the altitude of a punch to the gut.

Laura Flanders: No Solutions at State of the Union

We know what the problem is: Jobs. 15 million still unemployed. A National Journal piece last week noted that the Great Recession wiped out what amounts to every U.S. job created in the 21st century. And jobs had already been leaving — for three decades.

That’s a bipartisan problem-remember who passed NAFTA, which first opened the floodgates. As a commentator with the hardly radical Hoover Institute told the Journal — Instead of reinvesting the gains of globalization in improved plants or a higher quality of life work in the US, private companies privatized the profits and hired abroad. Driving down wages for them, and us.

The next part of my story centers around frauds 6, 7, 8, and 9 of 11 criminal frauds.

AMBAC is a Monoline Insurer and they offer-

Bond insurance is a service whereby issuers of a bond can pay a premium to a third party, who will provide interest and capital repayments as specified in the bond in the event of the failure of the issuer to do so. The effect of this is to raise the rating of the bond to the rating of the insurer; accordingly, a bond insurer’s credit rating must be almost perfect.

The premium requested for insurance on a bond is a measure of the perceived risk of failure of the issuer.

The economic value of bond insurance to the governmental unit, agency, or company offering bonds is a saving in interest costs reflecting the difference in yield on an insured bond from that on the same bond if uninsured. Insured securities ranged from municipal bonds and structured finance bonds to collateralized debt obligations (CDOs) domestically and abroad.

AMBAC is suing Bear Stearns (JP Morgan Chase).

The Ambac Suit: Bear Stearns Execs Double-Dipped, Committed Criminal Fraud on Investors

By: David Dayen Tuesday January 25, 2011 11:01 am

The mortgage traders at Bear, who now are spread out across the financial sector, sold purposefully bad securities to investors – emails revealed show that they told superiors they were selling “a sack of shit.” They got data on their pools of mortgages bundled up in securities deals that came back with high percentages of bad underwriting or even loans already slipping into default. They falsified that data for the rating agencies to get AAA ratings, never told the investors about the bad loans in the pools, and sold the shit as gold. But it gets worse.

…

They got paid by the investors for selling the mortgage-backed security, AND they got paid by the originator for taking back the bad loan. So Bear traders made money on the same mortgage twice. Only the investors could force a put-back on an originator after the security was sold – Bear Stearns didn’t have a legal claim on the loan after they sold it. They did so anyway.

There is no legal universe under the sun where that isn’t just criminal fraud and theft. Ambac eventually discovered that 80% of the loans in its MBS had an early payment default. They were corrupted and substandard from the moment they received them, so awful that Bear Stearns was forcing the bank to take them back – even though they didn’t own the loans.

This Ambac suit names the actual decision-makers, Marano and two others who are working at Goldman Sachs and Bank of America. JPMorgan, which now owns Bear Stearns, is named in the lawsuit as well, as a responsible party. It seems that this is a pretty standard repurchase lawsuit, but Ambac added accounting fraud to the claim to double the award owed to them.

The original Atlantic article-

E-mails Suggest Bear Stearns Cheated Clients Out of Billions

Teri Buhl, The Atlantic

Jan 25 2011, 1:01 AM ET

Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering. Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a “sack of shit.”

…

According to the lawsuit, the Bear traders would sell toxic mortgage securities to investors and then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and would not pass it on to the mortgage trust, which was where it should have gone to be distributed to the investors who owned the bonds. The Marano-led traders also cut the time allowed for early payment defaults, without telling the bond investors. That way, Bear could quickly securitize defective loans, without leaving enough time for investors to do their own due diligence after the bonds were sold and put-back any bad loans to Bear.

The traders were essentially double-dipping — getting paid twice on the deal. How was this possible? Once the security was sold, they didn’t have a legal claim to get cash back from the bad loans — that claim belonged to bond investors — but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme, and thus, are named as individual defendants in the suit.

