Daily Archive: 06/28/2011

Jun 28 2011

MBIA

MBIA is the Municipal Bond Insurance Association.  It is a monoline insurer that expanded into the Collateralized Debt Obligation market in the 90s and naughty aughties.

As it became undeniable that they’d engaged in Insurance Fraud and didn’t have nearly enough assets to pay off their policies their Insurance Financial Strength (IFS) rating declined from AAA in April of 2008 to BBB in March of 2010.

In 2009 they restructured the company, splitting off the original (and still profitable because they never default) municipal bond operation from the highly speculative and money losing CDO business.

The Insurance Superintendent of New York State oked this and MBIA has been using his approval to prevent defrauded customers like Bank of America, Morgan Stanley, UBS AG and RBS from bringing suit for fraudulent conveyance and breach of contract.  Well today the New York State Court of Appeals (don’t let the name fool you, this is the final court in New York) ruled that this was not legal and the suits could proceed.

NY Court: MBIA Policyholders Can Sue

By ERIK HOLM, The Wall Street Journal

JUNE 28, 2011, 12:57 P.M. ET

The judges in the majority in Tuesday’s ruling wrote that MBIA was wrong in its contention that a provision in New York state insurance law allowed the state insurance superintendent to be the “exclusive arbiter of all private claims” related to the MBIA restructuring plan.

“A cursory reading of the plain language reveals that it does not vest the Superintendent with the power to consider causes of action, such as plaintiffs’,” the judges wrote.



ABN AMRO and the other policyholders contend the restructuring wrongly left the account that backed the policies sold on structured securities without enough money to pay claims.

“The Court of Appeals has squarely rejected MBIA’s efforts to shut the courthouse door,” said Robert Giuffra, lead counsel for the banks and a partner with Sullivan & Cromwell LLP, in a statement. “We’re confident that MBIA’s fraudulent restructuring will be reversed.”

Much as I hate rooting for objectively bad actors like BoA to succeed, the truth is that having the vampire squid cannabilize each other in a feeding frenzy of fear and greed is the most likely avenue to punishing them the way they deserve.

Jun 28 2011

Lagarde the New Head of the IMF

It was announced that the International Monetary Fund has appointed French Finance Minister Christine Lagarde its first female head. With the backing of China, Russia and, today, the United States, Ms. Lagarde has some very tough tasks set out for her the most important being the economic crisis in Greece:

Greek Strike Overshadows Budget Vote

Greek police fired tear gas to disperse protesters in the center of Athens as labor unions shut down government services before a vote on austerity measures that may determine if the nation can avoid a default. . . . .

Papandreou faces his second survival test in a week tomorrow when lawmakers vote on the package that’s needed before the cash-strapped nation can tap a fifth loan payment from last year’s 110 billion-euro ($157 billion) rescue. Failure to pass the government’s 78 billion-euro plan may lead to the euro area’s first sovereign default. . . .

Asset Sales

State-asset sales are the “first pillar” in any new financing package for Greece and an important factor for its European Union and International Monetary Fund partners, who are supplying the aid, Finance Minister Evangelos Venizelos said in parliament today. He spoke as a debate on the second bill, the so-called Implementation Law, began under a fast-track process, to make a June 30 deadline.

The “Shock Doctrine” in full play and the Greek people are not happy

Jun 28 2011

Punting the Pundits

“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”.

New York Times Editorial: The First Amendment, Upside Down

The Supreme Court decision striking down public matching funds in Arizona’s campaign finance system is a serious setback for American democracy. The opinion written by Chief Justice John Roberts Jr. in Monday’s 5-to-4 decision shows again the conservative majority’s contempt for campaign finance laws that aim to provide some balance to the unlimited amounts of money flooding the political system.

In the Citizens United case, the court ruled that the government may not ban corporations, unions and other moneyed institutions from spending in political campaigns. The Arizona decision is a companion to that destructive landmark ruling. It takes away a vital, innovative way of ensuring that candidates who do not have unlimited bank accounts can get enough public dollars to compete effectively.

