Challenge from the Right

My Name Is Roger Murdock

After a greeting like that I can’t reasonably ask for more, but I do.

Yes, that is Yackety Sax.

Reprinted from 5/5/2012

The name simply means “The Fifth of May” and it’s an oddly U.S. American holiday.

Except in the State of Puebla they don’t much celebrate the victory over the French at the Battle of Puebla in Mexico which makes it much more like Patriot’s Day that we here in New England get to celebrate almost every year as an extra filing day (I understand there’s also a foot race in Boston).

Interestingly enough it was a stand up fight against the banksters which they lost (those who do not remember history…).  Some people say that the French intervention was intended to establish a supply line to aid the Slave Owner’s Rebellion (or as the more charitable put it, The War of the Rebellion).

Not Congressionally recognized until 2005, celebrations started in California as early as the mid 1860s and for over 100 years were most common in Southwestern States with a large population of people of Mexican descent.  Now of course it’s just another excuse to over consume the cheap crappy Tequila and Beer that Mexico exports (don’t get me wrong, there are good Mexican Beers and Tequila but Corona, Dos Equis, and Jose Cuervo are not them) and ignore real, actual factual Mexican history because we’re so fucking exceptional that understanding and caring about the countries we border is as beneath us as even knowing which ones they are.

Just don’t mistake it for Grito de Dolores.

This was no ordinary homecoming.  This was a do-or-die attempt to lay the ghost of years of rejection from the horse-rearing elite and the literati who sat in those privileged boxes overlooking the track and those unprivileged craven hordes who grovelled around the centre-field where he had suffered as a boy.

The clubhouse as I remember was worse, much worse than I had expected.  It was a mess.  This was supposed to be a smart, horsey clubhouse, oozing with money and gentry, but what I saw had me skulking in corners.  It was worse than the night I spent on Skid Row a month later, back in New York.  My feet crunched broken glass on the floor.  There seemed no difference between a telephone booth and a urinal; both were used for the same purpose.  Foul messages were scrawled in human excrement on the walls and bull-necked men, in what had once been white, but were smeared and stained, seersucker suits, were doing awful things to younger but equally depraved men around every corner.  The place reminded me of a cowshed that hadn’t been cleaned in fifteen years.  Somehow I knew I had to look and observe.  It was my job.  What was I being paid for?  I was lucky to be here.  Lots of people would give their drawing arm to be able to see the actual Kentucky Derby which was now hardly an hour away.  Hunter understood and was watching me as much as he was watching the scene before us.

Something splattered the page I was drawing on and, as I moved to wipe it away, I realized too late it was somebody’s vomit.  During the worst days of the Weimar Republic, when Hitler was rising faster than a bull on heat, George Grosz, the savage satirical painter, had used human shit as a violent method of colouring his drawings.  It is a shade of brown like no other and its use makes an ultimate statement about the subject.

‘Seen enough?’, asked Hunter, pushing me hastily towards an exit that led out to the club enclosure.  I needed a drink.  ‘Er… one more trip to the inner-field Ralph I think,’ I heard Hunter say nervously.  ‘Only another half-hour to the big race.  If we don’t catch the inner-field now, we’ll miss it.’  So we went.

While the scene was as wild here as it had been in the clubhouse, it had a warmer, more human face, more colour and happiness and gay abandon – the difference in atmosphere between Hogarth’s Gin Lane and Beer Street.  One harrowed and death-like the other bloated with booze but animal-healthy.

Who would have thought I was after the gristle, the blood-throbbing veins, poisoned exquisitely by endless self-indulgence, mint juleps, and bourbon.  Hide, anyway, behind the dark shades you predatory piece of raw blubber.

The race was now getting a frenzied response as Dust Commander began to make the running.  Bangles and jewels rattled on suntanned, wobbling flesh and even the pillar men in suits were now on tip-toe, creased skin under double-chins stretched to the limit into long furrows that curved down into tight collars.

Mouths opened and closed and veins pulsed in unison as the frenzy reached its climax.  One or two slumped back as their horses failed, but the mass hysteria rose to a final orgasmic shriek, at last bubbling over into whoops of joy, hugging and back slapping.  I turned to face the track again, but it was all over.  That was it.  The 1970 Kentucky Derby won by Dust Commander with a lead of five lengths – the biggest winning margin since 1946 when Triple Crown Champion, Assault, won the Derby by eight lengths.