…

Last week, JPMorgan CEO Jamie Dimon said it will take years to get through mortgage litigation risk the bank inherited and had set aside around $9 billion for litigation-related risk. Yet in the bank’s January earnings call, Dimon suggested that the bank may not have to buy back any soured mortgages from private investors and said that the issue is “not that material” for JPMorgan. Still, Ambac recently won a court order in December to add accounting fraud against JPMorgan to its suit, which can double or triple lawsuit awards. So it’s hard to tell whether America’s largest bank is prepared to pay for the sins of Bear. JPMorgan did fight tooth and nail for the Ambac suit not to be made public, however, because the firm argued it could damage the reputations of senior bank executives currently working in the industry. Individuals named as defendants in the amended complaint include: Jimmy Cayne, Alan “ACE” Greenberg, Warren Spector, Alan Schwartz, Thomas Marano, Jeffrey Mayer, Mary Haggerty, Baron Silverstein, Jeffrey Verschleiser, and Michael Nierenberg. But the court chose to fold these individuals into the charges against JPMorgan as the case goes through appeal.

JPMorgan is not the only firm in trouble-

Countrywide Accused in Lawsuit of ‘Massive Fraud’

By Karen Freifeld, Bloomberg News

Jan 25, 2011 5:54 PM ET

Bank of America Inc.’s Countrywide Financial unit, acquired by the bank in 2008, was accused of “massive fraud” in a lawsuit by investors who claim they were misled about mortgage-backed securities.

TIAA-CREF Life Insurance Co., New York Life Insurance Co. and Dexia Holdings Inc. are among a dozen institutional investors who filed the complaint yesterday in New York state Supreme Court.

As I’ve pointed out before one of the confusing things about Bankster Fraud is that there are no less than 11 different criminal frauds that are all lumped together.

In my next piece I’m going to examine one particular part of this puzzle, but I should note that starting tomorrow we’re going to be one step closer to the jump-suited perp walks we’ll need to see in order to unwind this discredited neo-liberal disaster of an economy with the release of the Financial Crisis Inquiry Commission report which recommends investigation by the Department of Justice for Criminal Prosecution.

Financial Crisis Commission Finds Cause For Prosecution Of Wall Street

Shahien Nasiripour, The Huffington Post

01/24/11 07:29 PM

(T)he decision to refer cases for potential prosecution could provoke a different conclusion: It may yet satisfy public craving for what Treasury Secretary Timothy Geithner once referred to as the “very deep public desire for Old Testament justice.”

…

The commission drew on testimony from less prominent senior executives with intimate knowledge of how Wall Street engaged in modern-day financial alchemy, turning mountains of dubious mortgages into seemingly rock-solid investments rated as safe as American Treasury bonds.

Richard Bowen, former chief underwriter for Citigroup’s consumer-lending unit, testified that, in the middle of 2006, he discovered more than 60 percent of the mortgages the bank had purchased from other firms and then sold to investors were “defective,” meaning they did not satisfy the bank’s own lending criteria.

Keith Johnson, former president of Clayton Holdings, one of the top mortgage research companies, testified that some 28 percent of the loans given to homeowners with poor credit examined by his firm for Wall Street banks failed to meet basic standards. Yet nearly half appear to have been sold to investors regardless, he added.

FCIC Will Refer Report to Authorities for Potential Criminal Prosecution

By: David Dayen, Firedog Lake

Tuesday January 25, 2011 6:00 am

Many have found themselves disappointed in the FCIC’s work to this point, be it their inability to gain headlines, their inability to issue subpoenas without bipartisan cooperation, or even the commission’s personnel. But lest we forget that the FCIC uncovered, virtually by itself, the enormous mortgage bond scandal, based on testimony they gathered from Clayton Holdings in October. William D. Cohan said at the time that this strong, if pulled properly, could lead to justice:

…

This could be the building block for the criminal referrals, or it could be something deeper. But we know it will be backed up by a voluminous amount of evidence. In addition to their long report on the origins of the crisis, Yves Smith notes that the FCIC will release audio archives of all of their interviews with hundreds of witnesses. She was one of them. They will also release all the source documents, which is crucial.

As for the report itself, the Democratic version promises to be extremely satisfying to those who recognize quickly that corporate greed, deregulation and a financial industry determined to sidestep oversight entirely with the shadow banking system caused the crisis. One official told Reuters that Commission Chair Phil Angelides subscribed to the “vampire squid” view of the crisis, recalling the famous turn of phrase Matt Taibbi used to describe Goldman Sachs.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 26 is the 26th day of the year in the Gregorian calendar. There are 339 days remaining until the end of the year (340 in leap years).