Eugene Robinson: The Economy Is Bad Enough

   There is no good reason for negotiations on the budget and the debt ceiling to be deadlocked, because the solution is obvious: First, do no harm.

   The Hippocratic injunction should be something befuddled economists and warring politicians can agree on. With the nation struggling to recover from a devastating recession, unemployment stuck at crisis levels, financial markets spooked by the possibility of European defaults and consumers disinclined to consume, it makes no earthly sense to suck money out of the economy.

   Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road-but in a purposeful, intelligent way.

Maria Margaronis: Greece in Debt, Eurozone in Crisis

Athens-When he was elected prime minister in 2009 at the head of Greece’s Panhellenic Socialist Movement (PaSoK), George Papandreou was going to wipe out corruption, open up politics, rejuvenate the country’s sclerotic economy. “There is money,” he said then, although he must have known there wasn’t any in the public coffers. Less than two years later, he has allowed the “troika” of the European Commission, the European Central Bank (ECB) and the International Monetary Fund to bind him on the horns of an impossible dilemma: either the Greek government implements a second round of austerity measures more savage than any yet endured by a developed country, with deeper cuts and tax hikes and a wholesale, cut-price sell-off of its public assets, or Greece faces default on its sovereign debt, imminent bankruptcy.

Cyril Mychalejko: Private Contractors Making a Killing Off the Drug War

As tens of thousands of corpses continue to pile up as a result of the US-led “War on Drugs” in Latin America, private contractors are benefiting from lucrative federal counternarcotics contracts amounting to billions of dollars, without worry of oversight or accountability.

US contractors in Latin America are paid by the Defense and State Departments to supply countries with services that include intelligence, surveillance, reconnaissance, training, and equipment.

John Nochols: Supreme Court Removes Another Barrier to Corporate Ownership of Elections

The US Supreme Court’s conservative majority continued its project of bartering off American democracy to the highest bidder with a decision Monday that will make it dramatically harder to counter free-spending attack campaigns funded by billionaire donors and corporate spin machines.

With a 5-4 vote, the Court has struck down a matching-funds mechanism in Arizona’s Clean Elections Law that allowed candidates who accepted public funding to match the spending of privately funded candidates and independent groups that might attack them. Under the Arizona law-which has long been considered a national model for using public funds to pay for campaigns-candidates who accept public funding are limited in what they can spend.

Robert Drefuss: Reality Check: Budget Cuts Inevitable at the Department of Defense

There’s an inevitability to the coming decline of US power and influence worldwide, as the American economy shrinks relative to the economic power of other countries, as America’s allies in places like Egypt strike out on their own, and as the size of the US military declines because the United States can no longer afford to spend upwards of $700 billion on defense.

Still, there are those who believe that the United States must maintain, and even increase its spending at the Pentagon, even as more and more Republicans are prepared to throw the military under the bus to save money. Take, for instance, Fred Hiatt of the Washington Post, who pens an op-ed in today’s paper titled: “What’s happened to America’s leadership role?” Hiatt, a reliable hawk who’s helped steer the Post into indefensibly pro-defense positions, including support for the wars in Afghanistan and Libya, accuses President Obama of surrendering the US leadership role by refusing to take the lead in battling Libya’s Muammar Qaddafi and by backing a modest drawdown in Afghanistan:

Jun 28 2011

On This Day In History June 28

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.

Click on images to enlarge.

June 28 is the 179th day of the year (180th in leap years) in the Gregorian calendar. There are 186 days remaining until the end of the year.

In common years it is always in ISO week 26.

This date is the only date each year where both the month and day are different perfect numbers, June 6 being the only date where the month and day are the same perfect number.

On this day in 1919, Keynes predicts economic chaos

At the Palace of Versailles outside Paris, Germany signs the Treaty of Versailles with the Allies, officially ending World War I. The English economist John Maynard Keynes, who had attended the peace conference but then left in protest of the treaty, was one of the most outspoken critics of the punitive agreement. In his The Economic Consequences of the Peace, published in December 1919, Keynes predicted that the stiff war reparations and other harsh terms imposed on Germany by the treaty would lead to the financial collapse of the country, which in turn would have serious economic and political repercussions on Europe and the world.

snip

A decade later, Hitler would exploit this continuing bitterness among Germans to seize control of the German state. In the 1930s, the Treaty of Versailles was significantly revised and altered in Germany’s favor, but this belated amendment could not stop the rise of German militarism and the subsequent outbreak of World War II.