‘I think it’s time I was thinking of getting back to New York.  Let’s have a meal somewhere and I can phone the airline for plane times.  What day is it, we seem to have lost a weekend.  I need a drink.’

‘You need a lynching.  You’ve upset my friends and I haven’t written a goddamn word.  I’ve been too busy looking after you.  Your work here is done.  I can never come back here again.  This whole thing will probably finish me as a writer.  I have no story.’

‘Well I know we got a bit pissed and let things slip a bit but there’s lots of colour.  Lots happened.’

‘Holy Shit!  You scumbag!  This is Kentucky, not Skid Row.  I love these people.  They are my friends and you treated them like scum.’

Ralph Steadman- The Joke’s Over

If you want to you can watch Kentucky Derby coverage from 11 am ET (on Vs. where it actually started on Wednesday) until 7 pm (on NBC, where they spare you the pre-race hype until 4).

I suppose this is good thing since you can hardly be expected to follow Horse Racing unless you’re a tout or plunger in one of the few forms of gambling deemed socially acceptable (as opposed to Poker, which is not gambling at all) and 2 year olds don’t have much of a record to handicap.  Hoppertunity is out with a sore foot.

Ice Cream.  Get your Tutsi Frootsie Ice Cream.

It’s really mostly an excuse to wear hats that would be rejected from a 5th Avenue Easter Parade or Royal Wedding and get tanked up on Bourbon that is best sipped with a soda chaser and not muddled up with mint.

The Kentucky Derby tax break

By RACHAEL BADE, Politico

5/2/14 6:20 PM EDT

A gift from Congress is expected later this year: renewal of a multimillion dollar tax break for thoroughbreds.

It’s a nice little perk for racehorse investors, considering some of these prized animals go for hundreds of thousands, sometimes, millions of dollars.

“Oh, the poor impoverished owners of racehorses,” said tea party favorite Rep. Tim Huelskamp (R-Kan.). “I don’t know how you can defend that … I’m sure it’s so critical that we borrow money from the Chinese to spend” on this.

…

The Senate Finance Committee last month approved an $85 billion package renewing most tax extenders for two years, including the racehorse provision, which will cost about $97 million in fiscal 2014 and 2015 – a small fraction of the overall tax package cost.

…

The Humane Society argues that “healthy racehorses end up in the slaughter pipeline when their owners abandon them because they are injured or aren’t turning a big enough profit.”

They cite Kentucky Derby winner Ferdinand, who was sold and then slaughtered in Japan in 2002.

Over a decade, the racehorse tax provision would cost about $500 million, according to a February Congressional Budget Office report.

…

“To me, the horse-thing is just one example of this bigger problem,” said Steve Wamhoff, policy analyst at the left-leaning Citizens for Tax Justice. He is steaming about “the fact that Congress can find time and money for this but not unemployment” insurance.

Loves me some Derby winner viande de cheval.

Mint Julep

Ingredients

• 4 cups bourbon
• 2 bunches fresh spearmint
• 1 cup distilled water
• 1 cup granulated sugar
• Powdered sugar

Directions

Other Stories in The New York Times

• Derby Dawns for Two Sons Seeking Win Fathers Missed By JOE DRAPE
• A Sport’s Beauty Clashes With the Stain of a Scandal By JOE DRAPE
• Derby Dreams Meet an Early End By MELISSA HOPPERT

I suppose I might mention this is the 140th edition.

I suppose I don’t have to tell the hipper among you today is Derby Day, the most exciting (don’t bink) two minutes in sports.

Preceded by the most boring 2 hours in sports and a display of drunken debauchery that puts a Turn Left Bumpercar race to shame.  Make sure you check out the $400 hats and ignore the pervasive smell of vomit that over rides even the odor of horse crap.

For more and better insights like this by Ralph Steadman who accompanied Stockton to the 1970 edition I encourage you to drop by my sites, The Stars Hollow Gazette and DocuDharma for full coverage.

I thought for about 20 whole seconds before I came up with the perfect music for today.  It’s a Romantic piece, a symphony in 4 parts (Berlioz, not me) evoking life in the Swiss Alps.

Unlike a true symphony it’s very short, about 12 minutes, and the four movements, Dawn, Storm, Call to the Cows, and March of the Swiss Soldiers, are unseparated by pauses.  No doubt you will recognize many of the themes, it’s among the most famous pieces in music.

That’s Arturo Toscanini by the way.

So if you want to learn a little bit more about, grab your silver julep cup (never too early to get drunk on Derby Day) and join me below the fold.

