Spitzer targeted for takedown by Feds? House Financial Services Committee wants to know.

Congressional Panel Seeks Inquiry on Roots of Spitzer Scandal - NYTimes.com

November 26, 2008

Panel Asks How Inquiry Began on Spitzer Banking

By DANNY HAKIM

ALBANY — Eight months after a federal investigation into a prostitution ring brought about the downfall of Gov. Eliot Spitzer, the question persists in some circles: Was the federal government out to get Mr. Spitzer?

No evidence has surfaced to support such an assertion, and the prosecutor in the case has said that politics played no role in the pursuit of Mr. Spitzer, a Democrat. But that has not put to rest suspicions, expressed on left wing blogs, that Mr. Spitzer, a zealous pursuer of Wall Street wrongdoing who some thought could one day be president, had been singled out.

Now, a congressional committee is pursuing what would be the first public examination of the events that prompted the initial inquiry into his bank transactions, which showed he was sending money to a front company for Emperor’s Club V.I.P.

The House Financial Services Committee intends to take up the matter early next year and tentatively plans to hold hearings that could include testimony from the United States Treasury’s law enforcement unit, along with Mr. Spitzer’s bank, North Fork, and HSBC, a bank used by a company connected to the prostitution service.

“The question was: Why were they looking for this? Is this political retribution?” said Representative Michael E. Capuano, a Massachusetts Democrat and a member of the committee who has been critical of the increased scrutiny of banking transactions, which increased greatly under the passage of the Patriot Act.

“It raises questions in my mind that he may have been targeted for political purposes,” he said, adding that he had no evidence that suggested as much. ....

One of Mr. Spitzer’s last appearances in Washington was before a subcommittee of the House Financial Services Committee — a hearing on bond insurance.

It was on that trip that Mr. Spitzer stayed at the Mayflower Hotel in Washington, where he had the encounter that would lead to his resignation a month later.

   Of course they "assassinated" him. It was obvious at the time.

8500: The New 9000

  I've sold all of my calls and loaded up on puts. I love dead-cat bounces, but this dog don't hunt. Massive federal bailouts of bankrupt banks: good for a bounce, but no way to run a country. Go ahead and keep it bouncing, Fed Boys, 'cause you're going to get about a third of all the cash I'm raking in anyway.

Boo Hoo, White Trash: You Lost! Time to hide in your Bible-Bunkers and tornado-bait trailer-parks!

Asia Times Online :: Asian news and current affairs

.... During the presidential campaign, most of the country seemed to have accepted the possibility of an African-American president, with the possible exception of a narrow band of the nation that stretched in an arc from southwestern Pennsylvania across the deep south to Oklahoma.

This area, (along with parts of Republican Senator John McCain's Arizona and most of governor Sarah Palin's Alaska) were the only parts of the country that voted more Republican than in 2004; these places will suffer the culture shock of having to accept a president who looks nothing like their favorite NASCAR racing hero.

Although this is not really the change I'm talking about, it will also be a welcome difference that government policy in all matters of science policy, from stem-cell research to the search for intelligent life in the universe, will no longer have to be vetted by focus groups comprised of high school graduates bused in by Karl Rove from the Bible-belt megachurches....

Obama's one-trick wizards

Asia Times Online :: Asian news and current affairs

....
The one-trick wizards of Wall Street had one idea, which was to ride the trend and pile on as much leverage as credulous investors and crony regulators would allow. It has gone pear-shaped, and those who didn't cash out early along with the cynics are poor. Fortunately for them, Obama will let them play with the budget of the US federal government for the next four years.

Failed financiers run the Obama transition team. It used to be that the heads of great industrial companies got the top Cabinet posts. Now it is the one-trick wizards. After George W Bush fired former Treasury Secretary Paul O'Neill, who had run Alcoa, the last survivor of the species was Vice President Dick Cheney, the former CEO of Halliburton. Obama's bevy of talent comes from finance. American industrialists have become figures of ridicule, like the pathetic chief executive of General Motors, Rick Wagoner, begging for a government loan. ....