In the late 1930s, John Maynard Keynes gained a reputation as the world’s foremost economist by advocating large-scale government economic planning to keep unemployment low and markets healthy. Today, all major capitalist nations adhere to the key principles of Keynesian economics. He died in 1946.

Governments ignore Keynes at their own peril.

Jun 28 2011

Six In The Morning

Afghans Build Security, and Hope to Avoid Infiltrators



By RAY RIVERA

 For someone who had once joined an insurgent group, and whose family was tied to a top Taliban commander, Akmal had a strikingly easy path into the Afghan National Army.

The district governor who approved his paperwork had never met him. A village elder who was supposed to vouch for him – as required by recruiting mandates – did little more than verify his identity.

No red flags went up when, after just six weeks in the army, he deserted. He returned more than three months later with the skimpiest of explanations and was allowed to rejoin. “I told them I got sick,” Akmal recalled.




Tuesday’s Headlines:

How the demise of a trusted adviser could bring down Ahmadinejad

General strike under way in Greece

‘We May Be Naive, But We Are Not Idiots’

Egypt to assist international Gaza flotilla

The real face of Hizbul Tehrir

Jun 28 2011

Debt Ceiling Negotiations, Obama Failure

Jon Walker at Firedoglake says that the negotiations on the debt ceiling keep moving right:

In the beginning, the idea that any political party would actively hold the debt ceiling hostage to reduce the deficit was considered absurd. Mainly because all the top politicians have admitted they don’t want the country to default and that actually forcing a default would have the exact opposite affect of sending Treasury bond rates up, making the deficit problem dramatically worse. Only a year ago, the idea the debt ceiling must be raised was not just the broad centrist position, and it has been the common sense position for decades.

Instead of holding a firm line and pointing out that Republicans were flirting with incoherent madness related to the debt ceiling, Democrats ,lead by President Obama, choose to feed the Republican deficit hysteria by actively refusing to take a stand. This moved the debate radically to the right. It made it acceptable to hold America credit worthiness hostage to demand deficit reductions despite massive unemployment.

John Amato at Crooks and Liars gives a tutorial in Negotiating for Dummies:

Every “cut” is on the table, but not revenue increasers. This is all kabuki and the debt ceiling isn’t the same type of game they played with as shutting down our own government was. But if Democrats use meaningless military cuts to justify massive cuts in education, food safety, health research and criminal justice as some kumbaya moment, then this will be not a deal, but a ritual sacrifice.

Rachel Maddow and Chris Hayes, Washington Editor of The Nation magazine, discussed the lengths to which the Republicans have gone to undermine President Obama, calling it “craven shameless, unprincipled partisan hackery”

At this point, I call it insanity on the part of the President and the Democratic leadership.

Jun 28 2011

ek’s return

A Dream to Some…

Frankly I’m surprised that anyone noticed my unexpected absence.  After all, people write for their own reasons and start and stop according to their muse and circumstance.  The only thing I ever expected from blogging was a place where I could express my opinions without being afraid to let it slip I was a Democrat.

That was 6 years ago last April Fools Day and much has changed.

I must admit I haven’t missed it.  I have other interests in the real world where in certain rooms there’s an obligation to give me a standing ovation when I enter so my ego is quite robust.  I’ve been developing my writing in other directions which you can see on display (when I’m not otherwise distracted by my narcistist vanity reflection) at The Stars Hollow Gazette and DocuDharma.

As the only active original founder (number 9, #9, no. nein) I assure you the editorial direction of DocuDharma has not changed a bit since it’s inception in September of 2007.  We still accept and feature fiction, poetry, and conspiracy theories in addition to the most scurrilous facts.  We expect our readers to be able to tell the difference.  No I/P ever without prior approval.