Pride of the North East

Even Connecticut, and let’s be honest, who nobody else from the region likes or respects.

2014, feel the excitement

Web Exclusive Extended Interview below.

Why Aren’t North American Workers More Militant?

May Day 2014: Reflections On Oligarchy

By: DSWright, Firedog Lake

Thursday May 1, 2014 9:28 am

Despite the origins of the holiday coming from events in Chicago the holiday is officially ignored in the USA. Outside the US celebrations are common in most major capitals in the world.

After the questionable trial and execution of anarchists for alleged involvement in a bombing in Haymarket Square in 1886, solidarity movements sprang up around the world and International Workers’ Day or May Day was born. The US government recognizes Labor Day in September a behavior started by President Grover Cleveland in 1887 to thwart attempts at linking May Day with the labor movement in America.

Workers and activists who protested in Chicago in 1886 were objecting to the economy and conditions of the Gilded Age – where the top 1%’s wealth and consequential political power so dwarfed the 99%’s that the American people questioned whether they had a functioning republic. Sound familiar?

Social science has advanced somewhat since the 19th century so today we have clear evidence the sepsis of plutocracy that effected the Gilded Age has flared up again. A study by Princeton University demonstrates thoroughly that the US has become a de facto oligarchy while field experiments confirm that donors rather than voters have the power. All this while the Supreme Court, a body ruled by nine lawyers who have never successfully run for public office, continues to gut restraints on money in politics.

We are in a new Gilded Age without a doubt so will there be another social movement that lays the groundwork for a Teddy Roosevelt to take on entrenched moneyed interests? Or has the resilience of corporate power and imperialism sucked America into a death spiral with which there is no escape?

Should we keep fighting or is it time to embrace the suck?

Never.

The Internationale is a famous socialist, communist, social-democratic and anarchist anthem.  It is sung traditionally with the hand raised in a clenched fist salute.

A DocuDharma tradition now at The Stars Hollow Gazette.

Why Does Refusing to Put Fraudulent Banks into Receivership Help the Economy?

by William Black, New Economic Perspectives

Posted on April 30, 2014

Conservative economists love “creative destruction.” They can’t wait to “get their Schumpeter on” when a business fails and thousands of workers lose their jobs. There is no more “creative destruction” conceivable than when we put a bank that has become a fraudulent enterprise into receivership, remove the controlling officers leading the fraud, and sell the bank through an FDIC-assisted acquisition. Indeed, the pinnacle of creative destruction would be doing this with a systemically dangerous institution (SDI) through a process that split the supposedly “too big to fail” bank into smaller components that (1) were no longer large enough to pose a systemic risk, (2) were more efficient than the bloated SDI, (3) no longer extorted a large (implicit) government subsidy that made real competition impossible, and (4) no longer had dominant political power via crony capitalism. Unlike the situation in which an SDI collapses suddenly in the midst of causing a global crisis when its frauds cause a liquidity crisis, it is vastly easier to put fraudulent SDIs in receivership in today’s circumstances. Unlike Arthur Anderson, the receivership power allows us to keep the enterprise alive and create more competitors rather than fewer.

As I often remarked, it is a testament to the financial and moral sophistication of our successors as financial regulators relative to our primitive era that they have realized that keeping fraudulent CEOs in charge of our largest banks – and virtually never putting such banks into receivership however massive and damaging their serial felonies – is the key to achieving financial stability. Their system, it must be admitted, has proven far superior. GDP losses are merely far more than 100X greater in the current crisis than in the savings and loan debacle. The jihad against effective regulation and prosecution of elite control frauds has been an enormous success. The primary question is whether to classify the resultant epidemics of accounting control fraud as “unintended consequences” of the three “de’s” (deregulation, desupervision, and de facto decriminalization) or as a very “intended consequences.”

…

Lanny Breuer’s infamous “lamentations” speech (while head of DOJ’s Criminal Division) underscored how he fell hook, line, and sinker for the absurd claims of economists hired by today’s most elite fraudulent banksters that banks (and bankers!) should be “too big to prosecute.” By Breuer’s own bumbling admission, he lay awake at night for fear that his (always hypothetical) prosecutions of the major banks might “cause” a fraudulent bank to “fail.” This is, of course, heresy under the Schumpeterian creed of “creative destruction,” but theoclassical economists are very forgiving of their co-religionists who get rich by spreading heresy in the service of fraudulent elites.