On this day in 1788, Captain Arthur Phillip guides a fleet of 11 British ships carrying convicts to the colony of New South Wales, effectively founding Australia. After overcoming a period of hardship, the fledgling colony began to celebrate the anniversary of this date with great fanfare.

Australia Day (previously known as Anniversary Day, Foundation Day, and ANA Day) is the official national day of Australia. Celebrated annually on 26 January, the date commemorates the arrival of the First Fleet at Sydney Cove in 1788 and the proclamation at that time of British sovereignty over the eastern seaboard of New Holland.

Although it was not known as Australia Day until over a century later, records of celebrations on 26 January date back to 1808, with the first official celebration of the formation of New South Wales held in 1818. It is presently an official public holiday in every state and territory of Australia and is marked by inductions into the Order of Australia and presentations of the Australian of the Year awards, along with an address from the governor-general and prime minister.

The date is controversial to some Australians, particularly those of Indigenous heritage, leading to the use of alternate names, such as Invasion Day and Survival Day. Proposals have been made to change the date of Australia Day, but these have failed to gain widespread public support.

Arrival of the First Fleet

On 13 May 1787, a fleet of 11 ships, which came to be known as the First Fleet, was sent by the British Admiralty from England to Australia. Under the command of Captain Arthur Phillip, the fleet sought to establish a penal colony at Botany Bay on the coast of New South Wales, which had been explored and claimed by Captain James Cook in 1770. The settlement was seen as necessary because of the loss of the colonies in North America. The Fleet arrived between 18 and 20 January 1788, but it was immediately apparent that Botany Bay was unsuitable.

On 21 January, Philip and a few officers travelled to Port Jackson, 12 kilometres to the north, to see if it would be a better location for a settlement. They stayed there until 23 January; Philip named the site of their landing Sydney Cove, after the Home Secretary, Thomas Townshend, 1st Viscount Sydney. They also had some contact with the local aborigines.

They returned to Botany Bay on the evening of 23 January, when Philip gave orders to move the fleet to Sydney Cove the next morning, 24 January. That day, there was a huge gale blowing, making it impossible to leave Botany Bay, so they decided to wait till the next day, 25 January. However, during 24 January, they spotted the ships Astrolabe and Boussole, flying the French flag, at the entrance to Botany Bay; they were having as much trouble getting into the bay as the First Fleet was having getting out.

On 25 January, the gale was still blowing; the fleet tried to leave Botany Bay, but only the HMS Supply made it out, carrying Arthur Philip, Philip Gidley King, some marines and about 40 convicts; they anchored in Sydney Cove in the afternoon.

On 26 January, early in the morning, Philip along with a few dozen marines, officers and oarsmen, rowed ashore and took possession of the land in the name of King George III. The remainder of the ship’s company and the convicts watched from onboard the Supply.

Meanwhile, back at Botany Bay, Captain John Hunter of the HMS Sirius made contact with the French ships, and he and the commander, Captain de Clonard, exchanged greetings. Clonard advised Hunter that the fleet commander was Jean-Francois de Galaup, comte de La Perouse. The Sirius successfully cleared Botany Bay, but the other ships were in great difficulty. The Charlotte was blown dangerously close to rocks; the Friendship and the Prince of Wales became entangled, both ship losing booms or sails; the Charlotte and the Friendship actually collided; and the Lady Penrhyn nearly ran aground. Despite these difficulties, all the remaining ships finally managed to clear Botany Bay and sail to Sydney Cove on 26 January. The last ship anchored there at about 3 pm.

Note that the formal establishment of the Colony of New South Wales did not occur on 26 January, as is commonly assumed. That did not occur until 7 February 1788, when the formal proclamation of the colony and of Arthur Phillip’s governorship were read out. The vesting of all land in the reigning monarch George III also dates from 7 February 1788.

Don’t know about you, but I’ll certainly be looking for alternative viewing tonight.

Please take your seats for the second act.

But I’m not done vomiting.