In October/November 2010 buhdydharma announced his intention to abandon the site and I urged TheMomCat to assume ownership, which she did partly to maintain the historical record (Armando’s "They All Disappoint" appeared first on DocuDharma and still links there, thanks Armando) and partly because she thinks it gives Authors a place of prominence to post their pieces when many of them are prevented from doing so in other places.

We feature 9 or 10 contributions a day including regular features by some Authors familiar to me like mishima, Robyn, Translator, david seth, and BruceMcF as well as other more occassional works.

Almost exactly a year ago, on July 4th 2010, TheMomCat and I established The Stars Hollow Gazette.  This site has developed into a News, Sports, Entertainment, and Opinion publication, but while the content so far reflects mostly TheMomCat’s and my input, we’re more than willing to promote random or regular member submissions.

Regularity and Scheduling

I am a firm believer that there is nothing sadder than an empty blog with no new content.  To me it’s a demise of a vital part.  Yeah, people will visit out of sentiment or through links as long as you’re willing to pay for the hosting, but there comes a point when there is no reason to tune in.

New content is vital to a successful blog.

If you run a single hander and you’re convinced you’re just as good as Glenn Greenwald you can get away with his publishing schedule.  Even Taylor Marsh is now publishing like Atrios.

At least daily is the minimum, otherwise why do I have you in my bookmarks?  Yes, you can take weekends off, personal days too.  Robert Reich is taking 3 weeks.

For a “Community Blog” of the SoapBlox variety you have to post at least 3 times a day.

  • Morning
  • Noon
  • Night

These do not have to be earth shattering threads of cataclysmic importance.  Far from it- the more trivial and formulaic the better because you have to fill your time if you want to be Network 23 daily.

Your ‘regular’ framework appears at ‘regular’ times to drive traffic with ‘new’ content and you hang more muse driven pieces around it.  People will be motivated to visit to catch your Cartnoon (not really as simple as it seems) or Evening Edition when they know they will be posted.

I also write about other things which I’m not ashamed to express in public.

Forwards, not Backwards

Much has changed.  The song remains the same.  I stand behind everything I’ve ever written.

There are subjects I don’t care to discuss anymore.  I consider them proven and denialists, flat earthers, and other conspiracy theorists have nothing to contribute and are best ignored as the Good Germans they are.

You can’t expect the 18,000+ comment a year kind of volume I used to generate nor am I willing to manage any franchises not related to my primary sites- The Stars Hollow Gazette and DocuDharma.  I’m happy to fill in on a temporary basis… sometimes.

I’m a busy guy.  Three to five pieces a day.  I intend to digest them (actually doing that already, but it’s another diary) so that if you want to read you can.  Your reaction is up to you.

I’d like to express my sincere gratitude to the individuals who’ve supported me through this transition. Truthfully, I can’t understand why.  Whatever minor encouragement I’ve provided has been more than repaid simply by your toleration of my tedious ramblings.

Your voice is important.  It needs to be heard.  The best way to learn how to write is to read good writers and write yourself.  I consider it a public service to provide you a platform.

I try and direct your eyeballs to items of significance on which I expect you to expand.  When I’m successful details emerge I had not considered and your confidence increases.  Real leadership is developing the skills of others.

Continual inspiration is difficult to achieve, reliance on rote much easier (but its utility is not to be

denied).  Without your personal contribution to political dialog nobody knows what you think.  You may feel nobody gives A Rat’s Ass.

Stop that.  I care.

I won’t be a stranger (well, any stranger than usual) and I hope you won’t be either.  I’m excited by the prospect of resuming our conversations and I’m eager to learn how your perceptions have evolved.  Please feel free to stop by and participate in my other sites, the Soapblox platform is quite robust up to 50 diaries a day (that would be one every half hour, which I’m perfectly willing to run at) with unlimited nested commenting of the pre-peeder refresh it your own lazy self type.

As well as being an HTML playground because everyone wants to look pretty.

I have some access improvements I’m going to make real soon, but I do have my writing to keep up with.  The more you do the less I have to, sometimes you make your own fun.

Where hides evil in my kingdom, then?