Breuer was so bad that he obscured what we primitive regulators and white-collar criminologists had emphasized for decades. First, no banker is “too big to jail.” They are easily replaceable and removing a fraudulent bank CEO from power is the single most productive act that regulators and prosecutors can accomplish. Breuer and Attorney General Eric Holder were involved in a con when they claimed that their failure to prosecute the senior bank officers leading the frauds was in any way related to “too big to fail.” Hilariously, they even applied the “rationale” for non-prosecution to former bank officers – as if a bank would fail “because” its former officers were prosecuted. It is a testament to the weakness of the reportage that this claim was not treated with ridicule.

…

The Bush and Obama administration have already allowed the statute of limitations to run on vast numbers of frauds led by the CEOs of mortgage bankers and the 10 year statute of limitations applicable to federally insured banks (which we obtained in response to the S&L debacle) is rapidly running. The recent DOJ IG report documented the hollow nature of the FBI investigations related to the crisis. Even when the statute of limitations has not run it becomes very difficult to try “old” cases because of the loss of documents and memory and the feeling of judges and juries that the matter cannot have been terribly grave if the FBI ignored it for eight years. Even if Holder had a “Road to Damascus” conversion today and tried to prosecute the elite bank frauds that drove the crisis he would be far too late. The DOJ will commit its greatest strategic failure to uphold the rule of law. That does not mean that it could not bring a dozen prosecutions against the most destructive and fraudulent bank CEOs during the waning years of the Obama administration, but there is no evidence that the FBI is even investigating those frauds.

Instead, Holder has given up on prosecuting the CEOs that led the frauds that caused our crisis. The new DOJ press leak indicates that DOJ may charge two foreign banks with committing frauds unrelated to the financial crisis. This is hardly a major accomplishment, but it is all that Holder can bring himself to do so it was ballyhooed in “Deal Book” under this sad title “2 Giant Banks, Seen as Immune, Become Targets.”

…

Deal Book has written another article praising a moral and policy travesty. Read beyond the article’s propaganda and you will find that it actually contains admissions by senior DOJ officials confirming that our description of the disgraceful policies that we charged that DOJ and the anti-regulators were following was correct and confirming that our conclusion that such policies were deeply criminogenic had proved correct. Bharara admitted that the GBH Doctrine created a “gaping liability loophole that blameworthy [controlling bank officers] are only too willing to exploit.” Until we appoint regulators with the spines, integrity, brains, and courage to realize that our paramount function is to place banks led by frauds into receivership and end the CEO’s ability to lead a control fraud we will fail to have a sound banking system and we will fail to restore the rule of law.

Big Banks Erred Widely on Troubled Mortgages, U.S. Regulator Confirms

By MICHAEL CORKERY, The New York Times

April 30, 2014, 8:14 pm

The latest analysis found that at least 9 percent of the errors discovered in the review involved banks improperly denying loan modifications that would have prevented foreclosures. The report also found that more than half of the errors related to administrative flaws and improper fees charged to homeowners during the foreclosures process.

Last year, 15 financial institutions settled with banking regulators, making payments that totaled $3.9 billion to more than four million homeowners. The settlements ended the independent reviews, which had been costly and lengthy. As part of the deals, the banks agreed to pay the homeowners, regardless of whether they had been harmed.

…

Bank of America, for example, had reviewed only 6 percent of its files, revealing a financial error rate of 8.9 percent. Wells Fargo had examined about 9.6 percent of its records, finding an error rate of 11.4 percent.

…

Before the reviews, regulators discovered many problems with the way banks had handled foreclosures after the financial crisis, including bungled modifications and the practice of “robo-signing,” where reviewers signed off on mounds of foreclosure paperwork without verifying its accuracy. Other errors included wrongful foreclosures and improper fees charged to homeowners.

…

In particular, the Government Accountability Office, an auditing arm of Congress, said this week that regulators had not demanded specific terms for $6 billion in foreclosure prevention measures that the banks agreed to undertake, in addition to the $3.9 billion in cash pay outs to homeowners.

It also said the decision to cut short the review left regulators with limited information about actual harm to borrowers when they negotiated the $10 billion settlement.

Regulators had calculated a preliminary error rate of 6.5 percent for all the banks when they negotiated the settlements last year, according to the G.A.O.

…

It was one of the largest and most costly bank failures in American history. And the bank’s collapse could end up costing the F.D.I.C. even more money because of the Independent Foreclosure Review.