For a quarter of a century, the inbred products of the Ivy League puppy mills have known nothing but a rising trend in asset prices. About the origin of this trend, they were incurious. The Reagan administration had encountered a stock market in 1981 trading 50% below its the long-term trend. Reagan restored the equity market to trend by cutting taxes, suppressing inflation and easing some regulations. The private equity sharps were fleas traveling on Reagan's dog. They simply rode the trend with the maximum of leverage. ....

That explains how a Washington political operative like Rahm Emanuel, now Obama's chief of staff, who studied ballet rather than balance sheets, could earn a reported $16.2 million in two-and-a-half years at Wasserstein Perella, the mergers and acquisitions boutique. At the height of the bubble, Bruce Wasserstein's firm sold out to Germany's Dresdner Bank for the fairy-tale sum of $1.6 billion. Even the crumbs from Wasserstein's loaf could make a Chicago politician rich.

Without leverage, the clever folk around Barack Obama are fleas without a dog. None of them invented anything, introduced an important new product, opened a new market, or did anything that reached into the lives of ordinary people. They wore expensive cufflinks, read balance sheets, exercised regularly, sat on philanthropic boards, and assumed that their flea's ride on the Reagan dog would last forever.

All they knew was leverage, and now that the world is de-levering, they are trying to put leverage back into the system. One almost can hear Mortimer Duke, Don Ameche's charcter in Trading Places, shouting, "Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!"

Of course, nothing excludes the possibility that Obama's team will come up with something constructive. But there is no reason to expect a drastic change from the crisis response of the same sort of people (starting with Treasury Secretary Paulson) in the Bush administration. They will bail out incompetent, failing firms and drop money from helicopters and call it a stimulus package. And it will turn out no better than it did for the humiliated Republicans.

What Barack Obama Needs to Know About Tim Geithner, the AIG Fiasco and Citigroup

Institutional Risk Analytics

The only way to deal with this ridiculous Ponzi scheme is bankruptcy. The way to start that healing process, in our view, is by the Fed emulating the FDIC's treatment of DSL, withdrawing financial support for AIG and pushing the company into the arms of the bankruptcy court. The eager buyers for the AIG insurance units, cleansed of liability via a receivership, will stretch around the block.

By embracing Geithner, President-elect Barack Obama is endorsing the ill-advised scheme to support AIG directed by Hank Paulson et al at Goldman Sachs and executed by Tim Geithner and Ben Bernanke. News reports have already documented the ties between GS and AIG, and the backroom machinations by Paulson to get the deal done. This scheme to stay AIG's resolution cannot possibly work and when it does collapse, Barak Obama and his administration will wear the blame due through their endorsement of Tim Geithner

 Sounds like all that Big Money Money paid to Rahm Israel Emanuel and others is going to turn out to be a good investment. The US will end up bankrupt and in default, but by then the usual suspects will have cashed out of their bailout-rescued investments and moved into Swiss francs and gold. I got more puts today, on GS XOM and CVX, and on MSFT just because I hate them. I'm making money like crazy off of this mess of waste, fraud and corruption. I just need to remember to get it all out of USD before the plug gets pulled.

"....a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000."

The End

by Michael Lewis Nov 11 2008

The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar’s Poker, returns to his old haunt to figure out what went wrong.

Found this via Clusterstock. Lots of great quotes in this, a good read.

“The single greatest line I ever wrote as an analyst,” says Eisman, “was after Lomas said they were hedged.” He recited the line from memory: “ ‘The Lomas Financial Corp. is a perfectly hedged financial institution: It loses money in every conceivable interest-rate environment.’ I enjoyed writing that sentence more than any sentence I ever wrote.” A few months after he’d delivered that line in his report, Lomas Financial returned to bankruptcy.

In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.

“With all due respect, sir,” Daniel told the C.E.O. deferentially as they left the meeting, “you’re delusional.” This wasn’t Fitch or even S&P. This was Moody’s, the aristocrats of the rating business, 20 percent owned by Warren Buffett. And the company’s C.E.O. was being told he was either a fool or a crook by one Vincent Daniel, from Queens.