Always… where you never expect it. Always.

Loose interesting stuff-

The Problem With Civility

| More

by: Armando

Sat Sep 15, 2007 at 21:05:41 PDT

On Civility

| More

by: ek hornbeck

Sun Sep 16, 2007 at 09:59:12 PDT

HRW: Khadafy ‘narrowly targeting the armed rebels’

by: fairleft

Thu Apr 14, 2011 at 19:51:21 PM EDT

Jun 28 2011

About That News Thing

Since April 8th, 2007 I’ve relied heavily on Yahoo as the go to source for my news pieces.  Those dirty rotten scoundrels have changed the format and organization on me to the point where it’s almost unrecognizable and I’m not at all sure I’ll be able to recover.

In any event it’s going to take a day or two of button pushing to see what I can salvage and I ask my readers to bear with me while I work through this process.

This is what I get for indulging myself in mudpies.

Jun 28 2011

Countdown with Keith Olbermann

If you do not get Current TV you can watch Keith here:

Watch live video from CURRENT TV LIVE Countdown Olbermann on www.justin.tv

Jun 28 2011

Minneapolis Meanderings At Netroots Nation

This years Netroots Nation in Minneapolis was the largest yet, over 2400 attendees from around the world. I had some reservations about going but from my past experience and being a new blog “owner”, I knew there was a lot I could learn and I did. There is this strange disconnect that we have with anonymous, faceless names on the net. We sometimes misinterpret what they say because we cannot hear their voice, or see their face, or watch their body language. At Netroots, we still may not know each others real names but we do get to put the face and the sound of the voice to what we now reading.

The other reason for my reservations was the current political climate. I knew there were going to be many Democrats there who are avid Obama supporters who would like his critics to sit down and be quiet, let the so-called “adult in the room” handle it. I thought Obama’s campaign machine, especially OFA, would have a huge presence. Was I ever wrong. The lack of support for the President was pretty evident in the booing that his Communications Director Dan Pfeiffer received and the hammering that Deputy Director of Health and Human Service Jay Angoff took when he couldn’t answer questions about the Affordable Health Care Act. I suspect next year in Providence, RI will be even tougher.

One of the best panels was Jane Hamsher, Lt. Dan Choi, John Aravosi and Felipe Matos. Besides Dan ripping up the OFA literature that was handed to the panelists, as I was walking in, Dan was getting “miked up”. I not only had the honor of saluting this brave man and personally thanking him but I got a hug and a kiss. Wow. Absolutely the highlight of the trip.

I got a hug and kiss from Sen Al Frankin at his meet and greet at my hotel and a thank you for phone banking for him from NYC. We are about the same height, too, five foot something.

On my last night, after the Daily Kos party which was very crowded and really loud. A friend and I headed back to the hotel where we were both staying in search of food. The hotel restaurant had already closed but the young lady who was tending the Martini Bar, she made a great martini by the way, directed us to a nearby restaurant that served steaks, ribs and fish. We had a great dinner, the wait staff was friendly and funny and as we were walking back to the hotel, we were stopped by a young couple. They had seen our badges from the convention (yeah, we were still wearing them) and wanted to tell us about the young lady’s immigration dilemma, so we could get the message out that there need to be some real and fair immigration reform. The young lady’s boyfriend explained that she is from a Latin American country studying for her doctorate in a science field. She has a job and applied to stay her after she graduates but has been denied a residence visa. That is insane. Seriously,  here is a young woman, intelligent, educated, contributing to this country’s economy and she is not allowed to stay? This country needs some drastic revision of its immigration policy and President Obama so missed the opportunity to use his popularity in his first two years in office to do that and so much more.

The five days in this lovely city on the upper Mississippi went fast. I was amazed and impressed with the friendly smiles and greeting from the staff at the hotel and convention center where you expect it but from people passing on the street. As a New Yorker, I’m not used to the morning dog walkers to smilingly say hello. Friday night after the New York Gay Marriage Bill passed, one of the pictures that went viral was the the photo of the new I-35W bridge illuminated in the rainbow colors of the GLBT movement. I am not at all surprised.

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