It is possible that the F.D.I.C. will have to cover at least some of the costs of the $8.5 million payouts, banking specialists said. Specifically, the F.D.I.C. could be responsible for any errors in the first three months of 2009 when the federal regulators owned IndyMac’s assets and ran its servicing operations, they said.

It’s Good – no – Great to be the CEO Running a Huge Criminal Bank

By William K. Black, New Economic Perspectives

April 29, 2014

Every day brings multiple new scandals.  At least they used to be scandals.  Now they’re simply news items strained of ethical content by business journalists who see no evil, hear no evil, and speak not about evil.  The Wall Street Journal, our principal U.S. financial journal ran two such stories today.  The first story deals with tax evasion, and begins with this cheery (and tellingly inaccurate) headline: “U.S. Banks to Help Authorities With Tax Evasion Probe.”  Here’s an alternative headline, drawn from the facts of the article: “Senior Officers of Goldman Sachs and Morgan Stanley Aided and Abetted Tax Fraud by Wealthiest Americans, Failed to Make Required Criminal Referrals, and Demanded Immunity from Prosecution for Themselves and the Banks before Complying with the U.S. Subpoenas: U.S. Department of Justice Caves in to Banker’s Demands Continuing its Practice of Effectively Immunizing Fraud by Most Financial Elites.”

Oh, and the feckless DOJ (again) did not require any officer who committed the felony of aiding and abetting tax fraud to resign or to repay the bonuses he “earned” through his crimes.  But not to worry, the banks – not the bankers – may have to pay fines as the cost of doing their felonious business.  The feckless regulators did not even require Goldman Sachs and Morgan Stanley to disclose to shareholders their participation in the program.

…

The context of this WSJ story is the broader series of betrayals of homeowners by the regulators and prosecutors led initially by Treasury Secretary Timothy Geithner and his infamous “foam the runways” comment in which he admitted and urged that programs “sold” as benefitting distressed homeowners be used instead to aid the banks (more precisely, the bank CEOs) whose frauds caused the crisis.  The WSJ article deals with one of the several settlements with the banks that “service” home mortgages and foreclose on them.  Private attorneys first obtained the evidence that the servicers were engaged in massive foreclosure fraud involving knowingly filing hundreds of thousands of false affidavits under (non) penalty of perjury.  As a senior former AUSA said publicly at the INET conference a few weeks ago about these cases – they were slam dunk prosecutions.  But you know what happened; no senior banker or bank was prosecuted.  No banker was sued civilly by the government.  No banker had to pay back his bonus that he “earned” through fraud.

…

Everyone involved in the faux foreclosure review – the “consultants” hired who to do the review, the mortgage servicers, the (non) regulators, and the GAO performed abysmally.  The “review” was an expensive farce.  The regulators did not conduct the review.  The servicers did not conduct the review.  The consultants were chosen by the servicers, which the regulators should never have allowed.  The consultants were allowed to have additional conflicts of interest such as having worked on the loan foreclosures they were reviewing.  The “design” of the (non) study was an embarrassment.  The (non) study collapsed almost immediately because it turned out that many of the servicers’ files were so pathetic that the study “design” could not be followed.  Rather than stop and reconsider the implications of those file defects for the likelihood that the servicers engaged in fraud in order to foreclose the regulators decided to continue.  The more severe the file defects the greater the incentive of servicers to engage in foreclosure fraud.

The consultants were soon hopelessly behind schedule and budget because of the severity of the loan file defects.  Eventually, the (non) regulators gave up and brought the (non) study to an end, not with a bang but with a whimper.  Real regulators would have had great negotiating leverage.  The servicers had agreed to conduct the study and failed.  It would cost the servicers more to complete the review than simply boost the payout by several billion dollars.  The two obvious answers were to continue the study and order interim payouts or to stop the study and in return for a significantly larger payout to homeowners.  Naturally, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve found a third, far worse choice.  They left the cash on the table that could have gone to the homeowners.  The GAO was no stronger.  They do agree that the OCC and the Fed left billions on the table but they also give them a pass, saying that the settlement is in the “range” that would emerge from the regulators assumed rate of bad foreclosures.  The problem, as the facts disclosed in the GAO’s report make clear, but GAO’s analysis ignores, is that the regulators’ assumed rate of bad foreclosures had no reliable basis and was proven to be far too low an estimate by the fact that the loan files were so incomplete that the consultants could not complete the study.  So, there is no reliable basis for GAO’s claim that there is any “range” of reasonableness for the payments to homeowners.