Truth to tell, there wasn’t a whole lot of hand-wringing inside FrontPoint either. The only one among them who wrestled a bit with his conscience was Daniel. “Vinny, being from Queens, needs to see the dark side of everything,” Eisman says. To which Daniel replies, “The way we thought about it was, ‘By shorting this market we’re creating the liquidity to keep the market going.’ ” “It was like feeding the monster,” Eisman says of the market for subprime bonds. “We fed the monster until it blew up.”

I've just started reading that "1421" book about how the Chinese discovered the world. Apparently even back then they liked to sell their goods cheap and on easy credit to their trade partners, who were thus kept indebted and presumably also hooked on the nice cheap cobalt-blue porcelain and so forth. Maybe the Chinese invented "feeding the monster". I wish they would learn Spanish before they take over the world. Spanish, while not the most beautiful-sounding language (neither is English by any means) has the remarkable advantage of having an exact correspondence between how it is spelled and how it sounds (excepting my beloved Argentines, who have to do everything in their own style including speak Spanish). There are plenty of highly intelligent people who sound like idiots if they write anything because they are not wired to remember the arbitrary and capricious, not to say cruel and unusual, relation of lack thereof between spoken and written English (I do have such hardware, but would much rather have hardware suitable for Quantum Gravity that Goddamn English spelling). Chinese, being a tone-system language and not even standardised within China as far as I know, is singularly unsuitable for the role of universal language (except for the fact that billions of Chinese already speak it, of course). I suspect that Western Barbarians such as myself are lacking the hardware to properly learn Chinese even had I been born there. So please learn Spanish, Chinese, before you take over what is left of the world after the current bunch of schmucks get done f*cking it up.

MI6 Hiring

Operational Officer - jobs from exec-appointments.com One of many reasons I love FT.com... Where else would I see MI6 job postings?

Salary on application London, and Worldwide Operational Officer MI6 Become an Operational Officer at MI6 and you’ll be faced with a career opportunity like no other. We’re looking for impressive, experienced professionals with political curiosity, an international perspective and the qualities to collect and assimilate secret foreign intelligence. Do so and you’ll help the Government protect the UK’s security, stability and prosperity. MI6 exists to tackle threats to the UK including terrorism, regional instability, the proliferation of weapons and drug trafficking. We look for resourceful, adaptable, impactful people from the widest possible range of UK cultures and backgrounds. There are three types of Operational Officer. Our Case Officers plan and carry out secret operations overseas. The Targeting Officers build up intelligence pictures of different areas of interest and identify potential target agents. Finally, our Reports Officers, based mainly in London, assess, validate and deliver intelligence to the Government. They’re all roles in which you can have a major impact on the UK – and develop a fascinating, long-term career. If you think you have the qualities we’re looking for, please click on 'Apply Now' Please note, we only accept applications from British citizens. You should not discuss your application with anyone. job ref OO Apply Now

Obama the first Jewish President?

Rahm Emanuel - Wikipedia, the free encyclopedia From his Wikipedia page:

Emanuel has been described as a “strong Israel partisan”^[26] and a “convinced Zionist” and “prominent figure in the US Jewish lobby.”^[27] A strong supporter of AIPAC, he personally introduced fellow Chicagoan Barack Obama to the organization's directors during the 2008 presidential campaign.^[28] A November 2008 article claimed that while expressing empathy for Palestinians, Emanuel has explicitly condemned their leaders.^[29]

Who Is Rahm Emanuel? Clusterstock.com tells us that in addition to representing AIPAC, Rahm Israel Emanuel is the biggest recipient of Big Money money. What a surprise. Big Finance, AIPAC, and his middle name literally is "Israel". Let's just quit having elections here and let the Knesset pick for us. Save a bunch of time and money that way.