• AMC Family– Mean Girls, Mean Girls 2
• Bravo– The Fashion Show (Finale)
• Comedy– Onion SportsDome
• Disney– Eloise at the Plaza
• Discovery– Dirty Jobs (last week’s and new), Auction Kings (premier)
• ESPN– College Hoopies, Florida @ Georgia, Purdue @ Ohio State
• ESPN2– Australian Open
• Food– Cupcake Wars, Chopped (premiers)
• FX– The Incredible Hulk, Lights Out x 3 (Episode 2 premier and 2 Instapeats)
• National Geographic– English Royals (with premier)
• Oxygen– Catwoman
• Sci Fi– TNG marathon
• Speed– Monster Jam
• Turner Classic– Sons of the Desert, General Spanky, Topper
• TLC– What Not to Wear (premier)
• TNT– Bad Boys
• Travel– Bizarre Foods With Andrew Zimmern (last week’s and new)
• USA– White Collar x 2 (premier and Instapeat)
• Vs.– Canadiens @ Flyers

Hello, Fry. Muahahahaha! Just dropped by to make sure you’re as happy with our little deal as I am… oh, give me back my hands! These things are always touching me in… places.

Later-

“The use of words expressing something other than their literal intention.” Now that *is* irony!

Not quite Bender Bending Rodriguez.

• AMC– Airplane
• Comedy– The Devil’s Hands Are Idle Playthings
• History– Top Gear (Season Finale repeat)
• Sci Fi– Dead Space: Downfall
• Turner Classic– There Goes My Heart, Zenobia
• Toon– Blue Harvest
• USA– Royal Pains (this week’s)
• VH1– Barbershop

Dave in repeats from 11/22.  Jon has James Franco, Stephen Amy Chua.  Conan hosts Steven Ho and Wanda Jackson.

Your lyrics lack subtlety! You can’t just have your characters announce how they feel! That makes me feel angry!

Zap2it TV Listings, Yahoo TV Listings

Evening Edition is an Open Thread

Now with 41 Top Stories.

1 Tunisia to shake up cabinet as US presses for vote

by Ines Bel Aiba and Hassan El Fekih, AFP

52 mins ago

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Bob Herbert: Raising False Alarms

If there’s a better government program than Social Security, I’d like to know what it is.

It has gone a long way toward eliminating poverty among the elderly. Great numbers of them used to live and die in ghastly, Dickensian conditions of extreme want. Without Social Security today, nearly half of all Americans aged 65 or older would be poor. With it, fewer than 10 percent live in poverty.

The Center on Budget and Policy Priorities tells us that close to 90 percent of people 65 and older get at least some of their family income from Social Security. For more than half of the elderly, it provides the majority of their income. For many, it is the only income they have. . . . . .

We need a reality check. Attacking Social Security is both cruel and unnecessary. It needs to stop.

New York Times Editorial: What Comes After No?

The Republicans have vowed to “repeal and replace” President Obama’s historic health care reform law. Now that House Republicans have muscled through a symbolic repeal bill, they will have to deliver their own alternative plan. Don’t expect much.

There are many more slogans than details. But it is already clear that their approach would do almost nothing to control skyrocketing health care costs and would provide little help to the 50 million uninsured Americans.

Eugene Robinson: In the GOP’s budget, a surplus of spite

Despite what you might have heard, the coming battle on Capitol Hill is not really about “government spending” in the abstract. It’s about two radically different visions of how money should be spent.

Republicans who feign attacks of the vapors and fainting spells over the big, scary deficit would be more convincing if they didn’t begin with the insane premise that defense spending should be sacrosanct. The House leadership in the past few days has begun to signal retreat from this indefensible position, but it’s unclear how much of the hyper-conservative GOP majority will follow.

Robert Reich: The State of the Union and the Federal Budget: Investing in America’s Future

Word has it that the president will be emphasizing “improving American competitiveness” in his State of the Union Address Tuesday night. As I’ve noted, the term is meaningless — but it’s politically useful. CEOs and many conservatives think it means improving the profitability of American companies. Liberals and labor unions think it means increasing export jobs.

Neither touches at the heart of the matter. Hopefully, the president will. Over the long term, the only way to improve the living standards of most Americans is to invest in our people — especially their educations, skills, and the communications and transportation systems linking them together and with the rest of the world (infrastructure).