It was clear that Hilary would have been at least as rabidly Zionist a president as Joe Lieberman, and McPalin needs no comment. It looks like a choice regarding Middle East policy was never on the ballot except for the third-party candidates, and never will be. I voted for Obama, but I sure am glad I didn't give him any money or put much effort into him. To be fair, Rahm Israel Emanuel doesn't sound completely rabid: he apparently supported the Oslo peace process. But give me a break here: Obama's first pick is a guy whose middle name is Israel, has or had dual US-Israeli citizenship, volunteered with the IDF during the first Iraq Attack, has Israeli family and spends his summers there, and is awash in Big Money Money, and about whom there is considerable chatter linking him to Mossad... Really, I couldn't make this stuff up if I tried... I would have left the country in a hurry if McPalin won, and now my wait-and-see attitude is already moving towards concluding there really is no alternative for the US but bankruptcy and implosion in the service of our various enemies and masters, foreign and domestic, so I think I'm still out of here, just in a more leisurely fashion.

Let the Big Three bite the Big One

Don't Do It, Obama. Don't Save Ford (F) And General Motors (GM)

   Instead of giving these shitheads money to build more fall-apart guzzlers, let's allocate the money for mass transit projects like light rail and so forth and then see if the Big Three can manage to contribute. Oil will be heading back to $200/barrel once economies recover if not before. The last thing we need is more cars. We need mass transit, and it should be subsidised so that everyone driving is also paying for someone to ride mass transit for free. Otherwise the whole country crashes when oil goes over a certain price: no more food in supermarkets, nothing, over and out.

Down with Utah!

Utah faces boycott after Mormon work for Prop 8

Utah faces boycott after Mormon work for Prop 8

By BROCK VERGAKIS, Associated Press Writer

Friday, November 7, 2008

(11-07) 16:32 PST Salt Lake City (AP) --

Utah's growing tourism industry and the star-studded Sundance Film Festival are being targeted for a boycott by bloggers, gay rights activists and others seeking to punish the Mormon church for its aggressive promotion of California's ban on gay marriage.

It could be a heavy price to pay. Tourism brings in $6 billion a year to Utah, with world-class skiing, a spectacular red rock country and the film festival founded by Robert Redford, among other popular tourist draws.

  I think this is a great idea, and should be generalised to include Alaska and all the deep-red states, which tend to be backwards economically as well as in other respects. Let's drive the Bible-thumping bastards into bankruptcy! Send the Bible-beaters back to their bunkers and put The Fear into them so they never emerge to plague the rest of us again!

'Serious concerns' over Lieberman's future

The Raw Story | Reid: 'Serious concerns' over Lieberman's future

  Get rid of him. If the Republicans don't want him, send him to Israel. It's clearly really his country more than the US anyway.

Maxing out the plastic

Broke Consumers Hit Credit Cards For A Few Last Pennies

  From Clusterstock:

Spending plunged in Q3, and it's likely to continue to get worse. Why?
Because U.S. consumers are broke, and the number of folks eager to lend
us money despite this condition has gotten a lot smaller.

We were broke in 2000, but we were able to borrow money to spend by
tapping the "equity" in our houses. Now we can't tap that equity
anymore (because it's gone), so we've moved on to credit cards. Lenders
are wising up to this, though. And then where's our spending money going to come from?

Soros: America must lead a rescue of emerging economies

FT Alphaville
....

The US must show the way in protecting the peripheral countries against a storm that has originated in the US, if it does not want to forfeit its claim to the leadership position. Even if Mr Bush does not share this point of view, it is to be hoped the next president will – but by then the damage will be much greater.

...Yeah, what he said... Soros is cool. Let's hope Obama offers him an important very senior post.

On Fire

Humans made fire 790,000 years ago: study | Science | Reuters

Humans made fire 790,000 years ago: study

Mon Oct 27, 2008 9:34am EDT

JERUSALEM (Reuters) - A new study shows that humans had the ability
to make fire nearly 790,000 years ago, a skill that helped them migrate
from Africa to Europe.

  Some decades ago, I had a personal relationship with Fire perhaps akin to that some claim to have with Jesus. This was not the result of premeditation or volition: the organisation of my consciousness moved from its normal mental-egoic intellectual configuration to one dominated mostly by some combination of Jung's Intuitive, Feeling and Sensing functions. During this period I spent a great deal of time in the mountains and along rivers and so forth, and often felt moved to build and gaze a fire. I had experiences involving the Salamander and many others in general conforming to mystical traditions I had a complete lack of exposure to. It was as a result of these experiences that I read a great deal of Jung and eventual found my way to Michael Washburn, whose "Ego and the Dynamic Ground" provided a very satisfying intellectual framework enabling me to try to sort of get my mind around what I had wandered into.

  This was all some decades ago, and these days I am thinking much more about Money in the broad sense than anything mystical, but I never either explained or dismissed that most intense period of my life.

  Reading that human fire-making goes back about 800 thousand years, it struck me that that should be long enough for evolutionary processes to have created a biological basis for the archetypes related to Fire. Subjectively, constellation of an archetype is perceived as contact with something not only independently existent, but more real than reality itself, so to speak. I remain agnostic on the question of whether for example there is a God, elemental spirits, the Old Ones and the Other Side, or whether experiences of these things are just externalisations of basic human psychic hardware developed during millions of years of evolution.

  And now back to Money. While I remain agnostic about the reality of the King of the Salamanders (the damn things are like cats: each one will give you to understand it is the King of them all, the One True Salamander [and I will note that the Old Testament God Jehovah is to me nothing more than a Fire Being with delusions of grandeur: a jealous, passionate angry and above all hungry being]), my opinion of the today's Big Bounce is that I will be shopping for put options tomorrow.

The Fund must act to protect emerging markets

FT.com / Comment & analysis / Comment - The Fund must act to protect emerging markets

The Fund must act to protect emerging markets

  Hear Hear! And the writer is a senior Citigroup manager, no less. I have the impression that Citi has been one of the leading financial houses in exploiting the developing world, so they may be mostly concerned with protecting their investments, but perhaps there is some real concern for "the victims of financial stress that is both not of their making and is beyond their control."

By William Rhodes

Published: October 23 2008 19:26 | Last updated: October 23 2008 19:26

....

After the resolution of the crises of the 1980s and 1990s, many emerging markets implemented key reforms, pursued prudent macroeconomic policies, strengthened banking and financial institutions and built up significant central bank reserves. In spite of their reforms, many of these countries have been caught in the downdraft of this credit crisis. They are the victims of financial stress that is both not of their making and is beyond their control. It could affect their real economies. The situation is deteriorating; these countries should not be left adrift. It would be imprudent to risk undermining the efforts in the Group of Seven leading industrialised countries to stabilise conditions by allowing the strains in emerging markets to evolve into an acute situation. Now is the time to act.

....

The lesson of the Latin American debt crisis and Asian financial crisis is that mechanisms must be put in place rapidly to shore up these vulnerable markets. The International Monetary Fund must assume a leadership role as it has in the past.

The writer is Citigroup senior vice-chairman; chairman, president and CEO of Citibank and first vice-chairman of the Institute of International Finance

Block the Vote:Will the GOP's campaign to deter new voters and discard Democratic ballots determine the next president?

Block the Vote : Rolling Stone

Block the Vote

Will the GOP's campaign to deter new voters and discard Democratic ballots determine the next president?

ROBERT F. KENNEDY JR. & GREG PALAST

Posted Oct 30, 2008 11:10 AM

....

In state after state,
Republican operatives — the party's elite commandos of
bare-knuckle politics — are wielding new federal legislation
to systematically disenfranchise Democrats. If this year's race is
as close as the past two elections, the GOP's nationwide campaign
could be large enough to determine the presidency in November. "I
don't think the Democrats get it," says John Boyd, a voting-rights
attorney in Albuquerque who has taken on the Republican Party for
impeding access to the ballot. "All these new rules and games are
turning voting into an obstacle course that could flip the vote to
the GOP in half a dozen states."

Suppressing the vote has long been a
cornerstone of the GOP's electoral strategy...

  Well, there they go again... Expect the mother of all stock-market crashes if they manage to steal this one: should be good for about minus 3000 on the dow by following Friday.

ACLU questions Army unit’s NorthCom role

ACLU questions Army unit’s NorthCom role - Navy News, opinions, editorials, news from Iraq, photos, reports - Navy Times

The American Civil Liberties Union is questioning the use of an
active Army brigade as an on-call federal response force within the
U.S., arguing that the military is barred from any role in civilian law
enforcement and that the force could be used to help the Pentagon
conduct domestic surveillance.

On Tuesday, the ACLU filed Freedom
of Information Act requests with the Pentagon and Department of Justice
asking for “any and all records” related to the decision to align the
unit under U.S. Northern Command, which is responsible for homeland
defense of the U.S., and the “ongoing and possible use” of the unit,
“including but not limited to contemplated functions; duties;
surveillance activities; and relationship to existing civilian agencies
or personnel or the National Guard.”

The ACLU FOIA request cites a Sept. 30 Army Times online story,
“3rd Infantry’s 1st BCT trains for a new dwell-time mission,” and a
U.S. Army North news release, as its sources for the information.

....

The assignment, the ACLU said, “raises important
questions about the longstanding separation between civilian and
military government within the United States — a separation that dates
to the nation’s founding and that has been reiterated in landmark
statutes, most importantly, the Posse Comitatus Act.”

"The banks simply DONT HAVE THE MONEY TO LEND."

FT Alphaville

Time for the Darwinian flush

Oct 20 08:41
by Paul Murphy

Highlights from the latest Hayman Advisors letter to clients (i.e. the text in full):

October 14, 2008

‘The ultimate result of shielding man from the effects of folly is to people the world with fools.’ Herbert Spencer

What’s Next? It is the “what’s next” that scares us the most.....

Highlights from the latest Hayman Advisors letter to clients (i.e. the text in full):

October 14, 2008

‘The ultimate result of shielding man from the effects of folly is to people the world with fools.’ Herbert Spencer

What’s Next? It is the “what’s next” More…

"The US consumer is finally broke."

Why This Recession Will Be A Doozy

Why This Recession Will Be A Doozy

Henry Blodget | Oct 19, 08 10:22 AM

The last recession was mild. The stock market and corporate profits tanked, but consumer spending--long the major engine of the US economy--danced merrily on through. In recent decades, it has ever been thus: bearish analysts and strategists have been underestimating the voracious spending habits and resilience of the US consumer for 50 years.

Unfortunately, at risk of invoking the four most expensive words in the English language, "this time it's different."  This recession, to quote the great Julian Robertson, will be a "doozy."

Why?

Because the US consumer is finally broke.  For thirty years, we piled on debt and then spent almost every new penny we got.  This borrowing spree was made possible by a smorgasbord of no-money-down lending products and ever-appreciating asset prices. Unfortunately, the situation has now changed. The lenders who created those products have now been demolished, and asset prices are falling fast. And this is leaving American consumers with no choice but to cut back.

How finance, insurance, and real estate lobbyists bought a bailout

The American Conservative -- Fire Sale

  I really like these Paleocons. Conservatives trashing McCain, the Hanke-Panke bailout, lobbyists: what's not to like? Keep it up and they might give conservatives a good name.

How finance, insurance, and real estate lobbyists bought a bailout.

By Kelley Beaucar Vlahos

There was little in the federal bailout bill that most Americans could wrap their arms, much less their minds, around. What did strike a chord—and one of the rare notes of consensus—was that greedy executives of failed institutions should have to give up their high salaries and golden parachutes before getting a life raft from Uncle Sam.

But the CEO’s needn’t be too alarmed. The $2 billion their industry has invested in Washington politicians over the last 20 years will likely bring healthy returns. Pesky details like “who” and “how much” to penalize were kicked down the road or left wide open for interpretation—nothing a few fat friends on the right committees and a team of crack lobbyists can’t handle.

---